Thomas Dübendorfer - SICTIC | Leaving Google For The Startup World

Building a stable company the efficient way: Contovista’s case of success

 

In 2013, software engineer and tech lead Thomas Dübendorfer left Google Zürich, turning over a new leaf into the new-found world of start-up financing. In this episode, the Internet entrepreneur and expert angel investor discusses the evolution of his investing career, sharing valuable advice for those willing to make their leap of faith into the world of start-ups.

 

Great beginnings

After completing a PhD in Computer Science from ETH in 2005, Thomas Dübendorfer knew that industry would be his next step. He soon seized the admirable opportunity of kick-starting his career by becoming a tech lead and software engineer in the early days of Google Zürich. In a small community of less than 60 workers, Thomas found a happy medium between his academic experiences and the concrete universe of large-scale programming. His line of work focused on fraud-prevention projects for advertisement systems; as relevant Big Data challenges arose on a daily basis, he grew in his expertise.

The company soon expanded exponentially, numbering around 1,400 workers by 2013. Consequently, a switch in work dynamics seemed urgent. New internal structures, such as team-building and emerging administrative layers, brought a significant contextual shift. With expansion came also a fresh set of initially unexpected skills: beyond “machine learning” and programming, Thomas became familiar with the delicate procedures of hiring his own collaborators. 

In hindsight, Dübendorfer recognises how these transformations can become “little disruptions” in the sustainability of a company’s development, effectively changing its work culture. Nevertheless, this accelerated flow still had its benefits…

 

Lessons learned from Google Zürich

Undergoing this form of “American-style scale-up” has definitely enriched Thomas’s perception of workplace mechanisms, some of which he considers valuable directions for Swiss companies:

  1. Including senior, experienced workers allows new workers to grow in productivity through active contact;
  2. By connecting many diverse paths and frames of mind, this growth-by-interaction approach can quicky turn complex; as such, paying close attention to the organic shifts of the company’s working culture is essential;
  3. Early coaching nourishes a healthy environment and helps incoming collaborators feel more comfortable and integrated in their workspace;
  4. Being transparent regarding performance provides precious insight by aiding collaborators in the assessment of their effective productivity;
  5. If things are not working out due to a personality incompatibility or divided goals, firing as a method of keeping team balance — though “hard” and “not very European”, as Thomas admits — may yet be a necessary evil.

However, as the corporation reshaped itself to new demands, Thomas started missing the “family groove”, the intimate, small-scale setting where his work as a programmer flourished. After 7 years of cooperation, Thomas made the decision of expanding to new horizons.

 

Switching paths

 

“I was also much fonder of working with young, inspired entrepreneurs, and I really tried to make this big. For me, it was a big bet; I knew it was a medium-to-long-term bet, so I knew I had to do this for several years before seeing whether it worked out or not. In the beginning, you never know . . .”

 

Thomas admits his first contact with entrepreneurship came “by accident”. Becoming an angel investor for Spontacts “basically overnight” offered him the tools to build Zeeder, a group of angel investors prioritising seed-stage ICT start-ups. 

As a member of Zeeder, Thomas co-founded two ICT start-ups: Frontity and Contovista. By noticing that banks were moving towards digital-based services and that customers grew more and more demanding regarding their personal finance, Contovista strove to fill the gap

The problem with traditional banking? “Dead data”, as in PDF files or simple transaction extracts, is far from interactive and informative regarding trends and specific needs. Contovista offers digital services to financial institutions and consumers recurring to data analysis. Their services use digital intelligent management to tailor meaningful, insightful data, fostering a proactive attitude towards finance management.

 

How to build trust as a start-up

As entrepreneurs know, banks are very careful in analysing risk, pondering every possible wrong turn before granting funds: 

  1. Is the digital database secure for large-scale banking
  2. What privacy options does it supply?
  3. What must be considered in the absence of a solid track record
  4. Is the system rescalable to fit an ever-growing customer base? 

The solution? A multi-skilled network of contributors. Contovista benefited from the collaboration of lawyers, executives and software engineers proficient with credit card data treatment: this diversity of useful competences brought an added layer of trust.

However, holding advisor and shareholder roles simultaneously has its conflicts of interest. To solve this, Thomas adds that granting upside participation is key to diversifying the conversation with the interested party. 

On a final note, presenting a concrete price tag, when compared to competing free-access models, may positively alter the institution’s perception of a product’s risk in the long run.

 

Approaches on competition

While Contovista was taking its first steps, personal finance was certainly having its hey-day as a “hot topic”. Driven competitors can truly storm a seed-stage start-up with doubt and apprehension. 

Nonetheless, Thomas has a different take on the quest for market success: competition is natural and necessary! In Contovista’s particular case, the presence of two other competing companies sparked a craving for achievement: with this vital propelling mechanism, the company managed to launch within the first 18 months and strengthen its connection to institutions through B2B agreements. 

For dealing with a competitive market, Thomas presents some helpful guidance:

  1. Know your surroundings and study your contextual framework carefully: “[y]ou definitely want to watch what’s going on. For us, focus was the most important”;
  2. Prioritise your vital connections: keep an open discussion with your favourite customers. Assess what banking partners you must keep on your side. Similarly, apply your budget on what’s truly essential
  3. Check your partners’ mindset regarding the surrounding market and take notes. What can you improve with this conversation? As Thomas explains, “[y]ou can also learn from how people perceive the competition.”

 

Going international

Contovista’s expansion to Germany and Austria seemed promising. However, the company opted for conquering the Swiss market first, guaranteeing a solid home base. On the one hand, changing too early might concede influence in the local market to competitors who eventually decide to switch from B2C to B2B. On the other hand, selling too late may also come with exponential risk after the 5-to-10 years mark.

On August 2nd 2017, barely 4 years after its initial incorporation, Contovista was sold to the Aduno group. According to Dübendorfer, the change was more than welcome: both companies showed “[a] very close entanglement on the know-how basis”. Aduno was a perfect fit for Contovista’s future endeavours, since they also operated with data analytics and collaborated with credit card processers, but with a significantly larger customer base. For Thomas, continuity of purpose is vital to customer maintenance: that is, making sure that a sustainable creation maintains its identity throughout its different stages.

In conclusion, Contovista illustrates a “perfect blueprint of how you can sell a successful start-up”. According to its co-founder, “[i]t shows you can build something from scratch, and, within a reasonable amount of years, have your first customers become profitable, and then actually sell the whole company.”

 

SICTIC’s motivations

On September of 2014, the Swiss ICT Investor Club (SICTIC) came to life. According to Dübendorfer, the association sought to respond to existing blank spaces. Many other investors’ clubs were concentrating their efforts on a broad scope of enterprises, so building a community with a shared, specific interest in stimulating data-driven technology start-ups became the next step. 

Unsurprisingly, a successful angel investors’ club like SICTIC holds its secrets. Dübendorfer shares his insight on building a positive, productive network:

  1. Pay attention to the type of adopted business model: what kind of community does it attract? Is it sustainable in the long term? If not, is a structural switch feasible?
  2. Do not miss opportunities to reach out and take chances with outside investors. For example, imposing a finder’s fee may be restricting to interested parties. Thomas’s strategy involved simply displaying the platform, allowing new contacts to discover their best possible flow. In brief, maximise company/investor matchmaking by allowing free, open-circle interaction.

 

What’s next?

Thomas currently possesses more than 20 portfolio companies. He has successfully incorporated 10 as of the moment, and is looking forward to establishing two more later this year. 

For the investor, the line of action is clear: you’ve got to look after the youngest companies, while making sure the most acclaimed ones can grow even further. To take just one example, his 2013 incorporation Frontify has now around 130 employees and international offices in New York and Frankfurt. So, it’s vital to find a balance between helping the largest companies go international while still supporting new founders in building something wonderful from day one.

  

Final advice from Thomas

Work efficiently. Use shared platforms such as Google Docs or Spreadsheets for fast-moving collaboration, instead of hurling e-mails packed with heavy attachments back and forth. This allows all users to keep track of activity step-by-step, nurturing a streamlined, collaborative understanding of the project at hand. 

 

About Thomas Dübendorfer

Thomas Dübendorfer is the president and co-founder of Swiss ICT Investor Club (SICTIC), the most influential angel investing association in Switzerland, with a scope of work deeply focused on technology start-ups in their earliest developmental stages. 

Thomas holds a doctoral degree in Computer Science from ETH Zurich, his alma-mater. In January 2006, he started his career as a tech lead and software engineer at Google Zürich, where he worked in fraud-prevention projects for advertisement systems. 

After 7 years, he left the company and devoted his life’s work to entrepreneurship and angel investment in seed-stage ICT start-ups, currently numbering more than 20 entrepreneurial endeavours in his portfolio. Beyond his accomplishments in industry and investment, Dübendorfer has ample experience in academic settings, having worked as a researcher and lecturer in institutions as the University of Zürich and ETH Zürich, where he co-lectured a module on Network Security for 10 years.

 

 

If you would like to listen to more episodes on business angels, check out our conversation with Carole Ackermann and Daniel Gutenberg.

Don’t forget to give us a follow on our TwitterInstagramFacebook and Linkedin accounts, so you can always stay up to date with our latest initiatives. That way, there’s no excuse for missing out on live shows, weekly give-aways or founders dinners!

Subscribe to our newsletter

Get updates and access to exclusive content. We’ll never share your email address or spam you.

Which newsletter(s) would you like to receive?

We use Mailchimp as our marketing platform. By clicking above to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp's privacy practices here.