“Car Guys” vs. The Disruptors: Germany Week in Review

 

CBS students at BMW Welt planning next “big idea”

Dr. Wolfgang Bernhard ‘88 is a proud man. He’s fit, maybe 5′ 11″ tall, his sharp chiseled facial features and touch of grey hair complement a finely tailored navy suit with a silver pocket square. When he speaks, he is assertive and charismatic, a commanding voice easily fills a room of 30 MBA students. Most importantly, Dr. Wolfgang Bernhard is a “car guy”.

Bernhard was the former Chief Executive Officer of Mercedes-AMG GmbH and would later hold various positions, including being a member of the board of management of Daimler AG, before retiring in 2017. Bernhard embodies the classic German ethos of discipline, hard work, first-one-in-last-one-out, and the “no bullshit, do-it-yourself” mentality. As an executive, he was not afraid to get his hands dirty by often taking monthly shifts on the Mercedes manufacturing line. “Know your business,” he tells us with a serious look, but slight smile. He continues to talk about German-engineering excellence and how hyper focus on attention to quality and improvement is unmatched. As he speaks to us, he is calm and composed…that is, until the topic of Tesla comes up.

“You need to be really good at manufacturing…they’re not. They’re just an IT company…that moved into auto…and they talk about the hell of manufacturing…that’s what it is! That’s what it takes to get the job done!  And for them it’s hell and for us it’s art! For hundreds of years we have been honing that art!” he states with just the slightest hint of red in his face. The subtext of his words are more powerful than the literal criticism. This wasn’t just about Tesla versus Mercedes, massive disruption in the auto industry, or even Elon Musk’s hubris…it was about something much deeper…the German identity.

Dr. Wolfgang Bernhard – Photo by Daimler AG on Flickr

Bob Dylan famously writes, “Come gather ’round people wherever you roam and admit that the waters around you have grown…you better start swimmin’ or you’ll sink like a stone, for the times they are a-changin.” While not as profoundly German as Nena’s 99 Luftballoons, Dylan’s quote encapsulates the point of contention at the heart of the German cultural and business identity as we approach the end of a decade. Dr. Wolfgang Bernhard’s career represents what has made the German auto industry so successful in the past, a commitment to excellence through laser-focus on the singular objective of car quality. But in a rapidly changing automotive and technology landscape, does putting on blinders stifle unique opportunities for innovation?

This is, of course, the opinion of Dr. Volker Bilgram, of HYVE – The innovation company, and Dominik Böhler, of the Technical University of Munich. In both presentations, the term “car guys” was used to describe the old school German state-of-being defined by risk aversion, over-engineering, and bureaucracy. This mentality was in straight opposition to the new wave of German startups that espouse bold innovation, human centered design, and flat decentralized work culture.

Paul Günther of Proglove

Founders of Proglove Paul Günther (product engineer) and Thomas Kirchner (CEO) embody this new wave of German startup culture. Kirchner is a former IDEO employee and with Günther, a former BMW employee, created a smart glove for industries. The glove was created through rapid prototyping and iterations incorporating continuous feedback from manufacturing workers. Contrary to the culture espoused by Wolfgang at Mercedes, the culture at Proglove empowers workers to choose when they start their days and provides access to unlimited vacation. But the auto industry isn’t the only sector German disruptors are attacking.

A short flight to Berlin, brought us to a fintech start up called Number 26 (N26). N26 is a mobile bank that offers millennial friendly features such as cash from any ATM without fees, instant account management and security, and real-time notifications. A week after CBS visited N26, the company closed a $160M round of funding  which is one of largest European fintech investments ever and clearly causally linked to our visit. N26’s success comes as a revelation as traditional European lenders, such as Deutsche Bank AG, continue to struggle posting its 3rd annual loss in a row.

*Quick meta note that Deutsche Bank decided to cancel our company visit on the day of, which is also causally linked to their string of failures.

I’m losing my train of thought trying to balance a clear theme of lessons learned in Germany while also trying to sum up the company visits for the week.  In the meanwhile…here are some more cool pictures to help illustrate the trip:

CBS visit to Factory Berlin – A community of startups

BMW Welt – The building is made to look like 4 cylinders of a car engine

CBS students (who received the red sweater navy pants memo) at Spotcap 

CBS at the Berlin Wall

Ok, I’m back! So just to recap, we have this cultural shift in mentality from the big German business players represented by Wolfgang Bernhard, formerly of Mercedes, to the new wave of scrappy startups mostly based out of Berlin’s silicon allee. But a question remains in this risk averse German culture, where does the financial capital come from to fuel the German disruptors?

Our journey in Berlin, took us to Earlybird Venture Capital, a venture capital investor focused on European technology companies. The fund was established in 1997 and has over EUR 850 million under management. While the firm officially funds companies at all stages, they did emphasize that demonstrable traction, such as revenue, is significantly more important to them when compared to their Silicon Valley VC counterparts. We were especially pleased, however, to see that in a male dominated VC world, the two rising stars at Earlybird presenting to us were young women. It is VCs like Earlybird who are enabling the German startup scene to flourish.

Milda Jasaite and Rebecca Hu of Earlybird Venture Capital

It is safe to conclude that the success of traditional and new German businesses will be integral to the countries’ global position moving forward. While we got our healthy dose of what is “new and sexy” in terms of German startups – it would be foolish to throw the baby out with the bath water in terms of the culture that has made Germany so successful in the past – the hyper-focus on perfection. The future of innovation has unlimited potential in Germany, whether it will be the “car guys” or the disruptors (or a combination of both) who lead this future, is still being determined.

-Chris Russell

Our 6 Favorite Examples of German Engineering

1. The ICAROS by HYVE

Sticker Price – 8000 Euros
My WTP – $250
R/E Ration – .4 (Reality/Expectations)
Innovation  Score – 77  (out of 100)
Practicality Rating – 1.2 (out of 5)
American Version – Peloton

The ICAROS is a VR enabled flying workout machine developed by HYVE.  Featured in my previous post, the ICAROS creates a rush of adrenaline and high expectations upon first glance. The design looks as though a one-person-seesaw procreated with an iPhone to create a sexy monster of a workout machine. In reality, however, it’s a good workout that engages the core and stretches the lower back, but the VR is lackluster with low resolution video and simple game play (fly through rings) mechanics. I experienced a little of the VR spins/dizziness, but I think it is something I would get used to if I used everyday. Overall, the ICAROS is a bit of a hype beast that would likely collect dust in your home and best belongs in an equinox or other overpriced gym.

2. The Paradise Cleanseat Power by CWS-boco

Sticker Price – 1770.36 Euros
My WTP – $2,177.54
R/E Ratio – 1.8 (Reality/Expectations)
Innovation Score – 90  (out of 100)
Practicality Rating – 3.6 (out of 5)
American Version – Dirty Toilet Seat

There are some products in life that you never knew you needed, but after one taste of that sweet nectar, you now struggle to live life without it. Meet the Paradise Cleanseat Power by CWS-boco, a self cleaning toilet seat. CWS is a Swiss company, but boco began as a laundry service by Bernhard Burmeister in Hamburg, Germany in 1899. 109 years of cleaning craftsmanship has culminated into the eloquence of design and practicality that is the Paradise Cleanseat Power.

3. The Mark by Proglove

Sticker Price – 850 Euros (scanner) + 8.50 Euros (gloves)
My WTP – $10
R/E Ratio – 1.3 (Reality/Expectations)
Innovation Score – 55  (out of 100)
Practicality Rating – 4.5 (out of 5)
American Version – Wait…there’s manufacturing in the U.S.?

Imagine the glove that Spiderman uses to shoot web, but instead of using web to fight crime, it uses a bar code scanner to shave 3 seconds off installing a part into a BMW! The Mark by Proglove and all of Proglove’s products are named after ex boyfriends and girlfriends of the team as a way to remind everyone that sometimes you have to let a good thing go to get to something better (this is 100% true). While not the most exciting of innovations, the Mark gets the job done as manufacturers see the return on investment within 3 months of having workers switch to its part scanning solution over traditional bar code scanners.

4. Tilt Turn by Veka

Sticker Price – Call for price a.k.a. Super Expensive
My WTP – $1200 (for 3 windows)
R/E Ratio – 2.1 (Reality/Expectations)
Innovation Score – 82  (out of 100)
Practicality Rating – 4.9 (out of 5)
American Version – That window that barely opens in NYC

The simple and blissful experience of using the Tilt Turn window by Zeka is unmatched by anything found in the states. The sensation one feels as your hand grasps the handle and gracefully tilts…and dare I say…turns the window, is just glorious nirvana. Well actually its more of a turn then tilt, but we’ll let that slide because it is such a great example of German engineering. I’m not the only weirdo who loves this window – check out an entire Tilt & Turn podcast by 99% Invisible. Nothing more can be said about this amazing product, well done Veka…well done!

5. Speed S +Plus Self Service Podium by Zumex

Sticker Price – 7290 Euros
My WTP – It is worth mortgaging your house or selling 2 Hamilton tickets
R/E Ratio – 10.0 (Reality/Expectations)
Innovation Score – 100  (out of 100)
Practicality Rating – 5 (out of 5)
American Version – Sunny Delight (As in everything else tastes like sunny d in comparison after you try this)

Ok so we are cheating a little with this one, but that is just how much the entire Innovation Aus Deutschland class loved this thing. The Speed S +Plus Self Service Podium by Zumex is a Spanish made orange juicing machine…there I said it. But alas, we found a loophole! Siemens (As German a company as possible) makes the PLM Software Solid Edge that enables Zumex to create better products through 3D design, simulation, manufacturing, data management and more! And lets face it, there’s nothing more German than creating the thing inside the thing that builds the thing. Please watch the above video to see why we love this juicer so much!

6. Narrow Band Iot Device by IoT Venture

Sticker Price – It’s a Protype so free?
My WTP – The price of a fitbit
R/E Ratio – 1.0 (Reality/Expectations)
Innovation Score – 77  (out of 100)
Practicality Rating – 3.2 (out of 5)
American Version – Find my iPhone

Did you know that 30% of all bikes in Berlin are stolen and only 5% are found? To be honest, I didn’t fact check this, but that is the claim of IoT Venture, a Berlin startup that is a member of the startup community Factory. IoT Venture uses new narrow band technology to build tracking devices that have longer battery life, better security, and deeper indoor penetration for more accurate tracking than the current solutions. The company is currently in a prototype phase, but hopes to help solve Berlins bike crisis when it launches. Although many were tempted to take the prototype as a souvenir, we were quickly informed that they would be able to track us down (which I thought would be the greatest product demo ever).

-Chris Russell ’18

Innovation Aus Deutschland: The Case Against Thiel’s Europe

3D printed mesh created at the Technical University of Munich

I’m willing to wager that the majority of American entrepreneurs, VCs, and startup enthusiasts have come into contact with Peter Thiel’s Zero to One: Notes on Startups, or How to Build the Future, at some point in their careers.  It is required reading in Owen Davis’ Launch your Startup class and for founders, such as myself, the book is somewhat of holy text that must be close to arms reach at all time.  Underlying Thiel’s lessons on building monopolies, selling products, and nihilistic consultant haterade*, however, is a deeply American ideal to innovation.

*haterade – excessive negativity in the form of a beverage

He writes, “Even the Great Depression failed to impede relentless progress in the United States, which has always been home to the world’s far-seeing definite optimists.” Thiel argues that it is bold planners (definite optimists) who truly innovate: “A startup is the largest endeavor over which you can have definite mastery…it begins by rejecting the unjust tyranny of chance.  You are not a lottery ticket.”

Now I’m not one to drape myself in red, white, and blue, shouting “Amuurricaa!” at a Toby Keith concert, but something about Thiel’s words evokes a strong sense of American pride (along with a montage of Michael Bay explosions, Top Gun theme music, and Steve Jobs).  Particularly, this the case when Thiel juxtaposes this depiction of American innovation with what he calls European “Indefinite pessimism.”

He writes, “Europeans just react to events as they happen, and hope things don’t get worse.  The indefinite pessimist can’t know whether the inevitable decline will be fast or slow, catastrophic or gradual.  All he can do is wait for it to happen, so he might as well eat, drink, and be merry in the meantime: hence Europe’s famous vacation mania.”  Thiel’s depiction serves to inform the foundation of the stereotype that Europe does not innovate like its American counterpart.

With all due respect to Mr. Thiel, I believe it is time for him to take a trip back to Germany (ironically, the country where he was born).

Let’s start by highlighting our trip to the Technical University of Munich (TUM), whose MakerSpace rivals any found in the United States.  TUM is the epitome of the German effort to innovate through agile practices, supplying entrepreneurs with the resources to rapidly prototype ideas and build “Minimum Viable Products.”  3D printers, laser/water jet cutters, textile and electrical facilities, and machine and woodworking shops are at fingertips of TUM students.  At this point, you may be thinking tuition must be out of control at this University (especially those of you who paid 200k+ for those English BAs) and you are right…the number is astounding.  A German citizen pays 0.00 Euros to attend the Technical University of Munich.  Moreover, there is no application process, and all are accepted!

At this point, you may have just dropped your iPhone, so take a second to collect yourself.  Let’s reiterate, “GERMANS PAY $0 TO ATTEND TUM AND HAVE ACCESS TO MILLIONS OF DOLLARS WORTH OF EQUIPMENT!!!”  As our TUM guide Dominik Böhler stated, “We believe people should be able to kickstart their ideas…and we have a 100 million EUR fund to invest in entrepreneurs.” TUM students are working on a variety of innovations including creating a prototype of Elon Musk’s famous hyperloop.

Taking a bus ride from TUM to closer to the heart of Munich, we arrived at HYVE – the innovation company. HYVE is an innovation consultancy firm in the same vein as IDEO and Frog in the U.S., a.k.a. innovation as a service (IaaS?).  Many are familiar with design workshop magic, but something unique about HYVE is their emphasis on crowd sourcing innovation. Dr. Volker Bilgram walked us through how HYVE used posts on forums and blogs to design an IoT package locker known as PaketButler.  PaketButler is basically a virtual “doorman,” (doorperson…it’s 2018 folks), that allows a package provider to deliver goods, informs the user of the delivery via smart phone application, and securely locks the package until the user is back at home.  The iterative prototyping process was continuously informed by feedback from customers online.

A short trip downstairs led us to the pinnacle of German engineering.  The ICAROS.  The ICAROS is a VR enabled work out machine, or as I like to call it, the Peloton for flying.  Priced at an extremely reasonable 8,000 EUR (yeah, it’s primarily B2B), the ICAROS combines your fantasy of flying with your nightmare of dying in a horrible plane crash into the side of a mountain.  I personally was pretty terrible at the game, but definitely felt it in my core afterwards (which was good considering all the Paulaner Salvators I have consumed).

The most fascinating aspect of the ICAROS is that it was developed internally by HYVE for HYVE.  This may seem weird that a consultancy firm would use its profits to develop its own innovations (that have a high chance to go bust), but this speaks to the German sense of the pride that one has no right to advise if one cannot do it on his or her own.  The ICAROS has gone on to win multiple awards and has been included in the German Accelerator – a program by the Federal Ministry of Economic Affairs and Energy (BMWi) that helps German start-ups to get to know the US market.

With our trip to Munich wrapping up, I think it’s safe to say that Germany has a lot to offer in terms of entrepreneurship and innovation.  I recommend that Mr. Thiel update Zero to One to reflect this (but please don’t Gawker me!  You are still right about most things…unfortunately).

Next stop is Berlin, the home of a booming startup scene!  Until then, stay classy, CBS.

-Chris Russell

Brazil Company Visits

Joe Qiao ’17

I would like to first respond to my presumptions from my previous blogs. One of my observations during the weekend was that Sao Paulo was a quiet and calm city. I wanted to see if the city will become hectic on workdays like other similar size cities around the world such as Tokyo or Shanghai. After two days touring around the city, my observation tells me that Sao Paulo is indeed a calm city. We had traffic but nothing like those in New York. We saw people on the street but nothing like those seen in Beijing. We see some high-rises but nothing like those in Hong Kong. Like I said, Sao Paulo has its unique charm from the relax and calm environment. I do have a question. Where are the 20 million people? !

The second observation was that Brazil does have a large income gap between the rich and the poor. Brazil’s GDP/ Capita is slightly over $10k, which is almost doubling that of China. However, the rich part of the city looks like any developed countries around the world whereas there are still many slams in and around the city. I can see why it is such a priority for the Brazilian political leaders to address the inequality problem in the society. I was told that Sao Paulo and the Southern states are considered the wealthiest part of the country. The Northern states and Northeastern states are in very bad shapes.

Back to the topic of company visits. I have previously attended world tours in a few cities but I have to say that the company visits in Brazil so far are the most professional and well-prepared. The company presentations were full of interesting content. For example, we had so many questions during our Natura and Suzano visits that we run over our schedule in almost every session and had to rush through our plant tour. Sadly we didn’t even get to shop at Natura after all the talks about their all-natural and environmentally-friendly products. We had a great time regardless. I was pleasantly surprised that the companies were so willing to receive us and spent a lot of effort giving us the best experience. The CEOs of both Natura and Suzano gave us warm welcome and high level company officials gave speeches and took us on the tour. We asked so many questions during the presentations. Of course the best questions always came from Professor Singh’s “I have two questions for you”.

My favorite experience was seeing the wood logs turning into packaged A4 paper at Suzano’s factory. Learning about how the company became so efficient made me wonder if I still want to work in Finance after graduation.

We also had a great time at Ambev and learned a lot about beer market in Latin America. We had a happy hour in their office and enjoyed some good food and beer. One of my takeaways was the Zero-Alcohol beer taste just like a regular beer!

And of course, I have to show off my favorite picture from today!

Great experience so far and I look forward to seeing Rio tomorrow! Stay tuned.

China is different

Over the last 2 weeks, along with 30 classmates and 2 professors I explored China, visiting Beijing, Shanghai, Hangzhou, Hong Kong and Macao. Our trip was centered around technology so in addition to hiking the Great Wall and eating Chinese delicacies like chicken feet we visited 10 of the biggest Internet companies and Venture Capital investors in China. On average, the Internet companies are only about 10 years old but have an astronomical number of users and huge valuations.

The biggest lesson that I took from our company visits is that business in China is different:

1) Chinese companies do not need to go global-

With a middle class of over 250 million people, more than 300 cities with a population of at least 1 million people, and over 800 million Internet users, China is like nowhere else. The local internet population is still under-served so there is a lot of opportunity to grow and no need for Chinese Internet companies to look outside China! Their focus is on making their products more “sticky” (a term we heard multiple times) and bringing more solutions to their existing Chinese consumers.

2) The big internet companies are so large that they do everything at once-

We observed that as Chinese internet companies grow, their growth does not follow that of internet companies elsewhere and it is difficult to pinpoint what their main business is.  For instance, the food delivery company that we visited called Meituan started off as a coupon website similar to Groupon, but it now also does coupons and restaurant ratings similar to Yelp, food delivery like Grub Hub and it is also a search engine like Google. The stories of Alibaba and Baidu are strikingly similar to this.  Baidu went from a search engine to food delivery. Alibaba has recently gone from e-commerce into the gaming industry.

These companies were able to do this because they typically did not face much competition in their early years and they were able to raise so much capital that when faced with the question of how to expand they looked at different business verticals instead of looking outside China. I also noted that although none of them is profitable and that even though their margins are a fraction of similar US businesses (food delivery margins in China are a tenth of US food delivery companies) they are focused solely on volumes, which I guess is what counts with that population.

China’s market is so big that it stifles its companies looking outside of China.

3) Chinese companies do not have counterparts outside of China-

Contrary to what I had heard before my visit, Alibaba is not the eBay of China.  JD.com is not the Amazon of China and Didi is not the Uber of China. While the tech may be similar, the details of their operations are completely different to the US and I was impressed to see how much they are innovating and devoting to R&D. They are not just copying from the west.  One company we visited, a subsidiary of Alibaba called Ant Financial has spent close to $250 million developing technology for anti-fraud transactions and is the first company to successfully develop facial recognition and retinal recognition technology that can be used for everyday transactions. They showed us a demonstration and it was effortless!

3.1) This was one example of China becoming a leader in tech advancements especially in Artificial Intelligence. We were informed that close to 50% of all research papers on Artificial Intelligence in 2016 came from Chinese researchers. I am not surprised because in every city that we visited, our tour guide was quick to point out the universities and to mention how many of the top 10 universities in China were in that city. With such a strong talent pool and money at their disposal, Chinese companies are investing heavily in R&D. I left China convinced that Chinese companies will definitely be responsible for a bigger proportion of the technological advancements of the next 10 years.

3.2) China is the real home of BIG DATA.

Before visiting China, I constantly heard of the term ‘Big data’ but until now I did not have a real appreciation for what it is.  The companies that we visited, especially Tencent and JD.com have the real “BIG DATA”.  They are able to collect so much data on their hundreds of millions of unique users from where they eat and shop, how they bank and how they spend on electricity.  To put big data in perspective, Ant Financial the digital finance company that I mentioned earlier, has more than 500 million users, which is almost 10 times the level of the biggest banks in the world. This gives them access to a huge volume of information on default rates, which in turn will allow them to make more informed credit decisions than traditional banks.  Interestingly, my group was curious to know if the government had access to this data but when we asked this question it was intentionally not answered.  Either way, with the size of data available to Chinese Internet companies, it will be fascinating to see if they utilize it to become the leaders in the BIG DATA age.

4) I observed no signs of a slowdown in the Chinese economy.

I had read that the Chinese economy slowed from nearly 8% to 6% growth but I did not see anything like this. That could be because people have become wealthy in such a short space of time. In the last 10 years, GDP per capita has increased from ~$2k to ~$9k. You can see it everywhere with luxury retail brands, the dining out culture, the smartphones and the hundreds of Porsche’s and Audi’s that I have seen people driving. The Chinese middle class is not slowing down and the bottom line of all of the companies that we visited also does not seem to be affected. They continue to invest and are chasing phenomenal growth rates.

5) “There is an entrepreneurial hunger in China like nowhere else.” These were the wise words of the founder of China’s biggest VC, Qining Ventures. He said to us that in the US, there is a lot of innovation but in China there is entrepreneurial hunger, which the Chinese government is fueling by funding and backing early stage startups. It was self-evident everywhere we visited and is a practice that I have read the Nigerian government, is trying to replicate.

Bankole Cardoso ’18

Chazen China Tech/Innovation Study Tour

 

Trabi Safari and Final Thoughts

The final day in Berlin began with a late start in the afternoon. Having completed our company visits, we dedicated our remaining days to exploring the city.  A number of us went to watch a local soccer match and others went on their own to explore various museums and historical sights such as Checkpoint Charlie.

The Trabant was once the most common car in East Germany

A small group decided to rent several east-German made communist era Trabant Cars for a tour around the city. With an ignition system resembling a motorcycle’s and an unconventional manual transmission, the Trabi was not only a vehicle of questionable safety but a moving piece of history.  While driving through the city we were educated on German history through walkie talkies provided to each car.

In the evening, to cap off our trip we all met for dinner at Spindler Klate- a waterside restaurant that turned into a night club.  After a series of toasts we had our final celebration before leaving for New York the next day.

As we boarded our respective flights back to New York, we began to reflect on the week long trip.   We were able to see German production excellence and innovation applied in different settings, we became familiar with several institutions (UnternehmerTUM) that were resulted in these products, and we learned how this commitment to excellence and process was applied to the world of startups.  Moreover, we learned how the German companies communicated their history and how they looked to the future.  Finally we were able to engage in open dialogue with very business leaders on issues ranging from corporote strategy to career paths.  While we all had different takeaways, it was clear that we all had learned a tremendous amount.

Starting in the industrial heartland of Bavaria and ending in the entrepreneurship capital in Berlin, we had lot of ground in a very short time (14 companies in 5 days).  I cant help but feel that my curiosity regarding this amazing country has only increased.  I leave Germany with memories to last a lifetime but armed with some new theories and techniques to apply to my own career.  Truly an unforgettable trip.

Diego Cuenca ’16

Chazen Germany 2016

 

Replicating Businesses Globally, Internet Retail, and a Creative Space for Entrepreneurs

We woke up early in the morning after our day in Stuttgart and boarded a direct flight to our final destination: Berlin.  The capital city boasts a population of over 3.5 million people with an economy that revolves around the high-tech and service sector.  Recently, the city has seen the emergence of a bustling entrepreneurial scene.  We went directly to two leaders in the startup space Rocket Internet and Zalando.

Rocket Internet was founded in 2007 and is now a public company that has based it’s operations on copying the business models of other established companies and replicating this in different geographies.  At the meeting we learned more about the process in which they hire founders to execute on a strategy in different countries.  They actively avoid countries where local incumbents are present or have a distinct advantage (China, USA, and increasingly India).  The roll-out of these strategies is very standardized despite each subsidiary company possessing very different markets or products.  The company attempts to marry local knowledge and agility of a startup with the precision of a large corporation.

Following our meeting with rocket we then made our way to one of their run-away success stories.  Zalando is also now public and got their start imitating US retailer Zappos.   Here we met with the SVP of Operations, David Schroder (who spent a semester at CBS), to learn about how the company plans to be Europe’s largest fashion retailer.  We learned about the challenges of growth and how they struggled with credibility issues before reaching scale.  The company now has a presence in many European countries including Germany, Austria, Switzerland, France, Belgium, the Netherlands, Italy, Spain, Poland, Sweden, Denmark, Finland, Norway and the United Kingdom.

After checking in the group went to an Alumni Mixer at Bar Le Labo – the city’s first liquid nitrogen bar – for some appetizers and drinks with Alumni, Columbia University Students, and prospective business school students.  During the night the owner Le Labo, Tobias Wittich, showed us his co-working space (Rainmaking Loft) where entrepreneurs can avail of a seat for minimal cost.  Further the loft hosts global startup programming such as Startup Bootcamp.  Current residents of the loft are involved in many different industries such as fintech, food, and transportation.

Rainmaking Loft – A Berlin co-working space and host site of Startup Bootcamp.  The mural in the back was done over 24 hours by a visiting artist

Following this tour and reception we all enjoyed a night out in Berlin before heading back to our hotel to prepare for the last day of company visits.

Diego Cuenca ’16

Chazen Germany 2016

Bosch, Auto Production, and an evening with Wolfgang

We arrived safely in Stuttgart and made our way to the headquarters of multinational engineering giant and the world’s largest auto supplier – Bosch.  We learned more about Bosch’s global footprint, how they encourage innovation internally (seeding and allowing employees to pursue startup projects), and how they invest as venture capitalists.  Bosch stood out from many corporate VCs as they are a total separate entity from the company and actually measure their performance against other VC firms not just their own operations.  We also learned that Bosch is owned 92% by Robert Bosch’s own charitable foundation and the company remains private to this day.

Following lunch we headed over to a Mercedes Benz’s car plant in nearby Sindelfingen where they produce models such as the S-Class and E-Class cars.  While we were not allowed to take videos or photos of the assembly process or final finishing we were able to snag a few photos of the customer center and witness some G-Class testing

Once the plant tour began we saw the large scale automation taking place in the plant. Over 90% of the process is automated mostly from robots purchased from another German Technology Leader- Kuka Robotics.   Cars are taken from building via covered bridge and conveyer belt from the automated assembly stage to the more manual finishing stages (which include badge installation, custom interiors etc).  Even at the manual finishing stage, many of the processes were automated or ordered using systems and analysis many of us found familiar from operations management and our study of the Toyota Production System.   It was an eye opening experience to those of us who had never been to a factory floor let alone a world class automotive operation like this one.

After a quick rest stop at the hotel we then suited up and headed for the highlight of the day- an evening with Daimler Truck CEO- Wolfgang Bernhard at the executive dining facility of Mercedes Benz Headquarters.  After a short introduction to the company, a review of his current priorities, and the CBS experience – he quickly launched into open Q&A with the group.  We then sat down for dinner and the gracious CEO sat down with each individual small group table to address any questions we had.   We covered topics such as what to do post-MBA to what is the future of autonomous driving.   Truly an unforgettable experience.

With a full belly and fond memories of Stuttgart we began the process of preparing for our final stop… Berlin!

Diego Cuenca ’16

Chazen Germany 2016

Engineering and Helicopters – on the way to Stuttgart

A sample power generation component weighing 50kg  printed as a single piece- deisgned by Dr. Kiener of Siemens

After a packed first day in Munich, the group was set to travel to Stuttgart but first a select group of students elected to travel to another famous Munich organization and the largest engineering company in Europe- Siemens.  We were met by the Venture group at Siemens, the Key expert of sustainable engineering (Dr. Christoph Kiener), as well as the management department of the company.  The company was founded in 1847 by Werner Von Siemens (the inventor of the first electric railway) and has grown into a company with over 70bn euro in annual revenue.  Today the company addresses the engineering needs of a wide variety of industries: power generation, automation, fire safety systems, and software.

Recently, Siemens has supplemented a strong academic research and development program with a collaboration with startup businesses.   The company supports business creation incubators such as TUM’s UnternehmerTUM and invests in startup businesses with technologies may be integrated into Siemen’s current solutions.

Following the Siemens visit the group set out for Stuttgart but made another stop at Airbus Helicopter (formerly Eurocopter).  Unfortunately due to strict policies the group was not allowed to take any photographs or videos.   During the tour the group was able to view the different stages of development for helicopters used for both military and civilian use.  The tour was led by former design engineers who had spent their life designing helicopters used in key military campaigns in Afghanistan and had on occasion earned their job in the company through the submission of their aircraft design.  Finally, the group was able to observe the construction of AirBus commercial airplane doors which were also being constructed at the facility.

After the tour reached it’s conclusion we headed to the nearest grocery store o stock up on food and drink before traveling to our next destination city- Stuttgart.

Diego Cuenca ’16

Chazen Germany 2016

 

CBS visits Bavaria’s Capital City

The CBS Chazen Germany tour started off with a Segway/electric bike tour through Munich. The group made its way through the city center and maxvorstadt.  During the tour they saw the Eisbach wave, various museums, TUM, and other landmarks. This was followed up by a three-course welcome dinner at Kafer Schanker.

 

On Sunday, the group woke up bright and early to rent some BMW performance cars and drive out to the Neuschwantein Castle about 2 hours outside Munich. After a guided tour through the castle, the students then headed out for a tour of the BMW Welt and Museum- a multi functional customer experience exhibition facility where customers can experience the automaker’s various model lines and even take delivery of their cars.  The students learned more about BMW’s history, the company’s focus on design and the driver, as well as the architecture of the Welt itself.  The day was capped off by a visit to the Hofbrauhaus (Munich’s oldest beer hall).

 

Professor Farrokhnia and Dr. Helmut Schonenberger speak to students before entering the Makerspace

The next day, began  with a morning trip to the Technical University of Munich’s Garching Campus for a visit to the UnternehmerTUM -the university’s center for innovation and entrepreneurship.  The students toured the Makerspace- a unique facility that allows the public to rapidly build and prototype.  The space features woodworking facilities, 3D printers, and textile stations. The Columbia students along with TUM Engineers then participated in a design sprint -led by Professor Farrokhnia-designing the perfect remote control in 2 hours.

 

 

3D Printed Race Engine Mold at EOS

The group then visited EOS – a leader in 3D printing and additive manufacturing. The group learned more about the company from Head of Sales- Denis Demirtas- they sampled 3D printed items such as a titanium Formula 1 Pedal.  They then toured the company’s headquarters, and observed a range of polymer printers and metal 3D Printers before returning to Munich.

 

 

 

Testing out the equipment at eGym

In the evening, the group visited eGYM- one of Europe’s fastest growing startups focused on the fitness hardware and software space. After a brief presentation by Chief Engineering Officer- Christian Schraml- the group tested out the gym’s tech-enabled gym equipment and enjoyed dinner while mingling with team members and investors.

Overall a great first city to visit during the trip. Now onward to Stuttgart

Diego Cuenca ’16 Germany 2016