Hello from Hamburg,
In an interview, Mario Kohle, founder and CEO of the Berlin-based unicorn Enpal, explains his business philosophy. He always thinks about how something should be, not how it is. He doesn’t think about how he can make something better; instead, he asks himself: How should something be in an ideal world? What would it be like if the problem were solved? Then you can see the path to achieving the goal more clearly, says Kohle, who naturally applies this strategy at Enpal as well. The founders’ seemingly impossible goal: to supply ten million German households with sustainable energy sources by the end of this decade and thereby drive the energy transition from the ground up.
The biopharmaceutical company Moderna has already achieved its first goal: By digitizing its processes early on, the company was able to develop its mRNA-based COVID-19 drug as early as January 2020. As it continues to evolve its business model, Moderna constantly asks “what if” questions, such as: What if mRNA could be a drug? The resulting hypothesis is tested using prototypes and translated into a business model.
Overcoming uncertainty by taking control of the future—that’s how I’d describe the approach taken by Enpal and Moderna.
I’m currently seeing the opposite happen in many established companies. Especially in these times of upheaval, many management teams fall into the pattern of playing it safe. But even though crises often force companies to cut costs, they also bring with them the need to invest in the unknown. We often try to address this conflict of objectives by proceeding cautiously. For example, when facing major transformation projects, we look for specialists and executives with experience—preferably in the same industry—who, moreover, should not disrupt the existing salary structure. In other words, we build the new based on the past and the opportunities at hand.
Two weeks ago, I witnessed a discussion in Berlin between startup founders and executives from established companies. That’s when the difference in how they approach the unknown became clear to me. Startups, driven by venture capital (VC) funding to achieve hypergrowth, set overly ambitious goals that create positive path dependence. They grow into those goals, even if they don’t always achieve them. Their hiring practices reflect this mindset: “If I want to achieve x market penetration in five years, I need to hire someone today who has managed a volume many times greater than what we have today—even if they cost three times what I can afford right now, and regardless of which industry they come from.”
Now, one might say: It’s easy for well-funded startups to talk. They have venture capital that established companies don’t have. However, the discussion in Berlin makes it clear that the constraints VC-funded startups face when it comes to shareholder decisions on investments are quite similar to those of companies that have been in family hands for generations. That’s because unicorns have a rapidly expanding group of shareholders consisting of a wild mix of friends and family, business angels, and venture capitalists—who often have very different interests and emotions. It’s not uncommon for one or another shareholder—who, before the war in Ukraine, was singing the praises of growth at any cost—to insist on profitability after the war breaks out and, three months later, to spark a dispute over the company’s valuation. In family-owned businesses, it might be Aunt Erna, who happened to become a majority shareholder over the course of generations and now simply refuses to understand why anyone should spend so much money on something when the outcome is still unknown.
Comparisons are flawed. But I wonder: Isn’t a time of uncertainty exactly the right time to be much more ambitious in what we want to achieve? How radically and uncompromisingly are you making decisions right now?
