Michael Adersberger has a PhD in physics and switched from CERN to the Munich software company QAware, where he not only learned about software engineering, but also gained experience in the field of corporate venturing and startups. Nicolas Olberg has many years of experience in IT. He has worked for the IT service provider MaibornWolff for seven years, first in software development and then in collaboration with startups. Twip is a joint project between the two software companies QAware and MaibornWolff.
Munich Startup: Please introduce Twip!
Michael Adersberger: Both of our parent companies are in the project business, ranging from large companies to DAX corporations. For our companies, however, it’s of increasing importance to generate meaningful and innovative ideas for our employees. Twip was founded so we can play a part in the fantastic and innovative subjects that we see in startups. Twip was born of conviction.
And why do we think we can support startups? We have access to nearly 900 software developers who cover all of the technical fields: from UI, UX, backend, cloud issues, DevOps, AI, you name it. With this wealth of engineers and our experience, we can give startups targeted support. For example, by taking a look at the architecture at an early stage and giving tips. Or by providing an entire team of developers at a later stage. We also help startups with recruiting.
“Our support is like a balance”
Our support is like a balance: We build things to get momentum going, but then scale our involvement back again as the team grows internally. In the end, we hand the responsibility back to the internal team and take our leave. That’s how we give startups a real boost.
Munich Startup: You offer startups “engineering for equity.” What does that mean exactly?
Nicolas Olberg: Engineering for equity (paying for software engineering with shares) is something we view as an option for working together with startups. We obviously know that it isn’t always easy for a startup to pay the customary daily rate for IT services, recruiting support and the like. So it makes a lot more sense to find a cooperation model that shares the risk. Engineering for equity is a variant that allows us to give startups a boost with our software engineers.
It’s not our goal to always make this kind of deal. We’ve noticed that the initial situation for startups can be very different. Based on that, other risk and collaboration models could make sense, such as convertible loans.
What other investors think about Twip
Munich Startup: What is your relationship like with other investors?
Michael Adersberger: We’re in a range of talks at the moment and are trying to establish trust among potential co-investors. We’re raising awareness among investors about the fact that we give startups an advantage in their development, especially in early stages. Another important point for our relationship with investors is that we can’t acquire too many shares in early stages, because the startup needs to remain attractive for later investments. That limits the amount that we can put into individual startups. So we’re currently planning a ticket size of 200,000 to 300,000 euros.
Nicolas Olberg: The feedback from investors is heterogenous: Some are skeptical because they think outside skills shouldn’t be added to a startup too early on. At the same time, you also have VCs who can immediately think of several cases that could use our help over the short term to get a startup going in the right direction faster and significantly increase their potential for success.
“Positive impact is our motto”
Munich Startup: You mentioned that you’re looking for startups that need you and who offer your developers interesting projects. What else are you looking for?
Michael Adersberger: Our motto is positive impact, because we believe it’s the central issue for our generation. We’re already facing concrete problems, like climate change and over-population. This is also made apparent by the virus that’s been part of our lives for much too long. We see it as our duty to play an active role in dealing with and solving these challenges.
Munich Startup: Are you working with the definitions from the Sustainable Development Goals of the UN?
Nicolas Olberg: We thought about whether three or four of the SDGs could play a particular role for us. But that was actually very difficult, because every one of the goals is of major relevance and we didn’t want to deliberately exclude any of the subjects. But there are subjects – such as health, education, resource conservation and carbon reduction – where we strongly believe that we can offer particular added value. What’s clear for us is: If a startup isn’t striving towards any of the 17 goals, then getting involved is a no-go.
From first meeting to final negotiations
Munich Startup: What’s the process for your investments?
Michael Adersberger: It starts with getting to know each other by taking half an hour to talk with the founders and understand their idea. It then continues with a pitch to the Twip team. We’ve developed a dedicated list of questions that covers all areas. The next step is a detailed analysis, which we use to delve deep into technical and market-oriented solutions. We also communicate with industry experts at this stage. This is followed by the decisive second pitch event, which is when the final decision is made: Are we going to invest? Then the final negotiations begin. There are often smaller projects to get to know each other before that, where we can highlight our added value.
Munich Startup: What startups have you worked with already?
Michael Adersberger: We didn’t start on an entirely green field, but rather in collaboration with startups that had already worked actively with MaibornWolff and QAware. On the QAware side, an example is the Allianz founding Syncier. Another example is the online event platform Magnid, which QAware boosted from a WordPress prototype to a scalable cloud solution with 250,000 users in six months.
Nicolas Olberg: With MaibornWolff, one extremely successful example of collaboration is Green City Solutions in Berlin. It was such a positive experience for us in terms of building the startup’s engineering team, in addition to expanding the technical solution together.
Twip recommends coopetition – also based on their own experience
Munich Startup: You told us that Twip was founded by two companies that actually also compete with each other. What have you learned from the process that you could pass on to startups?
Nicolas Olberg: Of course, MaibornWolff and QAware are competitors in some way. In spite of that, we’ve had a very friendly and close relationship for quite a long time and discuss all kinds of subjects beyond company boundaries. Twip has once again shown us that we’re much stronger when we work together. And that’s exactly what I would tell startups. Try to think in terms of partnership and, where it makes sense, to learn from each other and reach a higher level of efficiency together – to act based on coopetition and come together to find a better answer than on your own.
Startups need passion, commitment and self-discipline
Munich Startup: To be successful, a startup needs to…
Nicolas Olberg: be passionate and committed. I’m always particularly impressed by a startup when the team is seriously fired up about their product and when I notice that they can tell a convincing story about why that specific problem needs solving.
Michael Adersberger: have a true customer focus. What always worries me most is when startups have tunnel vision when it comes to pursuing their ideas and thinking about features, but then they end up losing sight of who they’re building the product for. You obviously need ideas, but you can’t just pursue every musing, but instead have to validate what the customer needs. To do that, you have to cultivate extreme self-discipline. Really good startups pull it off.
Munich Startup: How have you experienced the Munich startup scene so far?
Michael Adersberger: We started in the middle of the pandemic when you couldn’t really meet up with anyone. I miss the direct contact, especially when it’s a matter of determining whether things can function on an interpersonal level – which is necessary if you want to work together and make an investment. But there were also virtual events that impressed us. A great example is the UnternehmerTUM Demo Day, which was held in December. It was spectacular and really worked well.
“The Munich startup scene has always been so kind to us”
The Munich startup scene, and the startup scene in Germany in general, has always been so kind to us and has consistently put us in contact with exceptional people who have helped us refine our ideas.
Munich Startup: Who should interested startups get in touch with?