The start-up world exudes a huge fascination that attracts many young talents, but also more experienced employees. What motivated you personally to make the move from corporation to start-up?
Sebastian: My decision was a relatively easy one: I saw the digital train speeding past and was worried I would miss it. I really wanted to get on board.
Dorle: For me, two reasons, which gradually dawned on me, were pivotal. The more responsibility you are given in a corporation, the further you slide into political dimensions and endless decision-making cycles. I started noticing it more and more after I had my two children and realised I wanted to invest less time in coordination and processes that, in my opinion, were not solution-oriented. Plus the fact that the air is thinner the higher you climb up the career ladder and everyone is competing for certain positions and status symbols. My current employer Ableton, a manufacturer of software and hardware for musicians, gives me a lot more freedom and scope to shape things myself.
Thomas: Barzahlen, a fintech company that enables online shoppers to pay in cash, was in a growth phase and looking for employees with management experience and a wide knowledge of the industry. They wanted to bring some seniority to the start-up and get a coach on board to accompany them on the path to professionalism. I fancied a new challenge and new prospects.
Christopher: I had noticed that people in corporations often had the wrong way of thinking. In a start-up, you’re more likely to think from the customer’s perspective and not from a business one. Kapilendo’s offer isn’t more expensive or cheaper than that of a bank – but we offer customer-relevant added value: higher interest for investors and marketing potential for the borrower. Plus, classic banks are still lugging all the regulatory red tape around with them, and it’s all about reducing costs and the marketing of existing products. In a start-up it’s a lot simpler, faster and more focused on the customer. So, to sum up, the whole customer perspective was my main reason for leaving my job and establishing Kapilendo.
As a start-up founder, you have a lot of responsibility for your staff and the company, and the risk and uncertainty are comparatively high. Do you often yearn for the days of fixed structures and less responsibility again?
Christopher: Having a solid corporate roof over your head does have its advantages. Knowing that it won’t rain in on you, no matter what you do, is reassuring. There are benefits to working in a corporation, but they can be balanced out and even outdone by other benefits offered by the start-up world. I don’t find myself wishing to go back to those days, I’m very happy with the decision I made. I really can’t imagine my everyday life any other way.
There are a lot of generalisations made when talking about start-ups and their advantages. Do all start-ups “tick” the same way?
Sebastian: No, but there are certain similarities. What every start-up has in common is that everyone is working on a common idea and striving to perfect it on a daily basis. The growth phases for start-ups are similar, as well as the tools they use, like Slack and Confluence. But failure is a part of it too, and lots of start-ups are very much influenced by their founders. And they all have a foosball table!
When comparing the similarities of start-ups and big corporations, what would you say are the major differences between the two worlds?
Christopher: The whole culture in a corporation is completely different. While the stakeholders in a corporation are discussing why something cannot be done, everyone in a start-up is enthusiastic about turning an idea into reality. And if you fail, then at least you tried and didn’t spend years discussing it to death.
Thomas: The skills required of the employees are also very different in each environment. In a start-up, people work very independently and need a high level of adaptability in everything they do. We have to react quickly and flexibly to the opportunities that arise.
Dorle: As an employee, you should ask yourself the question of whether you’re the type of person who needs a regulated workflow and clear structures, or whether you can react flexibly and work without being given precise instructions and cut-and-dried responsibilities.
Christopher: Building on from that, there is another difference in the frequently mentioned topic of security. In a start-up, every round of financing you lose out on can instantly mean the end to your business. In a corporation, a loss of two billion euros wouldn’t necessarily affect me as an employee, nor would I put this loss down to my own personal performance. In a start-up everyone is fighting to survive on a daily basis.
This “fight for survival” you mention shows that not everything is rosy in start-ups. What challenges are you still facing?
Christopher: As we grow, the desire and need for structures is becoming more apparent, which raises certain challenges. Somewhere along the line we had to introduce a meeting culture, for example. But in our company, we make a point of cutting all meetings short after two minutes if we can’t clearly define what the benefit of it is for the customer. In a corporation, a one-hour meeting will always last one hour, regardless of content and objectives.
Dorle: The fact we are getting bigger is also an issue for us. In some areas we need new structures and processes and there is a certain – justifiable – worry that corporate-style structures could restrict the organisation’s flexibility and freedom to breathe. Keeping the balance is extremely important – even when faced with 240 opinions that all need to be heard.
Compared to start-ups, age and hierarchical pyramids often substantially overlap in corporations. How do you, Thomas, for example, deal with the fact that Sebastian Seifert, the founder of Barzahlen, is a lot younger than you?
Thomas: I’m often asked that question and I don’t know how to answer it because it’s not really an issue for us. There’s a wide spectrum of ages and experience. We profit from the knowledge of individual employees through very flat hierarchies, in which it’s the content and not the age that really matters. I’ve also discovered “reverse coaching”, in which us oldies can learn a lot from the younger employees, about the perspective with which they approach subjects and tasks, for example. But I still always lose at table football!
Just 15 years ago, a lot of young professionals at the beginning of their working lives wanted to work for corporations, and then later at one of the four so-called GAFA companies (Google, Amazon, Facebook, Apple). That seems to have changed today. What, in your opinion, are the key factors for so many young people wanting to ride the start-up wave?
Dorle: The main driver is the sense of purpose, which plays a very big role in our company. 60 to 70 percent of our staff are musicians who have turned their dream into a profession and spend their days developing the instruments that they might use for their own performances or music. On top of that it’s also the self-efficacy and the opportunity to get involved with things outside your actual job scope. Our hierarchy and down-to-earth atmosphere are other factors that mean we see our founder at work every day, for example.
Christopher: I think it’s because you can contribute proactively from the outset and are able to see what you’ve achieved on a daily basis. And because you are given personal responsibility and the opportunity to contribute your own ideas. People want to get their ideas out there and actually do work that is meaningful. When I was working as a consultant, every single Monday morning when the alarm went off at 4:00 am I used to ask myself what the point of it all was. And then the time came when I simply didn’t have an acceptable answer anymore.
Thomas: Due to our size alone, we are extremely dependent on interns who are very much involved from the very beginning and without whom the business wouldn’t run at all. In a start-up, everyone has the feeling that they’re needed. That’s an important driver for young people!
Sebastian: I can only confirm what’s already been said: you have much more of an influence on the product and the work itself. And regarding the security: I need the security of being able to work freely on the product, rather than being lulled into a false sense of security that I won’t fall down the hierarchical ladder.
Recruiting the right staff for start-ups is crucial to their success. How do you find and convince new employees to come on board?
Dorle: Sometimes through classic processes like tenders etc. But we also recruit a lot of our staff from our own community and network. Sometimes we employ new members of staff without having a crystal-clear idea of their future role. We might meet someone with a brilliant mind, and then the role often just develops around them.
Christopher: We mainly recruit people from our network and don’t always know what job they should do to begin with. We just give them a desk and see how they can contribute. And money isn’t the decisive factor either. People are not necessarily looking for reward in a monetary sense, but more in the form of work-life balance and flexibility, as well as a passion for the product and a sense of purpose. Inner motivation is a lot more pronounced in the start-up environment. We can even pitch against a €150,000 salary offered by Deutsche Bank, although we might only be able to offer half of that.
Salary aside, what other reasons might persuade you to go back to a corporation?
Sebastian: In principle, the form of the organisation is secondary, I just need to have the right people in the company and the right parameters. The way they work and think is what matters.
Dorle: I need inspiring people who I can learn from and who think in new ways. If certain matters and people can be spared from corporate structures to a certain extent, then I would also find the right conditions in a corporate group.
You’re all familiar with both worlds. What do you think corporations can change to become more attractive to young talents and take on the appealing vibe of a start-up?
Dorle: It depends on who you have working for you. If it’s people who want to make a difference and independently move things forward, then they have to find a suitable culture where they can make an impact – on everything from structures and processes to responsibilities down to the design of the workplace. You have to be prepared for that and live with the demands and needs. So the entire corporation has to open itself up and decide whether it should take these new paths or not.
Sebastian: An exciting approach would be to combine corporate structures for individual central tasks with smaller teams for the core business, in which employees could be free to shape things themselves. Or smaller teams and activities completely outsourced to reduce anonymity and develop a new work culture. A lot can be learnt from the working methods and mindsets of start-ups.
Thomas: Trying things out, finding employees who aren’t resistant to change and giving them the space to do things in new ways. Putting the focus on smaller matters instead of on departments. When a task is brought to the attention of a small team, the employees have a specific, tangible goal and strive to achieve it.
Christopher: I’m also a fan of stand-alone solutions without oppressive hierarchies. Commerzbank, for example, has paved a promising way with their Start-up Garage. Outside of the group, customer-centric products have been developed that, depending on their success, are then implemented in the company – without having to introduce an overwhelming change programme.
Dorle: When the working models like work flexibility and other types of decision-making processes are fundamentally changed, then that poses a big challenge, especially for middle management. The role of the manager is changing: from a mere delegator of tasks to a role as a coach and advisor, who sees their opinion as just one of many. When an existing organisation undergoes big changes, it triggers feelings of insecurity that have to be dealt with early on. I’m sure that management and staff want this change, but personally I think it’s mainly these role insecurities in middle management that tend to hold up the whole process.
Sebastian: Everything we need is already there. Apart from a new way of thinking: developing a culture in which mistakes are dealt with constructively, not simply copying start-ups, redefining the company and being disruptive, i.e. disrupting conventional behaviour for the sake of the cause. The basis of this is trust in your staff. It’s at least worth trying. But whatever you do, don’t believe that everyone in start-ups goes around wearing flip flops and shorts and plays table football – I’ve never worked as much in my life as I do now, and it’s never felt like so little because the fun, focus and success simply surpass everything else.
Thank you for talking to us and all your fascinating insights!