I'm not sure this is news to anyone who knows me well but I haven't really publicized it much. Contractually, today is my last day at the Otto Group. We parted on good terms, and there is no real juicy story to tell. We simply no longer saw eye to eye on strategy and how things were going to be run. After over six years, I decided it was time to move on. The typical story after you've used up a ton of political capital and new management comes in.
What I did want to do with this post is give a little background on how we built Liquid Labs and Otto Group Digital Solutions as well as give some insight as to what I saw as the key success factors for us. As we had been approached over the years by so many other corporations looking for some of our secret sauce, I'll try to address the most important ones here. This will remain high level to keep it at a bearable length.
First and foremost, a ton of credit goes to Juergen Schulte-Laggenbeck and Marc Berg in helping make the first lesson very clear. In conjunction with the two of them, Michael Backes (my co-founder) was the mutual glue who brought us together. This is necessary info to make things clearer. Juergen was the CFO at the Otto Group when we launched Liquid Labs and Marc was on his team. In turn, Michael was working with both of them on making the Group more innovative. As we were friends via our venture capital backgrounds Michael brought me in.
This was a whirlwind process. Michael and I came up with the idea to pitch the Otto Group end of December 2011. Marc Berg made meetings happen in January and we were up and running by the 1st of February 2012. The first lesson learned here: build a ton of momentum. Don't ask for permission or stick to procedure and start working without investing too much time in slides or business cases. I have to give a big round of applause to Juergen and Marc, who both had the balls and political chutzpah to make this work. There were a ton of details which we ironed out in hindsight but we sure weren't all playing by the rules when we started. Marc and Juergen though have since left the Otto Group.
After we were up and running, we kept up our speed and were working on the first startups within a week of launching. We started a bunch of companies in the first six months. We had a success story with RiskIdent in the first year. They were on their way to profitability and are now five years later saving the Otto Group over €25m per year in fraud losses. The second lesson learned: build a track record fast. The only thing that really counts is performance when it comes to company building. You better have companies that are either profitable or on their way there. They have to be delivering strategic value while remaining competitive in the market. Do not focus on politics or cosmetics. Slides, reporting and tons of meetings do not lead to sustainable businesses being built. You need to build up political capital and successful outcomes take you farther than slideware. Eventually, you may still be shown the door, but remember that corporate innovation is often a suicide mission anyway. You'll eventually either be fired or end up running the place. Pick one.
The third lesson is to treat the "little people" like royalty. They are the ones that matter. We used a lot of the Otto Group for support and interacted with multiple business units and entities to be successful. We went and met with everyone....be it accounting, legal or the folks out at a Hermes hub. There were so many smart, motivated people with great ideas at all levels below the board. Yes, there were headaches along the way, but usually, we knew whom we were speaking to and they knew us. There were a ton of personal relationships built and these were key to our success. Do the legwork and get in front of people. In a large corporation, there are key stakeholders who don't always stand out but can be critical to your success. You won't find them making phone calls. Invite them to your events. See them regularly. Ask for their advice and be genuinely interested in what they have to say.
At the other end of the spectrum, find out who the renegades are. In our case, it was Hanjo Schneider, the former CEO of Hermes and Otto Group Board member. There are many opinions about Hanjo but I will always have respect for his entrepreneurial spirit and lack of care for precedents. He was a bit of a pain for us when he initially took over our board but once he saw that we knew what we were doing, he basically stayed out of our way. He also supported some of our bigger swings at bat, including BorderGuru. We had to put far more money to work up front in that case and it ended up very successful for Hermes. They acquired the business shortly after we started it. BorderGuru continues performing to this day and has become a part of the strategy at Hermes. It is a shame that Hanjo too has left the company. The lesson remains though: find the renegades who can write big checks as you will eventually need them on your side.
Easiest lesson: always have the owner on your side. This is a very typical lesson for family-owned businesses but I will forever be grateful to the Otto family for their support and understanding. Both Dr. Michael Otto and his son Benjamin were willing to listen to my contrarian ideas and believed in what I was trying to accomplish, even though some details were always missing. It was they who made sure that we were able to raise €85 million for Otto Group Digital Solutions and were willing to risk supporting our strategy. I will always remain apologetic and indebted to them for not completing the mission I sold them on.
The final lesson is the easiest one to convey: have a great co-founder. It is much harder to do anything alone. Company building when multiple projects are in the air is almost impossible alone. Michael, whom I already mentioned above, is my partner in crime. We came into this adventure equal parties and always split responsibilities down the middle. The running joke from our close business acquaintances was that you only "got us as a two-fer"....that means two-for-one (or "im Doppelpack" for my German friends). He is much smarter than I and usually far saner. As he likes to say about me: "I break things and often "do" before thinking. I mean well and although abrasive in style, I'm deathly loyal to my team!" Thankfully I have him to clean up when I go too far. We work well together and will soon work together again. I am sure of this.
Finally, there are a few honorable mentions in this post whom I would be foolish to leave out. Roberto Valerio, who was around the longest. The hardest to keep around long but we love em' anyway. (By the way, he too is out at Otto). Mirko Krauel, Jan Fischer, The Torbens, Christian Athen, Malte Gosau (not just a colleague but a friend whom I brought into all of this), Sandra Hartwig, Thomas Flick, Friederike Mueller, Esteban, Jan Voss, Christoph Giffey, Hannah Noethig, Bianca Steinke and everyone else at Liquid Labs, Otto Group Digital Solutions and the portfolio companies past and present whom I didn't mention. Michael and I just steered a bit. You guys really did do all the work.
Finally, thank you to Nicole Fink, whom I could never call just our Office Manager. Truly a friend if not family at this point and the third partner in crime for Michael and I.
If you've read this far, feel free to reach out and catch up. I am taking the summer off (kind of) but will be back to something new in September.