New Blog
This blog post first appeared first on old medium publication (https://medium.com/startuprad-io), and was moved to this blog with the relaunch of our website in summer 2024.
Entrepreneur Tools — What startups get Wrong working with Corporates
It is absolutely key that they [startups and corporates] cooperate. You cannot … any longer have a one-stop shop, where one bank or company does everything.Kate Pohl, Senior Advisor
Tune in to our Internet Radio Station here:
Subscribe Here
Find all options to subscribe to our newsletter, podcast, YouTube channel or listen to our internet radio station here:
Entrepreneur Tools (EP)
This is a new series, within Startuprad.io’s YouTube Blog. We meet a lot of people and of course, we talk with some of them about the typical entrepreneur problems. Sometimes an entrepreneur solves known problems in a very systematic way, which we find great, or has great insights. In both cases, we will talk to him or her and bring you these recordings as entrepreneur tools.
We are looking forward to your feedback. Below you find a playlist with all episodes, further down you find the specific podcast.
The Entrepreneur
Kate Pohl (https://www.linkedin.com/in/kate-pohl-5899766/) is a US ex-pat living in Germany. She has vast experience in commercial banking including stops at JP Morgan Chase, BNY Mellon, ABN AMRO, Citibank, and ING, as well as a Wharton MBA. At the time of the interview, she was working as a consultant for several startups. At the time of publication, she is Head of Banking Strategy at Traxpay. With her experience, we talk about frequent problems in cooperation between startups and corporates, their different way of thinking, and expectations.
The interview is a good starting point for thinking about your cooperation strategy, as a startup entrepreneur.
You can learn more about Traxpay here: https://www.startuprad.io/blog/we-are-nothing-like-greensill-says-frankfurt-based-traxpay/
The Questions to ask
To start: Make your market research.
What do corporates want?
How does my startup fit in there?
How do I get the right positioning?
To approach the corporate: More research.
Whom to approach?
How do I approach it?
How do I get in the first meeting?
How much do I tell in the first meeting?
For the final agreement:
Get advice on the final agreement!
The Video Interview is set to go live on Thursday, August 19th, 2021 at 17.00 CET
The Audio Interview is set to go live at the same time
New Blog
This blog post first appeared first on old medium publication (https://medium.com/startuprad-io), and was moved to this blog with the relaunch of our website in summer 2024.
Entrepreneur Tools — What startups get Wrong working with Corporates
It is absolutely key that they [startups and corporates] cooperate. You cannot … any longer have a one-stop shop, where one bank or company does everything.Kate Pohl, Senior Advisor
Tune in to our Internet Radio Station here:
Subscribe Here
Find all options to subscribe to our newsletter, podcast, YouTube channel or listen to our internet radio station here:
Entrepreneur Tools (EP)
This is a new series, within Startuprad.io’s YouTube Blog. We meet a lot of people and of course, we talk with some of them about the typical entrepreneur problems. Sometimes an entrepreneur solves known problems in a very systematic way, which we find great, or has great insights. In both cases, we will talk to him or her and bring you these recordings as entrepreneur tools.
We are looking forward to your feedback. Below you find a playlist with all episodes, further down you find the specific podcast.
The Entrepreneur
Kate Pohl (https://www.linkedin.com/in/kate-pohl-5899766/) is a US ex-pat living in Germany. She has vast experience in commercial banking including stops at JP Morgan Chase, BNY Mellon, ABN AMRO, Citibank, and ING, as well as a Wharton MBA. At the time of the interview, she was working as a consultant for several startups. At the time of publication, she is Head of Banking Strategy at Traxpay. With her experience, we talk about frequent problems in cooperation between startups and corporates, their different way of thinking, and expectations.
The interview is a good starting point for thinking about your cooperation strategy, as a startup entrepreneur.
You can learn more about Traxpay here: https://www.startuprad.io/blog/we-are-nothing-like-greensill-says-frankfurt-based-traxpay/
Is your Startup in Need of A bank Account? — Affiliate Links
Try the account of our Affiliate Partner Penta: http://bit.ly/3bdHX3d
The Questions to ask
To start: Make your market research.
What do corporates want?
How does my startup fit in there?
How do I get the right positioning?
To approach the corporate: More research.
Whom to approach?
How do I approach it?
How do I get in the first meeting?
How much do I tell in the first meeting?
For the final agreement:
Get advice on the final agreement!
Is your Startup in Need of an Office? — Affiliate Links
Try the account of our Affiliate Partner WeWork: https://we.co/2GYbxvS
The Video Interview is set to go live on Thursday, August 19th, 2021 at 17.00 CET
The Audio Interview is set to go live at the same time
Subscribe to our podcasts here
Are You Looking to get a Task Quickly Done? — Affiliate Links
Try the account of our Affiliate Partner Fiverr: http://bit.ly/2S0f2YF We get there our video editing and graphic work done to free us up for more useful tasks
Further Readings
Cash Pooling https://de.wikipedia.org/wiki/Cash-Pooling
Treasurer, a person in charge of the treasury of a company https://en.wikipedia.org/wiki/Treasury
Feingefühl — Maybe translated as sensitivity, mostly with a much broader meaning
Franz Kaffka https://en.wikipedia.org/wiki/Franz_Kafka
If you are tough enough, here is one example of a Kafka book, twisting Joe’s brain https://www.youtube.com/watch?v=62UDvRM_oqw
Theodor Fontane https://de.wikipedia.org/wiki/Theodor_Fontane
Feedback
Reach out to us, here is our audience survey, to give us feedback, suggest topics, interview partners or just to say “Hallo!” https://forms.gle/mLV6mVKwGwKuut8BA
The Interviewer
This interview was conducted by Jörn “Joe” Menninger, startup scout, founder and host of Startuprad.io. Reach out to him:
Original post with all links and show notes: https://www.startuprad.io/blog/entrepreneur-tools-what-startups-get-wrong-working-with-corporates/
Transcript
[0:00] Music.
[0:08] Startuprad.io your startup podcast and YouTube blog covering the German startups.With News interviews and Live Events.Hello and welcome everybody this is Joe from startuprad.io your startup podcast and you to block from Germany,today we are bringing you another SM e interview and therefore I would like to work on Kate hi Kate how you doing.Hi Joe I’m doing great thank you,it’s such a pleasure to have you here and guys if you like what you’re hearing what you’re listening what are you seeing make sure to hit the like And subscribe button and if as a very nice comment and share it as much as you can.That said Kate you are working with startups and with culprits and.Help them to cooperate but let us first get a little bit into how you got to this position you are also advising several startupswe are interviewing or have been interviewingbut how did he get to this position you don’t start out and say I want to be an advisor to start up what happened there.
[1:26] Yeah I know I wasn’t born and said okay startups that’s my that’s my thing,now I had a rather long and heavy career in Commercial Banking and really started with the whole Bank training program very heavy risk training and move through,from the FI side really correspondent banking to the corporate side and then really concentrated on transaction services so cash trade securities.An innovation became more and more interesting to me more and more my hobby if you will and by the time I got to my last bank I work for ING as the last stop.I got to do Innovation as my job so I was working on the wholesale side for for Innovation and I was working with certain startups and I got the bug and I loved it.And as I got the opportunity three years ago I made myself independent I became a freelancer working together very strongly with fintechs I also advise Banks and corporates.
[2:28] It’s always the the theme is digitalization its Innovation that’s what I’m looking at for cash and trade.We may add for everybody who’s not really in banking that correspondent banking basically means you have a networkas a bank you used to have a network with other Banks and that’s basically how you made International transactions and transaction Services means everythingrelated to trading for cash or like Equity Stock Exchange stuff like this.
[3:04] Well it’s to just be very clear on the transaction Services side although I did work on the security,peace it was primarily cash when I say cash I mean account opening,it’s all the EB tools its liquidity management it says cards commercial card programs Etc and on trade it would be the plain vanilla if you will Elsie’s collections but also all the supply chain finance and supplier Finance tools.And at what point did you decide a worm,this corporate job isn’t for me anymore I’m much more enjoy startups what trigger do there,well I think it was really as I said I think it was working with I and J was a real pleasure I must say I mean it was my fifth International Bank I have more than 30 years experience in Commercial Banking,but it’s the bug really bit me when I got to I started out working with third-party payment provider called Peconic which is strong in the battle of.
[4:07] And one of my jobs was to really bring it to Germany and really get down and dirty as how that works what would you do the marketing strategy plan,it was the first time I had stand-up meetings that was really exciting different I loved it,fast Dynamic and I saw myself a little bit as the bridge.Between what had had had happened so the old world to what was really happening the new world which I loved.And I was able to explain to people what this all meant and where it was going because they had trouble either they were in the Old Camp of the new camp.
[4:44] And having done that working also with another company called KO base which is also a spinoff from ING.I really decided that the whole strategy piece working with fintechs and bringing my.Per transaction Services knowledge and my coaching skills and my risk experience together in one,it’s a really exciting possibility and that’s when I got the idea to start really advising and Consulting.
[5:16] And I had the opportunity to go Rogue to go freelance and I did it,so you went freelance and that that’s one of the points we will be talking about,today not necessarily how freelance working for startups is but rather,what you and maybe even I have learned from that because today we want to talk about how startups could or should approach,the cooperation with the copyright because there is usually a lot of misunderstanding and evenfear maybe on both sides to startups fear to be copied by the corporate and corporate sphere to be.Outrun by the small and agile startups what how would you start.For example I’m now founder and I said whom I think I need to cooperate with corporates how would you start.
[6:23] Help me think about it.
[6:26] It’s a very good question and I think that if we go back in history a few years there was a real fear even from the corporate side to work with the startup why because all they were laser focus.Possibilities in terms of solutions the substance was let’s say small.And the question was would they survive are they really clever enough in terms of their you know risk assessments do they do compliance well am I taking on something that isn’t going to work.There was also the the big question of the I would call it even the language startups would speak in one way and have certain,ideas and corporates and Banks put them both in the same category would not they didn’t understand each other it was as simple as that they work differently.There was Legacy on one side and there was Greenfield on the other so it was there were a lot of barriers.But in the end of the day it was absolutely key and it is absolutely key that they collaborate.
[7:34] Because that’s the future in my mind we no longer can have the One Stop Shop where a corporate or a bank makes everything does everything.They’re going to need to work with the right kind of providers and on one hand if you look at PS D2 and open banking how that’s opened up the possibility for banks and on the corporate side I think there’s a lot more confidence today.
[7:57] To work with startups that have the right ideas or maybe startups the become scale UPS so I mean that’s how I would start it Joe.That’s already a good start we may add from this star that P is D2 is the payment service directive number twowhich forces Banks to open up a little bit to startups of course you can learn down more down here in the show notes what that actually means and I think therethey have been librariestalked and written about piece T to alone and we won’t get started here go down here in the show notes and you will be able to learn more and.
[8:38] Okay now I understood that as a startup founder and how.Would I need to come up with a list of potential cooperation Partners as corporates should I just look at my direct competitors at.Companies who do something similar or kind of similar how would you bridge that.
[9:06] Okay well the first question is you know what is the corporate one and it is it a is it a question if we use perhaps you know we work very closely with.
[9:14] I know secret on my profile with.To fintechs one in the cache world one in the trade world if I start perhaps with the trade example and look at trucks pay.
[9:26] The product there is really a platform to allow companies.Buyers who are selling or excuse me suppliers who are selling to buyers and those buyers went to help those suppliers.By actually paying them early but at a discount of course.Really taking care of that is that it’s a huge process there’s a lot involved and you really need a very sophisticated platform to make that happen,in a good way both in terms of risk and economies of scale and all the rest so here you have you know a fantastic platform and how does how does that work from there,well in this particular case working together with tracks pay we’ve decided what kind of a company would actually fit the profile so.What kind of company would want that sort of service then we also work with banks in this case and say what kind of banks are multipliers could we talk to that would also have corporate clients that would be interested in this kind of service.
[10:29] So it’s on this particular case or in this particular case it’s very much a need question,what corporates could use these services in other words they are quite International there is a lot of complexity they have suppliers that really could benefit by quicker,more liquid.More liquidity in their invoices so that’s actually not too difficult the more difficult part is to really should reimagine the process to explain to them that this can be done,it can be done easily and quickly not only say it prove it and to the banks to say,your corporate customers are no longer interested in mono Bank platforms they went multi-bank platforms so what you’re doing now might be,cool that it’s not cool for the future you’re going to have to work with the provider that will give your buyers what they want,that’s one side on the cash side when I when I work with a company like this.
[11:34] There it’s really a question of companies who the looking for a provider who can really reduce complexity.
[11:45] If you think of you know the treasure a headache oh my gosh I have 2,000 Erp systems I’m joking but many Erp systems in iterations I have really hundreds of banks in 50 different countries maybe 2000 accounts,I have a lot of people out there with different rights.It’s spaghetti it’s worse than spaghetti it’s complex and you’re looking for someone to make that easy who could stand in the middle and fix that and on top of that give me yet more products and services through a platform.So again there’s either the fintech has to say,who’s out there that could really use my product what makes sense you know and I help them look through that and I help them also position that and on the other side to explain to corporates.Why that’s so important and to show them the value so those are the some of the parameters I work with.Basically I would boil it down I have been typing why are you reading to question 1 what to corporate want question to how do I fit inin there and question three how do I get the right positioning there but would that be fine for first step.
[13:01] Yeah what is it what a corporate ones want I think with a with a really looking for they know what they want and then in the case of tracks pay corporates want to,umThere’s the view of the supplier and the buyer the buyer would like to take their liquidity and probably use it more efficiently the supplier would like to increase their liquidity when they need it.So that’s what they want what’s your question number two again would you repeat that how does my startup fit in there.And the start and then from the corporate point of view they’re going to be looking at any sort of startup or any sort of scale up that would fit exactly that need how do they find them,through people like me who really know the market who’ve done a market scan who’ve talked to who’ve worked with,my research I spend two or three hours every day researching the market.
[13:58] I look at every provider a liquid every provider is doing in Europe or in the US in my area of expertise.I see how it’s changing so either you know you work through someone like me maybe you would work through an advisor so some of the consultancy services where you know I also contribute to.But it’s not easy because there’s so many interesting providers out there and you need you need to know a little bit about their experience and their product and.You know is the longevity really there so that would be,number two and number three is the right positioning that’s that’s a three questions that I got how to you position yourself right,for this first interaction with a corporate here and I think I think it’s very very key that you have you know I’m doing I’m working with Tish,it’s about to come out with a totally new rebranding you know messaging but also the most incredible platform.And it is the question is here is really doing your homework as a fintech on the one side and really figuring out how to position yourself.I think as far as the corporate goes it is they.
[15:15] They either know exactly what they need or they think they do and they need to have the right kind of advice and consultancy help.To get where they’re going what do I mean I’ll take a cash example a corporate may say I went pooling.I want cash pooling but what they really mean is I want to improve my liquidity picture.
[15:40] And if your fintech is smart and agile and clever they’ll understand that the point here is improving liquidity and there are many things that can be done to do that.
[15:52] There isn’t a corporate out there that isn’t looking to optimize the quiddity so that’s that’s one way to look at it if you will.
[16:00] Mmm I see I see and.
[16:04] Let’s say we got it all figured out because that already is a really tough step in for people who worked in corporate before.Because what I’ve been in startups got in the past and what I’ve seen they they just sent me,theater pitch deck that is tailored to investors and that has awesome kpis,annual recurring Revenue monthly recurring revenue and then I was going huh,what is the important information for me here so basically you have to put yourself into the shoes of the corporate with can bevery hard depending how on how much you understand of them and then think from their position,because if I could just add something that goes back to to what we were talking about just before is the language.So two things as you very rightly say you have to put your yourself in the position of the treasure and frankly unless you’ve worked with treasures for some time that might be a difficult one I mean I sold to treasure as for,many many many years so I understand the kind of questions the kind of challenges I know sort of a day in the life of the treasure what they’re doing that’s absolutely key,on the other side it’s even if you understand all that how do you how do you do treasure speak so how do you actually talk to them how do you position to them.
[17:34] And you know you also mentioned something about getting you know Dex or paper.The question is also you know are you using are using in the field sales are you using you know more of the marketing approach you know what are you actually it is it.There’s there’s so many tools out there and yet you have to really understand your audience where they looking where they’re buying what they’re reading so that does make a huge difference as well in terms of positioning.
[18:06] That makes sense and I would then go ahead and.Ask you how would you think how would you help to think the CEO the founder of a start-up about questions.
[18:25] If or if not he or she has figured it out but by the way we may add a treasure is the person in charge in big corporates that make sure they havethe the money enough money and also in the right currency,that can be quite tricky if you’re dealing like in 5 or 10 different currencies 5 or 10 different time zones 20 or 30 Banks and then you start to see the complexity in that,I’m not really envied those people but when I was going at is okay let’s say you have a list of corporates,you have a rough idea how you would fit in and how you would position yourself but then the question is.
[19:14] Whom should I talk to who is the right person to talk to and how should I startto approach them for me personally it’s pretty simple I talked to startupsthey usually approach me sometimes I approach them and then usually it directly the founder via LinkedIn but,I’m afraid if you want to cut if you want to work with companies like Bosch Porsche or a Mercedes and it’s not so easy to get accepted as contact up on LinkedIn by the CEO right.Absolutely.It’s actually that’s actually a brilliant question because that’s one of the things that I spend a lot of time talking to my startups about is,how to get.
[19:59] How to how to get the first discussion going how to how to really get in there how to really talk about it and,yeah I think that you know they certainly work LinkedIn that’s that’s one of them but you know first trying to figure out who to talk to in an organization which could be the treasurer could be the cache manager it could be compliance it could in fact be a char,it’s very interesting there’s different there’s different Pockets it could be.It really depends on what obviously what you’re selling and even if I’m talking about a company like this that has,that concentrates on payment optimization it still looks at all those different areas,so there’s a lot of social media work that can be done that makes it easier that’s how you know I would suggest starting.But also once you’ve done that.You know once you’ve got them on the phone or when you’ve got their ear for a moment what do you start saying what do you do and positioning it is absolutely crucial as I said.You’ve got to really understand what their pain points are try to get them out on the table very very quickly.They have to feel that it’s worth having that first discussion with you.
[21:12] I was actually you you’re already over took me because the first question was,whom would I approach how would I approach and then the next question is how to get the first meeting but basically what I did do is from you with,First Step would be read their social media post their press releases maybe even the annual reportsand absolutely what I found interesting was you always have different parts you could talk to you depending on your product or your service but wasalways from be important you have to make sure you talk to someone who has a budget for doing stuff like this because if you don’t have a budget you just wasting your time,Fed Up unfortunately that’s usually true without a budget it makes it difficult.You know I was I was going to add one thing that I think is not that shouldn’t be forgotten you know we talked about sort of the cold call way of going at it.One thing that’s absolutely important when thing I do for my clients is if you have a lot of.
[22:18] It makes a lot of difference it’s like everything else in life you know if you have somebody give an introduction.Of course in the end of the day it’s always key you know is your product the right one you know is it going to work blah blah blah.But getting that first talked getting that first interview getting in the door with contacts makes all the difference so that certainly is a big help so having an advisor.
[22:44] Is often very helpful.
[22:46] Mmm also meaning contacts are gold contacts are key what would I personally would be doing I go through the,social media content look for the content that’s relevant to me maybe there is a person who is mentioned there,in the blog post or whatever it is they are sharing or maybe you could look for a who else is sharing this blog post or stuff maybe it’s the person in charge of x y at this company and they’re also sharing it on Twitter,that’s a great contact or LinkedIn.And of course then you said connections connections are important there if you know someone who knows someone it’s,much much easier 10 than to just do a cold call and warm intro yeah,exactly and then assume you get to the first meeting how would you advise to them to prepare and how much can or should I tell.
[23:50] We don’t do easy questions here no all very very good questions you know when I’m working working with a few fintechs on that you know a few startups on that actually you know exactly how do you position yourself,when do you do what how soon do you do it what kinds of question what are the best questions to ask how industry-specific do we have to get.Um it really I have to say it really depends dot dot dot because there’s no you know one-size-fit-all if it’s all is not going to work.But having said that you know doing your homework is absolutely.Let’s face it everyone wants to feel like they’re important and if you know more about me before you talk with me of course I feel better about it it’s very key on the other hand you also want to listen,listen listen listen very important so if you ask the right open-ended questions to get certain is certain information about where they’re going the,key to them would you know where the shoe is pinching that’s also very important so it’s a combination and it really depends and you have to have a little.
[24:57] I’m thinking of the German word I’m trying to remember the English word as a fine crew you really have to feel your way carefully through some of these situations to to do it right it’s not,it’s not a scheme that you can plot out in every case you have to be ready for some dead ends and you know we.
[25:17] I’m just looking at the at the,at the show notes I’ll have here down in dish in the blog post and I’ll explain PC to cash pooling Treasurer and find if you let this is if it is going to be awesomeI try it you know it’s the ityou know one of the things I didn’t mention when we started I’m half German half American I have literally two passports to citizenships and I grew up with both languages.And I really get to the point where I sometimes have difficulty doing anything and just one so this is this is one of those words.And I’ve also seen not only do you have an MBA from Wharton but you also created with a degree in German literature who was your favorite writer,you’re supposed to say go to now right I don’t know a Fun Tan actually was one of my absolute favorites and did a lot of work on that.
[26:13] I’m not too sure how I would mention butI would totally not do Kafka calf guys always just twisting my brain you’ll have some version of text of Kafka and it’s always like in a dream reality is justmoving of absolutely down no cuff Co is not I although I had to read quite a bit no that was not my favorite writerI see okay below find your fuel that will be Kafka,let’s say we have thiswe have the first meeting done and then we have a few more meetings how would you,talk to start up about signing a corporation I would personally say,talk to a third party it doesn’t have to be necessarily a lawyer because he will understand the,the law aspects of it but not the business aspects talk to friend who is also founder took to talk to a third party who somehow knowledgeable.
[27:21] And make sure you’re not really disadvantaged there.Plus would always find important many many cooperation agreements I’ve seen their very awesome exact down to the detailand they don’t say one word abouthow to get out of this contract they have notice period and that’s it but then don’t specify anything how to get out a process or stuff like this this is always important for me because,when you don’t end this cooperation on good terms it may get ugly it may get long and you may even get into a legal fight and that’s something you really really want to avoid as a startup.
[28:05] What would you advise.
[28:08] All of the above sounds good to me I think I think one thing that I also find is that many startups.I say desperate to get into the game that they’re willing to perhaps give too much away that’s something I would worry about or watch out for.It’s not that you don’t compromise I think you can both sides can do that and you have to but you have to also.Nowhere.The boundaries are that’s something I’ve seen a few times and that’s in that would that would be a piece of advice I would really give.So that and also understanding you know where your partner is coming from I think that’s also very key so we think between the between would you said when I said that’s a.You have a framework and also you know the very obvious talk to someone who’s done it before.
[29:07] Try to get some advice you do that I think is always key so now as kind ofthe guideline I’ve I’ve written down during we have been talking what to corporates one how does my startup fit in there how do I get the right positioning,whom to approach how do I approach how do I get in the first meeting how do I tell what do I tell in the first meeting.Get advice on the final agreement as we said of course the lawyers always good but also make sure you get the business side and how to end the contract right.
[29:46] Absolutely and also get as I said.I really do see some of the startups that they that are so anxious to get into business that they’re willing to give away too much.And they’re not looking out for their own interests it is important mmm well.That’s actually awesome closing words we recording now for 30 minutes already which is little bit longer on my regular episodes but I do believe there are now a lot of questions,from all the startups out there.And of course you can reach Kate down here in the show notes there’s her LinkedIn profile as well as her company website.Kate thank you very much it was just a pleasure having you on my show hope to see you back and help to that many many entrepreneurs find it interesting and helpful what we’ve talked about.Thank you very much it was a real pleasure if you are a professional looking at the European startup scene Germany is a place you cannot miss.
[30:55] Music.
[31:05] Most likely you have never heard or read anything only startups before in English but you will in the future be ahead of the curve And subscribe to.
[31:15] Music.
Are You Looking to get a Task Quickly Done? — Affiliate Links
Try the account of our Affiliate Partner Fiverr: http://bit.ly/2S0f2YF We get there our video editing and graphic work done to free us up for more useful tasks
Further Readings
Cash Pooling https://de.wikipedia.org/wiki/Cash-Pooling
Treasurer, a person in charge of the treasury of a company https://en.wikipedia.org/wiki/Treasury
Feingefühl — Maybe translated as sensitivity, mostly with a much broader meaning
Franz Kaffka https://en.wikipedia.org/wiki/Franz_Kafka
If you are tough enough, here is one example of a Kafka book, twisting Joe’s brain https://www.youtube.com/watch?v=62UDvRM_oqw
Theodor Fontane https://de.wikipedia.org/wiki/Theodor_Fontane
Feedback
Reach out to us, here is our audience survey, to give us feedback, suggest topics, interview partners or just to say “Hallo!” https://forms.gle/mLV6mVKwGwKuut8BA
The Interviewer
This interview was conducted by Jörn “Joe” Menninger, startup scout, founder and host of Startuprad.io. Reach out to him:
Transcript
[0:00] Music.
[0:08] Startuprad.io your startup podcast and YouTube blog covering the German startups.With News interviews and Live Events.Hello and welcome everybody this is Joe from startuprad.io your startup podcast and you to block from Germany,today we are bringing you another SM e interview and therefore I would like to work on Kate hi Kate how you doing.Hi Joe I’m doing great thank you,it’s such a pleasure to have you here and guys if you like what you’re hearing what you’re listening what are you seeing make sure to hit the like And subscribe button and if as a very nice comment and share it as much as you can.That said Kate you are working with startups and with culprits and.Help them to cooperate but let us first get a little bit into how you got to this position you are also advising several startupswe are interviewing or have been interviewingbut how did he get to this position you don’t start out and say I want to be an advisor to start up what happened there.
[1:26] Yeah I know I wasn’t born and said okay startups that’s my that’s my thing,now I had a rather long and heavy career in Commercial Banking and really started with the whole Bank training program very heavy risk training and move through,from the FI side really correspondent banking to the corporate side and then really concentrated on transaction services so cash trade securities.An innovation became more and more interesting to me more and more my hobby if you will and by the time I got to my last bank I work for ING as the last stop.I got to do Innovation as my job so I was working on the wholesale side for for Innovation and I was working with certain startups and I got the bug and I loved it.And as I got the opportunity three years ago I made myself independent I became a freelancer working together very strongly with fintechs I also advise Banks and corporates.
[2:28] It’s always the the theme is digitalization its Innovation that’s what I’m looking at for cash and trade.We may add for everybody who’s not really in banking that correspondent banking basically means you have a networkas a bank you used to have a network with other Banks and that’s basically how you made International transactions and transaction Services means everythingrelated to trading for cash or like Equity Stock Exchange stuff like this.
[3:04] Well it’s to just be very clear on the transaction Services side although I did work on the security,peace it was primarily cash when I say cash I mean account opening,it’s all the EB tools its liquidity management it says cards commercial card programs Etc and on trade it would be the plain vanilla if you will Elsie’s collections but also all the supply chain finance and supplier Finance tools.And at what point did you decide a worm,this corporate job isn’t for me anymore I’m much more enjoy startups what trigger do there,well I think it was really as I said I think it was working with I and J was a real pleasure I must say I mean it was my fifth International Bank I have more than 30 years experience in Commercial Banking,but it’s the bug really bit me when I got to I started out working with third-party payment provider called Peconic which is strong in the battle of.
[4:07] And one of my jobs was to really bring it to Germany and really get down and dirty as how that works what would you do the marketing strategy plan,it was the first time I had stand-up meetings that was really exciting different I loved it,fast Dynamic and I saw myself a little bit as the bridge.Between what had had had happened so the old world to what was really happening the new world which I loved.And I was able to explain to people what this all meant and where it was going because they had trouble either they were in the Old Camp of the new camp.
[4:44] And having done that working also with another company called KO base which is also a spinoff from ING.I really decided that the whole strategy piece working with fintechs and bringing my.Per transaction Services knowledge and my coaching skills and my risk experience together in one,it’s a really exciting possibility and that’s when I got the idea to start really advising and Consulting.
[5:16] And I had the opportunity to go Rogue to go freelance and I did it,so you went freelance and that that’s one of the points we will be talking about,today not necessarily how freelance working for startups is but rather,what you and maybe even I have learned from that because today we want to talk about how startups could or should approach,the cooperation with the copyright because there is usually a lot of misunderstanding and evenfear maybe on both sides to startups fear to be copied by the corporate and corporate sphere to be.Outrun by the small and agile startups what how would you start.For example I’m now founder and I said whom I think I need to cooperate with corporates how would you start.
[6:23] Help me think about it.
[6:26] It’s a very good question and I think that if we go back in history a few years there was a real fear even from the corporate side to work with the startup why because all they were laser focus.Possibilities in terms of solutions the substance was let’s say small.And the question was would they survive are they really clever enough in terms of their you know risk assessments do they do compliance well am I taking on something that isn’t going to work.There was also the the big question of the I would call it even the language startups would speak in one way and have certain,ideas and corporates and Banks put them both in the same category would not they didn’t understand each other it was as simple as that they work differently.There was Legacy on one side and there was Greenfield on the other so it was there were a lot of barriers.But in the end of the day it was absolutely key and it is absolutely key that they collaborate.
[7:34] Because that’s the future in my mind we no longer can have the One Stop Shop where a corporate or a bank makes everything does everything.They’re going to need to work with the right kind of providers and on one hand if you look at PS D2 and open banking how that’s opened up the possibility for banks and on the corporate side I think there’s a lot more confidence today.
[7:57] To work with startups that have the right ideas or maybe startups the become scale UPS so I mean that’s how I would start it Joe.That’s already a good start we may add from this star that P is D2 is the payment service directive number twowhich forces Banks to open up a little bit to startups of course you can learn down more down here in the show notes what that actually means and I think therethey have been librariestalked and written about piece T to alone and we won’t get started here go down here in the show notes and you will be able to learn more and.
[8:38] Okay now I understood that as a startup founder and how.Would I need to come up with a list of potential cooperation Partners as corporates should I just look at my direct competitors at.Companies who do something similar or kind of similar how would you bridge that.
[9:06] Okay well the first question is you know what is the corporate one and it is it a is it a question if we use perhaps you know we work very closely with.
[9:14] I know secret on my profile with.To fintechs one in the cache world one in the trade world if I start perhaps with the trade example and look at trucks pay.
[9:26] The product there is really a platform to allow companies.Buyers who are selling or excuse me suppliers who are selling to buyers and those buyers went to help those suppliers.By actually paying them early but at a discount of course.Really taking care of that is that it’s a huge process there’s a lot involved and you really need a very sophisticated platform to make that happen,in a good way both in terms of risk and economies of scale and all the rest so here you have you know a fantastic platform and how does how does that work from there,well in this particular case working together with tracks pay we’ve decided what kind of a company would actually fit the profile so.What kind of company would want that sort of service then we also work with banks in this case and say what kind of banks are multipliers could we talk to that would also have corporate clients that would be interested in this kind of service.
[10:29] So it’s on this particular case or in this particular case it’s very much a need question,what corporates could use these services in other words they are quite International there is a lot of complexity they have suppliers that really could benefit by quicker,more liquid.More liquidity in their invoices so that’s actually not too difficult the more difficult part is to really should reimagine the process to explain to them that this can be done,it can be done easily and quickly not only say it prove it and to the banks to say,your corporate customers are no longer interested in mono Bank platforms they went multi-bank platforms so what you’re doing now might be,cool that it’s not cool for the future you’re going to have to work with the provider that will give your buyers what they want,that’s one side on the cash side when I when I work with a company like this.
[11:34] There it’s really a question of companies who the looking for a provider who can really reduce complexity.
[11:45] If you think of you know the treasure a headache oh my gosh I have 2,000 Erp systems I’m joking but many Erp systems in iterations I have really hundreds of banks in 50 different countries maybe 2000 accounts,I have a lot of people out there with different rights.It’s spaghetti it’s worse than spaghetti it’s complex and you’re looking for someone to make that easy who could stand in the middle and fix that and on top of that give me yet more products and services through a platform.So again there’s either the fintech has to say,who’s out there that could really use my product what makes sense you know and I help them look through that and I help them also position that and on the other side to explain to corporates.Why that’s so important and to show them the value so those are the some of the parameters I work with.Basically I would boil it down I have been typing why are you reading to question 1 what to corporate want question to how do I fit inin there and question three how do I get the right positioning there but would that be fine for first step.
[13:01] Yeah what is it what a corporate ones want I think with a with a really looking for they know what they want and then in the case of tracks pay corporates want to,umThere’s the view of the supplier and the buyer the buyer would like to take their liquidity and probably use it more efficiently the supplier would like to increase their liquidity when they need it.So that’s what they want what’s your question number two again would you repeat that how does my startup fit in there.And the start and then from the corporate point of view they’re going to be looking at any sort of startup or any sort of scale up that would fit exactly that need how do they find them,through people like me who really know the market who’ve done a market scan who’ve talked to who’ve worked with,my research I spend two or three hours every day researching the market.
[13:58] I look at every provider a liquid every provider is doing in Europe or in the US in my area of expertise.I see how it’s changing so either you know you work through someone like me maybe you would work through an advisor so some of the consultancy services where you know I also contribute to.But it’s not easy because there’s so many interesting providers out there and you need you need to know a little bit about their experience and their product and.You know is the longevity really there so that would be,number two and number three is the right positioning that’s that’s a three questions that I got how to you position yourself right,for this first interaction with a corporate here and I think I think it’s very very key that you have you know I’m doing I’m working with Tish,it’s about to come out with a totally new rebranding you know messaging but also the most incredible platform.And it is the question is here is really doing your homework as a fintech on the one side and really figuring out how to position yourself.I think as far as the corporate goes it is they.
[15:15] They either know exactly what they need or they think they do and they need to have the right kind of advice and consultancy help.To get where they’re going what do I mean I’ll take a cash example a corporate may say I went pooling.I want cash pooling but what they really mean is I want to improve my liquidity picture.
[15:40] And if your fintech is smart and agile and clever they’ll understand that the point here is improving liquidity and there are many things that can be done to do that.
[15:52] There isn’t a corporate out there that isn’t looking to optimize the quiddity so that’s that’s one way to look at it if you will.
[16:00] Mmm I see I see and.
[16:04] Let’s say we got it all figured out because that already is a really tough step in for people who worked in corporate before.Because what I’ve been in startups got in the past and what I’ve seen they they just sent me,theater pitch deck that is tailored to investors and that has awesome kpis,annual recurring Revenue monthly recurring revenue and then I was going huh,what is the important information for me here so basically you have to put yourself into the shoes of the corporate with can bevery hard depending how on how much you understand of them and then think from their position,because if I could just add something that goes back to to what we were talking about just before is the language.So two things as you very rightly say you have to put your yourself in the position of the treasure and frankly unless you’ve worked with treasures for some time that might be a difficult one I mean I sold to treasure as for,many many many years so I understand the kind of questions the kind of challenges I know sort of a day in the life of the treasure what they’re doing that’s absolutely key,on the other side it’s even if you understand all that how do you how do you do treasure speak so how do you actually talk to them how do you position to them.
[17:34] And you know you also mentioned something about getting you know Dex or paper.The question is also you know are you using are using in the field sales are you using you know more of the marketing approach you know what are you actually it is it.There’s there’s so many tools out there and yet you have to really understand your audience where they looking where they’re buying what they’re reading so that does make a huge difference as well in terms of positioning.
[18:06] That makes sense and I would then go ahead and.Ask you how would you think how would you help to think the CEO the founder of a start-up about questions.
[18:25] If or if not he or she has figured it out but by the way we may add a treasure is the person in charge in big corporates that make sure they havethe the money enough money and also in the right currency,that can be quite tricky if you’re dealing like in 5 or 10 different currencies 5 or 10 different time zones 20 or 30 Banks and then you start to see the complexity in that,I’m not really envied those people but when I was going at is okay let’s say you have a list of corporates,you have a rough idea how you would fit in and how you would position yourself but then the question is.
[19:14] Whom should I talk to who is the right person to talk to and how should I startto approach them for me personally it’s pretty simple I talked to startupsthey usually approach me sometimes I approach them and then usually it directly the founder via LinkedIn but,I’m afraid if you want to cut if you want to work with companies like Bosch Porsche or a Mercedes and it’s not so easy to get accepted as contact up on LinkedIn by the CEO right.Absolutely.It’s actually that’s actually a brilliant question because that’s one of the things that I spend a lot of time talking to my startups about is,how to get.
[19:59] How to how to get the first discussion going how to how to really get in there how to really talk about it and,yeah I think that you know they certainly work LinkedIn that’s that’s one of them but you know first trying to figure out who to talk to in an organization which could be the treasurer could be the cache manager it could be compliance it could in fact be a char,it’s very interesting there’s different there’s different Pockets it could be.It really depends on what obviously what you’re selling and even if I’m talking about a company like this that has,that concentrates on payment optimization it still looks at all those different areas,so there’s a lot of social media work that can be done that makes it easier that’s how you know I would suggest starting.But also once you’ve done that.You know once you’ve got them on the phone or when you’ve got their ear for a moment what do you start saying what do you do and positioning it is absolutely crucial as I said.You’ve got to really understand what their pain points are try to get them out on the table very very quickly.They have to feel that it’s worth having that first discussion with you.
[21:12] I was actually you you’re already over took me because the first question was,whom would I approach how would I approach and then the next question is how to get the first meeting but basically what I did do is from you with,First Step would be read their social media post their press releases maybe even the annual reportsand absolutely what I found interesting was you always have different parts you could talk to you depending on your product or your service but wasalways from be important you have to make sure you talk to someone who has a budget for doing stuff like this because if you don’t have a budget you just wasting your time,Fed Up unfortunately that’s usually true without a budget it makes it difficult.You know I was I was going to add one thing that I think is not that shouldn’t be forgotten you know we talked about sort of the cold call way of going at it.One thing that’s absolutely important when thing I do for my clients is if you have a lot of.
[22:18] It makes a lot of difference it’s like everything else in life you know if you have somebody give an introduction.Of course in the end of the day it’s always key you know is your product the right one you know is it going to work blah blah blah.But getting that first talked getting that first interview getting in the door with contacts makes all the difference so that certainly is a big help so having an advisor.
[22:44] Is often very helpful.
[22:46] Mmm also meaning contacts are gold contacts are key what would I personally would be doing I go through the,social media content look for the content that’s relevant to me maybe there is a person who is mentioned there,in the blog post or whatever it is they are sharing or maybe you could look for a who else is sharing this blog post or stuff maybe it’s the person in charge of x y at this company and they’re also sharing it on Twitter,that’s a great contact or LinkedIn.And of course then you said connections connections are important there if you know someone who knows someone it’s,much much easier 10 than to just do a cold call and warm intro yeah,exactly and then assume you get to the first meeting how would you advise to them to prepare and how much can or should I tell.
[23:50] We don’t do easy questions here no all very very good questions you know when I’m working working with a few fintechs on that you know a few startups on that actually you know exactly how do you position yourself,when do you do what how soon do you do it what kinds of question what are the best questions to ask how industry-specific do we have to get.Um it really I have to say it really depends dot dot dot because there’s no you know one-size-fit-all if it’s all is not going to work.But having said that you know doing your homework is absolutely.Let’s face it everyone wants to feel like they’re important and if you know more about me before you talk with me of course I feel better about it it’s very key on the other hand you also want to listen,listen listen listen very important so if you ask the right open-ended questions to get certain is certain information about where they’re going the,key to them would you know where the shoe is pinching that’s also very important so it’s a combination and it really depends and you have to have a little.
[24:57] I’m thinking of the German word I’m trying to remember the English word as a fine crew you really have to feel your way carefully through some of these situations to to do it right it’s not,it’s not a scheme that you can plot out in every case you have to be ready for some dead ends and you know we.
[25:17] I’m just looking at the at the,at the show notes I’ll have here down in dish in the blog post and I’ll explain PC to cash pooling Treasurer and find if you let this is if it is going to be awesomeI try it you know it’s the ityou know one of the things I didn’t mention when we started I’m half German half American I have literally two passports to citizenships and I grew up with both languages.And I really get to the point where I sometimes have difficulty doing anything and just one so this is this is one of those words.And I’ve also seen not only do you have an MBA from Wharton but you also created with a degree in German literature who was your favorite writer,you’re supposed to say go to now right I don’t know a Fun Tan actually was one of my absolute favorites and did a lot of work on that.
[26:13] I’m not too sure how I would mention butI would totally not do Kafka calf guys always just twisting my brain you’ll have some version of text of Kafka and it’s always like in a dream reality is justmoving of absolutely down no cuff Co is not I although I had to read quite a bit no that was not my favorite writerI see okay below find your fuel that will be Kafka,let’s say we have thiswe have the first meeting done and then we have a few more meetings how would you,talk to start up about signing a corporation I would personally say,talk to a third party it doesn’t have to be necessarily a lawyer because he will understand the,the law aspects of it but not the business aspects talk to friend who is also founder took to talk to a third party who somehow knowledgeable.
[27:21] And make sure you’re not really disadvantaged there.Plus would always find important many many cooperation agreements I’ve seen their very awesome exact down to the detailand they don’t say one word abouthow to get out of this contract they have notice period and that’s it but then don’t specify anything how to get out a process or stuff like this this is always important for me because,when you don’t end this cooperation on good terms it may get ugly it may get long and you may even get into a legal fight and that’s something you really really want to avoid as a startup.
[28:05] What would you advise.
[28:08] All of the above sounds good to me I think I think one thing that I also find is that many startups.I say desperate to get into the game that they’re willing to perhaps give too much away that’s something I would worry about or watch out for.It’s not that you don’t compromise I think you can both sides can do that and you have to but you have to also.Nowhere.The boundaries are that’s something I’ve seen a few times and that’s in that would that would be a piece of advice I would really give.So that and also understanding you know where your partner is coming from I think that’s also very key so we think between the between would you said when I said that’s a.You have a framework and also you know the very obvious talk to someone who’s done it before.
[29:07] Try to get some advice you do that I think is always key so now as kind ofthe guideline I’ve I’ve written down during we have been talking what to corporates one how does my startup fit in there how do I get the right positioning,whom to approach how do I approach how do I get in the first meeting how do I tell what do I tell in the first meeting.Get advice on the final agreement as we said of course the lawyers always good but also make sure you get the business side and how to end the contract right.
[29:46] Absolutely and also get as I said.I really do see some of the startups that they that are so anxious to get into business that they’re willing to give away too much.And they’re not looking out for their own interests it is important mmm well.That’s actually awesome closing words we recording now for 30 minutes already which is little bit longer on my regular episodes but I do believe there are now a lot of questions,from all the startups out there.And of course you can reach Kate down here in the show notes there’s her LinkedIn profile as well as her company website.Kate thank you very much it was just a pleasure having you on my show hope to see you back and help to that many many entrepreneurs find it interesting and helpful what we’ve talked about.Thank you very much it was a real pleasure if you are a professional looking at the European startup scene Germany is a place you cannot miss.
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