German Scalers advised how to conquer Germany7.1.2021
Germany is the biggest market in Europe. So, naturally, also Finnish startup companies are interested in conquering it. German Scalers program gave an opportunity to promising startups to explore expansion potential specifically from German market perspective.
Due to the exceptional situation, both the program and the Demo Day closing event on 10th of December were held completely using remote work tools. The actual program lasted 12 weeks, during which the selected companies gained extensive, new knowledge particularly about German markets.
”Initially, company visits to Germany were also planned but travel restrictions made the visits impossible, for now”, Rasmus Basilier, the host of German Scalers told on his Demo Day opening speech.
”Often, entrepreneurs want to take steps on internationalization but are left alone with their dreams. Our goal was to provide networks, motivation and means from German point of view, to enable those dreams come true.”
According to Basilier, the program managed to reveal a lot of new potential.
At the closing event, company representatives had a chance to tell in their own words what they have learned during the autumn.
Have courage to takeover new markets
Risto Kallio, the CEO of Muototerä from Tampere, told that he gained a lot from the program. To the highest priority, he raised the importance of focusing to company valuation.
”When one knows the target market, it is easier to define the company valuation. We learned that family businesses and a long history are highly valued by Germans. Also, our market segment is beneficial there”, Kallio summarized.
He mentioned how he has also learned a lot from other companies in the program.
“The trainings were of high quality, but as the program proceeded, we also got concrete examples and valuable lessons from other entrepreneurs who were there. For example, others were ahead of us in utilizing LinkedIn.”
Jukka Sjöstedt, the CEO of Radientum, a company that develops integrated antennas, brought up the cultural differences regarding networking.
“In Germany, getting access to gatekeepers or members of the senior staff is not always possible solely via the net”, Sjösted told. “We learned a lot about building trust and changed our approach from technical to slightly more personal angle.”
Tips from other entrepreneurs interested in German markets were about courage.
”If you think about it, do it”, Kallio encapsulated. ”Before that, of course, you need a plan. For creating a plan, you will get a lot of help from e.g. Business Tampere and other similar communities.”
Sjöstedt agreed with Kallio. ”Try fast, fail fast. Germany is a vast market, and there are things entrepreneur needs to manage and experience on his/her own. It is not possible to outsource everything to the networks, there are things that have to be learned through the hard way.”
Take cultural differences into account
In a similar way to Sjösted, Markus Jääskeläinen, the marketing manager of SimAnalytics, underlined the cultural differences when building contacts.
“In traditional process industries, one needs to meet people”, he summarized. “The most important thing is to create networks inside the target market. Compared to Finns, Germans are more reserved in responding to cold calls, and the gatekeepers have a higher role.”
Chris Moore, the COO of ReceiptHero also told how he learned a lot about building and maintaining networks. ReceiptHero provides a platform for digital receipts.
“In Germany, interaction means constant commitment. Bulletins, status and news reports, to keep the momentum going”, Moore told. “When you are entering the market from outside, you always have to gain trust differently and convince them why they should continue the conversation especially with you.”
Hone your strategy
According to Kane Caswell, sales manager of Nursebuddy, soon reaching six years in Finland and Britain, Germany is tempting for several reasons.
“We develop software to support professional care staff, and Germany is both large and highly digitalized market”, Caswell summarized. “We got valuable information about our target companies and competitors.”
The program also focused on the language issue. According to Caswell, Nursebuddy produced at least some of their marketing material in German also.
“In Germany, Google has a much more dominant position in marketing when compared to Finland or Britain. It is worth a try to test whether advertising works better in German or in English”, Caswell suggested.
Pauli Tarna is the CEO of SmartWatcher. The company provides indoor air quality monitoring. He instructed entrepreneurs to also contemplate whether there really is a product-market fit.
“It’s important to think over your strategy”, Tarna said. “Is it so that your technology, service and resources meet the required level for you to operate at full power? Local networks and operators are a requirement in Germany. One can’t do anything there in an incomplete manner or only from here, remotely. Of course, it pays to accept all the help from Finnish networks and ecosystems, also.”
Proceed to German markets slowly
Windi Muziasari, CEO of ResistoMap and Tuukka Ylälahti, CEO of Mesensei shared on their speeches how the organized program is a great wake-up call for startups, who quite often are strongly focused on their day-to-day chores.
”Often, a startup has limited resources. So, this made us take a broader look”, Muziasari told. “As a concrete example, my views on sending emails have changed. I used to hate it. However, now I can think of the people who really need our services, I see the communication more personal.”
Ylälahti told how he has assimilated more strongly that sales and communication need sharpening regularly.
“Often, it is difficult to take a step to observe one’s own work outside the comfort zone. Because of that, these programs are highly useful”, he summarized.
Both underlined the slow pace of German markets.
“Compared to Britain and United States, the speed of entering is totally different”, Ylälahti said.
“Everything is so much slower, and one has to accept that. You have to make contacts by yourself and more directly.”
Muziasari admitted, that he had expected the process to be much easier and faster.
“Together with Tuukka, we both target universities”, he said. “Working with them, especially, may take a lot of time. It’s good to prepare for the process to be slow.”
Like all the participants, Muziasari’s ResistoMap gained a lot of valuable lessons from the program.
”The program helped us to contact new customers, and those are always essential for an entrepreneur to have. Now, we can expand our operations using new knowledge and contacts.”
6Aika – Ecosystems of Growth: six cities supporting the growth of companies together
The Ecosystems of Growth project helps growth-seeking companies join networks and services that support their research and development. The project is a part of the 6Aika Six City Strategy, implemented by the six largest cities in Finland: Helsinki, Espoo, Vantaa, Tampere, Turku, and Oulu, together with the Council of Tampere Region. The project is based on an idea where cities actively support the innovation operations of companies and build networks for this purpose.