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EXCLUSIVE: Buy and Build in eCommerce — Acquiring the Price Dip — Founder Interview

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.

This article is part of our coverage of Startuprad.io Knowledge Graph: The DACH Startup Ecosystem.

Executive Summary

  • This blog post first appeared first on old medium publication (https://medium.

  • Learn how to acquire competitive advantages in your eCommerce ventures with a buy & build strategy, unlock potential growth and add new capabilities: In this episode, Joe, interviews Peter, the founder of an AI startup called Pythia.

  • At the day of publication of this interview we celebrate in Germany Father’s Day.

  • Note: Mother’s Day is always celebrated on the second sunday in May in Germany, where we do not publish, so there are no Mother’s Day episodes.

  • If you are listening to our content for the 2nd time please consider following us on social media.



New Blog


In this episode of Startuprad.io, host Jörn "Joe" Menninger sits down with the founder of EXCLUSIVE to explore how this DACH-based startup is tackling real market challenges. From early-stage hustle to scaling strategy, this founder interview dives deep into what it takes to build a startup in the German-speaking ecosystem.

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.


Executive Summary

Learn how to acquire competitive advantages in your eCommerce ventures with a buy & build strategy, unlock potential growth and add new capabilities: In this episode, Joe, interviews Peter, the founder of an AI startup called Pythia. Peter discusses his company’s buy and build strategy for acquiring e-commerce startups, which involves integrating them into their standardized processes and assigning brand managers or CEOs to oversee them. He also talks about the challenges facing companies in the current market, including rising prices, tighter financing, and more restrictive customers. Peter’s company is looking for profitable e-commerce companies with solid earnings and adjusted earnings, and they plan to continue buying until late 2027, with the goal of reaching €80 million in revenue and €20 million in profit.

There has been a kind of Bermuda triangle created by external forces for e-commerce companies recently. Financing becomes more expensive, inflation increases production prices and consumers are more restrictive with their purchasesPeter Hart — Founder and CEO DIPQ and Pythia

Happy Father’s Day

At the day of publication of this interview we celebrate in Germany Father’s Day. In Germany the day is always celebrated on a Thursday, Ascension Day, which is also a public holiday in Germany, which gives fathers time to celebrate.

Happy Father’s Day!

Note: Mother’s Day is always celebrated on the second sunday in May in Germany, where we do not publish, so there are no Mother’s Day episodes. Sorry to all mothers and belated happy Mother’s Day as well!

Over the last 12 months, we looked at the demand for consumer products and made a buy or build decision, which always ended up to be a buying decision, due to the lower multiples.Peter Hart — Founder and CEO DIPQ and Pythia

Follow Us on Social Media!

If you are listening to our content for the 2nd time please consider following us on social media.

When we made a buy or build decision in 2020 and 2021, they always ended up being a build decision, due to the sky-high prices.Peter Hart — Founder and CEO DIPQ and Pythia

Our Enablers


This recording is supported by HTAI and the Enterprise Europe Network Hessen

This recording was made possible by HTAI and the Enterprise Europe Network Hessen. These organizations have made tremendous contributions to helping startup businesses succeed and thrive, providing a range of services from helping to find grants to ongoing partnerships. By taking advantage of these resources, startup companies can network and develop innovative strategies for success on the international stage. The dedicated support of HTAI and the Enterprise Europe Network Hessen is paramount in providing startup businesses with the tools for lasting success. Look for our dedicated sub-podcast in partnership with them: Tech Startups Germany on our


The best way to identify investors and cooperation partners for early-stage startups. Sign up for early access here:

We usually look at Shopify stores. If they are not, we move them over time to Shopify.Peter Hart — Founder and CEO DIPQ and Pythia

The Video Interview is set to go live on Thursday, May 18th, 2023


Since Corona a lot of players have come to the digital advertising and ecommerce space, since there was no reasonable other place to advertise or sell. This drove advertising prices and increased overall competition.Peter Hart — Founder and CEO DIPQ and Pythia

The Audio Interview

You can subscribe to our podcasts here.


The Founder

Peter Hart is a young and exceptional entrepreneur (https://www.linkedin.com/in/peter-hart-94373435/). He appeared in Germany’s version of Shark Tank and got a deal for 200.000 Euros as a 25-year-old. Currently, he is not even 35 and already runs 12 brands simultaneously. You can learn more about how he achieves this in the Starting Y interview in the links on the blog post.

He started with a body aftershave brand called Dr. Severin and then went on to develop the software he used to forecast consumer trend tools into the AI startup Pythia. With this he build and bought several consumer brands and now logically continues this approach with buying up profitable e-commerce shops with Dipq (no website).

Currently there are not many investors active. For all of our acquisitions we have been the only ones bidding.Peter Hart — Founder and CEO DIPQ and Pythia

The Strategy

Peter has with Pythia a competitive advantage in predicting trends and uses his knowledge of the market, as well as the cash flow of the existing businesses to buy up smaller ecommerce brands, to build them up further. The company has already many functions in place e.g. SEO, website design, logistics, and many more… using economies of scale and scope.

So far they have acquired three companies:

They are taking advantage of the lower multiples for ecommerce brands which have come down almost 75% compared to pre-corona. The strategy is similar to the amazon shop consolidation plays.

They plan to continue buying until late 2027, to reach€80 million in revenue and €20 million in profit. Peter sees the most likely final goal at an IPO of the consolidated entity.


February 2020 Interview

You can find the interview from February 2020 here:



March 2022 Audio-only Interview

You may know that Joe is co-hosting a podcast on the mindset of Entrepreneurship, called Starting Y (https://medium.com/@startingy)? He interviewed Peter there in early 2022 on how he runs 12 brands at the same time

For the company we are buying we can offer the founder a “mic drop” if they want to get out with the closing of the deal.Peter Hart — Founder and CEO DIPQ and Pythia

Open To Talk To External Investors

Peter is open to talk to external investors, they are currently considering to build a private equity like fund to make more and larger acquisitions. You can reach out if you want to learn more.

Currently we get 30–40 pitch decks a month from companies that are up for sale, without requesting them.Peter Hart — Founder and CEO DIPQ and Pythia

Profile Acquisition Targets

Dipq is looking for profitable companies. They are looking at their definition of adjusted earnings, especially for companies that are suffering from management mistakes that are easy to correct.


Hiring

You can apply on the website and find open positions as well here:


Tune in to our Internet Radio Station here:


Further Readings / Additional Resources


Feedback

We are always looking for ways to make the show better. Please take this opportunity and share your feedback with us! You can also suggest topics or interview partners that you’d like featured on future episodes by leaving a comment below — we would love to hear from YOU!!!


The Interviewer

This interview was conducted by Jörn “Joe” Menninger, startup scout, founder, and host of Startuprad.io. Reach out to him:


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Topics Discussed in this Interview

In this interview we are talking about


Automated Transcript


Narrator (00:00:05) — Welcome to Startuprad.io, your podcast and YouTube blog covering the German startup scene with news interviews and live events.


Joe (00:00:19) — Hello and welcome everybody. This is Joe from Startup Rate dot. I owe your startup podcast from Germany, Austria, and Switzerland today. I do have Peter here with me. Hey Peter. How you doing?


Peter (00:00:31) — Hey. Hey, Joe. How you doing?


Joe (00:00:33) — I’m doing good, thank you. We may add that you have been a guest in my podcast before we link, uh, so you run multiple companies. We link down here in the show notes our interview with Pithia, the AI startup as well. When you, as the interview of starting why you have been talking about how to run multiple companies at the same time. But today we are here for something else, um, because you guys are running a buy and build strategy. Now, let us talk first a little bit about who you are and who, how you actually started this idea, because you don’t wake up one morning from a corporate job and say, Hey, let’s do buy and build strategy.


Peter (00:01:22) — All right. So Joe, thanks for having me again. It’s always a pleasure and happy Father’s Day, by the way.


Joe (00:01:29) — Yes, exactly. We are publishing this on the 18th of May, which is a public holiday in Germany in many states as well as Father’s Day. So happy Father’s Day to everybody. ,


Peter (00:01:43) — Happy Father’s Day. So, right. Um, well, to, to go back to your question, um, so yeah, I went into, um, aerospace engineering and, and, and economy when I was studying. So I thought I’m gonna, I’m gonna go with a corporate ladder, did some internships in, in some, um, major companies and, um, but always had had the thing that I was too young. So everybody told me, you’re too young. You’re too young to, uh, for that job. You’re too young for that job. All the jobs I wanted were basically, um, age restricted, at least in the, in those, uh, corporations. Uh, I think it’s a very widely common phenomenon. Um, so I was like, so how old do I have to be? I was 20, 22 at the time. They said like, you have to be at least 30 to, to run this department. Like, you know, un unrelated to whether, you know, skill or whatever.


Peter (00:02:42) — Uh, you just have to pass that barrier. So I thought, I can do this. Like, I can just just wait. No matter how good I become, just wait. So I decided to, to, to quit it. I mean, I think most people who wanna found something need a little push at some point. I definitely needed it cuz it’s a, it’s a scary and highly unknown field to go into when you really, um, also my family has had, I had no background from, from home of, of entrepreneurs or something like that. This was like really something, um, totally off, but that was a good push. So I decided I could try some things and then worst case, come back at 27 or 29 or whatever and still cross the 30 barrier and then, you know, um, do do the career thing, Paul. Well, that’s, um, I think a little over 10 years ago. So here we are. Um, I’m really, I’m really happy to do the job I do. So, um, I guess all in all, it was a good thing.


Joe (00:03:52) — Mm-hmm. ,


Peter (00:03:54) — Right? So, yeah, first thing, um, was Dr. Severin, um, a beauty beauty company. Um, e-commerce, heavily e-commerce based, um, heavily Amazon based. And from there, after going through the German shark tank and everything, more, more, more brand, more brands, um, we were created more brands, um, on the same construct and concept. Did some socks brands and, and they all, they all live still, um, today in our portfolio. But as you mentioned lately, we started, um, also adding external companies to our portfolio since, yeah, since pretty much one year now we’ve done, um, three transactions, um, due to the current pricing, the current pricing is very low on e-commerce startups. Right.


Joe (00:04:53) — Can can you tell us a little bit how this actually gets in the whole strategy? So basically you do have an AI company that helps you forecast the next trends in consumer business. You do already run a few consumer facing consumer, uh, focused brands on this basis, and you use some of the cash flow to actually buy more companies. Is that approximately how it works?


Peter (00:05:22) — That’s a really good summary. Yes. So, right. Um, so I, our AI company basically consults consumer companies. And since we are running consumer companies, we’re, um, also, um, using our own tool a lot. Um, which fuels, basically what it does is predicting trends through, um, evaluating data, big amounts of data, and, um, then out of that you can build like products and services, um, and you can calculate better, like whether the amount of people who need this are growing or are declining. And, um, so we use that. Yes. And to your question, we, when we buy something, we integrated into our, uh, processes, which are, um, very standardized for all our, like all the base processes like logistics and, and supply chain and, and, and, and website maintenance and all these things. Um, and we integrated into them into our base processes. And then, um, we have would have a brand manager, um, taking care of the brands or, or a ceo, um, we put in place. If they don’t come with the, with the brands we buy,


Joe (00:06:49) — What first came to mind is something that is more or less similar to the people who are buying up Amazon shops is something along this line. Like a buy and build strategy,


Peter (00:06:59) — Right? Yeah. Um, exactly. So there has been, this has been a trend for a while now. Um, I think, um, for us, it, it’s not really, um, the same case because we are, um, we’re we’re just adding to our portfolio. It was like, it’s just currently for us, it’s cheaper to buy than to build ourselves. Click. Prices are very high, like starting something up right now. And, um, it’s just the, the, the common question make our buy. And for us, over the past 12 months, it was definitely buy because, um, click prices online marketing prices are high, but, um, company prices are low. So you buy structure that already has customers that already has a certain SEO status, all these things that are quite, uh, expensive to replicate right now. You get, um, before that, it wasn’t the case before, like, especially maybe 2, 2 20 to 21 prices for e-commerce companies were really high, like the multiples were through the roof. Um, so same question. Buy like, make or buy making was, was, uh, was a better way for us. Now, for the past 12 month, price have been dropping extremely, so this makes more sense for us now,


Joe (00:08:28) — Uhhuh and, but


Peter (00:08:29) — This is not like our forever strategy, right? We’re adding to our portfolio, we’re making ourselves bigger, but as a opposed to the companies that do, we’re specifically founded to do that, it’s, it’s a slight difference. Also, we don’t wanna have too much Amazon exposure. Mm-hmm. , we definitely prefer having the customer on our side. So we’re doing the, the Shopify wave basically. Mm-hmm. , all, everything we buy is, um, we’re looking at Shopify, uh, based stores and in very rare cases we’re then, um, moving them to like, our first, our first transaction was non Shopify, so we’re looking at moving it, um, over time. Yeah. Yeah. Mm-hmm. to Shopify.


Joe (00:09:17) — What first came to mind was, uh, do you have any idea where the forces are behind this? Meaning the marketing prices go up and the company prices go down. Is this kind of, um, a global shift in the value generation? Are the marketing entities, what comes to mind? Are Google, Facebook, and so on and so forth, do they become more powerful in terms of pricing than the e-commerce companies?


Peter (00:09:44) — So, well, there’s definitely a lot of, uh, centralized power when it comes to online marketing. Um, like meta, the, the Facebook company, Facebook, Instagram company and, and Google have, have a huge share of, of all the clicks delivered. And there is definitely also, even though it’s not openly communicated, but there’s been some leaks about pricing power, uh, abuse, where the bidding system, for example, is rigged, uh, on, on Google side, but without me being an expert in that. Um, it’s just that, that’s definitely a fact. Um, also since Corona, I think a lot of more, a lot more players entered the under marketing space because there was no way to, to advertise otherwise or to sell otherwise for a while. So, um, but prizes have been rising since my career started by maybe times 20 or times 30, like 2013, the same click we would buy back then for a few cents, maybe two, 3 cents now cost us up to one 50 or, or more.


Peter (00:10:56) — Um, so prices have, have been rising. It’s not, it’s not as cheap as it once was, but on the other hand, conversion techniques have gone better. Mm-hmm. . Um, and to close up on, on your question, I think there’s a huge pressure right now on, on companies, um, from many sides. Like customers are a bit more shy than, uh, they were over the past years. Um, general economy is, there’s a lot of question marks. Um, financing has become tighter. So refinancing, especially business models that are have, were built or are running on external capital flow, that’s, uh, definitely has been tightening a lot. I mean, interest rates have been rising, so that’s gotten more expensive and tighter. So there’s like a three, three dimensional Bermuda triangle going on for, for I think a lot of companies, which is, um, yeah, financing, like I mentioned, becoming harder and, and tighter.


Peter (00:12:05) — Um, the inflation making like, uh, production prices higher and can you translate those prices to your customer question mark. You need more working capital actually to, to produce right now if you have physical products mm-hmm. . Um, yeah. And number three, obviously consumers being a bit more restrictive with their money because heating has become more expensive, all kind of things where you look at the average consumer and you say, okay, this person has maybe $300 to spend a month extra after all costs and, and everything, and has $300 just to go shopping a month For a lot of people living has, living costs have increased by more than 300 a month. So all these people, for example, who had 300 a month to spend now maybe have a hundred or zero mm-hmm. , um, or minus 200. So you might obviously it, it, it’s harder. So for example, just to pick Germany, I think heating prices and electricity prices per household have increased by, I think on average over 200, 200 euros per, per household, per month. So, um, that’s definitely, and, and, and, uh, yeah, inflation wise, um, food and everything has, has become much more expensive. Um, so you have, uh, depending on the, on the living standard and the habits, we have a much higher base cost.


Peter (00:13:49) — So that’s, that’s a number three, which is really, um, tough for, for, I think for companies also for e-commerce. Um, and I think on the other hand, buying has frozen up completely in many cases. We’re the only ones bidding on a company, so this didn’t used to be like this. It’s a real bias market right now. Um, because I think, yeah, the number of transactions, um, has lowered, I think the, the appetite, um, also of our, of the, of the companies that have been specific, specifically founded for this case, that have also been struggling, um, lately, and I think this is what causes this immense delta between, between what your original question was between the prices, online marketing prices and the company company value valuations right now. Mm-hmm.


Joe (00:14:52) — , uh, on, on the macro picture, the, the, the, the mood available capital for consumer is not as free, uh, as it used to be as much, uh, free cash flow, free spending money as they used to have due to inflation plus additional worries. And on the other hand, um, the investors that would compete with you in bidding up the prices are currently not bidding, basically. Right. So as you said, this is a biased market. I would, I would be interested in what terms of pricing are we talking about here for e-commerce company? I, I assume right now only in Germany,


Peter (00:15:28) — Right. Um, but it is quite a global trend. So we are also looking at, uh, a lot of, um, targets, uh, overseas. We haven’t, um, bought anything that’s not in Germany, but we’re keeping an eye on it already. So we used to have like eight times ebit mm-hmm. eight times ebitda, but like eight times earnings before, before, uh, taxes. So let, let, let’s just say seven, seven times profit, 6, 6, 7 times profit used to be. Mm-hmm. 2021 used to be a solid benchmark. There are definitely tons of cases that were outside of this, but for a proper business, if it’s not big enough for it to gain, like for example, just spices got sold I think at 30 times sales or something, or 20 times sales, 15 something between 15 and third time sales. So that, that’s a, that’s a different story. Um, but basically this was the more or less the benchmark in, in, in, let’s say in e-commerce brands that are between 1 million and 5 million revenue mm-hmm.


Peter (00:16:44) — , right? So quite small, small. So now it’s about two times. So the price has declined by 75%. Um, or to put it the other way around, the multiples have, yeah, have, have dropped from eight, let’s say eight to two. And what I think is, um, it definitely needed some adjusting to, to the current market, um, to the market circumstances. But I think, uh, you know, you could have half the valuation would’ve been fair to my mind, but it has been half, basically two times from eight to two. Um, and I think that’s why, and that’s basically the reason for us buying, because I obviously you buy when you think the value is higher than what you pay for. Mm-hmm.


Joe (00:17:43) — , you already made two, uh, three transactions we’ve heard. Yes. Um, what are you looking at in terms of company, in terms of profitability, cash flow and revenue size?


Peter (00:17:54) — Right. So we’re not, so we’re looking at profitability. Um, first and foremost, that’s our, um, our thing because that’s our strategy to, um, especially maybe considering that there might be some, some, uh, windy and, and, and stormy times ahead. We just wanna make sure, um, we have the profitability, we need to also survive potential crisises. Um, as a non externally funded startup, you always obviously have a, an I for, for, um, cash flow and, and free cash especially, um, like free, free cash and, and solid earnings. Um, so that’s, that’s what we look at, uh, mostly, um, having a solid business, um, with that has, uh, also a solid earnings, um, yeah. Has solid earnings. So, but what we, we mostly look at is like what we call, um, basically adjusted earnings. So a lot of the things we look at have, have, um, some, most of the things have some major issues, um, or, or major, let’s say management mistakes mm-hmm.


Peter (00:19:15) — , and, um, repairing those usually leads to a much higher adjusted earnings. Um, like, like makes the adjusted earnings look way different than the, than real earnings. On the other hand, if you have a founder or a founder founding team that is working their asses off, then you have, you have to adjust your EBIT the other way around because if you have like two or three founders who pull like, you know, 100 hour work weeks mm-hmm. or useful and, and, um, but pay themselves like maybe, I don’t know, 50 K a year each mm-hmm. , then you definitely, um, you’re, the event you’re looking at is, is not, not the real one. So for companies and these, these sizes like the adjusted, the adjusted, um, earnings are, uh, very much more important than the earnings on the paper because it’s, it, you know, you don’t run through compliance. It’s, everything is a bit more unprofessional than if you look at, I don’t know, like a big corporate company


Joe (00:20:28) — Mm-hmm. mm-hmm. . I see. Um, are you guys really turning into PE investor here?


Peter (00:20:36) — I, I don’t know where we might, um, build a fund, um, soon.

Right? That is just speculation right now. First we want to consolidate and, and, you know, prove our, our point of, of what we’re doing. Um, but yeah, so our, our plan is if the market environment stays this way and prices remain more or less the way they are now to continue buying up until late 27


Joe (00:21:07) — Mm-hmm. ,


Peter (00:21:09) — So basically another rough four years from now, and to reach with our, uh, buy and build portfolio to reach somewhere around 80 million in, in revenue in 20 million profit. So at that time we, we would be much rather a fund than now.


Joe (00:21:29) — You think you can do this better than a private equity investor?


Peter (00:21:33) — Uh, yeah. And, and, uh, not, not better than all private equity investors. I, um, I know, uh, uh, a few and have big respect for them. Um, and there are some really, really good, um, things going on there. But, uh, what we have is basically the structure for that. So we don’t need to look for an external, um, ceo, whatever. We have all the processes in our house. We have built them all from scratch, like from zero revenue. We have, we have a high expertise in the company and we have, our processes have been basically market tested in a way that I think is hard to replicate. So this is also one of the reasons why we can offer for, for the people who, who are selling their businesses, we can offer them to mic drop. Mm-hmm. , this is something. And if people really want out of their company and are like, I can’t, I can’t stand being in this place for another day, this is, uh, where we can come in because we have all the, it’s always the same base processes, like I said, all these things, website maintenance mm-hmm. , supply chain advertisement, um, obviously adapt to the, to the product, but mostly, many, many processes are the same. And I think this is our advantage that we’re playing. This is the hand, we’re the, the hand we’re playing right now.


Joe (00:23:06) — So basically you’re, you’re currently looking, you only bought in Germany, but we already talked, you, you looked at overseas European Union, you also opened to something like America. Asia,


Peter (00:23:18) — Yes. So we’re monitoring prices right now, um, have been done, have been doing this for a while. Obviously it’s easier for us right now to, um, to buy in Germany because just like our home market mm-hmm. , but, um, for expansion maybe, we’ll, we’ll look depending on the prices, obviously always mm-hmm. . So for now we’re, our, our pipeline of targets is, is filled very, very well, too. Well, in a way, , it’s hard to keep up the flow because once you start buying all the, obviously all the m and a brokers and everyone who’s looking for the buyer, which is Harvard now are sending you decks mm-hmm. without end. Um, right. So


Joe (00:24:04) — How many pitch decks do you, do you get, like in an average month? Right now?


Peter (00:24:09) — In an average month, I would say about 30 to 40 without requesting any mm-hmm. . If, if, if we, like for example, we just bought a company like, um, four weeks ago, so right now we’re not actively asking for new decks because mm-hmm. , we, we we’re looking at buying like four targets a year, max. Actually, our, our benchmark for our plan is three per year. So four is like, just if there’s a special, special occasion, um, to be able to integrate. I think we were able to learn a lot from the, from the, um, buy and build companies that have appeared over the last few years, but with Amazon buyers and everything, um, we talked to a lot of them, and so we were able to identify some major mistakes that they have had to run through, and we don’t run, run through that, that that one of them is like buying too fast. Mm-hmm. buying too fast, not being able to integrate, not being able to consolidate properly. Um, that’s one of the major takeaways. And the, the things that I mentioned earlier, is the entrepreneur really the company, or is the company working without the entrepreneur? Mm-hmm. . So this is why speed and I think diligence are key to, to making this, this right. Even though prices are low. Mm-hmm.


Joe (00:25:41) — , uh, would you describe basically, I, I would see like, there’s one acquisition company and there’s a marketing team, there’s a co team, there’s distribution team, there’s a logistics team, yada, yada, yada. Um, basically you plug in the new company, so you have one legal entity with which you’re buying. Which one is that?


Peter (00:26:00) — No, actually we’re buying the companies as a whole, so they remain for now they have their own entity mm-hmm. . Um,


Joe (00:26:09) — But basically the, the, the structure is the same. And you, you use one holding company


Peter (00:26:14) — Mm-hmm. , and then there’s all the, all the, uh, entities below it. Mm-hmm. . So the,


Joe (00:26:20) — What’s the name of the holding company?

Peter (00:26:22) — T I P Q


Joe (00:26:23) — G I P Q. Okay. Um, are you open to talk to other investors who’d like your approach? Because you just said, oh, well, one day down the road we made erase a fund.


Peter (00:26:38) — Sure. Uh, sure. So, um, our, our current plan, um, to, to reach our, our goals, uh, at the end of 27, of, of, uh, 20, 20 million in, in, in earnings and 80, 80 million in, um, in revenue that’s, um, is in need of an additional 8 million, um, of investment over the years. So I think from our plan perspective, if we want to go this, this far, otherwise we just buy it from our own cash flow. So far we just bought everything, um, from our own cash flow and, um, haven’t leveraged anything, but it would take some leveraging or investment over the years to, um, yeah. To keep up mm-hmm. and, um, so yeah, sure. To your question, we’re talking to you already. Yes. ,


Joe (00:27:34) — My next question would’ve been, uh, how are you funding your business? But right now we still add operative cash flow from the other consumer brands mm-hmm. , um, what, what is like the long-term goal? We already know, like in terms of value, uh, 80 million, um, annual revenue in euros, 20 million in profits, but what is like the strategic long-term goal? You want to, you want to IP open the entity at one point?


Peter (00:28:02) — Yes. This, this is gonna be the most, uh, or yeah, or selling to a big, uh, corporate who is looking for, um, something of a, of a strategic entity. But, um, I think the, for us also, like, I think the most, um, the, the, the most probable way will be in I I P O


Joe (00:28:28) — Mm-hmm. . I see. So, uh, that should be a few years down the

road.



Peter (00:28:33) — Yes. Mm-hmm. . Yeah, definitely. So definitely after 27 mm-hmm. , yeah,

Joe (00:28:40) — After 27. I see. Um, you, you’re talking about basically how I would describe it, you buy the e-commerce dip right now. Um mm-hmm. , I would be interested, what’s your outlook for the German and European economy since we, you have the goal 2027? Do you see it? Only the economy, the e-commerce purchasing behavior going back, uh, to, to precor levels in 2027?


Peter (00:29:08) — So that’s a really, I think people smarter than me need to answer this question. Um, that’s a really, really hard question. I, I’m really, it’s really hard to predict macro, I think. Um, but definitely from what, what’s possible to see right now is that households have more costs than they had before. And the, the, um, yeah, basically earning hasn’t adapted to this, like salaries and, and all these things. So I think for now, a little bit of a tightening in, in consumer spending is very, is very likely to continue. I mean, the government is trying to make packages. You’ve seen it yourself. They’re very small and very, they’re basically a drop on the hot stone. So I think this is gonna take a while. And also what is visible right now is that interest rates have hiked mm-hmm. a lot. And, um, people have bought houses at high prices over the past few years. So that’s gonna, I think that’s also another stress factor, uh, on, on, on consumers and on the markets.


Peter (00:30:38) — So especially if you have adjustable rates, um, that, that’s gonna be a really tough time, I think. So we, we are basically preparing for the worst that that’s how we, um, are running our businesses and, um, hoping for the best of course. Um, but it’s hard to tell. I, I, I don’t, I, I’m not, I cannot make a, a good prediction on, on this, but, um, there’s some factors that definitely rough. On the other hand, there’s a lot of things that are going good. Efficiency should be rising, a lot new tools are coming out. Are we able to cover this whole thing, the cover, cover, the bigger, bigger slides with, with, with efficiency? Um, like are we cover, are we able to keep our, keep a certain growth, um, uh, certain healthy growth, um, through efficiency maybe? Efficiency options are definitely rising over the past few months.


Peter (00:31:45) — You definitely have heard and talked about it, chat, G P t, mid journey, all these tools, insane efficiency increases. We see it in our company. We’ve more and more processes are being taken over by AI in our, in our company. I basically have always have two taps open, one for mid journey and one for Che C p T and do most of my work and try also, also, it’s uh, basically a mandatory thing in our company to try to, um, do as many tasks as possible. At least 50% is the current benchmark of your processes with these tools. You can write your email with it, you can write your product description with it. You can write your, your, your text, your, your presentation, your whatever. Not, um, you can make, uh, design concepts all, all day long. You can do 50 design concepts in a, in a day easily. It’s, it’s insane. It’s, um, it’s something that I, as an entrepreneur have obviously always wished for. It’s like having a, a magic wand in some way. Like having, having a Harry Potter magic wand in your, in your hand and being able to immediately produce what’s on your mind. I mean, at the, at least go a much bigger distance from your mind to put it on the, on the road. Um, so that’s, that’s a pretty great time. So maybe that, that will cover some of, some of the, the holds. We’ll see about it.


Joe (00:33:28) — Um, our interview today is, um, sponsored by the European Enterprise Network. They, they’re based here in Frankfurt. Ryan Mine in Hessel. Um, did it help you in any way to be based here? What do you, what do you think and like about the local business environment?


Peter (00:33:47) — Right. So, um, especially the institution you just mentioned, um, is, um, definitely one of the really good things here. There is, there is, there’s community there. It’s growing also, there’s hubs and everything. So, um, I think the, the local governments and banks have also, um, made big efforts to, to, to push this forward, to push, uh, the region forward. Um, so I’m, I’m, I’m quite happy with being here. Otherwise we would’ve moved already. So, um, yeah, it’s a, it’s a good region to be in. It’s a lot of ex access to a lot of things and Berlin is not far for anything more special. So we’re, we’re good. We’re also like very central between Munich and Berlin and, and, um, and Dusseldorf and, and K. So it’s, it’s a really good place to be, I think


Joe (00:34:47) — Also enough talent for what you are looking for.


Peter (00:34:50) — Now. Talent could definitely be, there’s a lot of competition here. There’s a lot of good companies in the region and there’s a lot of competition for talent. Um, so we have, yeah, we have a lot of people who work from other places, but hiring here is actually somewhat tough. Yeah.


Joe (00:35:12) — Um, if you would have something like a wish in terms of addressing the decision makers here in the state, what, what would be your like number one priority for this?


Peter (00:35:24) — Probably building more, um, building more accelerators and incubators. Yeah. I think that helps a lot for a region as a whole. I think this grassroot thing is, is is really something. We also started in one and a lot of the companies that were founded there in our time are still around. And I’m, and, and, and I built my professional network together with these other people who were there. So we still have a really strong bond cuz we started off like, we’re so small and, and, and, and, and young and, and you know, we talked so much late into the night. We’re sitting there and, you know, even though it was really different businesses, everybody was founding, there was so much in common, obviously. How do you hire all these questions? Which bank do you take? Which, what? Why do you find investors? I mean, all these questions are, are, um, are common.


Peter (00:36:22) — Um, you have in common, even though the business might be different. So this, this was really helped me like understanding what is an entrepreneurship, what is, what is this, what is that? It also, it was the first time somebody said, Hey guys, you’re a startup. And I was like, what are we a startup? We’re a beauty company. I don’t know. Is this a startup? Yeah. Cause you were selling online. Oh, well, okay. So , I guess we’re a startup. That’s cool. Um, so a lot of, like, you get the first, you break the first ground. I think it’s, it’s really important. Right.


Joe (00:36:55) — I see. Um, I, I would’ve a lot more questions to actually bother you with, but, uh, don’t worry. We’ll do it in another interview. I kind of have a feeling that we’ll have one in the future again. Um Right. Everybody would like to reach out to you. They can go down here in the show notes and directly reach you via LinkedIn profile. Um, are you guys currently hiring for any of your companies? Could you share, uh, a career’s website link with me?


Peter (00:37:23) — Right. Uh, we, we are hiring, especially what we’re looking for is new partners to come around along. Since we’re growing so fast, um, we are, we we’re handling this a little bit like a law firm or something like that, like with a partner structure mm-hmm. . And, um, we’re looking for partners who are from the, more, from the analytical space, but also are able to do hands-on, um, things like, like, um, COO roles and stuff like that. Who, who really like this management part and stuff like that to deploy things. Um, this is, uh, this is what we’re really looking for.


Joe (00:38:03) — Mm-hmm. . I see, I see. So thank you very much for your time. Everybody who’d like to learn more, go down here in the channel notes, wherever you’re listening to this, wherever you are watching this all go to our medium block, medium forward slash start rate minus io. And there you can learn more. Peter, it was a pleasure to have you again as guest and hopefully see you soon again.


Peter (00:38:26) — Yeah, one more sentence to the last point. We’re also accepting open, just open, um, open letters in sense of just send us who you are and what you’re doing and, um, we’ll figure out a role maybe. Mm-hmm. sounds pretty good, right? Okay. So, well, Joel, thank you very much as well, and have a very good week. You too. Bye-bye. Bye-bye. And thanks everyone for listening. Bye.


Narrator (00:39:03) — That’s all, folks. Find more news streams, and events at interviews at Startuprad.io. Remember, sharing is caring.


Key Takeaways

  • EXCLUSIVE is part of the growing DACH startup ecosystem, addressing market needs with innovative solutions.

  • Learn how to acquire competitive advantages in your eCommerce ventures with a buy & build strategy, unlock potential growth and add new capabilities:

  • Learn how to acquire competitive advantages in your eCommerce ventures with a buy & build strategy, unlock potential growth and add new capabilities:

  • This founder interview provides insights relevant to entrepreneurs and investors in Germany, Austria, and Switzerland.

Frequently Asked Questions

What does EXCLUSIVE do?

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.

Who founded EXCLUSIVE?

Learn how to acquire competitive advantages in your eCommerce ventures with a buy & build strategy, unlock potential growth and add new capabilities: In this episode, Joe, interviews Peter, the founder of an AI startup called Pythia.

How is EXCLUSIVE funded?

The best way to identify investors and cooperation partners for early-stage startups.

About the Host

Joern "Joe" Menninger is the host of the Startuprad.io podcast and covers founders, investors, and policy developments across the DACH startup ecosystem. Through more than 1,300 interviews and nearly a decade of reporting, he documents the evolution of the European startup landscape. Follow Joern on LinkedIn.

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