WEBVTT 1 00:00:00.000 --> 00:00:03.000 Episode 2: 20 Years of Building Cost Software 2 00:00:00.000 --> 00:00:03.000 . 3 00:00:05.000 --> 00:00:08.000 Sasan: Hello everybody. Welcome to the second episode of Beyond Cost. Today's guest Thomas Dieringer We are super thrilled he is manufacturing entrepreneur software entrepreneur sales leader investor mentor and a lot of other things Thomas father and father Awesome that you're here Thank you for coming to the podcast and maybe in the beginning just a general intro from your side and then we hit it off. 4 00:00:34.000 --> 00:00:37.000 Thomas: Yeah, Thank you for the introduction happy to be here and to give you some insights about my personal career and how it how the industry will develop from my standpoint. 5 00:00:44.000 --> 00:00:47.000 Sasan: Yeah, Thomas thank you I looking at your career it's I was preparing for the podcast I had the feeling you had multiple careers multiple lifetime of careers but you actually started very much in manufacturing You were part of [00:01:00] a injection molding company It was a family company that you took over so how was that like basically growing up with manufacturing around you. 6 00:01:09.000 --> 00:01:12.000 Thomas: Yeah, I mean, that was my second step. My first step unfortunately was an Nixdorf representative in Eastern Europe which was that time pretty unique because there was not a real big companies were not really existing in Eastern Europe and Nixdorf was pretty famous in the German manufacturing industry. So, I founded a company in Hungary tried to sell something was completely unsuccessful for more than a year. Then the German wall the Eastern European wall broke down in 1989 and suddenly all the German companies came over to Eastern Europe and we sold like hell. - So it was very successful. All these German companies they had this mix of software all around the world. So it was pretty easy up to 1993 when SAP came out with [00:02:00] R/3 Yeah And SAP. 7 00:02:01.000 --> 00:02:04.000 Thomas: Maybe for the. 8 00:02:02.000 --> 00:02:05.000 Sasan: Audience: Nixdorf, SAP R/3... Could you just give a yeah what we are talking about. 9 00:02:07.000 --> 00:02:10.000 Thomas: Nixdorf had a software which was very similar to SAP R/3 today so with a manufacturing part and controlling part material handling part and so on and SAP at that time had just the mainframe software so most of the companies use the mainframe in the headquarters, but all around the world is Nixdorf software. But when SAP launched R/3 in 1989 1993 that was pretty unique and then suddenly all these German companies said: Hey we will not replace the mainframe software by R/3 we will first of all install it, probably even our newly bought subsidiary in Eastern Europe. So, we made the first SAP R/3 projects together with a partner I had to sell the company at that time because we didn't have any SAP knowhow the 10 00:03:00.000 --> 00:03:03.000 only way how to train people was at SAP because all the partners it was pretty new. All the thing we sold or introduced SAP R/3 in several manufacturing companies and unfortunately ZF was the first company in Eger in Hungary where we introduced the software. 11 00:03:19.000 --> 00:03:22.000 Sasan: But, Thomas have a question here maybe one step back. So, talking about eighties where you started this right yeah. 12 00:03:25.000 --> 00:03:28.000 Sasan: That. 13 00:03:26.000 --> 00:03:29.000 Thomas: Was already 1993 Yeah So and then let's say I left this company I sold it to a German consulting company ... Before we go there. 14 00:03:35.000 --> 00:03:38.000 Sasan: Yeah, You founded that company in the first place. I mean, 1993 most people don't have a personal computer, the internet is not around the corner and you're out there you're like I'm gonna do a very specific software tool for the manufacturing industry how come. 15 00:03:49.000 --> 00:03:52.000 Thomas: Yeah, that was more or less also related to my father because he had in injection molding company at that time in Austria and his head of IT left the company and went [00:04:00] to Nixdorf so and I developed a an a complete production planning software for our injection molding company in Austria. I didn't know that there was something similar existing already from Nixdorf, but let's say the Nixdorf software was more generic. That was I developed at the time was really dedicated to our needs and so I got first time in contact with injection molding with cavities, with cycle times, with utilization, with machinery costs and so on. A nd that, of course, was also helpful when we introduced for example SAP R/3 at ZF in Hungary or in many other companies So I founded this software company in Hungary but then let's say my customers were not just investing in Hungary they invested in Czechoslovakia which was at that time one country. So, we invested in Bratislava but after Czech Republic was separated we had to invest in another company in Prague. [00:05:00] Later on we went to Warsaw and to Moscow. So, I was in Moscow when the first McDonald's was open. Wow So, that were a long queue. So, people waited for five hours that they could enter the McDonald's. For foreigners it was much easier so we could enter it within 50 minutes, but that was a quite exciting experience Let's see. 16 00:05:20.000 --> 00:05:23.000 Sasan: And, you coded yourself I got that right. 17 00:05:22.000 --> 00:05:25.000 Thomas: 18 00:05:22.000 --> 00:05:25.000 Thomas: So, this Nixdorf software we sold was of course a ready-to-use software, we just translated it and all the Eastern European languages we implemented all the regulations the local regulations financial regulations and so on and I parallel developed with two employees the software for our own injection molding company, but then my father got bankrupt in 1996 with his company I bought one of these subsidiaries in Hungary that was a very small company with about 45 employees and just one product that was a TV housing probably you [00:06:00] remember there were small TV sets with a video cassette in it that was the only product that time we had So and then I started to sell let's say or to negotiate and to meet other potential clients. First of all Philips but later on even other companies like Sony, Bang & Olufsen, JVC in Berlin and so on. We got many of these clients and after two three years we also got some contracts with Audi in Győr - indirect because we developed or we delivered cylinder head covers These were different plastic components lacquered for the Audi and unpainted for the Volkswagen group. And we did all many other interior parts for the CD players and so on but what I learned at that time was so first of all the products we produced were mainly for such an such a car radio was a front panel consisting of 15 [00:07:00] different plastic parts which were painted, printed and we also because it was Hungary we had low labor costs we also inserted PCBs cables and so on manually so we used the cheap labor costs of course And yeah So and is there a lot of negotiations with German buyers Yeah based on hourly rates based on how we can reduce the cost. 19 00:07:26.000 --> 00:07:29.000 Thomas: And, I wonder because you and after that your career very much was in the tech industry in the software industry Yeah is there some things where from running really a manufacturing physical factory basically that you say oh these were great learnings I applied basically to everything Yeah that's true because I mean I made a technical school - So I had some basics but of course I never negotiated a plastic part before and I had a lot of learnings because especially Philips they had [00:08:00] an extremely good supplier development program. So, I did not just I did not have discussions only with the purchasing part of Philips there were people from the quality department they came over and they learned me a lot of things you know how to deal with complaints how an 8D report looks like how improvements should be done So they gave me books which I read that time So there was a lot of learnings Let's see how effective developments should work you know so they had a lot of experience how they could let's say reduce manufacturing costs And I used all the learnings of course. 20 00:08:39.000 --> 00:08:42.000 Sasan: Yeah, And later on we'll come to that you went into the procurement space but it's it's interesting in that period you were actually on the other side So did that shape your view on procurement being on the other side and being a seller In the beginning. 21 00:08:53.000 --> 00:08:56.000 Thomas: Yeah, The funny thing is I didn't have a plan to start in procurement So when I had this [00:09:00] injection molding company in Hungary we got a lot of inquiries from consumer electronic automotive companies. And Let's say making a quote and that was pretty complicated because you have in each production process a scrap, which you have to calculate if the late if the last production step is going wrong you know you have to destroy the entire product because then you cannot use the plastics anymore and so on when it's when it's painted. So we developed a kind of very simple Excel calculation sheet Yeah with a database behind you know which was at that time the only way how to do it And when I sold this injection molding company to a Swedish group called Nolato and one year later I started a software development company the first idea was to make an let's say product costing software based on the experience we made with our Excel calculation software. 22 00:09:55.000 --> 00:09:58.000 Sasan: So, something similar to Tset actually. 23 00:09:58.000 --> 00:10:01.000 Thomas: That was very [00:10:00] similar I visited all my Previous customers like Philips, like Sony like JVC and so on I tried to sell them these kind of calculation software which we completely redeveloped in a kind of SaaS application but I got a lot of complaints because SaaS was that time not really common. 24 00:10:18.000 --> 00:10:21.000 Sasan: What time are we talking about. 25 00:10:19.000 --> 00:10:22.000 Thomas: 2001 2002 So right. 26 00:10:21.000 --> 00:10:24.000 Sasan: After the bubble. 27 00:10:22.000 --> 00:10:25.000 Thomas: Right after we were like I'm gonna do B2B SaaS. So, we even didn't know at the very early beginning that's called SaaS you know. 28 00:10:29.000 --> 00:10:32.000 Thomas: Yeah, ! 29 00:10:29.000 --> 00:10:32.000 Thomas: So, that's just let's say somewhere and the internet was not really strong so I got a lot of complaints because of the SaaS security aspect and of course in China for example many companies didn't have internet at that time. So, that was another problem. But The funny thing was we had one potential client which was later on our first customer that was Hansgrohe. So, the company producing bathroom equipment. They liked the concept of the product cost calculation because in [00:11:00] SAP that time the only way to send out an IFQ was I send a company let's say an email and they send me back the entire price of the product but they wanted to get a cost breakdown of the product. 30 00:11:12.000 --> 00:11:15.000 Thomas: So, we developed kind of interface that we receive and request from the SAP We send that to the supplier and the supplier has to fill out in our platform a complete cost breakdown and that was so unique no other company was able to do that. So, Hansgrohe did almost every day a demo for us for another potential client. 31 00:11:36.000 --> 00:11:39.000 Sasan: - So. 32 00:11:36.000 --> 00:11:39.000 Thomas: That was the way how the company was growing So originally the company was planned to be an Part costing software but it then let's say changed to a procurement software Yeah which was of course focused on direct procurement Yeah On direct parts which needs more or less complex calculations behind. 33 00:11:56.000 --> 00:11:59.000 Sasan: I understand And you founded the company in Vienna [00:12:00]. 34 00:12:00.000 --> 00:12:03.000 Thomas: I founded the company in Vienna Yeah I got introduced to some guys being 10/15 years younger than I Really good developers development was done in PHP Which was very common that time for web application even Facebook was developed the first version of Facebook was developed in PHP and so that was the way how it was growing Yeah. 35 00:12:20.000 --> 00:12:23.000 Sasan: And, how because we have that sometimes as Tset it's a very specific topic And be it Now from a company perspective I want to know what is the cost or from a buyer perspective I wanna understand what I'm paying for how should I say Sometimes for people who are not in this world it's not like the most sexiest topic let's say so what how did you motivate people and introduce them to this world because it's you know from for everyday developer or person on the street that you see it's very far away from what they normally have touch points with, no? 36 00:12:52.000 --> 00:12:55.000 Thomas: I mean Most of the developers I could introduced they were developing just webpages more or less easy [00:13:00] webpages because two three years later the interactive webpages with AJAX and so on were starting that was quite interesting for them And the first developer I got was later on my let's say co-founder I gave him some shares 10 years later and we worked together for more than 20 years but originally let's say I was very it was everything Very unplanned Probably that would not be possible today Yeah because everybody's familiar with how a startup is founded How The first let's say year how the second year should work and so on. So, that time when I founded a company that was everything quite new There was not more or less no internet existing where I could learn things You know that was just coming up And when I founded a company I thought I'm the only one with this idea and I think two or three years later there was the first fair in Germany so-called eProcure and on that fair let's say we booked a small booth and so on and then suddenly we saw [00:14:00] 20 other companies you know - having similar ideas Not the same you know not so much focused on direct procurement but very similar they did they developed they made somehow co most of the companies made co-development with the first customer Yeah You know we always had and that was something you mentioned before we always had the advantage compared to other companies that I had this strong A manufacturing background so I knew exactly what companies need and in which direction we should develop. 37 00:14:27.000 --> 00:14:30.000 Sasan: Absolutely No makes sense And some people might say you're good at sales I'm one of them Yeah was sales something that from the very beginning when it was about pull for tool that you were thinking about or did it come later as a necessity or was it just a clean transition out of your manufacturing times where you would sell basically parts Yeah. 38 00:14:52.000 --> 00:14:55.000 Thomas: To be honest even the manufac in the manufacturing company I was not so deeply involved in manufacturing [00:15:00] problems and manufacturing processes. So, I was more the sales guy Yeah Visiting potential clients and in this industry for example in consumer electronics they brought out every year the there was a new generation of DVD players and so on TV sets. So, once as if you don't get the contract You have always a chance the year after for a new contract. 39 00:15:24.000 --> 00:15:27.000 Thomas: Yeah, So. 40 00:15:24.000 --> 00:15:27.000 Thomas: Because every year there was a new release in automotive it was a little bit different because lifetime of a product as you know is eight years you know so it was a little bit more difficult But in consumer electronics every year you have a new chance Yeah So and of course I was doing sales without having any sales training So that was just learning by doing you know and understanding what people need in the software company Of course I also started in sales and marketing My wife she was professional marketer so she did she was responsible for marketing that time. 41 00:15:55.000 --> 00:15:58.000 Sasan: Was she. 42 00:15:55.000 --> 00:15:58.000 Thomas: Your wife or you met her I met her in 2000 [00:16:00] when I was negotiating the exit of the manufacturing company Ah so that was a funny thing You know on one hand negotiating with a potential let's say buyer in Sweden on-site and on the other hand putting SMS with my potential wife you know and telling her oh I love you so much Yeah And probably we can take some holidays pretty soon Yeah funny thing but yeah she was doing the marketing I was let's say responsible first of all for creating a product And then later on of course the sales. 43 00:16:33.000 --> 00:16:36.000 Sasan: Given that you really like are a self-learn person on that field and probably there went into a lot of trial error what was the point where you like looked at back and you're like I'm good at this or was there like a moment Yeah that's. 44 00:16:50.000 --> 00:16:53.000 Thomas: A very good question I think when we were about 25 30 employees we had already two three sales guys and I started to [00:17:00] take external coaches for training So first of all we trained people in conflict management and so generic things But later on we had also trainers for how a professional sales process should look like So when we had a trainer who trained SAP in many areas countries and so on and different ways So I learned a lot about how an optimal sales process should look like but I also learned a lot about value-based selling So the customer is not just buying a product or even some customers don't know if they need a product Yeah So you go there and you tell them Hey look I have here in you at the year and if you buy this software you have this and these advantages and cost savings potentials and so on So and we I had a contact to a university in Austria together with this university We wrote an entire book [00:18:00] you know how An ROI for an SRM solution could look like So that was pretty new at that time Soon we started somehow value based selling. 45 00:18:09.000 --> 00:18:12.000 Sasan: -. 46 00:18:10.000 --> 00:18:13.000 Thomas: And, I also learned a lot from the best in class companies that time Yeah And later who were they. 47 00:18:17.000 --> 00:18:20.000 Sasan: Yeah, So who was your kind of you would look up to or like they're really good at this. 48 00:18:21.000 --> 00:18:24.000 Thomas: At the very early beginning it was SAP let's say SAP, IBM They had very good sales processes Later on it was Cooper that was a high flyer an American company focused on indirect procurement processes and we learned a lot about these company how these companies are doing that And later on we merged with a US company which was financed by American Private Equity So we were really one very large company one of the biggest players worldwide and also. 49 00:18:51.000 --> 00:18:54.000 Sasan: Come to that in a second But before we won we moved there So you did a lot of sales training at Pool4Tool you learnt a lot but you had to your what was your sales [00:19:00] staff before the exit. 50 00:19:02.000 --> 00:19:05.000 Thomas: We had about 15 people in sales Yeah. 51 00:19:04.000 --> 00:19:07.000 Sasan: And, now if a young sales professional would come to you what do you have like a one line sentence or like a number one priority or guideline that you say follow this. 52 00:19:17.000 --> 00:19:20.000 Thomas: Yeah, The only thing is Think how the customer is thinking about you. So, not from internal let's say what kind of features we think we have what you think you have. Think about how the customer is thinking. So, why should I sell why should I buy anything Why should I buy from you why should I buy now. Yeah. 53 00:19:37.000 --> 00:19:40.000 Sasan: Yeah, Fantastic No great And then you already mentioned it so Pool4Tool was rather successful and then another company came into play and they knocked on the door What happened there. 54 00:19:47.000 --> 00:19:50.000 Thomas: Yeah, so we had already a subsidiary in the us we had already a subsidiary in Dubai and in Singapore but that time most of my competitors they got private equity money We [00:20:00] also had an offer from private equity. Let's say we should get about 70 million but on the other hand need to achieve a growth of about 45% year by year we should move our headquarter to the US and I discussed that with my wife and she said Hey we've just got children no way to move now to the US we should stay here try to find another way. And the other way was a kind of merger with a much bigger American company which was called at that time SciQuest we renamed the company in JAGGAER one year later we bought an Italian company called BravoSolution And the combination of these three companies let's say could cover more or less all the procurement company processes you have in a large organization And we were one of the three or four biggest players worldwide. And yeah You know how it's running in private equity one of the first things they did is for every department finance and so on and even for sales and marketing [00:21:00] they hired an external consulting company to improve the company processes and to check let's say how good they are and so on So then again before yeah again I had the chance to learn a lot from these external advisors. 55 00:21:13.000 --> 00:21:16.000 Sasan: Before we go there So this company that then came out of it was Jaggaer but what was going through your mind? When was that? So 2000. 56 00:21:24.000 --> 00:21:27.000 Thomas: 2016 17 Yeah. 57 00:21:26.000 --> 00:21:29.000 Sasan: So, this is basically 15 years after founding Pool4Tool. Yeah So, it's for 15 years you're the founder you're the CEO you're driving this and it's basically your baby. 58 00:21:37.000 --> 00:21:40.000 Sasan: That's right. 59 00:21:37.000 --> 00:21:40.000 Sasan: What and how was that process? Was it hard or were you like okay this just makes sense? 60 00:21:42.000 --> 00:21:45.000 Sasan: Of course. 61 00:21:43.000 --> 00:21:46.000 Sasan: Were you emotional about it or. 62 00:21:44.000 --> 00:21:47.000 Sasan: It. 63 00:21:45.000 --> 00:21:48.000 Thomas: Was it was of course very hard especially for my family because every year started pretty good you know was quite exciting and so on And when I took vacation at the middle of the year I recognized oh we don't have enough [00:22:00] revenue for all the costs we have So Slaters from beginning of the year and vacation I got a little bit Let's see Nero which of course my family recognized And latest in October November I got really busy to achieve the numbers we needed So and let's see we were all the time let's say having we were never making a loss we were always so boots trapped plus minus no external investment over the whole 15 years Yeah we had more or less no external investment we had a small excellent investor who was running our US department - but I financed everything by my own with the money I got from my previous exits, and that was of course a challenge because I and even my family knew if this is not going right I will lose everything I have - so and that was of course always a huge challenge. 64 00:22:52.000 --> 00:22:55.000 Sasan: But, then you came to the conclusion you said okay this just makes sense and coming into a new structure [00:23:00] learning again a lot So. 65 00:23:01.000 --> 00:23:04.000 Sasan: I was. 66 00:23:02.000 --> 00:23:05.000 Thomas: Then at the end the junior partner for this new very large procurement organization and yeah so that was I learned a lot about sales because the US sales is extremely pushy - I mean for me It didn't matter so much if we do the if we close a deal at the end of March or at the beginning of April But private equity is extremely focused on the quarter by quarter results and we had let's see biweekly meetings with the US colleagues but as closer the end of water was coming you know as more meetings we had and at the end of the quarter in the last two weeks we had every night meetings you know to discuss every potential deal: what we could do to close it now and not in two weeks and so on. So, that was pretty hard Yeah Was. 67 00:23:52.000 --> 00:23:55.000 Sasan: Was it a cultural shock for you or was it something that you were like I was thinking like that [00:24:00] anyway but more for your team it was difficult? 68 00:24:02.000 --> 00:24:05.000 Thomas: Yeah, Let's say I expected something like that and it wasn't that kind of shock for me but yeah when I had discussions with my sales guys when it was my company I had sales guys they just mentioned: Hey that's not working, your targets are too high, I will not be able to fulfill it you have to look for another guy, but when I was just let's say responsible for outside the US for the business outside the US it was much easier because I could say to these guys: 'Hey! The Americans gave me that target you have to achieve it otherwise no other way.' So that was somehow easier for me and I think for the team it was a big change, but also the team from my point of view learned a lot and was performing much better after the merger than compared to before. 69 00:24:51.000 --> 00:24:54.000 Sasan: Yeah, And you already mentioned American Sales Team Orly are way pushier do you think that's something that is [00:25:00] good and important for the American market or is it something that we Europeans could look at and learn from globally in our Sales activities. 70 00:25:08.000 --> 00:25:11.000 Thomas: Yeah, I mean Of course I have made a lot of failures and I try to explain the things I have learned to all the founders I get in touch especially to these one where I'm a business angel and in my career especially when I was young I hired people and I thought these people will perform very well. You know and I got somehow especially in the small team you get personal relationships to these guys and if these guys are not really performing well you try to change the chop a little bit so that the chop is let's say is a better fit to their capabilities to their advantages. Sometimes works, but mostly it doesn't work and Americans act a little bit different here. They try to find the best [00:26:00] guy for a special job - And if this guy's not performing in three four months to fire this guy and hire another one. So they have more this typical higher fire philosophy, which they're famous for but let's say I didn't know let's say how it's really working but you seem to have sense. So what do. 71 00:26:18.000 --> 00:26:21.000 Sasan: You say What's your verdict. 72 00:26:20.000 --> 00:26:23.000 Thomas: I've read in a book that this is a typical problem for European companies because Europeans they hire someone they know because they trust these people that they really let's say do their past to help the company founder to help the company to be successful But at the end these people are probably not these people with the best know-how for this position in America This is much more pushy They try to hire really very experienced people with a very with a background who did this job already five times before And that's extremely useful and helpful you know if they have experience especially to for [00:27:00] this special problem to have their resolution They founded already five times different solutions at other companies. 73 00:27:06.000 --> 00:27:09.000 Sasan: So, they're way sharper in terms of organizationally thinking about it's not how to split activities jobs outputs Just take the guy who's really best and let him do what he's best at. 74 00:27:16.000 --> 00:27:19.000 Thomas: It's not just sharper the funny thing is if you are working for Emily you recognize there are two things always two things One is The figures and the other one is the time So it's extremely time-saving because there is a chance that you hire someone who is not extremely experienced and you train this person that this person get the knowledge and so on with let's say internal capabilities external coaches and so on But at the end it's time intensive And if you're working for m and a you don't have time Because the investment period is probably five years - Then m and a also their private equity selling to another private equity or to strategic investor whatever and you always have to keep in mind hey what [00:28:00] kind of timeframe do we have to get to achieve these targets And how could we do it in the best case with as less money as possible and as short as possible You know it's always the combination of time and money Yeah Which if you are run it by your own company and you have let's say 15 years time like I had you are not that much focused on the time, you're more focused just on the money. 75 00:28:23.000 --> 00:28:26.000 Sasan: Understood So it's really complete different mindset return structure Yep yeah But you eventually exited so to say the second part of your journey too with Jaggaer became very successful I think the biggest or second biggest enterprise solution in the area of procurement in general Yeah and but after that you decided to switch roles a bit become a mentor a business angel one might say after so many years of leadership you would beat them with mentoring people and but no you decided to go right into it What was kind of the [00:29:00] motivation after the exit that you were like I would like to you know like work together with the next generation of founders. 76 00:29:05.000 --> 00:29:08.000 Thomas: Yeah, You know Most of the money I invested in real estate so I'm I'm I'm living from the money I get from the real estate but that's very boring this kind of business you know - There is not so much change you know it's not really something for your brain and working with startups on one hand is very interesting And on the other hand I love to work with people and I love to work with young people not so much with old one you know and that's something you can do working as a business angel. T his is extremely interesting. On one hand and the other hand I think it really helps companies to avoid failures, to save time, to save money and at the end to be more successful. Yeah And having a huge network and having the experience how what kind of challenges you have as an entrepreneur in a bootstrap phase or in a series A phase or later on being already let's say invested with [00:30:00] with private equity I think is a complete different challenges you have Is also a different methodology how you have to work and it was always even for my company a big challenge. So, we had employees they were extremely good up to a time when we were 25/30 people. 77 00:30:19.000 --> 00:30:22.000 Thomas: And, then later on let's say being let's say 50 people there is another structure There is another internal way of working together and so on. They were not able to change that. 78 00:30:31.000 --> 00:30:34.000 Thomas: So, we had another people and these people let's say were extremely good up to the time we were 120 130 people and being international and then again we had a similar problem that the company has to change You know that the way how you work together is changing You know we were making a lot of parties and company events at the very early beginning. That's something you cannot do if you are an international you know if you are a lot of people you have to motivate the people in a different way. 79 00:30:59.000 --> 00:31:02.000 Sasan: -. 80 00:30:59.000 --> 00:31:02.000 Thomas: [00:31:00] And some young guys you know they were able to change their own behavior you know and their own way of working but other people couldn't do that you know so we lost them somewhere on the way on the journey and that was very interesting. 81 00:31:14.000 --> 00:31:17.000 Sasan: I see okay and now maybe we have some founders Yeah watching today and they would be very much interested of a capable and knowledgeable investor like you so for them what is a criteria What how do you look as a founder and you say this is founder material I will bet on this one. 82 00:31:34.000 --> 00:31:37.000 Thomas: To be honest when I started this business angel way of working I was very much focused on the idea the business idea. 83 00:31:42.000 --> 00:31:45.000 Thomas: Over the last five years I learned that the team is even important as the idea I have seen extremely good ideas and teams let's say working very difficult together and I have seen extremely good [00:32:00] performing teams you know with an idea which was not very new you know not very modern but extremely successful. So, you can see for both sides from both sides, but I think the combination of the product and the market on one hand On the other hand the team who is let's say working on it that's but talking about. 84 00:32:22.000 --> 00:32:25.000 Sasan: That team Yeah what is What makes a great team? 85 00:32:25.000 --> 00:32:28.000 Thomas: What makes a great team. 86 00:32:27.000 --> 00:32:30.000 Sasan: Yeah, I think for a founder setup so for early stage I wanna start to company like what are the things where you look at it and you're like this is a good working team. 87 00:32:34.000 --> 00:32:37.000 Thomas: I think you have to be on one hand extremely focused Yeah You have a business idea and in this dedicated market pretty often there are already competitors there with a little bit different business ideas whatever, but on the journey you get some let's say the your customers your first customers tell you a lot of things you should be able to deal [00:33:00] with you know or functionality which is missing and so on And I think here in this time it's extremely important that the team is very much focused on one strategy and being in this very narrow market extremely successful before you try to cover a very huge market and being everywhere very light and flat. So that's one of my learnings and so stay on course Set the course Stay on course Yeah And then of course also how you deal with the money Yeah Being let's say the times have changed You know everybody has seen that over the last two years ago growth with everything Now profitability is much more important than two years before - And let's say a lot of companies were not able to thrive The profit so much so that they could reduce the burn rate a lot So you have seen what happened with these kind of companies good idea good people But if the burn rate is too high you have problems and that's [00:34:00] something but what is also important you know to have your costs and to adapt to market changes. 88 00:34:06.000 --> 00:34:09.000 Thomas: Yeah,. 89 00:34:07.000 --> 00:34:10.000 Sasan: So, one of the greatest thing you do As an investor and I firsthand experience is giving feedback you're very good at it how do you balance this between being direct but still supportive or do you say I don't balance it at all If you cannot take it you're the wrong person. 90 00:34:24.000 --> 00:34:27.000 Thomas: Yeah, Well That's a very good point because when I started that I was used to tell people how they should do it and if they're not doing it that way pushing for it but being an external consultant or being an advisor or a mentor whatever you can tell someone Hey maybe that's the better way, but if you got not listened or not recognized then you can repeat it probably one time or two times But that's it and then you have to live with the consequences. 91 00:34:56.000 --> 00:34:59.000 Thomas: Both sides And I was pretty often sitting at [00:35:00] home and thinking how much should I push it now even with the risk that this person is a little bit upset later on. 92 00:35:07.000 --> 00:35:10.000 Thomas: Yeah,. 93 00:35:08.000 --> 00:35:11.000 Sasan: Not with Tset to just be clear Yeah with Tset He never had that experience. 94 00:35:11.000 --> 00:35:14.000 Thomas: Yeah, Yes but yeah you have that with everybody you know because at the end not every founder has the same let's say idea mindset whatever than I have So that's pretty normal and the question is always the same: 'Hey how much should I push here or how much should I just advise or other even other ways how I could teach or let's say explain the guys what kind of alternatives they have? Or what kind of consequences could come up?' you know so that's an interesting way of working togetherAnd I enjoyed it you know And up to now it always worked very well. 95 00:35:45.000 --> 00:35:48.000 Sasan: Yeah, But so yeah Got it And talking about working together 2001 almost no internet. People don't know what SaaS is There was no definition of it The data revolution the cloud revolution now: AI, [00:36:00] LLM models how do you see the future? How do you see all of these new tools especially let's maybe focus on the ai is it just one more tool that we will rather quickly get adapted to or do you think this is more fundamental this will structurally change things. 96 00:36:19.000 --> 00:36:22.000 Thomas: Yeah, Very interesting thing, because when I recap let's see when I founded all of my companies. So, it was always the thing that yes there was already and very established process existing you know a process how companies are working you know even they have let's say worked on their processes for the last 30 years And then was a part of software coming up And this software and it doesn't matter if this is let's see if you're talking about a manufacturing process a supply chain process procurement process whatever So the software was just covering one-to-one The process the manual processes existing before The funny thing now is and you [00:37:00] had to have let's say these companies were more successful having the right technical knowhow And being able to combine let's say software development skills together with the process skills being necessary in this area But now I think it's changing a lot because the processes are changing the way how you do things are completely changing And you have to be you have to have a very creative mindset Yeah To think about how a process could look like in three years and it's much more different what kind of mindset or what kind of knowhow you should have today as it was necessary to have 20 years ago Yeah. 97 00:37:42.000 --> 00:37:45.000 Sasan: I see And now maybe some advice to the companies who buy these solutions may again they're I guess you live the changes in procurement especially in direct procurement from Hey the software looks cool Okay To now RFQ lists and feature lists [00:38:00] and sourcing committees for software projects So what would be your advice especially because you have this approach of value-based selling so you think from their perspective what should they focus on now when they're very big companies and basically these processes going to change What should be their view. 98 00:38:20.000 --> 00:38:23.000 Thomas: Yeah, I mean if you think about Volkswagen or the very large companies how they buy I think they are very experienced They are already having an idea what AI is able to do they have a lot of data engineers They have invested billions of Euros in their own technologies software companies and so on but I think if talking about companies with let's say 1 billion of revenue they have these small teams responsible for processes and tools But they have probably not really AI specialists - [00:39:00] They don't have data specialists. 99 00:39:03.000 --> 00:39:06.000 Sasan: -. 100 00:39:03.000 --> 00:39:06.000 Thomas: And, there's always a question about the mindset of the management team How let's say not how young they are but how willing they are to adapt to potential changes I mean everybody knows that changes are always painful for companies but this is a question of how you structure your own company how you make them ready for changes and I think the chop of a company dealing with AI is not just let's say showing the company the potential ROI but in the future even how processes could look like in the future for things you cannot imagine today you know - but I'm pretty sure that today it's a huge chop to prepare yourself for a supply and negotiation and I'm a hundred percent sure that the whole the entire category management how you know it today will be useless pretty soon because at the end [00:40:00], if you do a preparation for each supply and negotiation indirect you always re redesign your category strategy And I remember 10 years ago you did a category strategy every 18 to 24 month and then it was fine. Today, the world is changing so fast So doing a category strategy every 20 24 month you know would not work Yeah So there are so many changes in terms of a custom, in terms of energy prices, in terms of material prices and so on. So, you have to adapt your strategy all the time and that's something you will see from my point of view in much better preparation for a negotiation considering much more elements, much more data points, most of the things probably done by AI more or less automatically. So, you can consider much more, but at the end you don't need this long-term strategy. You will [00:41:00] reconsider your strategy every month, every second month and the whole the entire company must be much more agile than before. 101 00:41:07.000 --> 00:41:10.000 Sasan: I see. 102 00:41:07.000 --> 00:41:10.000 Thomas: Yeah, So you had long-term plannings in most of the companies for many years And I think even the top management the CEO has to rethink the strategy of his own company Every second month I'm am I on the right way Or let's say do we have to adapt it here or there Do we have to close production sites Do we look for do we have to look for new technology suppliers whatever I think these changes we'll see much more much often much more often than in the last 20 years Yeah. 103 00:41:38.000 --> 00:41:41.000 Sasan: Yeah, Wow Thomas from the manufacturing floor to the future of AI and how corporations need to be more agile even more so than in the past Thank you a lot The incredible Incredibly hard to keep up with you Just a span of topics that you cover and yeah thank you for being part of this for the viewers Thomas is [00:42:00] a great advisor and mentor on both sides Be it you're a startup you're a corporate you buy stuff you sell stuff I think this conversation really showed Thomas can help you out Definitely Then last words to you Thomas. 104 00:42:14.000 --> 00:42:17.000 Thomas: I wish you all the best I think even here in Tset we will see a lot of changes due to the changes in the world you know with political changes in the US European changes and, I'm a hundred percent sure that you will do a great job. 105 00:42:29.000 --> 00:42:32.000 Thomas: Thank you, Thomas. Bye to the audience. 106 00:42:32.000 --> 00:42:35.000 .