People new to entrepreneurship and the tech scene might get the impression that they’ve missed the boat, that all the good ideas have been taken, that tech is everywhere and software has successfully “eaten the world” as Marc Andreessen famously put it.
But as we announce the fund’s investment in Berlin-based Distribusion today, we got to talking at the Creandum office that the opposite is true. The Uber and AirBnB story is everywhere because it’s changed consumers lives, but there are massive industries out there, like shipping, pharmaceuticals, and automotive that are just now getting a taste of technology (shout out to our portfolio company, Xeneta, in the shipping industry!)
Take Distribusion as an example. By now, you would think that ordering a bus trip would be as simple as buying a flight in 2003 – just pop online, put in your starting place and destination into a travel site, and then bus operators will compete for your trip. But in most countries, ordering a bus trip still starts by googling local bus operators to see who has routes to your destination, go to the local operator’s site and there (if you are lucky) buying a ticket online – not a convenient global search solution. This is still happening in 2016!
Technology is going everywhere, which is why we’re a fan of how Distribusion enables intercity bus operators to partner with travel apps and websites through a centralized platform – think like a B2B partner like Amadeus but for the world’s intercity bus travel. Like any two-sided platform it’s a big challenge – they have to integrate with every single bus operator and partner with more and more platforms, but with that team and this funding they should be armed to for the task.
With Distribusion in our mind, what can we learn about tech going everywhere?
1. Keep your eye on regulations
Looking at Distribusion as an example, its founders Julian Hauck and Johannes Thunert got into the game by spotting that German intercity bus travel was going to be deregulated. “Our thought was ‘hey, let’s make busses bookable online,’” says Julian Hauck, CEO of Distribusion. There are thousands of these stories. For another German example, Nestpick and other rent platforms spring up after German apartment broker laws were updated. What can we learn from this? When regulations stop defining a market, companies with great timing can start defining it.
2. Find the best position to scale.
In the beginning, Distribusion monetized by operating their own travel portal targeting consumers while at the same time developing a B2B solution they could sell to other travel portals. While raising money in 2014 they found it tough to convince investors while having two business models, so they took a big risk to kill their consumer product that was making money in order to invest time into the B2B product that had the best opportunity to scale. As Distribusion continues to partner with more and more global bus operators and travel bookers, it seems the gamble paid off.
3. Drive your vision of tech taking over the world.
One thing we’ve respected about the founding team is their commitment to their vision. When payments suddenly got stopped by a bank tough years ago and things got tough, the founding team took consulting jobs during day time to pay their team’s salary while focusing on their B2B product during nights. These were rough times for the company, they had to close down their Berlin office and most of their office PCs were stored in a garage for a few months. Rather than this being a sign of poor company momentum, to us it shows how committed the founders are to their vision. In short, know that there really can be light on the other side of the tunnel.
Know any other entrepreneurs that are taking tech everywhere? Let’s talk!