An interview with Vice-President Hana Milanov and INVENOX CEO Martin Hammer
“A young company is like a white canvas”
Four of the five founding members of INVENOX met in 2011 in the context of their doctoral studies at the Department of Automotive Technology at the TUM. They were researching a technology that was to become the foundation of their company. Together with a business major as the fifth founding member, they founded their startup in 2014 to produce the energy storage system they had developed for electric power-driven applications. The enterprise has grown rapidly. This week, a new INVENOX site was inaugurated in Garching: a building with 1600 square meters of floor space, laboratories and research facilities, as well as a partially automated assembly line. Alongside INVENOX, several other TUM spinoffs have been remarkably successful. Recently, the software enterprise Celonis raised investment capital of 27.5 million euro, for example, and only a few days ago the TUM spinoffs ProGlove and CervoTec also raised several million. Many spinoffs profit from their proximity to the university, especially during the early stages. But the TUM also benefits from the close association.
Mr. Hammer, how did you come up with the idea of founding a company in the midst your doctoral studies?
Martin Hammer: That had a lot to do with our environment. Back then, we were working on the Visio.M electric car project at the Department of Automotive Technology and had the opportunity to test our energy storage technology in parallel. Prof. Lienkamp, the department chair, supported us staunchly and reassured us that our idea was industrially viable. He gave us the leeway we needed to pursue our doctoral studies, project work and the spinoff in parallel. This allowed us to take advantage of TUM promotional offers early on.
TUM has an array of programs for young entrepreneurs. What is the idea behind these, Prof. Milanov?
Hana Milanov: At TUM, it is our mission to support an innovative society. We want to see our research making an impact on society and we want to inspire young people to improve our health, our mobility or our use of energy. Companies are often too big, too slow, to open their eyes towards new ways of doing things. Universities allow for more radical innovation and paired with the right support structures, can propel young talents to make an impact through entrepreneurial ventures. From creativity research we know that new ideas form when different perspectives collide. With so many disciplines and nationalities represented here, a University is a physical place where different perspectives literally sit in the same room. With entrepreneurial programs, we want to help our talents bring new ideas to the market.
Mr. Hammer, how precisely was your spinoff fostered?
Hammer: That started right with the initial idea. We participated in a number of programs of the Entrepreneurial University and visited workshops and lectures in every phase – more than 20 in total. For example, we took part in an entrepreneurial camp or e-camp, a comprehensive one or two-week intensive course, of sorts, that covers all the basic issues germane to founding a startup. We already had the technology, but only after taking part in the camp did we understand the steps required to be successful as a hardware startup in Germany. Founding a hardware startup here is not the obvious choice, especially in the energy storage segment. Batteries, per se, are no longer produced here and the competition on both domestic and international levels is significant. The TUM helped us select the most suitable programs and supported us in the application processes. Our patent application was also very important. Here, TUM Forte was very supportive – on our own, we probably never would have taken the step.
In your experience, what are the topics young entrepreneurs need the most help with?
Milanov: A young company is like a white canvas. Whatever paint you put on it starts shaping the way the painting is going to develop. You have opportunity to make fantastic art but you can also mess up things substantially. We can teach startups about things like formulating a team, understanding how to get from technology to a business model, and – that’s where universities are hugely important –help by giving them legitimacy, supplying initial networks and getting them close to so many talents to work with.
Mr. Hammer just addressed how unusual it is for a German startup to produce hardware. Do technology based startups like INVENOX need promotional activities different from those of their software counterparts?
Milanov: Yes, developing a new molecule, or sensors, or batteries, requires very different development and testing times from the ones in a software-based startup. This, among other things, makes some of the mistakes a team could make more costly. We can help avoiding those by assuring that these young teams have good mentorship early on, that they have opportunities to learn from other people’s mistakes. But we also teach them that a crucial part of entrepreneurial success is to be open to the possibility of failure. That’s not to say that we are encouraging people to fail, but a truly new thing doesn’t happen without some hiccups along the way.
How was it in your case, Mr. Hammer?
Hammer: I would agree with that. In the initial phase we made many mistakes – but it is the mistakes that show you where you really stand. You can’t allow the setbacks to demotivate you. In hindsight, it is easy to say you need to recognize the problems in the planning stage already. But in practice it is simply not possible to build a “100 percent solution” right off the bat. We did research on a novel technology and in the process problems arose for which we had to find novel solutions.
Prof. Milanov, you have done research on entrepreneurship. What effects does research have on practice?
Milanov: There is of course the general mechanism that we transfer research into education – be it in the form of scientific papers, practitioner articles, or through designing experiential exercises for the students. For example, we have an executive education program (EMBA) in entrepreneurship and innovation where our faculty can directly transfer latest knowledge in working with these students. Here at TUM, we also have something unique: Our Entrepreneurship center is a building where researchers, students, investors and entrepreneurs in different stages come together under one roof. So not only does research flow into education, but it’s also inevitable that we get inspired in terms of research by interacting with startups. For example, the TUM Entrepreneurship Research Institute is working with our incubator startups on a project to understand business model development based on the feedback the teams have with their mentors and with each other.
The Entrepreneurship Center opened only after you and your colleagues set up your own business site, Mr. Hammer. Did you still have contact with other startups early on? At the end of the day, they are often direct competitors for funding. Does that create a competitive situation?
Hammer: We were quite involved with other startups – even within in our department at TUM. We had quite extensive exchanges on just about every topic: from technical things and business issues to experiences and contacts. We later got to know even more startups through the seminars and workshops. There was never really any competition – many things are simply easier in collaboration. When funding is allocated, the best idea wins. Taking a competitive stance won’t help your own startup in that situation. We are still in close contact with the other spinoffs. In the meantime, one of these companies, Pacefish, has even moved into our building – we simply get along well.