The German Internet start-up battle

There is lots of noise in Berlin. Numerous Internet start-ups have been founded and seed-funded in the last years. 2009 was dominated by new (mainly copied) ecommerce cases. As an early stage VC investor (Target Partners) who sees the majority of the investment cases in Germany it was quite astonishing to see the “rat-race” which is currently taking place. The German Internet and ecommerce incubator scene was ruled from the European Founders for some years. Due to the fact that this concept seems to work others tried to copy this approach. The result is that three or even more incubator organizations are often competing with their start-ups today. A good example is the battle of the German copy-cats Sponsorpay, Gratispay and Deal United. Every start-up is supported from a different incubator an is doing more or less the same.

I highly respect the power and the experience of all involved people – in the supported start-ups as well as in the incubator organizations. But I am honestly asking myself if it is a good thing or a waste of resources that such kind of competition looks sometimes like an end in itself. Well, time will tell and in the meantime we all have some interesting things to observe.

The deal flow in 2009

This year was really an interesting one. We’ve seen more deals than ever before. Statistically the ratio of pure Internet case has decreased and the percentage of technology cases has increased. Which is a good tendency because we believe that technology can make the difference. If I compare the deal flow in 2009 with the deal flow some years ago it is more than obvious that the German start-up market is growing. There is no proof but I think this is the result of various causes, e.g.:

• Public stories about successful entrepreneurs are motivating other people
• Active business angels are supporting entrepreneurs and their ideas
• Social media are connecting and inspiring entrepreneurs
• Seed investments are possible again because of the establishment of the High-Tech-Gruenderfonds and some business angel networks

I hope that this trend will continue.

The investments in 2009

Will be posted in some days…

No words are necessary. Just have a look and think about how a day without the Internet would be…

The ‘Hightech-Gründerfonds’ (HTGF), a German public-private Seed investor located in Bonn, organized a conference with almost all active German Seed and Early Stage investors today in Bonn. We discussed the situation of Seed cases, potential follow-on investments and how the public investors can work together with the private VCs.

The HTGF has generated an impressive deal flow and is really reinforcing the Seed investments in start-ups in Germany since its foundation in 2005. I think it is a much better situation for young start-ups today.

Thank you Michael, Alexander and the entire team in Bonn.

Gartner analyst David Cearley gave some advices how to deal with the  top trends coming in 2010 that companies should incorporate into their strategic planning, if not necessarily their own computer systems.

The full list of 10:

1. cloud computing
2. advanced analytics
3. client computing
4. IT for green
5. reshaping the data center
6. social computing
7. security–activity monitoring
8. flash memory
9. virtualization for availability
10. mobile applications.

If I compare these technologies and trends with the potential investment cases we are working on or even with the entire deal flow we are receiving I can see similarities.

Pete Cashmore (founder of Mashable.com and definitely a guy who knows what he’s talking about) and presents his view of the top trends in the web for 2010:

1. Real time web: the web experience (consumption & production) will become more and more instant
2. Localization: Information in the web will be linked to local data and thereby open a whole new level for the internet
3. Augmented reality: a layer between the real and the digital world will become platform for untold experiences
4. Content curation: Be it your social graph or professional curators, filtering information is and becomes more and more crucial
5. Cloud computing: data and even applications won’t stay on your computer much longer
6. Internet TV & movies: this area of entertainment will more and more migrate to the web
7. Convergence: why carry more than one device with you?
8. Social gaming
9. Mobile payments: as everything becomes digital and real time a proper solution for payments on the go will break through
10. Fame abundance & privacy scarcity: What you wanna do when they come for you?

Complete article on CNN here: http://bit.ly/7QSGfl