This is a the second part of a guest post by Konstantin Zagaynov, Co-Founder at Videoly.co, a service that connects product video reviews to e-commerce shops. The first part can be found here.
Doing business and sales
I’ve done B2B sales in Finland and Germany. I think in Finland an early-adopter mindset and “let’s just try it, measure the results and make a decision then” attitude are common, while in Germany it is rather “this looks interesting, we will talk to the management”. This leaves you wonder – why to discuss so much and not just try it out? However once you are in the pipeline, things execute quicker and it is usually easy to track the progress.
Vesa Perälä, a Finnish founder of Inbot.io, adds: “Germans are probably more demanding consumers and customers than Finns in general but in order to succeed as a start-up anywhere, the offering and skills have to be top notch regardless of the location. “
Martti Mela, CEO of lifelife.io,: “German customers are very risk averse and price aware. Recommendations from others customers significantly help in turning leads into paying customers.”
One thing you have to learn for doing B2B sales in Germany is writing formal emails. Typing «Sehr geehrter Herr Müller» feels so uncomfortable instead of informal «Hi Erik» style used in Scandinavia, but it is absolutely necessary.
Punctuality is not a myth. If an event or even a party is said to start at 6PM, it will start at 6PM and 98% of people will show up by this time. “My mother taught me: rather be 15 minutes earlier than 15 minutes late” my friend Gina told me at my daughter’s birthday.
Olli Salonen, Senior Technical Lead at Futurice has an interesting point: “For Nordic software companies, one of the biggest differences in Germany is the lower maturity of the digitalization of business and services. As a Finnish citizen, I have come to expect to be able to take care of most things online, even most government paperwork. This is something that is lagging in Germany, and as such, Germans have lower expectations for what should be digital. We often find ourselves in the position of having to convince businesses that digitalization should be part of their strategy as a whole, instead of businesses approaching us and asking what kind of digital services we could build for them. However, it definitely creates potential for the future since this will change sooner rather than later.”
Germany is a very interesting market for any European company since it is big and money-rich. Germany is the biggest market in the European Union with the population of 80 million people, which is 2,5 times more than all Nordic and Baltic countries combined.
Vesa: “Germany is a really good home market from market size perspective compared to tiny Nordic countries.”
Berlin itself will be not the best option for every type of business. Traditionally, different sectors have been strong in different areas. Hamburg is a hub for media companies, Ruhr and North Rhein-Westfalia is where most of the mobile operator and energy business are located. Automotive business is concentrated in Bavaria and Baden-Würtemberg in the south and Wolfsburg in the north. Frankfurt is a financial heart of Europe. Stuttgart, München, Nürnberg and North-West would be the right places to find partners for industrial service innovations.
Hiring people
Martti, lifelife.io: “Lots of young people nowadays want to live in Berlin, so attracting really competent foreign workforce is easy. The salaries are lower in Germany but the employer costs make around 20% on top of the gross salary.”
Vesa from Inbot agrees: “The talent pool is way bigger in Berlin than in Finland (Helsinki). The freelancer scene is also very developed. This enables more flexible and cost-efficient arrangements with high-quality developers and other talents. In general, the labor legislation is very similar to Finland.“
Indeed, quite often one can meet early-stage internet company stuffed up to 80% with freelancers.
Olli, Futurice: “Berlin attracts people from countries all over the world, and if I’m in a room with ten people, I’m often counting ten different nationalities.”
Paul Houghton, Senior Developer at Futurice, who is half-Finnish and half-American, moved to Berlin two years ago after having lived in Finland for more than 10 years, adds: “Berlin is quite welcoming of people from other places. I am told that other parts of Germany have a higher expectation that you know the many German rules and ways, but in a city where many are from somewhere else this is softened and that can open opportunities.“
Edita Lobaciute from Berlin-Startup-Consulting says that, “Lately, I hear more and more buzz about Baltics here in Berlin. People from the Baltic region proved to be hard-working, open-minded and ambitious workers in the various fields of business.”
It is common for startups in Berlin to hire interns whether it is team assistant, design or sales. The intern recruitment culture is a big advantage for both early stage startups and for students. “In Norway, the practice of using interns has not been as widespread as in Berlin.”, says Remi Elias Mekki, Norwegian founder of a stealth-mode startup.
Typically interns are students who are required by their studies to take 4-6 months stint in the real company, fresh graduates from the university to gain first professional experience or someone who is making a shift in their career. A big bunch of interns prefer startups to established corporations, due to the opportunities to learn about the core of the business by working hand-in-hand with founders.
A big change in Germany is a minimum wage law that has been put into action since 1st of January 2015. A company doing business operations in Germany cannot pay its employees less than 8,5 €/hour. This change has confused many, from interns and founders to tax consultants and NGOs. Obviously, this is a good news for many previously underpaid employees. Still, time has to show whether this will have positive or negative effect on the startup industry since early stage companies might not afford to hire motivated, but lacking experience, employees.
Note, that the law applies not only to the companies registered in Germany, but to any company doing operations within German border. For example, Polish truck drivers driving from Warsaw to Amsterdam, have to be paid 8.50€/hour when they move between Frankfurt on the Oder and Dutch border.
To sum up, Matti Rönkkö adds: “Talent of people here is just unbelievable. People really enjoy building things”.
Culture
“How to recognize Scandinavian in Berlin? Well, they are the only ones wearing helmets”, – jokes Paul and adds: “Nordic cultures pride themselves on honesty. In Germany the culture is similar, but the expression is different and in some ways better. Be prepared that people will say straight to your face what is on their mind. In Finland much is not said, the culture of silence means the positive and negative feedback can longer to surface. Germans are brutally direct in a good way, as in “you look like shit today- are you ok?” You can learn quickly from such feedback and you are expected to similarly quickly speak up and get to the point.”
If I make a gallop among all Scandinavian and Finnish people that have moved to Berlin to name two things that are better in Berlin than in their home countries I bet the most popular answers would be “weather” and “beer”.
Martti: “In Berlin spring starts two months earlier than in Helsinki. Also, the city offers an ever increasing amount of vegan dining options.”
Finns need to be prepared for different sauna culture. Those who took a ferry between Germany and Finland have probably seen an “international conflict” between German and Finnish truck drivers when they go to the sauna together. In Berlin if you see a sign «Finnische Sauna», it is going to be a German-type one. Talking is considered a bad tone and there is no water for you to throw on the stones. For this there is a dedicated staff called «Bademeister», that serves ones in half-an-hour aromated water with certain intervals. But I’d say rather than complaining, enjoy! And this applies to every single minute spent in the foreign company – instead of focusing on the drawbacks, think about utilizing the positive.
In the end I asked founders “what would be one most important advice you would give to startups moving to Berlin?”.
Stefan: “Be passionate about you business and don’t be afraid to think big.”
Edita: “Get out of your comfort zone! I know that at home ‘even walls help’, but you need to travel, you need to meet people, you need to ask questions, you need to expand your network and only then you can succeed.”
Article by Konstantin Zagaynov, Co-Founder, Videoly.co, photo by Berlin Tech Meetup
Videoly.co is a SaaS that connects product video reviews created by brands, bloggers and consumers to online shops’ product pages. For shops, this is a convenient way to connect unboxing, tutorial and product review videos across thousands of products in five minutes and to know how every particular video affects sales. Such reviews increase conversions and sales by 30% on average. For content reviewers, we provide a way for their content to be distributed across thousands of shops.
