Last week we reported on Florian Heinemann’s official departure from Rocket Internet, following in the footsteps of fellow WHU alumni and former Rocket MDs Christian Weiss and Uwe Horstmann who (together with Thies Sander) form the core of Project A. Now that they’re unveiled, it’s go time. Will Berlin’s most promising new incubator (and utopian lab test) live up to its hotly-contested bloodline?
It’s 1:15pm on a Tuesday, and Florian shows up on time.
At Florian’s suggestion, we meet up at the little (legitimately) French bistro La Bonne Franquette on Chaussestrasse 115, where men in ironed suits are eating delicious-looking plates of rabbit and other succulent grass-fed animals.
I guess this is a place Florian goes regularly, because he says hi to the guys sitting next to us, who respond visibly below him on the food chain, cowering their heads to their meals as if promising not to listen in on our conversation.
The majority of them look like him, at different life stages…
So, when did you first start working with the Samwers?
“I first started working with them on Jamba!/iLove between 2003-2005. During that time I was living between Cologne and Berlin. After spending 9 months in the US, I returned to Germany to get my PhD. The brothers started Rocket in 2007, not long after EFF (The European Founder’s Fund) was founded, and my focus quickly shifted there.
Project A is probably the hottest company in town right now.
“Thanks. One of motivations for leaving was to return to a more dynamic environment, somehow like Rocket used to be before it became an institution with thousands of staff members. So, yes, it’s pretty exciting to me too.”
What types of founders should approach you?
“Unique B2C companies. Heterogenous teams. If you have a great tech guy and one great product guy, it’s easy for us to complement that with a strong business guy. We like the type of people who start in an environment like HackFWD…companies that are creative but need a strong business model and the resources to scale. That’s our expertise.”
“This is me in 2000 at my first company JustBooks/AbeBooks, based in Düsseldorf.”
You went to WHU one year behind Oli Samwer, right?
“Yes, we both had the same scholarship, so we’d run into each other quite a bit in that circle. I guess you could say we were close to friends status.” (Florian confirms, they would have been friends on Facebook.)
What was he like back then?
“Oliver was very dedicated, focused, and entrepreneurial even in that time. I wouldn’t say he was the most social guy, though.”
Did he change anything at WHU, for the better?
“His main contribution was starting the Entrepreneurship Club there. WHU is known for its excellent speakers who come to campus, but before Oli, they were all from McKinsey, etc. At that time, the Internet was emerging and Oliver recognized it. In my class of ’99, 20 of the 70 graduates started their own Internet companies. Before that, 90% of them went on to be consultants or bankers. I’d say Oliver played a direct role in that.”
What would you be doing if you weren’t at Project A?
“I’d be a professor. My parents were both teachers. For me, entrepreneurship was a career option, not a passion. As a professor, you help others in a positive way and that motivates me. It’s a similar freedom to what I do. You get to do what you think is right.”
Would Project A ever consider opening up its shop system?
“It wouldn’t be an asset because it’s all about controlling it, but we’ve thought about it. We don’t want to work like an agency, of course, but we might be open to giving out tools like the BI system, for instance. I could see that happening in the future.”
What annoys you regarding Rocket?
“The fact that people so grossly underestimate it, and instead highlight those ‘innovative companies’ that are making no headway financially. When you look at the sheer economic substance, it’s like comparing Barcelona’s soccer team to a local soccer team.”
Do you remember receiving the ‘Blitzkrieg email’?
“Yes. And I remember thinking it was a bit long. Oli normally writes very short emails. As for the content, the use of Blitzkrieg for a German person. the bit about signing in blood, the military stuff… that was all disturbing.”
I found it inspiring. Did it teach you anything?
“It makes me think a little more about my emails today. We did a lot of telephone conferences at Rocket and the tone there was often harsh. But putting it into an email was a mistake. I try to only write what I mean.”
What about the Blitzkrieg song? We got no response from Rocket when we sent it over. Did you guys hear it?
“Yes, of course, we were all listening to it,” he says. “The day it came out, I was going to Zalando. When I walked into the marketing room, they were playing it out loud.”
“We took it with a good sense of humor.”
What’s a fair founder’s share?
“That’s a hard question. Rocket has a very good track record, so purely on economic calculation, if you have 40 million plus funding for something, like Wimdu, for instance, a 5% model could be more profitable for a founder in the long run. For Project A, we’d rather give a larger share to founders because we think it attracts different people. That’s why we’re using a 50/50 model.”
Do you think any business models deserve protection?
“No, 99% of them do not. The only exception to this is if the level of innovation is high enough that a patent is granted or that the idea qualifies for some kind of trademark. Otherwise, the best state for a healthy market economy is a lot of people doing the same thing.”
“A patent is basically granting a monopoly to somebody. It distracts from the natural market. In Europe, we’ve always been rather reluctant in granting protection. The argument for that is you need a very strong interest from the originator to protect them.”
What about brand protection, design trademarks?
“Granting some of protection rights for exact design, that’s something you could argue for. Creating something is a creative act and you have the right to own a creative act. That said, there’s a lot of charm to the argument YouTube’s led, for instance, of the free economy. I think people forget that cloning isn’t so removed from this. It’s a use of freedom.”
Is Rocket scared of you guys?
“Rocket’s so far ahead of everyone else. Zalando is worth more than the entire German ecosystem. If Oli is really getting Kinnevik funding, we’re talking about billion-dollar plus. There are hundreds of millions of dollars flowing into Rocket companies every year. For us with a 50 million euro fund, looking to invest only very early-stage, we’re not really competing.”
(According to one insider source who prefers to remain unnamed, Oliver said internally, “Anything Project A does we’re going to do twice as big.)
So…what’s it like sleeping next to a Samwer?
“She’s their second degree cousin,” he tells me, no smile emerging. “We met each other at Carnival. She doesn’t influence my decisions any more than if she wasn’t related to them.”
No one at the office has teased you about it?
“Not to my face.”
Since publication of the article, Florian Heinemann has requested the following two alterations be posted additionally:
1) Zalando evidently is not worth more than the entire German ecosystem. What I meant was that Rocket companies incl. Zalando, Wimdu, Citydeal/Groupon etc. in recent times probably have attracted a similar amount of funding as the whole German Internet startup scene combined.
2) Oli already has attracted funding from Kinnevik in the area of several hundred million dollars. What I meant was that if Oli is really getting substantial funding beyond Kinnevik, we’re talking about billion-dollar plus.