Take the example of HALLOSONNE, an Austrian company installing photovoltaic systems on residential homes. HALLOSONNE was built as a rent-only model, but direct customer interactions revealed demand ...for purchasing photovoltaic systems. Ultimately, this can increase end-customer value through, for example, the release of new products and more agile operations, allowing a company to react faster to trends or customer demands. Banking those margin gains, however, will take time, and initial investments must be sufficient to cover development, increased customer acquisition costs, fulfillment, and building technical capabilities.
When US-based software-as-a-service (SaaS) unicorn Snowflake brought in Chris Degnan as its funding CRO, he built a go-to-market strategy from the ground up, propelling sustained high growth and ...global reach. The challenge of turning initial traction into sustainable growth is accelerating, and we expect the number of CROs in unicorns to increase as a result. Pipeline: CROs must get the mechanics to work, then manage the inputs From testing various demand generation techniques to measuring the success of sales and marketing campaigns, it is up to the CRO to make informed decisions on where and how to allocate resources for optimal growth. To unleash the power of the pipeline, a CRO should ensure that all activities are focused on targets and that progress is monitored: tracking the number of daily qualified calls and emails, the number of marketing-qualified leads and sales-qualified leads generated each week, and the number of quotations received.
While advising Forto, I also worked full-time as a general partner for Earlybird Venture Capital, where I built its climate-tech practice and helped the firm to scale from €700 million to €2 billion ...in assets under management. ...we made environmental, social, and governance (ESG) criteria core to our private investments. ...is our B2B market access, especially in the DACH region, which we have built for many years. Fabian Heilemann: The current situation in the general VC market, with global shrinkage especially in the e-commerce, fintech, and consumer health segments, is as challenging now as it was in 2008.
Furthermore, residential power was identified as one of four areas to reduce CO2 emissions and primary energy consumption. ...in the fall of 2021, we launched our private-label heat pumps, scaling up ...production in June the following year to meet the growing demand for green tech. pullquote key3 Markus Berger-de Léon: How did the organization evolve over time to accommodate its fast growth? Fast-forward to today, and we see a significant shift toward prosumers: individuals who generate their own energy via solar panels or other renewable sources. To do so, we also created a special-purpose vehicle—to pool money from investors to finance wide-scale heat pump installations, which individual customers could pay back over the course of a lease—and became one of Europe’s largest financiers of heat pumps. pullquote key5 Markus Berger-de Léon: What advice do you have for other founders of start-ups?
For my future endeavors, I wanted to set up more-diverse teams to leverage more skills, which can lead to better decisions. pullquote key2 Jerome Königsfeld: Once you realized that you wanted to ...become a part of the climate tech sector, how did you screen the market to find the right technology? sidebar 2 Christian Vollmann: We generally have great scientists and technology in Germany, but we are chronically bad at commercializing the tech. Christian Vollmann: For one, the shipping industry—container ships and cruise ships that emit hundreds of millions of metric tons of CO2 every year—is set to benefit greatly from the use of green methanol as fuel. ...the chemicals industry is also expected to benefit from methanol as a nonfossil input for carbon-based chemical products such as plastics, adhesives, paint, insulation, and more. The total amount of VC investment we have received so far is €13 million, led by Planet A, SquareOne, and Maersk Growth. pullquote key6 Jerome Königsfeld: As a founder who has experience in both classic VC-funded internet start-ups and asset-heavy climate tech companies, what are some things that you wish you had known in advance, and what were the biggest challenges you faced with C1?
According to our research, the businesses that perform best are those that defy conventional wisdom and embark on bold M&A moves regardless of economic downturns. ...is to make the most of the ...acquisition’s unique assets, such as rapid innovation or fast growth, while protecting the incumbent’s core business. ...is to define the respective responsibilities of the start-up and the incumbent and the interfaces between them. Since the value lies in accelerating the startup’s growth momentum rather than capturing cost synergies, they don’t attempt to integrate complex systems.
While AI and big data, for example, are relatively small fields today, accounting for less than 5 percent of total value creation across all segments, they include 16 of the top 100 unicorns.exhibit ...2 There’s a clear market opportunity. Strong fragmentation is one example of such a weakness: if a market has many players and no clear leaders, it is often easier for a new entrant to disrupt it and build up significant market share. For this reason, ventures at the forefront of trends benefit from greater capital availability and more-attractive valuations. ...successful ventures provide unique solutions (for example, intellectual property that’s hard to replicate) that change an unacceptable status quo.
With their cash reserves, existing customer base, established brands, and in-house expertise, incumbents should in theory create entirely new businesses with higher odds of success. What’s more, ...significant differences in key elements of incumbents and new entities, such as governance practices, funding models (approaches to make sure a business’s core activities are funded), and organizational structures, can result in the parent company being a drag on new ventures. ...one advanced-industrials conglomerate took note of the fragmented security market and increasing demand for security software and decided to create an app store and operating system focused on IoT security software and devices. ...teams should test the elements of a promising idea’s business model.
McKinsey’s Markus Berger-de León and Jerome Königsfeld sat down with some of Europe’s leading venture capitalists (VCs)—Florian Heinemann, founding partner at Project A Ventures; Christian Saller, ...general partner at HV Capital; Jenny Dreier, investor at EQT Ventures; and Alex von Frankenberg, managing director of High-Tech Gründerfonds—to get their outlook on the next two years and discuss what European incumbents, VCs, and start-ups can do to emerge from these uncertain times stronger than before. pullquote key1 Jerome Königsfeld: What is your outlook for the next two to three years? ...VCs must factor in that large exits will become more difficult to realize in the coming years. ...only start-ups in need of funding currently raise money, and they have become humble with their valuations. pullquote key3 Jerome Königsfeld: Which start-up sectors are enjoying the biggest tailwinds amid the current crises? With reduced media spend across the market, fixed-cost heavy channels, such as TV ads, will come under pressure and may be willing to make highly discounted deals with start-ups.
Overall, four practices stand out: architecture (that is rigorously scalable), operating model (supported by processes that scale), customer insights (that are targeted and applied to product ...development), and talent and performance management (grounded on entrepreneurial talent). Co-create with customers One of the defining root causes for the business’s lack of success in scaling promising minimum viable products (MVPs) was that its software-developer culture demanded technical perfection before launching products to the broader market. ...this business became one of the top three performers in the sector in less than three years. 2. ...a double-digit team built proprietary accounting and billing systems, even though they had no impact on the customer experience and there were already plenty of good options in the marketplace.
