Startup Mannheim | The story of a thriving entrepreneurial ecosystem

12/06/2018  |  Entrepreneurship, Interview, Startups

On a mission to create the best conditions for startup founders, creatives and corporates, Mannheim is a truly inspirational urban environment! As a firm that shares a passion for new challenges and high entrepreneurial standards, CODE_n recently paid a visit to Startup Mannheim. Despite their highly successful story, the people behind Startup Mannheim have kept their modesty and eagerness to learn. At the same time, they’re always happy to share their own entrepreneurial experiences with others. We met up with Christian Sommer, Managing Director of Startup Mannheim to delve into the secret of their success.

Iulia: Let’s jump right in. What exactly is the heart and goal of Startup Mannheim?

Christian: Startup Mannheim, or it’s legal entity mg:gmbh, is a public company, so it’s owned by the city of Mannheim. It was created with the goal of making Mannheim a better place – bringing young, agile, innovative people to the city. Our aim was to create an inspirational environment for startups, artists, investors, and entrepreneurs so they can begin mapping out the future from here. Startup Mannheim is an ecosystem that pulls together a diverse spectrum of professionals from numerous industries, ranging from information technology and medical engineering to music, the creative industry, and the fashion business. We also use this initiative to move beyond borders and connect cultures, so one of our main strategies is to attract startups from abroad. We’ve embarked on an energetic journey to improve the economic prospects of the city and establish a solid foundation for future growth.

Iulia: How did it all start?

Christian: We currently have eight startup centers in Mannheim, but back in 1985 we only had the MAFINEX Technology Center. That’s when it all started. MAFINEX was actually one of the first startup centers in Germany and it remained so for many years. It’s the perfect place for startups in the tech and IT business to develop innovative, groundbreaking products and services. Later, in 2002, we opened the women’s entrepreneur center, which not only rents out office space and artist studios of various sizes, but also offers professional advice to women who are going to set up their own business, or are interested in doing so. Then came the Musikpark Mannheim, the first and so far only startup center for the music industry in the whole of Germany. At the moment, there are approximately 60 companies here and they’ve created more than 200 jobs. Mannheim is an official UNESCO City of Music, so it’s in Mannheim’s blood and our Musikpark in combination with the Popakademie demonstrates that it’s one of the leading education and training facilities in the region in this field. German-Turkish relations are an important driver of the business sector in Mannheim, so we have a dedicated startup center called the dtw for entrepreneurs of a Turkish background. It offers consulting and coaching seminars, and it’s the best place for sustainable startups with an intercultural background. Furthermore, we have a dedicated startup center for all the entrepreneurs interested in creative areas and the arts, who’ve found their home in a landmark building called ALTES VOLKSBAD. For entrepreneurs in fashion and the clothing industry, we created TEXTILEREI, which is about handmade products and unique designs of the highest quality. Then there’s the medical industry, which is continuing to explore new and innovative technology – we also wanted to help this area succeed and support the expansion of groundbreaking startups, so we created CUBEX41. It’s in the middle of Mannheim University Clinic and the Fraunhofer Project Group for Automation in Medicine and Biotechnology (PAMB) is one of our tenants. Last, but not least, our most recent startup center is C-HUB, which we describe as the quintessence of Mannheim’s creative industry. C-HUB offers an inspiring setting to more than 50 companies in eight sub-markets of the creative sector, as well as an event program and consulting services.

Iulia: Do these startup centers interact with each other?

Christian: Definitely. Building cross-industry bridges and links between people of different backgrounds is one of our main goals at Startup Mannheim. So we constantly work toward helping these different centers interact with each other. For instance, we have an interesting project at the moment in the field of brain surgery. Surgeons conducting brain surgery bring music into the OR to analyze its effects on the brain. That’s where we come in. Our job is to find interesting business cases for our startups and match them to a specific area of interest or focus within the field.

Iulia: Give us a sneak peek into the network of the eight startup clusters. Are there any specific requirements that startups need to fulfill to apply?

Mannheimer Gründungszentren, MG, MG 2017, www.startup-mannheim.deChristian: We have 300 startups in our ecosystem, and they’re split into two main categories. First, we have the tech startups, who are interested in securing funding from venture capitalists. We offer them all our support to maximize their business growth. Second, we have new entrepreneurs, the founders of new enterprises who don’t necessarily want to have an impact at a national or international level. They simply want to have the freedom to do what they want, when they want, and be their own bosses. There’s no obligation for startups to become part of Startup Mannheim. We only expect them to have serious intentions and feel passionate about what they’re doing. However, we do analyze their business ideas and their teams before making a final decision.

Iulia: You believe that diversity is the secret of success. In what sense is Mannheim a diverse platform for entrepreneurs? Why is it the perfect city to develop a startup ecosystem?

Christian: Mannheim is a city of only 300,000 inhabitants, but it’s one of the most vibrant and diverse cities in Germany with people from over 170 countries. It’s a place to experience and explore. Diversity is part of our DNA: more than 40% of the population have a migratory background. The city has been a pioneer in welcoming migrants and it’s well equipped to integrate newcomers. Mannheim also has a strong American influence and this led to the city embracing the creative economy and becoming a melting pot of a number of musical influences. Given its background, Mannheim is the perfect place for business disruption, innovation, and bold ideas. We’ve created a startup ecosystem to add coherence and consistency and better promote what entrepreneurs are already doing in the region.

Iulia: What’s the best way to make Mannheim an attractive place for businesses, so they actually want to stay here? Mannheim has always been a city where ideas are born; it’s known for its innovation, but not everything that starts in a city stays in a city. So an important question we have to ask is how do you make a location appealing to startups – not only as a place to take their first steps, but also as a place they can ultimately thrive in so they want to stay?

Christian: That’s something we’re currently looking at in detail. One of our biggest challenges is to make people stay, to convince entrepreneurs that they can not only start their businesses here, but actually thrive here in the long term. Mannheim is a city of character. It’s a bit bleak in places, but the people are open-minded. We want to create a cultural atmosphere that makes people say they want to stay here, because they simply enjoy the amazingly rich cultural scene. In this sense, we also implemented Germany’s first “Night Mayor” this year, with the aim of improving the nightlife scene in the city. Mannheim wants to be a young, dynamic, and innovative city. It’s also important to mention that at the moment, the city has probably one of the lowest youth unemployment rates in Germany and that’s also thanks to the strong industry players and medium-sized companies based here. Our aim is to bring our local and international startups in touch with the large variety of corporations in this region, firms like BASF, Roche, Siemens, and Bosch, who are seeking to tap into the potential of open innovation. We believe this is the recipe of success.

Iulia: Is Startup Mannheim a bottom-up initiative? How was it possible to create this huge network and establish Mannheim as “the startup city in the southwest?”

Christian: Unlike Berlin or Tel Aviv, which count on robust bottom-up startup ecosystems driven by the people, in Mannheim it all started as a top-down initiative and that’s also directly connected to the critical mass of people. There weren’t enough of them back in the 1990s. A variety of projects have allowed the city administration to maintain an urban culture characterized by a spirit of openness and understanding. We’re actually very lucky to have the unconditional support of the city. They believe in Startup Mannheim as much as we do and our mayor, Peter Kurz, is always pushing us to try new things and explore the entrepreneurial opportunities that arise from living in such a diverse city.

Iulia: It’s clear that Startup Mannheim is a success story and is striving to create the best conditions for founders, creatives, and corporates to work on innovative projects. EU funding has helped a lot in setting up all of these innovative facilities. Can you tell us more about this? How has Startup Mannheim benefited from EU support?

Christian: Apart from the economic support we’ve received from the city authorities, we’ve also received funding from the state of Baden-Wuerttemberg and the European Union. In total, about 100 million euros were invested in the infrastructure of Startup Mannheim. For a city like Mannheim, which only has 300,000 inhabitants, that’s quite a lot of money. So from a situation of crisis in the early 90s, when people were leaving the city for more attractive places such as Berlin, Munich, or abroad, we’ve been working hard to attract a wide array of local and international entrepreneurs and transform Mannheim into the powerhouse of innovation and creativity it is today. Iulia: Do the startups here also receive financial support?Christian: Yes, they do. There’s one public-owned fund of about two million euros, which is authorized to award no more than 200,000 euros to an individual startup. Then there’s also a program called KREATECH, which is for small entrepreneurs who want to apply for funding of up to 20,000 euros. It’s a kind of funding pot offering startups direct access through the city authorities. We’re also working with the banks through High-Tech Gründerfonds, which is a public-private venture capital investment firm focused on high-potential tech startups. On top of that, we have direct contact to private investors thanks to our vast network of business angels, who receive plenty of encouragement from the local authorities. If we really need a big VC investor, we go to Berlin or Frankfurt.

Iulia: What have you learned about the startup culture over the years?

Christian: It changes quickly, and the ability to adapt to change has become of existential importance to modern businesses. The startup culture of today is nothing like the startup culture of five years ago. You have to work at an incredibly fast pace nowadays if you want to thrive in the startup environment. You also have to be able to anticipate the “next big thing.” Actually, we think that bringing people together from completely different backgrounds, industries, and fields, so they can work alongside each other and inspire one another, will be the “next big thing.” This is the cornerstone of the future of work.

Iulia: How are you supporting Mannheim in becoming an attractive place for people internationally?

Christian: We’re proud to have recently joined forces with Tel Aviv, which is also a successful global startup ecosystem, and this has helped build a bridge between Mannheim and Israel. Our advanced landscape for business founders convinced our partners to establish a cooperation between Israeli startups and Startup Mannheim. We’re providing them with a broad network of contacts from strong German enterprises based in Baden-Wuerttemberg. We recognized the strengths of both parts of the equation at Startup Mannheim. On the one hand, there are lots of innovative Israeli startups, who think globally; on the other, there are these big, experienced industry players in Baden-Wuerttemberg. We see great potential here and that’s why we’ve created an onboarding program for international startups. Not only do they get support in terms of the administrative procedures when they arrive in Germany, but we also offer them free access to our co-working spaces, accommodations, access to our networks and even legal and tax advice. But most importantly, we offer these startups contacts to the corporate world and German industry. There is strong interest in the onboarding program at the moment. We’ve worked on it for nearly a year now. We’ve also learned a lot from our own mistakes over the past year. We’re now looking into startups with relevant business cases, checking the landscape of corporates, and then sending them pitch decks so we can evaluate if we could work together. If that is the case, we invite the startups over, they make presentations and then we try to set up a pilot initiative. If everything works fine, we hope the startup will open a subsidiary here in Germany.

Iulia: Which cities or countries are you cooperating with at the moment to search for startups?

Christian: Right now, it’s Tel Aviv in first place and then it’s Eastern Europe – countries such as Hungary, Russia, and Poland. We’ve already had delegations over from Russia and Hungary. In addition to that, next year we will hold a conference with the French Embassy in Berlin to discuss future collaboration. We’re also setting up an international accelerator in Hebron in the Palestinian territories – we’ve received financial support from the German government to develop the entrepreneurial scene in the city. They have a very strong technical university there with the right kind of facilities, but unfortunately they really don’t know much about different ways to use all these things to their advantage, so they can run their own startup ecosystem. Mannheimer Gründungszentren, MG, MG 2017,

Iulia: What are your plans for the future? What comes next for Startup Mannheim?

Christian: In 2019, we’re going to open our first startup center fully dedicated to the MedTech sector. I think medical technology will play an even more important role in our strategy in the foreseeable future. Our plan is to work with Heidelberg University and all nearby hospitals. We also have more internationalization on our to-do list, because we want to entice more and more international startups to come to Mannheim. That’s in line with the plans of the city administration as well. We’re also planning an “artist in residence” program. We want artists to start working with the big industry players in the region, so they could set up their own in-house art studios inside the manufacturing plants of different companies. Artists could work alongside engineers and come up with new solutions by thinking in parallel and playing to their creative problem-solving skills.

Iulia: Thanks a lot, Christian for all these extremely interesting insights into the world of Startup Mannheim! We’re looking forward to hearing about further developments and potential future collaboration between CODE_n and Startup Mannheim. We see a lot of synergy effects on the horizon.