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Silicon Valley: Plug and Play relies on logistics start-ups
The place with the highest start-up density per square meter in Silicon Valley is located in a building in Sunnyvale that is typical of the Californian technology valley: gray-beige, unadorned, as if created by chance in the sprawled landscape between office parks and housing developments. The interior of the three-story building is more colorful. The headquarters of Philips Semiconductor once manufactured semiconductors Plug and Play Technology Center, an accelerator that is promoting itself as the largest in the world.
In countless rows of desks and honeycombs, almost 400 start-ups are here in the hope of finding capital, customers and success with the help of Plug and Plays. In the offices and in the lobby there is a jumble of languages under flags from all over the world. Businessmen in suits give each other in groups in the corner office of plug-and-play boss and founder Saeed Amidi. Start-up founders in sneakers rush through the aisles, investors wait for the next round of pitches.
The start-up scene for logisticians is booming
There are almost as many accelerators in Silicon Valley as there are young entrepreneurs inspired by ideas for a world better. The top addresses include companies such as Y Combinator, Angel Pad and 500 startups. Plug and Play is probably the most international one. The accelerator, which was founded in 2006 and claims to have a network of 6,000 start-ups, has not only set up an extensive mentoring program in California, which is also well known among foreign founders. It exports the concept to 21 satellites around the world that have been built with partners in cities such as Sao Paulo, Paris, Berlin, Abu Dhabi, Jakarta, Beijing and Tokyo. In Stuttgart, for example, Plug and Play operates the mobility-oriented Startup Autobahn program with corporations such as BASF, Daimler, Deutsche Post DHL and Porsche, which aims to bring together innovative start-ups and established industrial partners.
In Sunnyvale, Plug and Play now offers 16 three-month start-up programs in areas such as retail, the Internet of Things, fintech and cybersecurity. A year ago, the Supply Chain and Logistics program was added, which Amidi says is one of the most active. For each industry-specific program, around two dozen founders are selected from hundreds of applicants, who immerse themselves in the plug-and-play world for three months and are brought together with investors, corporations, pacemakers and like-minded people. Plug and Play invests small amounts of between 25,000 and 500,000 USD annually in more than 100 start-ups and brings its participants together with venture capitalists. The company itself does not set up any funds - the capital invested in start-ups comes from Amidzad, the private venture capital firm of the Amidi family.
Plug and Play uses interested parties as investors
Which start-ups are included in the program is not decided solely by the Accelerator employees, but primarily by the group partners. That's the big difference to the competition. Most of the potential customers that Plug and Play brings together with the start-ups are partners who fund the programs relevant to them. “90 percent of our value comes from our network,” says Amidi, who has made a lot of money investing in plug-and-play independent start-ups such as PayPal and Dropbox. "We help start-ups with capital, customer acquisition and fine-tuning their business until it is tailored to the needs of customers."
Plug and Play has around 220 group partners, with new ones being added all the time. “We have partners who help shape the programs, determine their direction and select the start-up candidates based on their own needs,” says Candice Hu, who is responsible for the supply chain and logistics program. "In a second group are partners who work with the start-ups and can invest in them and have access to our events." The partners in the first division pay significantly more to be able to play with Plug and Play, over the amount Hu is silent about the contributions.
With Evertracker CEO Marc Schmitt in Silicon Valley
One of the start-ups included in Plug and Play is the Hamburg-based software company Evertracker. Since the end of February, Evertracker co-founder and CEO Marc Schmitt has been flying from Fuhlsbüttel to Silicon Valley every few weeks in order to get as much as possible out of his start-up, founded in 2014, for two or three days at Plug and Play. In return, the 36-year-old accepts the 15-hour flight, jet lag in both directions, the tight schedule and the very simple but expensive motel on an eight-lane motorway.
Evertracker was selected from 500 applicants worldwide at the end of January, along with 21 other start-ups. Plug and Play started the program at the instigation of the Danish shipping company Maersk, which, like the other group partners, is looking for better access to founders and innovative ideas in Silicon Valley.
Plug and Play has now recruited 24 corporate partners for the program, including BASF, CMA CGM, Deutsche Post DHL, Lufthansa Cargo and Prologis. Start-ups in this area have huge potential, believes Mike Zayonc, who started the program at Plug and Play: “Everyone - from raw material manufacturers to retailers and logistics providers - have problems that many start-ups face have innovative solutions. "
The second edition of the supply chain and logistics program started in March and ends in May with “Expo Day”, on which the founders can advertise their technology and projects to investors and companies. According to Schmitt, Evertracker has developed one of the first Artificial Intelligences that can automate processes along the value chain and make them controllable with foresight. Some well-known European car manufacturers, retailers, representatives of the construction industry and suppliers are using the technology. At the customer's request, Schmitt does not give any names.
Capital and customers
The Evertracker CEO hopes to be plug and play to get more capital and, above all, more customers. For a start-up that develops technology for large corporations and a change-resistant area, the latter is a lengthy undertaking that often fails. "When we approach companies, we usually talk to the wrong people - they are trying out a new technology, but cannot make long-term strategic decisions for the company," says Schmitt, while on a Friday morning at the end of March he was using his Mac on one of the Tables installed on the first floor of the accelerator. "The great thing about Plug and Play for us is that they establish contact with the right contact persons in the company, who can make decisions and take care of the start-up and the project." the start-up projects are suspended on the board, which is a huge advantage, says Schmitt.
After a few weeks in the accelerator program in Silicon Valley, Evertracker has already started pilot projects with two corporations. "Since we've been here, everything has accelerated tremendously - the conversations with investors and potential customers and the access to ideas and people who come and go here all day," says Schmitt. "To put it exaggeratedly: Everything we have achieved in three years, we have here within three weeks."
5 minutes pitch and 5 for questions
The Evertracker boss arrived in Sunnyvale on Wednesday evening and has been rotating ever since. On Friday, he and twelve other start-ups will be presenting to investors in a windowless conference room. Schmitt got up at 4:30 a.m. to work on his presentation in the motel room. The day before, Ra’ed Elmurib, the experienced CEO of Shoof, had helped him with good suggestions for improvement. Schmitt met the team that wants to revolutionize goods tracking with inexpensive wireless technology at Plug and Play and is working with them on projects. Shoof has already raised USD 4.5 million in venture capital and is renting a few square meters of office - with walls and a door - from Plug and Play in Sunnyvale. Each founder has five minutes for his pitch and another five minutes for questions. Schmitt is satisfied with his appearance: “That brought a lot, even if it doesn't lead directly to an investment.” Thanks to the presentation, Evertracker is at least a little better known again.
Next up is a conference call organized by Plug and Play with three employees from Georgia-Pacific, one of the world's largest manufacturers of paper and packaging, who are interested in Evertracker's technology. Then it's lunch with the investors from the morning, then Schmitt meets mentor Andy Stinnes from the venture capitalist Cloud Apps Capital Partners. Stinnes has years of operational experience in the business software market, he can help Evertracker with problems and with feedback and contacts.
Schmitt is already flying back to Hamburg on Friday evening. His seven-person start-up team is too small for anyone to leave for three months in Silicon Valley, says the founder. In addition, the office space with plug and play is too expensive. And Evertracker can now also access the Californian network at home: In the past few weeks, the Hamburg-based company made it into the Stuttgart program called Startup Autobahn as well as the one launched by Plug and Play and partners like Allianz, Munich Re and Swiss Re Insurtech program, which aims to innovate in the insurance industry. (Helene Laube)
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