Few things determine the success of a start-up as much as location, which dictates its reach and, importantly, access to talent. Take Munich, where new technology firms are partnering with top universities.
It was back in 2009 that Munich began redeveloping a 20-hectare former industrial and military site into a mixed-use development area. It included everything from apartments and workshops to artistic studios, theatres, arts schools and co-working spaces. Known as the Kreativquartier, the area is quickly forming its own ecosystem for young start-ups, students and creative types. “The mix of people is extremely fruitful for us,” says Ramona Pielenhofer, co-founder of Sichtbarmacher, a collective that supports social and sustainable entrepreneurs with their communication and marketing. Her company is based in an office space created using a repurposed shipping container.
Christian Escher, another co-founder of Sichtbarmacher, likens the area more to Berlin’s “shabby” start-up scene than the “fancy” look of Silicon Valley. But it’s about to get an upgrade: Unternehmertum, a privately owned non-profit linked to the Technical University of Munich (tum), is this year opening Urban Colab, a five-storey hub and collaborative space dedicated to entrepreneurs and smart-city solutions. “We’re excited for the Urban Colab to open as it will add more technological impetus to our ecosystem,” Pielenhofer says of the project, which is supported by the city.
Bavaria’s capital has seen an explosion of young start-ups in the past decade. Trace back the success of Biontech, the German company that developed the first coronavirus vaccine authorised in the Western world, and you’ll end up in Munich. “Though the company is based in Mainz, it’s no surprise that its foundational meeting took place in the Bavarian capital,” says Michael Motschmann, board member of Munich-based mig Verwaltungs AG, one of Biontech’s three seed investors. “The city is a world hub for technology entrepreneurs.”
Munich is home to nine unicorns (privately held companies valued at more than $1bn), according to Dealroom, a data provider. That puts it in Europe’s top league, just behind the larger capitals of London (45), Berlin (11) and Paris (10). And Munich’s role as a start-up capital is only growing: funding for Germany-based start-ups rose to €5.3bn in 2020 and Munich’s share of that pie has more than tripled from 8 per cent in 2014 to 29 per cent in 2020.
Munich has a powerful mix of some 20 universities and academies alongside global corporations such as Siemens, bmw and Allianz. All this education, corporate experience – and wealth – is a boon to start-ups.
But what really sets the city apart is the support offered by Unternehmertum. The innovation is backed by Susanne Klatten, the heiress of bmw and one the world’s 100 wealthiest people. “A challenge for many entrepreneurial centres is to involve equally committed world-class players,” says Helmut Schönenberger, Unternehmertum co-founder and ceo. “When we set up Unternehmertum in 2002 we had just that: Bavaria’s political support, Ms Klatten’s substantial backing and tum’s buy-in.”
The idea for Unternehmertum stems from a fact-finding mission that Schönenberger embarked on in 2000, comparing Stanford University in Silicon Valley to tum. It was his resulting master’s thesis on these differences that caught the attention of Klatten. Nowadays, start-ups hailing from tum and Unternehmertum receive more than half of all funding that goes to this Bavarian technology cluster.
Key takehome: Don’t discount young workers. Top talent will add to your firm’s dynamism.
Schönenberger says that what distinguishes Unternehmertum from comparable centres is its scope. “While typical accelerators guide their members for a few months, we’ve set up an entire ecosystem to accompany our students and start-ups for up to 10 years,” he says. Students begin with an introductory course to entrepreneurial challenges. Then they tinker in Makerspace, a prototyping workshop with high-end tools. They move on to incubator and accelerator programmes before obtaining capital from Unternehmertum’s own venture fund, uvc Partners. “To scale that ecosystem, while keeping a personalised, project-based focus, we have taken our mentoring approach to an extreme,” says Schönenberger. A coaching scheme teaches graduates to mentor the most recent intake. That allows for an annual capacity of 5,000 students, who in 2020 launched 80 start-ups.
“Our other aim is to contribute to the city’s sustainability,” says Schönenberger. That’s a key part of the motivation behind the Munich Urban Colab in Kreativquartier, adding some extra panache to its already colourful start-up scene.
Monocle comment: Even long-established cities need room to grow and innovate. Munich is showing how new academic offerings and government backing (in Bavaria’s case, a “lederhosen and laptops” campaign launched in the 2000s) can help a city change its stripes.