1. October 2012–
Stephan Uhrenbacher (left), based in Hamburg, is the founder of recommendation service Qype and Airbnb-esque 9flats, and an occasional early-stage investor, including in new collaborative consumption app WHYown.it. He’s also an established blogger, including on what to look for in an angel investor and entrepreneurial fads he’s getting tired of.
Here we ask him – as a relative newcomer to the game – about his own approach to investment:
You’re a founder, current CEO and now investor. What made you want to take that last leap?
I think of it more as a gradual process. I started out as a ‘product guy’. Even today, I always think about the use of a new service to its customers first. Then I became a company builder. I founded companies, And I also grew and sometimes restructured companies. My next field of interest became investing. Not so much because I have so many funds to invest, but because it is a logical next step to leverage myself. Therefore it is not a leap but a process which I think will take a while.
What’s going on at Upspring – is it an incubator? How many projects and what stage are they at?
Upspring is a vehicle for my interests. I am still focusing on building, with the occasional (small) investment thrown in. So I’m on the board of Qype, I run 9flats as a CEO and I supervise Avocadostore, which is still quite small, but profitable. I also have a stake in WHYown.it which I consider in an experimental stage, but run by a talented entrepreneur (Philipp Gloeckler, right). There are two other small investments. I have also started to coach CEOs of later stage companies – this is better being done without a stake in the company.
Useful, disruptive, saving the environment – no dating and no gambling. Those are the ideas that excite you… How often do you actually see them?
Fortunately, these criteria don’t have to be all met at the same time. But they serve as a good filter. The goal is to avoid having to sift through the 2000 business plans typical VCs get. I still get the occasional proposal for an online marketing company or gaming, but although these are fields where we in Germany have traditionally a better rate of success than with B2C companies, I just am not interested by them.
What is the most common mistake you see entrepreneurs make?
I often see people who are determined, but have only one area of strength. For the guy with the hammer, every problem looks like a nail. So I often meet great product guys who are terrible at monetisation and more often I see great sales people with little attention to detail. This is common and not a mistake. The mistake starts when people don’t complement their skills with other skills. Too often you will find two bus dev guys starting a company together with no product experience.
Do you have any advice for entrepreneurs dealing with investors?
Most people are very focused to find money. The problem is if you get money from the wrong people. It is much easier to end a marriage than to get out a relationship with the wrong investor. So the real challenge is to create a situation where you can chose among investors and then finding people with the right kind of expectation. Once you have investors, the most common mistake is to surprise your investors. No investor likes surprises. Manage their expectations. So if you have bad news to give, do it early and premeditated.
What’s your biggest or most expensive regret?
I wanted to get experience in a large company after I graduated, and I am glad that I did that. However, I probably left a lot of money on the table in the first internet wave that I still did as an employee as I did not have insights in how to found a company myself.
It is really hard to chose a specific quote, as Buffett rattles off so much printable stuff in one day. Pick one from my blog. (We picked – “I am a better businessman because I‘m an investor and I’m a better investor because I’m a businessman.”)
What’s the latest great book you read?
The Dhandho Investor. It just reminds you of basic principles of value investing, which is the opposite way of how companies are often being built. It is a much smarter way.
What advice would you give to your younger self?
Actually, I would not tell myself to do much differently as most things I did, like the choice of a degree in engineering and business administration proved to be useful a long time after. But in hindsight I would probably tell myself to worry less and have more confidence in my abilities.
What excites you for future tech?
Mobile, mobile, mobile. Sounds so 2007, but I still think we haven’t seen everything that is possible with everyone being connected all the time. I am much less excited about the current hype in education and health, as the big spenders here are governments and I would much rather convince end users than health insurance companies…
Image credit: Flickr user Fortune Live Media
FOR RELATED READING, CHECK OUT:
Who’s afraid of Airbnb? 9flats’ Stephan Uhrenbacher talks clones and North America
VIDEO – WHYown.it app brings social borrowing to your friends
Investor Spotlight: Peter Read on why Berlin “floats his boat”