9 tips for scaling up a deep tech company in Germany

If you’re on planning an expansion to Germany as a startup or a scaleup, then take some lessons learned by heart.  Silicon Canals interacted with one of the Berlin-based business developers from EIT Digital – Wolfgang Kniejski. Here are the top pieces of advice that came out of the discussion.

#1 Change the approach

“Each country needs a different approach when it comes to marketing and sales. In Germany, especially in the deep tech area, it is important to rethink your marketing strategies and plan the budget expenditures accordingly. For example, there was a French cybersecurity company (the name can’t be disclosed) that came to Germany and when they raised money from a German investor, one of the investors insisted that they should have a ‘German Champion Board member,’ a high-level expert who knows the cybersecurity market, it’s behaviour, structure, circumstances and who has the capability to provide hands-on support as a Board member. Indeed, we helped the scaleup to recruit the expert Board member and to establish a legal entity in Munich. Furthermore, the expert also helped to grow the business in Germany successfully.”

#2 You need to have vast networks of contacts

“It’s not about one person having the contacts, it about a team of experts in different market segments and different channels having a diverse network. Let’s say, if I know how the telecommunication channel works, it’s not necessary, that I would know how the automotive or logistic sector works. And this is where EIT Digital accelerator plays the main role, as we have a vast network and we know a bunch of innovation directors, managers and executives in different market segments, with whom we also organise matchmaking events. They review and shortlist the scaleups they’re interested in, and they provide the scaleups with their opportunities to pitch and close the deal.”

#3 Sales executive should be a local

“It is important to understand the German culture. It does not mean that the scaleup founder e.g. from France or from the Netherlands or another country, needs to be perfect in German. They should hire a local sales executive that’s is familiar with the local culture.”

“What I mean over here is cultures and languages are two different things. Language is not an issue; however, culture is. That is exactly what I term as ‘language barrier.’ It is important to understand the culture of a country, which a local German sales executive would understand better than, for instance, a French sales executive who can speak the German language.”

#4 Success component is very important to the salespeople

“In Germany, there is a relatively lower base salary but a higher incentive compensation. This leads to a totally different cost calculation because sales cost gets added on to the original units or service costs, hence the success component is very important for the German salespeople. A German salesperson may also ask for various in-kind support. For example, a car or a first-class German railway tickets as an add-on from the social compensation aspect, which can be considered by them as motivating factors.

#5 Location decision depends on where your customer is

“I think it’s a good idea to look into Berlin if you want to start up a company. There’s a lot of financing for startups in terms of business angels, early-stage investors even later stage investors. The ecosystem is one of the biggest in the world. But then again, it depends on where your customers are or which sector does your deep tech scaleup target. If you’re into the finance tech, then it’s Frankfurt, if it’s automotive it’s Stuttgart, Munich or the area around Wolfsburg. If you’re into logistics, then you could set up your branch office in Hamburg or Mannheim. So, it really depends on your target customers.”

#6 Use local contacts to get your innovations into the market

“It is advisable to have local contacts or to get in touch with the renowned local accelerators, to achieve success.”

For example, a Bulgarian health monitoring scaleup called Checkpoint Cardio was a big success when scaling to the German market. They developed unique patented wearables based on Artificial Intelligence (AI) for online diagnostics, prevention and emergency reaction for cardiovascular diseases. With the technology, they saved several lives in Greece, Bulgaria and Russia. However, nobody was keen to work with them in mid-Europe, because there main medical monitoring center is in Bulgaria and no one in Europe had heard about them before. But, with the help of the EIT Digital accelerator programme, they signed the first contract. We accepted them into our portfolio last November, and – until now – we have accumulated € 535.000 revenue for them already. That’s one of the big success stories, which is based on local networks and local contacts, which help us grow together.”

#7 Different meetings require different dress codes

“The dress code should be in a way that how a scaleup wants to position itself. If you’re talking to a technical guy at a customer level, then its good to have a smart dress code approach. You may wear a pair of jeans and a t-shirt with some technical prints. Or one may wear a Polo shirt with the logo of the company. But if you’re going to have an introduction meeting at the decision-making level of the target customer, then it’s good to wear a jacket as well. Meanwhile, at the corporate level, not many people wear a tie anymore, so that can be skipped.”

#8 The two main elements of business cards

“There are two important elements to be taken care of in terms of business cards. Firstly, the logo is very important, it has to be visually nicely designed from a marketing and branding point of view. Secondly, the name and the job title font should be easily readable and shouldn’t be printed too small.”

#9 Introduction emails should include attachment instead of being too long

“The decision maker is not making decisions alone; the person will circulate your information to other people involved in making the decision. So, make sure your introduction emails are to the point and not very long. Instead, one can propose a follow-up call or meeting to discuss the next steps. This kicks the process and keeps the ball rolling. Furthermore, if you really want to share more information about your scaleup, include an attachment in the form of the presentation of use cases in your email.”

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This article is produced in a collaboration with EIT Digital. Read more about our partnering opportunities.