This week I had the great good fortune to spend some time chatting with André Christ, CEO of LeanIX. André began his career working as a consultant before founding LeanIX in Bonn, Germany back in 2012. As always whenever I sit down with someone who has chosen to go out and start a company from scratch, I’m keen to find out whether they always knew they were going to be an entrepreneur.
“I didn’t become an entrepreneur right after school or even after university. I took a kind of detour working for DHL, one of the largest companies in the world. I was with DHL for four years and it was there that we identified the problem. Companies struggle to maintain an overview of their IT landscape and there was no Software-as-a Service approach to the problem that I was aware of. I thought that presented the perfect opportunity. With ever increasing digitization, companies need more transparency of their IT ecosystem.
That was the start of LeanIX, but I’d had a couple of earlier attempts at being an entrepreneur. I’m a passionate tennis player and when I was young, I started stringing tennis rackets for people. That was the first time I earned any money.
Then while I was at school, I started doing software development and started earning money as a freelancer. I worked with startups and larger corporations. Around that time, one of the companies I was working with went bankrupt and so, when I was 18, I lost a significant amount of money that I’d worked hard for. It was a tough lesson, but I learned the hard way that when you build a company, you better manage it the right way.
When I was a student in Germany, I worked in high tech, and I was fortunate to meet a lot of startups. Working at DHL was intriguing because the unit I started in was doing management consulting for CIOs of DHL, so although it was one of the biggest companies in the world, there was a startup feeling to the work I was doing.
After four years, I was ready to start doing my own thing. I left the corporate world with very good memories but with a clear idea about building my own product.”
So many of the founders that I talk to trace their origins back to some kind of business venture they started in school. It really seems like those experiences where the stakes are low, but the rewards feel unimaginably high are formative for many people who go on to start companies later in life.
On the verge of starting LeanIX after working for DHL for four years, I wondered how André was able to validate his idea and the opportunity he believed he’d identified.
“I had some great opportunities while I was still with DHL. I visited a number of countries where I was collecting data about the local IT landscapes. Two and a half months in Asia. Eight weeks in the Americas. I would talk to the CFOs and the CIOs in each country, and I learned that speaking to local management is very different to speaking with central management.
We saw that solutions seem to be designed for headquarters first and often the regional teams struggle to understand the software that is presented to them by head office.
We always had this idea that more people should benefit rather than just a few people at headquarters. It seemed like the first quarter of every new implementation was spent getting to grips with what was happening instead of starting work right away.
I guess you could say that I had a good number of validations over the four years that there was a real problem that we could address.”
There’s something to be said for using your day job to validate your thinking for whatever you have brewing. It’s not at all unusual for future founders to make the most of their real-world experiences to develop their thinking and test a hypothesis while they’re still employed. I think you need to be careful not to cross the line, but there’s a good reason that so many startups have been founded by former employees of big corporations.
Once André had started LeanIX, I wondered how he had managed to find those first customers.
One advantage we had was understanding the decision-making process large corporations go through before adding new software. We knew what it meant to go through procurement or through legal. We put a lot of effort into pitching and convincing those first stakeholders. But there was also a lot of luck.
Someone once told me that you will always find the first three to five customers, but the next ones are more difficult. After the lucky part, we became more systematic. Selling to enterprise requires persistence, but also diligence. We capture the nature of the problem for each engagement, and we learned how to articulate it so that management would respond. My experience as a management consultant helped me create targeted pitches for the CIOs.”
Having been in André’s position I have learned that what he calls luck is more likely to be the point where preparation meets opportunity. He seems to have been very single-minded about what he wanted to build and how it would help the companies he was approaching.
I asked him what the biggest challenge of those early years had been.
“We spent three years bootstrapping the business, funding the company with our own money. We had pitched to two or three investors and when they passed, we just went ahead and did it ourselves. I didn’t know enough about fundraising and I didn’t have the time for it. I was focused on getting customers. It was a tough three years where we were also doing consulting projects during the day and coding the product in the evenings.
Bootstrapping is great, but I would recommend trying to move towards a different model after 12 or 18 months.
One of the funny stories from that time was when we landed our first big corporate customer, a company that is still with us today, they loved our pitch and then they said that they wanted to come and visit our offices and see the setup. The problem was that we were only a two-person company at that time. We started thinking about who we could call up and ask to pretend to be part of the company so that we could make a good impression on our client.
Then we also had situations where we would have a meeting and the client would request a feature and by the follow-up on the next day, we were able to show the feature already working. That’s what it meant to be a nimble young startup, hungry for success.”
I love hearing these stories from the early days of a startup and it’s clear that André and LeanIX have come a long way since then. I’m pretty sure they no longer need to get people to pretend to work for them. I have no doubt we’ll continue to see growth and innovation from this company that started humbly and grew, fueled by hard work and a keen understanding of the market.
