Jon Soberg is a partner at Blumberg Capital.
It’s still winter in Munich. It’s not cold, and while snow from recent flurries hangs in the trees, it melts to slush on the sidewalks and streets.
I enter a small, essentially empty coffee shop for a meeting with one of the biggest names in entrepreneurship globally: Oliver Samwer, the controversial co-founder of Rocket Internet.
Samwer hasn’t granted many interviews. He is known to walk out of meetings with journalists if they don’t go the way he wants them to go. He has a reputation for being obsessively aggressive.
But when I meet Samwer, he is warm, energetic, and refreshingly to the point. He has made time on a weekend, but there is no wasting time with Samwer. We had spoken several times previously and I was there to do more detailed due diligence on my team’s first potential investment into one of his companies.
He dove in, explaining his vision for the company, and how he intended to foster aggressive growth. He isn’t one for complimenting his CEOs, nor for sugar-coating performance. He moved quickly from point to point, and touched on multiple different initiatives that he was driving.
Since Blumberg Capital’s initial investment in Paymill, we have since collaborated on two more investments with Global Founders Capital, the new fund that Samwer and his two brothers, Marc and Alexander, recently raised.
Toward the end of the conversation, he made the single statement that to me defines what he, his brothers and the whole team at Rocket do, “Jon, I don’t build boats, I build aircraft carriers.”
I walked away from the conversation impressed, and Samwer has since agreed to share a few insights for VentureBeat.
Jon Soberg: I have always found the Alando story fascinating — how you wrote letters to eBay about establishing a platform in Germany which were ignored, and then decided to start Alando. Fast forward to 2007 — can you talk about events or influences that inspired you to come up with the model for Rocket?
Oliver Samwer: When I studied in Germany and U.S. in the 1990s, I was absolutely amazed about the whole start-up scene in Silicon Valley. People had so many ideas and the Internet just seemed to be a great playground to express your business ideas. And then my brothers and me just started.
Soberg: When you were first coming up with the model for Rocket, what scale did you think you would achieve?
Samwer: We were always only focused on building good companies. When we saw that it worked well in Germany, we just took it to more and more markets. The optimism that we can create a global impact only developed over time. We obviously work very hard to become better and more successful every day.
Soberg: In the press, the term “clone” seems to be almost always associated with Rocket. Do you feel that they are missing parts of the story, and can you talk about the innovation in operations and scale that you have pioneered?
Samwer: I think there are always two challenges to build a successful company: Having an innovative idea is one thing, but being able to execute the idea properly the other. Whilst having full respect for the innovators, we focus most of our efforts on the latter and have been very successful with it so far.
We are indeed very innovative when it comes to the execution. Building great companies takes many years where you have to come up with innovative ways to overcome operational obstacles every day. Execution is often 90 percent of the success of a company and in a world that gets more transparent every day, execution will become even more important down the road.
Soberg: When I speak to people in the U.S., they frequently have no idea of the scale that Rocket has achieved. Can you give us a few metrics to illustrate?
Samwer: We like our role of being the silent giant in the background, rather than being the loud player in the front row. Some numbers I can share: Currently, we have 55 ventures, operate globally in over 40 countries, support founders and their companies that employ more than 20,000 employees worldwide, and achieved several well known exits so far.
Soberg: The founders of your companies say that you speak to each of them at least weekly, and they claim you always know all the details as well! With 55 active companies across every continent that has any kind of market (none in Antarctica), do you have any special approaches for managing all of these responsibilities? Is there a point where you purposely cut back your personal involvement?
Samwer: Naturally, we want to support the founders with real value-add and therefore need to be good at details. I am working very hard to get all the knowledge, because as Francis Bacon already said: wisdom is power. It makes no sense being the high-flying bird observing things from above, when you want to make a business. I like to be part of teams and you can only contribute when you know the details.
Soberg: There is a lot of discussion in the press about attrition at Rocket. I have also heard a lot about Rocket being “boot camp” for entrepreneurs, and helping to build entrepreneurial skills in many countries. Can you talk about your attrition rates, your ability to replace people who leave, and Rocket’s contribution to local ecosystems?
Samwer: When you start working for Rocket, you learn a lot; not only about business, but also about yourself. We are a unique ecosystem of highly talented people who strive to build great companies around the world. As a result we have contributed to the global startup scene and become an incubator of many, many successful companies around the world.
Soberg: I have written posts on VentureBeat about hiring A players, and also people becoming A players. Please talk about your approach to hiring (and firing), and any special criteria you have for hiring, and for identifying your top performers. How do you reward your best?
Samwer: Most of the guys who start at Rocket are in their mid-20’s to early-30’s and with us get huge responsibilities as company founders right away. We believe responsibility and freedom is key to be attractive for A players. I would say, talented people who are curious and passionate about doing business every day join us resp. stay at Rocket and ultimately build great companies.
Soberg: Congratulations on your new fund. How do you determine which businesses you want to create, and which ones you want to operate with Rocket?
Samwer: Firstly, we need to make clear that the fund has nothing to do with Rocket’s business model. The fund focuses explicitly on areas, Rocket does not operate in yet and purely invests in companies. Our aim with the fund is to support young and creative people to fulfill their dreams by backing them in their execution of their ambitious business plans. Topics like “big data,” travel or mobile apps are definitely on the march and people send us interesting ideas every day. I would like to support them with my global network.
Soberg: You have said that there is motivation to keep winning over and over. Do you have a criteria for when you have reached the peak?
Samwer: We are every day excited to work with some of the most talented young people in the world and about the limitless possibilities of the internet. This is what we enjoy and that is why we continue to strive every day to help to build some of the best companies in the world.
Jon Soberg is a Managing Director at Blumberg Capital, where he invests in early stage companies, specializing in FinTech, SaaS, and eCommerce. Prior to joining Blumberg Capital, Jon has been a serial entrepreneur and senior executive in multiple companies including Ditech, Broadband Digital Group and Adforce, which had a highly successful IPO.
A CFA Charterholder and adjunct faculty in the Wharton Marketing Department, Jon earned a B.S in Engineering from Harvey Mudd College, an M.S. in Engineering from Northwestern University, and an MBA in Entrepreneurial Management and Marketing from the Wharton School, where he is a Palmer Scholar.
Oliver Samwer image via Rocket Internet
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