Sustainable Business Ideas Dominate

More than 200 guests from Germany and abroad attended the 4th HHL International Investors Day on June 13/14, 2017 hosted by Germany’s leading entrepreneurial university. This unique event brought together founders with potential investors, established enterprises, and successful start-ups from HHL to promote an active exchange. The guest list included Dr. Alex von Frankenberg (CEO of High-Tech Gründerfonds), Prof. Dr. Tobias Kollmann (Chairman of the Young Digital Economy Advisory Board of the Federal Ministry for Economic Affairs and Energy), Dr. Rouven Westphal (Managing Director, Hasso-Plattner Capital), Dr. Jan Wiedei (Head of Digital Sales, Deutsche Postbank AG) as well as Antje Strom (Partner Audit at KPMG). The event focused on the new opportunities and challenges of software as a service, artificial intelligence, energy management and medical technology as well as the smart city. During the event, start-ups received awards within the framework of several founders’ competitions – e.g. the HHL Best Founders Award and the Best Bio-Based Business Award which came with EUR 2,000 and EUR 500 in prize money respectively.

HHL Dean Prof. Dr. Andreas Pinkwart drew a positive conclusion of the event, commenting, “Over the last few years, HHL managed to create a tight network of founders, business angels, venture capitalists and established companies for Leipzig as a city of innovation with the HHL International Investors Day and to attract the members from as far as Silicon Valley with exciting topics to come to Leipzig. In addition to the annual two-day meeting with an exclusive framework program, the partners support the founding teams of HHL and SpinLab all year round in various ways; e.g. as coaches, mentors and investors. This increases Leipzig’s appeal as one of the most sought-after start-up hubs in Central Germany.”

Start-up Binee wins HHL Best Founders Award

Alongside the other events of the International Investors Day, a multi-tier international start-up competition was also held. The HHL Best Founders Award, which includes EUR 2,000 in prize money, went to the Binee team. Once a participant of SpinLab – The HHL Accelerator, the company allows for the collection and return of small electronic devices, such as smartphones, financed through advertising. Binee CEO Martin Jähnert is thrilled about the award, commenting, “Winning the HHL Best Founders Award shows us that we are on the right path with our business idea. The prize money will go directly towards the production of the next Binee recycling boxes.” The second award, which was also sponsored by the Association of Friends of HHL and comes with EUR 500 in prize money, went to the start-up Hawa Dawa. The company, which is headquartered in Munich, offers an innovative method of recording and displaying urban air quality.Hawa Dawa measures, models and visualizes the state of urban air quality in real time, using a spatially distributed grid of inexpensive sensors.Live data analysis makes local air quality available as a resource for automated decisions for the first time, carrying great potential for fields such as smart city, smart buildings, eco-mobility and health care management.

Hawa Dawa also won the KARL KOLLE Prize, worth EUR 1,500, for the best technological idea. Hawa Dawa CEO Karim Tarraf said, “The award shows that digitalization enables the development of new opportunities for concepts to solve the greatest environmental problems of our time. Hawa Dawa contributes to shaping the future of our cities. If it is known and not just assumed how high the air pollution in a particular place is at a certain time, the costs incurred can be better apportioned to the people responsible, preventive measures can be applied more effectively and, as a logical consequence, the future can be molded in a more environmentally friendly manner.” The start-up madebymade received the Best Bio-Based Business Award, which was given out for the second time and comes with EUR 500 in prize money. The young Leipzig-based business feeds residual materials to the larvae of the black soldier fly. Sustainable protein meal and other usable by-products are won from these larvae. These are intended to replace the primary, mainly imported, feedstuffs fishmeal and soy. The first production site is supposed to open this year. CEO Kai Hempel says, “The Best Bio-Based Business Award encourages us in our efforts in continuing to develop and work on the idea with all our strength. We will use the prize money as a travel budget for negotiations with potential partners and investors.”

Artificial intelligence produces new business models for start-ups and established companies

During a panel discussion on the opportunities and challenges of artificial intelligence on the eve of the International Investors Day, Frank Schmiechen, Editor-in-Chief of the Gründerszene business journal, stated, “Most processes, communication channels and productions can be re-imagined and designed more effectively with intelligent technologies. This results in new business models; mainly for start-ups which are able to take existing business models to the next level with the help of artificial intelligence.” Fabian Westerheide, Coordinator of Artificial Intelligence at The German Startups Association, confirmed, “Every enterprise, every government, every human being has the need for new products to remain innovative and in business. In Germany, however, there are not enough start-ups in the fields of logistics, robotics, finance, automation and health care. There is a great backlog in this context which also represents a unique opportunity for companies to solve problems on a sustainable basis.”

For digital location politics in Germany

Opening the International Investors Day on June 14, Prof. Dr. Tobias Kollmann, Chairman of the Young Digital Economy Advisory Board of the Federal Ministry for Economic Affairs and Energy, appealed for action by the federal government, saying, “We urgently require a separate Ministry of Digital Affairs in Berlin as well as a standardized structure for digital politics in the federal states.” Moreover, according to the professor, Germany must see itself as a digital part of Europe. Only with combined forces will Europe be able to stand its ground in the competition with the United States and Asia as a digital economic area. Prof. Dr. Kollmann also demanded, “The components of digital location politics should include more investment in broadband networks, creating fair competitive conditions and the promotion of start-ups.”

“The VC industry in Germany is not profitable enough”

Dr. Alex von Frankenberg, however, countered that there was not enough financing available in the system. The CEO of High-Tech Gründerfonds (HTGF) said, “There are sufficient funds for the seed phase in particular, while capital is limited in the growth phase.” The expert named low return on investment as one of the reasons, commenting, “The VC industry in Germany is not profitable enough.” Dr. von Frankenberg also dispelled the impression that the number of business start-ups was decreasing. “Looking at the increase in deal flows, these are investment proposals, one may conclude a growing number of start-up founders. Maybe fewer people do freelance work, however, there more real entrepreneurs with technology-based ideas.” Dr. von Frankenberg also contradicted the assumption that start-ups would find it easier to receive funding in Silicon Valley. “While a financing round in the Valley may produce about 32 percent, one at the HTGF could reach as much as 67 percent.” While Dr. von Frankenberg views governmental support for entrepreneurs in Germany as positive, he is critical of German venture capitalists. “Some still say that blockchain is a temporary trend which will blow over. Certainly, just like the Internet once did,” the CEO of HTGF said with a smirk.

“Banking is personal and digital”

Dr. Jan Wiedei, Head of Digital Sales at Deutsche Postbank AG, provided a perspective from the financial world, at the 4th International Investors Day. “Digital Business and Digitalization have probably been the most discussed words in the last two years. Common sense tells us that something big is coming. It will affect growth, efficiency, technology and culture. However, companies tend to view the required actions differently; some financial institutions view digital as a discussion about apps, others view it as having the potential to significantly alter business patterns, USPs and the way we create value for clients, shareholders and employees. The fact remains that traditional ways of running the business will change significantly.” Dr. Wiedei sees the potential of artificial intelligence (AI) and software as a service (SaaS) mainly in sales and services in daily banking. “Look at call centers; it is likely that in a few years AI will answer the plain vanilla questions directly and an agent will concentrate on the complex ones. With SaaS, it’s the same situation; financial institutions invest huge amounts of money and focus, for example, on being compliant with the regulations. Is that a USP in itself? No. So why not share this cost,” asks the financial expert.

How digitalization influences energy management technology and companies

How does an established energy company handle increasing digitalization? According to Hans-Joachim Polk, Board Member for Infrastructure/Technical Affairs at VNG – Verbundnetz Gas Aktiengesellschaft, corporate culture must not be disregarded in this matter. “We work on establishing the mindset required for digitalization in our company,” says Polk. For this purpose, a small business was founded which provides VNG with insight into relevant start-ups, trends and challenges. Viessmann Group, a family-run business, also builds on digitalization. “We must evolve from a mere hardware company to a hybrid provider of both hardware and software services,” comments Timo Tauber, from Mergers & Acquisitions of the manufacturer of heating, industrial and cooling systems. According to Tauber, the change is necessary as hardware is increasingly becoming a replaceable good. “We have to reposition ourselves to remain competitive.” Viessmann Group hired over 100 new employees to form a “digital team”. According Tauber, it is not enough to build start-ups; rather the mindset of all employees needs to be changed in such a manner that further promotes innovation and digitalization within the company. Especially in this context, fully integrated, intelligent networks would lead to a breakthrough. According to VNG Board Member Volk, decentralization is not a solution for efficient management of intelligent networks. “There will be new forms of energy consumption. We should not oppose this trend but rather find new solutions. Efficiency is important. We need more intelligent systems and networks,” says Polk. The expert also talked about energy storage. “We are still relatively inefficient with the existing storage solutions. Without intelligent storage solutions, the renewable energy movement will not work.”

Smart City or “The threat is real and not science fiction”

Looking back at the Smart City panel, moderator Jun.-Prof. Dr. Vivek Velamuri, who holds the Rolf Schrömgens Professorship in Entrepreneurship and Technology Transfer at HHL, commented, “It was astounding that, following the basic definition of a smart city, which uses digital technology to improve services and welfare, we focused the discussion on the well-being of the citizens. This refers more to a social than a purely financial or technological concept. In this context, we also discussed the fields of health care, education, and politics in addition to aspects of e-mobility and energy.” According to Jun.-Prof. Velamuri, many of the smart cities are not located in Europe but in the developing countries because the desire to solve urgent problems was greater there. Commenting on the challenges for smart cities, the HHL lecturer says, “Data security is a much-discussed topic. Many examples have shown that the threat is real and not science fiction.” Jun.-Prof. Velamuri emphasizes that start-ups play an important role in developing new, often unconventional ideas.

Digitalization in health care focuses on the patient

Against the background of a complex and cumbersome health care system and the movement away from standardized towards personalized medical care, Dr. Rouven Westphal, Managing Partner and Managing Director at Hasso Plattner Ventures, says “Start-ups which cooperate with applications such as Gesundheitscloud (health cloud) can move and achieve great things by providing services which allow patients more self-determination.” The Gesundheitscloud is a patient-centered platform for health care data which takes into account data security aspects as much as patient education regarding the conscientious utilization data. According to Dr. Westphal, the work of physicians must be reassessed as a result of digitalization. Many of the services which doctors provide can be automated and therefore replaced. The documentation activities alone, which take up 85 percent of doctors’ work these days, could be reduced by up to 50 percent using digital processes.”

The 4th HHL International Investors Day on June 13 and 14, 2017, was organized by the Center for Entrepreneurial and Innovative Management (CEIM) and the Stiftungsfonds Deutsche Bank Chair of Innovation Management and Entrepreneurship (Prof. Dr. Andreas Pinkwart). Numerous well-known sponsors and supporters such as CMS Hasche Sigle, Deutsche Bank AG, Dell, DZ Bank, the Association of Friends of HHL, Grazia Equity, Heinz Dürr Invest GmbH, KARL-KOLLE-Stiftung, KPMG, Leipziger Stiftung für Innovation und Technologietransfer, Leipziger Verlags- und Druckereigesellschaft mbH & Co. KG (Madsack), Mittelständische Beteiligungsgesellschaft Sachsen mbH (MBG), Porsche Leipzig GmbH, Quarton International AG, the Saxon State Ministry of Social Affairs and Consumer Protection as well as taskforce management on demand AG and Technologiegründerfonds Sachsen provided additional support for the event Partners of the 2017 International Investors Day are the City of Leipzig, GISBERT, the BioEconomy Cluster, media partners Junge Gründer and Gründerszene, the founders’ network of the Leipzig universities SMILE/SMILE medibiz net as well as SpinLab – The HHL Accelerator.