Making the visions of start-ups come true

Support in management and financing: In Radstadt, the Make Visions Group makes it possible for great ideas to bear fruit.

Make Visions, says founder and CEO Martin Klässner, does not see itself as a classic financial investor, because in addition to monetary resources, the company from Salzburg also provides promising start-ups with support in the form of a specially developed management method and many years of experience. Klässner explains how he was able to achieve the most successful exit from a start-up to date.

The first thing we notice, is that your website is in English. Why
Martin Klässner: Martin Klässner: We are operating internationally, and bilingualism is always more work. That’s why we decided to keep it uniformly in English. This is quite a pragmatic reason.

Please briefly explain Make Visions’ business model.
Klässner: Klässner: We are a group of companies. With Make Visions Capital, we are a classic investor and invest in early-stage companies with a focus on the energy, robotics, med-tech and life science sectors. With our subsidiaries, such as GrowthSquare, we support companies of all sizes in setting up internal management and strategy systems in such a way that these companies can be scaled strategically quickly and cost-efficiently.

Why did you decide on the two locations Vienna and Radstadt?
Klässner: Klässner: We still have our headquarters in Radstadt in Salzburg. I live in Radstadt, and we built up our first company Has.to.be there and made it big. We also wanted to stay in Radstadt as headquarters with our subsequent companies. In Austria, however, a large part of the IT environment still works in Vienna and the accessibility in Vienna is much better. That’s why we decided to open a second branch in Vienna.

What makes Radstadt such an interesting location? Is it nicer in the countryside?
Klässner: Klässner: The area is beautiful, and I believe that the Pongau region in particular offers excellent opportunities to build up IT and tech companies. On the one hand, IT and tech are some of the few things that can be optimally implemented internationally from a tourism region. On the other hand, we have a lot of qualified employees in the region who definitely have the skills to make a high-quality contribution in the IT and tech sector. Combined with little competition, these are excellent location criteria for setting up a business here.

Is there a trend in IT to move away from the big urban centres?
Klässner: Klässner: In Austria we have the excellent situation compared to Germany that high-speed internet is available everywhere and therefore there are basically no restrictions on where you set up such companies. A very important criterion in the IT environment is to have a low staff turnover. We believe that trust creates innovation. Trust can only be built if employees stay with the company for a long time. A location in the countryside is more attractive than in the city, where fluctuation is higher than in our region.

There are currently twelve investments in which you are involved. In which region are these start-ups located?
Klässner: Klässner: We are currently focusing on Germany, Austria and Switzerland; there are two companies in Switzerland, the rest are distributed regionally across Austria and Germany – from Freiburg, Darmstadt, Berlin, Vienna, to Linz and Radstadt. That is a certain self-restraint. We believe that, especially with early-stage companies, it is simply important to have a close relationship with the founders and the company itself. We do not see ourselves as a financial investor, but as a strategic and operative investor, and we support our companies very intensively and actively. Despite all the possibilities of video conferencing, we see it as relevant not to neglect personal contact, which is why a radius of 1,000 kilometres around Radstadt is useful. This is not a hard cut for us, but we try to move within this radius to be able to support the companies efficiently.

Do you invest your own capital in start-ups, or do you take care of the financing?
Klässner: Klässner: We only invest 100 per cent of our own capital, but we also support our start-ups in setting up follow-up financing, mostly from our network.

How do you select suitable start-ups?
Klässner: Klässner: We have a very intensive but small network in which we search very specifically for suitable companies; on the other hand, we regularly receive inputs and pitches. When we invest, we look first and foremost at the team. We invest less in business models than in people. If I have identified an excellent team that still has one or two barriers in the business model, that doesn’t stop us from investing. We believe that with the expertise we can contribute, we can optimise any business model or business models that are basically product-market fit. However, if we see an excellent business model but no suitable team, that is a no-go criterion for us to invest in such a company.

Is there a margin of error and a percentage of capital that you plan for loss in advance?
Klässner: Klässner: Internally, we assume that about 30 per cent of our investments may not yield a return. Since we start very early or invest in the pre-seed and seed phase, we also have the highest risk. Nevertheless, we believe that our loss rate is lower than that of a purely financial investor because we are also very active in the companies ourselves. We can sufficiently control the strategy and direction of the companies with our Art of Acceleration method, which we are introducing. If there is a fundamental product-market fit, we can establish and guarantee a sustainable development of the company.

Do non-monetary sustainability criteria play a role in the selection of start-ups in which you invest?
Klässner: Klässner: Where we do not invest is in the oil business or weapons factories. Since we are currently very strong in the energy and medtech environment, we basically assume that sustainability factors have been achieved. We don’t evaluate this separately, but we make sure to invest in regenerative companies, in energy optimisation and, in the life sciences sector, in sustainable companies that bring economic and ecological improvements.

What are the three most important factors for you to take on a start-up?
Klässner: Klässner: First and foremost, we only invest in companies when they can demonstrate a fundamental product-market fit. We try to identify companies that have an excellent team and have already developed a product into an MVP (NB: Minimum Viable Product) under their own steam and have been able to win their first customers with it. This is where we come in with our expertise and provide this company with a management method. With the management method that we have developed, we are building a company structure that makes it possible to grow and scale as cost-efficiently as possible and to advance the product strategy to the point where follow-up financing customers can be established. We expect this initial validation in the first instance. We provide support for everything that follows. We support with funding clients, building the strategy execution frameworks and helping the team to scale up.

When is the right time to enter a company?
Klässner: Klässner: We try to enter as early as possible, but so late that we have seen that there is a product-market fit and thus interest in the market for commercialisation. If there is only a concept, we don’t get involved unless we are 100 per cent convinced that it is going to work. As a rule, we expect the founders to have developed a basic product from their own capacity to the point where they can at least win the first customers. With the investment they then want to collect, a product should be professionalised, distribution built up and commercialisation established.

You also send employees to the start-ups to support them in their daily business.
Klässner: Klässner: We have focused very strongly on attacking the relevant points with our group of companies. We provide our companies with a legal department, which significantly reduces ongoing legal costs. All our portfolio companies have access to our legal department and can draw on a corresponding contract pool and advice. We provide accounting and controlling expertise and take care of bringing the finances in line and setting up reporting. And we support the implementation of the Art of Acceleration management method with staff from GrowthSquare, which makes it possible to put the strategy in place that has been agreed between founders and shareholders in a people-centric way. We make it possible to promote the focused growth of companies and see ourselves as an expert consultant. And the founders can lift scaling phases without having to go through various learning phases firs

What is unique about your management method, and can it be learned?
Klässner: Klässner: It can be learned. We developed our first company from two employees to 250 and made an early attempt to introduce the OKR method (Objectives & Key Results) as a strategy execution model. We very quickly realised that the US mentality does not work smoothly everywhere in a European context. On the one hand, the mentality of the people is different, on the other hand, the OKR method leaves a lot of freedom in how issues are implemented, which often has a very negative impact on the efficiency and especially on the cost efficiency factors. Therefore, we have started to develop our own management methodology, which includes elements of the OKR method, but is very individualised. From this methodology, which we called Art of Acceleration, we developed a framework that can be implemented in companies of any size. It is specifically designed to make a coordinated strategy accessible to every employee and to put the actions for achieving the strategy on paper in such a way that reporting and, above all, monitoring of strategy execution can be implemented there. This focuses on ensuring that employees have a high level of participation and that the resources provided are used as efficiently as possible to generate company growth as cheaply as possible.