11. September 2013–
Björn Welter just won’t stop talking. I have an unbroken torrent of 15 minutes in my recording as he explains the intricacies of his frozen yoghurt company, Wonderpots, from the costings on a single spoonful of strawberries to where he sources the tiles for the two Berlin stores.
The 37-year-old CEO is high-voltage at the best of times, but the news of Wonderpots’ recent crowdfunding campaign has lifted him up a notch. In seven days it raised €500,000 on Companisto, making it the most successful campaign on the German equity-based platform and smashing the original target of €200,000.
So, in a city full of app developers, digital hipsters and eCommerce clones, why enter the tricky analogue world of food retail? And what’s the secret sauce (if you’ll excuse the pun) to creating a brand that’s fit to expand across Europe? Welter takes another breath – we’re sure we’re about to find out…
Waiting for Wonder
“I wanted to do Wonderpots since 2006”, he says, “but back then, the market wasn’t ready in Germany – the whole organic food and wellness trend only really took off in 2010, so we waited, and finally decided to launch in 2011. But the whole time I was working on the concept”.
Welter doesn’t fit the typical entrepreneurial template – he doesn’t have an MBA or a background in law, but a degree in Architecture and Design from the renowned Bauhaus-Universität. Before the venture he held high-profile roles for Virgin Atlantic, helping to design the Upper Class Lounges, before joining UK food chain Pret a Manger as International Head of Design.
It was during his time at Pret that the Wonderpots concept began to take shape, with the chain providing the perfect environment to learn what it takes to run a rapidly expanding modern food brand. In 2011, it was time to come back to Germany and launch – in August of that year, the Wonderpots flagship store in Berlin opened its doors, followed by a second in December. The company announced €1m in sales in 2012. It seemed that Berlin finally had a taste for froyo…
Minimal borrowing, slow growth, attention to detail
Maybe it’s because of the design background, but Welter’s attention to detail is bordering on the obsessive. He and co-founder and long-time friend Tomek Piotrowski have prepared an intricate business plan that did much to bolster crowdfunders’ confidence.
“Our reporting structure is on the same level as Zalando. I know exactly how much it costs to chop a spoonful of strawberries – from labour, to waste. From the spoon to the cup to the strawberry there are about 400 products to manage, but we know every single one.”
But unlike Zalando, Welter and Piotrowski resisted the urge to borrow wildly in order to expand rapidly, choosing a low initial borrowing, and waiting instead on shop revenues before deploying the next business phase.
“We chose one investor [angel investor Klaus Wecken] and a relatively low amount, that way we can have easier finance rounds in the future. We were always thinking of the next round.”
Welter speaks in frank detail about the numbers: “Obviously, the more shops we open, the more revenue there will be, but we want this to be very stable. We want to pre-finance every shop. Every one we open is cashflow-positive from day one. From then it just generates profit and pays itself back.
“For instance, our shop in the Alexa Centre [a tiny five square metre unit] cost around €50k, and has paid itself back in about 3-6 months. After that, on average, it’s €456k turnover per store, per year.”
Wonderpots is looking to a similar, more (in)famous model: “That was what Starbucks was doing – they have such a fantastic margin on coffee – they were looking at $200k to $300k in profit per shop per year, so you just build a new shop for $100k. That’s what happened in Seattle – they were building stores across from one another at intersections. Because eventually, it’s better to build shops than to pay taxes.
“From 12 shops onward we can open 12 shops per year, approximately one per month from the cashflow. The growth is healthy, but it’s not extreme.”
“Retail is really depressing in Germany”
So why bother with a Companisto campaign at all? Was it really necessary, given such a seemingly robust business plan?
Welter explains: “We now have nearly 900 Companistos from all over Germany. These are amazing brand ambassadors. Whether you have €5 or €15k, you still have the same connection to the brand. It’s like a small IPO.”
A self-confessed Jobs acolyte, Welter displays a similar flair for marketing in the Companisto campaign, and also has the same recognition of the power of brand identity, something that I suggest may be a little lacking in German retail experience…
“Oh absolutely! More than any other in country in Europe, retail is really depressing and disappointing in Germany. But then the UK, especially London, has an incredible footfall per square kilometer. You can sell anything in London on the street. Someone will always fall into your shop, so it’s developed this retail experience.
“All our creative processes are founder-driven. Most creative people don’t become entrepreneurs – they come from a business or law or economics background and then buy in these services. And then think that the logo is the brand. The brand is also the way you communicate the retail experience. It’s Amazon one-click buying, it’s Zalando’s shopping experience – that’s all part of the brand DNA.”
The future for froyo
So will people have the same appetite for froyo as they do for Apple computers or Starbucks coffee? Welter aims to find out: “We are on a fairly quick expansion plan now. Our focus for the next 12 months is more shops in Germany, and to launch a delivery service and app, as well as a retail product in supermarkets.”
The rest of Europe will have to wait a little while longer . “If I had one or two more people in senior management I would already be looking at Stockholm or the UK. But money is not the motivation, it’s setting up a beautiful product or business. That’s how it’s always been. Success is a result of this, not the motivation.
“Anything that you believe in, that’s authentic, you can make a business from it”.
For related articles, check out:
“Focus and go fast” – 5 painful lessons from one-year-old Berlin startup Vamos
“Good design is good business” – An exquisite guide to free design resources for startups
15 steps to launch your own startup in Europe