“Doing nothing wrong, does not mean you are doing the right things”

 

We are excited to welcome Christoph Ostermann to the SET Ventures team as our Entrepreneur in Residence. Through a fireside chat with René Savelsberg, Managing Partner at SET, we would like to further introduce Christoph to you and share his views.

René Savelsberg: “Christoph, with your entrepreneurial background as a founder of, among others, sonnen, and now active also as a private investor, what do you think are the key differences between the entrepreneur-view vs a VC-investor opinion, and what can we learn from each other?”

Christoph Ostermann: “I think that investors and entrepreneurs have different perspectives on the way we look at certain aspects of an early stage company. As an entrepreneur I instinctively have a pretty operational view. I always look at the company from the perspective of where are the weaknesses, and how can we fix it. What are the assets and how can we use those for further growth? Maybe from the investor’s point of view this is not a major focal point because you do not intend to interfere with the daily management or have the urge or ambition to run the company yourself.”

René: “I think this is indeed how investors want to see and understand risks [down side] where entrepreneurs see opportunities [for improvement]. Your comment shows the operational perspective of an entrepreneur.”

Christoph: “Indeed. But I do believe that both investors and entrepreneurs have a dynamic perspective on how they evaluate companies. We both look at risks and opportunities but emphasise different aspects.”

René: “One important aspect for investors is of course the team. Ultimately we invest in people and we want to see the team we invest in and the promise that the team will be there after the investment and deliver. Also we ask ourselves whether we can find the right people to augment the team in the near future. Would you say an entrepreneur is more optimistic op this topic?”

Christoph: “Obviously entrepreneurs are a bit more optimistic here; you can always find the right people for the right job. However, that is a lesson I could learn from investors, to not be too optimistic with teams.”

René: “In your time as CEO of sonnen you have dealt with and been approached by many investors. Is there solely commonality to be found between investors or are there a lot of differences?”

Christoph: “I think especially corporate venturing is a different ballgame, with a lot of differences between them. Simply because the company you are representing as a potential investor differentiates you from the other players. However, looking at the typical VCs, I think they look very similar in how they position themselves at first sight. The only thing that differentiates them is the fact that they are also represented by individuals. Those individuals determine the differentiation, and that’s what makes all those VCs completely different. At the end of the day, the choice of an entrepreneur to go with which VC really depends on that individual representing the firm, because it is the only differentiator.”

René: “I can relate to that. In a situation where we look at a company in more detail, we naturally ask a lot of questions. I think it’s equally important for a management team to understand what kind of investor they are trying to attract.”

Christoph: “Absolutely. I did not fully understand the difference between venture capital and private equity at first, and the business model that drives each of them. But here is also a learning for investors: it’s important to show why you’re different, because seemingly there’s a lack of differentiation from the outset and ultimately entrepreneurs decide based on the individuals representing the investor.”

René: “Is that also a reason for you to join SET as an Entrepreneur in Residence (EIR), to be aligned with SET and to learn how we as an investor look at opportunities? We are of course interested in the perspective you bring into our discussions, but are you personally interested in the investor’s perspective?”

Christoph: “Absolutely! I would say that I am somewhere in the middle of my learning curve: I am not as stupid as I was in the beginning of my career and have learned a lot in the past years. This new EIR role will be really insightful. After ten years of sonnen I am excited to do and learn something else and not jump on the next operational role. In re-adjusting after I left the sonnen I quickly realised I cannot just sit at home and want to do something which I consider to be meaningful and interesting. That’s why I decided to join SET.”

René: “Maybe some last words on the energy transition. What is your view on the global transition and what part do early stage companies play?”

Christoph: “At the end of the day this transition is happening and a new energy system will arise. The technology is here and for many applications it’s already price competitive. It’s not happening quickly enough yet because companies and consumers feel like they need to give up something. No one wants to pay more and/or give up convenience. People need be willing to compromise more. But it is not necessarily a matter of extrinsic pressure, it is also a matter of culture within companies to deal with change. If companies focus too much on risk-based management, short-term they are not doing anything necessarily wrong, but for the long term they also not doing anything right. Work to do!”