German virtual incubator CIE on its attempts to strengthenIndo-German co-operation in the startup space

This article is part of the series called Startup Hatch, about incubators and accelerators in the startup ecosystem.Christian Schwarzkopf and Tim Lagerpusch are the founders of one of the biggest start-up communities and virtual incubators in Germany, the Center for Innovation & Entrepreneurship (CIE) from the Karlsruhe Institute of Technology.

Tim and Christian came to India last week to visit Delhi, Bangalore and Mumbai to meet entrepreneurs and Indian startups, to connect with angels and investors, interact with incubators here and build up their network in the Indian ecosystem to explore business opportunities. When we from YourStory met them for an interview, both were overwhelmed by the dynamic nature and scale of the Indian market. Read more about to learn about their insights and plans in India.

Tell us about yourselves.

We are both entrepreneurs. While establishing our company during our time as business engineering students, we experienced a weak entrepreneurial ecosystem with few interactions among young founders on campus, no professional advisory structures and missing links with the national and international investment opportunities as well as the entrepreneurial scene. We started the incubator in order to bring up more startups with better growth perspective.

Introduce us your incubator in Germany.

The CIE is a virtual incubator. We mainly offer mentoring support, connection to outside professionals and connect all our startup teams with each other. The main idea is that entrepreneurs help each other to become stronger and more successful. The incubator is supported by the university and the German government. We started 3 years ago in October 2008 and we’ve gathered 160 startup teams around us until now. The startup activity is not only further increasing on campus but also reaching all over Germany. It’s mostly done by word-of-mouth publicity and social media. About a dozen of our startups are venture backed and a few more new angel investments are lined up as well.

You are working with very early stage companies, right from university. What kind of service and support to you provide to these teams and how do they benefit?

We care about people right from the first idea. The focus lies more on these people’s development than on the idea. Our main support is mentoring and discussion time. Furthermore, we connect all startups to one big family grid. We help finding first customers, investors, co-founders and employees. We bring in high-value role models, initial legal advice and host a lot of networking events, providing the teams with visibility and contacts at the early stage. All services are upfront for free. However, we request the founders to give back to the community – now and tomorrow.

Please give us some insights into the German startup ecosystem.

In terms of the digital world, you find two types of startups in Germany - the ones that rely on innovation and the copycat approaches. For copying proven business models, there are a couple of successfully established incubators mostly located in Berlin like RocketInternet, who have dozens of deals in the pipeline. Their most successful one was a clone of Groupon called Citydeal, which was sold within 6 months to Groupon itself. The startups with new ideas and approaches, on the other hand are growing and spread throughout Germany, with most activity is happening in the big cities like Berlin, Munich, Hamburg and Cologne. However, our Karlsruhe ecosystem is gaining more importance every day becoming a major player in Germany as well.

If you compare the India with the scene in Germany, what are your thoughts?

Indian seed valuations are higher than German ones due to the huge domestic market. But they are grappling to find mature, rich markets like in Germany. They are very well prepared for international markets from the beginning, usually operating in English. Since office space is more expensive in the Indian metropolises, Indian startups have to be even more bootstrapped.

Please tell us three observations/facts that you’ve noticed about the Indian market.

Crazy traffic and chaotic infrastructure in the cities.

Diverse customer and business segmentation influenced by religion, hierarchy and income differences.

Better mobile phone infrastructure than home sanitation.

What are you expecting from your trip to India? What kind of synergies and partnerships are you exploring in /with India?

We want to strengthen the startup scene in both countries. We see synergies in bringing startups right from the beginning together. In contradiction to copying each other, we want to find Indian co-founders for German founders. Furthermore, we want to find small IT development agencies that could do service for small German startups. Eventually, we might send German startup teams to India to discover the Indian market and vice versa. Indian teams could discover the European markets based in our incubation space providing office infrastructure (desk, internet, telephone).

You want to connect Indian and German startups. What kind of value to you expect from such partnerships?

Primarily, it would be faster international growth and mutual exchange for concept improvement. In addition, such cooperation shall help to save costs on the development side.

Have you found some ideas from India which could work in Germany as well?

We saw some startups teams mainly for the software engineering sector that could address German customers as well. We have to analyze their products and services in detail before we can elaborate the German market potential for each idea. As mentioned before, small companies here doing business with small companies there could be a good start.

What opportunities could Indian startups see in the German market and why do you think that German market could be attractive for them?

The German market is a mature and rich market. People and companies can probably pay much higher prices for products than their counter-parts in India. Because Indo-German cooperation and markets have not been extensively established on both sides, you can find a huge market with less competition.

How would your incubator help Indian start-ups to do business in Germany?

We can introduce Indian startups to initial customers, help with office facilities and connect them with the local entrepreneurial players. We can also help with administrative issues. Most of all, we could provide some credibility through the backing of the Karlsruhe Institute of Technology (KIT).

What follow-up activities can we expect from your guys in the coming months?

We want to start with 4 first concrete steps now:

- We would like to set up speed-dating video conference calls between our startups and graduates students from Indian universities. We will do the first trial with IIIT Bangalore and eCell at IIT Bombay. Other universities are welcome to join us.

- We are happy to share our list of startups with Indian incubators and investors in order to identify synergies between the startup teams

- One of our startup teams will join the iAccelerator, IIM Ahmedabad’s incubation program in November, while another team will try to attend the eSummit at IIT Bombay in January 2012.

- We would like to start a few small IT projects, hiring Indian startups.

YourStory is going to partner with Center for Innovation & Entrepreneurship (CIE) in order to provide Indian startups linkages to the German market and vice versa. Stay tuned and read more about the possibilities on the Indo-German front, only on YourStory.in

To know more about CIE, check out www.cie-kit.de.

Wolfgang Bergthaler | YourStory.in