From time to time, we’ll be featuring founders and asking them all the same questions.
Today: Paul Huber.
Who are you, and what is your startup about?
I hold a Bachelor of Engineering (FH) in Optoelectronics and an MBA.
The company I founded is an engineering firm that supports clients in the development of optical and mechatronic systems. These can include, for example, transmission control systems, driver assistance systems, or surgical microscopes.
We focus on business processes such as setting up test departments,
and we design and implement test automation solutions, including the design of test environments.
Our expertise lies in requirements and test engineering methodologies as well as risk analysis; we also specialize in standards such as SPICE and ISO 26262.
We also offer workshops and training courses on all of the topics mentioned.
I myself completed secondary school and then did an apprenticeship as an electrician; after that, I became a state-certified telecommunications technician, during which time I also earned my university entrance qualification and went on to study optoelectronics.
In addition, I earned an MBA at the University of Applied Sciences in Neu-Ulm while working full-time.
I’ve always worked throughout all these stages of my career and founded my own company in 2006. Because human factors always come into play—and as a foundation for training and coaching—I also completed training as a systemic family therapist.
Where did you get the idea for your startup?
Actually, I wanted to start a company that uses optical sensors to create digital terrain models from the air. However, I was unable to carry out this idea for financial reasons.
The business idea I ended up pursuing came about as a result of a request from an acquaintance of mine who urgently needed someone for test engineering.
What motivated you to finally start your own business?
I was extremely dissatisfied with the company I was working for because I couldn’t put my ideas into practice.
Back then, I probably didn’t really fit into an “academic” engineering firm because of my background in the trades.
In any case, that job was fraught with numerous misunderstandings.
Strangely enough, though, my previous job—which was much more research-intensive—went very well…
How did you go about it?
I had my employer terminate my employment and used the free time I gained to develop a business plan for my first business idea. At the time, I had entered a business plan competition because I hoped to gain inspiration from it.
Putting the truly relevant business idea into action actually happened quite quickly.
Was there any support available?
Before the startup phase, I took advantage of various training programs offered by the Chamber of Industry and Commerce (IHK) for entrepreneurs.
During the startup phase, I took advantage of the government startup grants available at the time for entrepreneurs.
In the first five years, I also took advantage of additional funding opportunities to establish my initial market presence.
Where would you have liked to seek assistance?
The discussions with various banks, such as KfW, weren’t really helpful.
Above all, while equity funding programs were advertised, upon closer inspection they turned out to be unfeasible, since they always required existing products and developments—and thus a significant amount of pre-invested equity—as a basis for funding. To me, that was simply illusory.
Who do you recommend?
The IHK’s training programs—though you should have some prior knowledge to understand the business topics covered.
The support programs for new entrepreneurs were also very helpful. Back then, however, they were much better than they are today.
What was particularly good, and what was particularly bad—(when the company was actually founded, or in business in general)?
The Difference Between Reality and Appearance in Business.
That is, the sudden emergence of barriers to market entry—for example, because companies no longer want to work with small businesses. And that’s why going through staffing agencies becomes necessary just to be able to work with these companies at all. Of course, this also means that margins are skimmed off here, leaving you without the resources needed for your own growth.
These companies relentlessly exploit their market power.
This means that inexperienced employees are virtually unsellable, while experienced employees are poached after only a short time with exorbitant salaries—salaries that you yourself cannot afford to pay due to the difficulty of marketing employees while they are still inexperienced.
And these companies then simply undo years of hard work by using small businesses as free training grounds.
While all companies are complaining about the shortage of engineers, they’re looking for that expertise for practically nothing…
What surprised you?
That the actual business plan I needed to get the grant approved was extremely basic.
The business plan for the competition could have been simpler, too.
What do you like most about being self-employed?
I have much more control over how I shape my life than, say, an employee, and I don’t have to ask anyone’s permission when I want to carry out a project.
What advice do you give to people who also want to start a business?
Make sure you’re well-informed about the business sectors in which you plan to operate.
Especially in the B2B sector!
Many barriers to market entry are invisible and are either not reported at all or misrepresented in the trade press, because stakeholders within organizations often determine what gets published.
Market barriers can arise very quickly because trends, competition, and conflicts of interest have an extremely strong influence on the purchasing behavior of larger companies. Furthermore, the product departments and purchasing departments within companies are separate, which makes it nearly impossible for small businesses to make a case for quality versus price. This is true even if you are familiar with the relevant department and have a proven track record of delivering high quality there. In other words, the market can very well function like a monopoly or oligopoly, which undermines normal market mechanisms!
Small and medium-sized businesses, on the other hand, rarely outsource anything related to methodological expertise and know-how. Development services—such as the development of electronics or software—are more common in this regard.
In my opinion, at least, you make money with business ideas that allow you to reach individual consumers, because that’s where the market still operates according to supply and demand. Unless, of course, lawmakers step in. Like, for example, with the standards for cucumbers or the ban on incandescent light bulbs.
Dear Mr. Huber, thank you very much for your detailed answers.
