Australian start-ups should look beyond the United States and make careful considerations before accepting funding offers, says the co-founder of successful German start-up Jimdo.
Jimdo, a DIY website creator with more than six million users worldwide, was founded in 2007 by Christian Springub, Fridtjof Detzner and Matthias Henze in northern Germany.
The trio originally lived and worked in a farmhouse. Now, Jimdo has offices in Hamburg, San Francisco, Tokyo and Shanghai.
Detzner, who is currently in Australia, spoke to StartupSmart about what Australian start-ups can learn from their European counterparts. Here are his five top tips:
1. Think twice before accepting funds
Earlier this year, Jimdo turned down an eight-figure sum in funding. While the money would have given Jimdo the chance to become a market leader, Detzner says there are other priorities.
“Because of the growth with Jimdo, we were getting offers from VCs every month,” he says.
Jimdo received a particularly impressive term sheet from a top-tier VC. In the end, the decision to decline the offer was very much a personal one.
“When you be honest, and you’re getting a big investor on board, you’re still in the driver’s seat. But for us, it’s like selling the company. It wouldn’t feel good to us,” Detzner says.
“That’s why we turned it down. We’re more interested in running a long-term, sustainable business and having fun with all the people on board.”
2. Look beyond the United States
“We’re really in touch with [Australian start-up] 99designs… Their first thought was to go through the US.”
“It’s easy for Australian start-ups to go to the US and focus there, and they should do it. But I would say they shouldn’t forget about the rest. There’s a lot more.”
“We’re approaching it the other way. We’ve got all these other foreign languages.”
3. Launch in other languages
“Two or three weeks after we launched the German version [of Jimdo], we launched an English version and a Chinese version, and we’re now in 11 languages.”
“The advantage as a European start-up, particularly as a German-speaking start-up, is we have to imagine going into other countries.”
“It’s in our DNA that we just do it and that’s what we’re good at… Certainly all the English-speaking markets are the most important and that’s why we set up an office in San Francisco.”
“But other countries are taking off and it’s good to be involved in as many countries as possible… Our second largest market is Japan.”
4. Think about your business model – now
“It’s getting kind of cool to run a start-up. More and more people are trying to build something new, which is really, really great.”
“A lot of people are struggling with their business model and don’t know how they plan to earn some money. A huge number of start-ups are not that long-term thinking.”
“Even some really large start-ups don’t have a business model, which I think is not that good. When you don’t have a real business model, you’re not able to run the company long term.”
“Nothing is consistent – not for the customers that are using the service, not for the employees, not for anyone.
“With a business model, you can rely on that. It’s also good value for your customers. I don’t think it’s good motivation just to run a company or a start-up and just sell it – that’s not what you should be interested in.”
“You, as an entrepreneur, should be willing to create something that will last for a bit.”
5. Bring it back to the customer
“We’re a product-focused company – that’s what our main goal is. The cool thing about creating websites is you’re creating something that makes your customers more successful.”
“It makes your customer and their business more successful, and that’s a good goal.”
You can help us (and help yourself)
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.