<!–:en–>A lot of cowards, few entrepreneurial spirits<!–:–><!–:de–>Viele Angsthasen, kaum Unternehmergeister<!–:–><!–:ru–>Много трусливых, слабый дух предпринимательства <!–:–>

A lot of cowards, few entrepreneurial spirits

Students in Germany have a common goal: a permanent position. Very few risk a business startup. Unless the starting capital is only five euros.
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To be your own boss – that always sounded tempting to Sebastian Winkler. The 29-year-old computer science graduate worked on the business idea with three friends in his living room: a software program for smartphones able to send large amounts of data.

The young entrepreneur looked for support from the startup center at Berlin Humboldt University (HU). “We worked on the application for months”, said Winkler. It was successful: the team received a stipend and free use of office space for one year for its business model.

Dreaming of their own business makes Winkler and his colleague like foreigners in their own country. St. Gallen University recently asked 93,000 students from 26 countries how they view business startups. Result: German students, together with Finnish, Japanese and Dutch students are the most reluctant about startups. 78 percent of future graduates prefer to work as an employee here in Germany.

Every fifth startup goes bust

What´s the reason for this? Volker Hofmann of Humboldt-Innovation, the startup center at HU Berlin, gives an answer. By international standards, Germany

Lightweight smells the so – a was glad what Amazon.

has innovative small and medium-sized companies, and so it is very attractive for students to be employed in a company. “Many students are deterred by the risks that a business startup involves.” Their fears are not completely unjustified: every fifth startup by HU students goes bust sooner or later.

Students at TU Dresden are also familiar with financial difficulties. About 50 students attempt to set up their own business here every year. “It is important to enter into discussions with many potential buyers early on”, says Frank Pankotsch, managing director of the startup center. That makes the chances of finding an investor higher.

A survey at Trier University in 2008 confirms the impression of the startup centers. It is above all the “high or seriously calculable risks” which deter students from startups. Female students in particular thought that they lacked practical experience and did not have sufficient market knowledge.

There are fewer hurdles for business startups in Bavaria, at least for participants in a competition organized by the Bavarian Educational Institution. The aim is to implement a business idea with only five euros of starting capital. The winners this year are the four founders of the company Campus Kandinsky. The group of business management and theatre students from Bayreuth University, as well as a chemistry postgraduate, organized exhibitions for young amateur artists.

The students set up their GbR at the beginning of May, and the first event took place at the end of June. “We had six weeks to go from the original concept to the finished business report”, says Ludger Herget, one of the business founders. However there was little help from Bayreuth University. “We were quite on our own”, says the 23-year-old business management student. “The subject of startups has been dealt with rather poorly up to now by the university.” That´s why the four students want to set up a startup forum themselves at their university, in order to mutually help each other in future.

Aim: A permanent position

Stefan Schwenzfeier would also have liked more support from his university. The 26-year-old science undergraduate from Siegen set up the hip hop record label Feine Kreise a year ago and looked for advice from the startup office at his university. However the staff sent him away. His business idea didn´t sound interesting enough. “The advice was laughable”, says Schwenzfeier annoyed. He had to get help from friends for his first tax declaration. “I haven´t learnt that from university.”

Currently Schwenzfeier is writing his master thesis. He wants to continue his small company at the same time, but his goal after graduation stands firms: a permanent position.

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<!–:en–>Felix Baumgartner's Parachute and CYPRES<!–:–>

We are doing a listening comprehension exercise: Transcript of Felix Baumgartner Parachute and CYPRES video By the way, CYPRES stands for Cybernetic Parachute Release System.

No parachute system has ever been used for a supersonic free fall from the edge of space. Months of development and testing have resulted in a revolutionary technology.

“We designed the parachute system, I’ve tested it, I’ve got close to a hundred jumps on it, all different configurations, Felix has jumped it, everything’s happy, as far as the parachute stuff goes I feel like everything’s good to go and it’s going to work.”

The container houses a small stabilization chute, called “drogue”, and two landing parachutes as well, as it also holds two oxygen bottles which can supply up to ten minutes of oxygen at altitude. A harness attaches the entire rig to Felix Baumgartner. The combined components still weigh about sixty pounds or twenty-seven kilos: three times that of a typical skydiving rig.

“Well my normal parachute that I jump out of an airplane with is a hundred square feet, the main parachute in this particular one is two hundred and seventy square feet, it’s a specially manufactured parachute, it’s built to be stronger, to be more durable for the shock that it may take on this particular jump.”

When Felix jumps out, he’s a relatively small guy who weighs one hundred and sixty-five pounds I think, something like that, when he jumps out of the gondola he’ll be weighing two hundred and eighty-five pounds, so we have to stress everything for a guy his size. We came up with a parachute that is right for this job, it descends a little bit slower, that’s why the pack is a lot larger than a normal skydiving set-up. The reserve is also larger, the reserve is two hundred and seventy square feet also, both of those have been designed for this particular job, the reserve is extra reinforced, made to withstand a harder opening shock. We’ve given him the strongest parachute that we can build for that.”

To minimize risk, Felix’s parachute rig houses several safety devices to protect him in the event of an emergency. If Felix becomes unstable, he may need the small drogue chute to keep from spinning uncontrollably.

“I was kind of against the drogue system to start with at all, because it can tangle around you like Joe’s happened to him way back when, but the science team and everyone decided we needed this drogue stabilization device so it fell on my plate to decide how to deploy it, so I came up with this contraption, the ‘G-Whizz’ meter and a push button on him to deploy it.”

If Felix loses consciousness during free fall, the so-called CYPRES device, will automatically deploy his parachute at a certain altitude.

“So our CYPRES will fire the reserve at twenty-two hundred feet over the area that he’s going to land, it does that off of barometric pressure.”

“Seven nine seven, the CYPRES is set, I check it one time by pulling on this yellow cable that’ll be pulled when he exits the seat. When I pull the cable out, like he does up there, boom turns on and we’re ready to go.”

The skydiving rig has more handles to help cut-away parachutes. If Felix’s chute inadvertently deployed at high altitude, his landing could be delayed, meaning he may run out of oxygen. After cutting the main chute, he’d only deploy his reserve parachute once a normal altitude was reached.

“Because of the design of the pressure suit, he’s not going to be able to look down and see which handles he’s grabbing, he has to be able to feel which handles he’s reaching for. So having them in distinctively different places, and sizes, and orientation, even, is going to help him survive any emergency that he may encounter. The system is going to have a rip cord to deploy the drogue and then he’s going to have a rip cord to deploy the main parachute, and a rip cord to deploy the reserve parachute, and then a cut-away handle for the main parachute and a cut-away handle for the reserve parachute, so there’s a

A if Technician when almost to more I you.

couple of extra handles there versus the standard sport system.”

In his quest to break records, Felix has one underlying goal.

“He has a chance to set the world record for the highest free fall, so what we’re going to do is he’s going to jump out. If everything goes great he’ll free fall the whole way down and open his parachute at five thousand feet and we crush the record and it’s awesome… he went faster than the speed of sound, free-fell longer than anybody else. If for some reason something goes wrong, or he needs to fire the drogue parachute, that would null and void the record, because what happens is as soon as any part of the parachute system opens, it’s considered stabilization, and a stabilization device voids the free fall record. To be a true free fall, he has to free fall out with no assistance whatsoever, down to a normal opening altitude and open his parachute.”

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<!–:en–>Germany is digitally dependent<!–:–><!–:de–>Deutschland ist digital abgehängt<!–:–><!–:ru–>Германия отстала в цифровых технологиях <!–:–>

TOO FEW ENTREPRENEURS

Out of the 100 most visited websites in the world there is not one “made in Germany”. Germany is only average in the Web Index compiled by WWW´s inventor Tim Berners-Lee. German software houses are also rarely recognized internationally. We are digitally dependent – and there are reasons for this.

This article is a direct translation of the a German article that was published in the German Manager Magazine here: Deutschland ist digital abgehängt

Information and communication technologies (ICT) are a significant factor in the Germany economy. According to information from the industry association Bitkom, in Germany in 2012 a turnover of about 150 million euros will be generated by about 850,000 employees. According to the management consultancy firm Boston Consulting Group (BCG), yearly growth of the German internet economy, an essential component of the ICT industry, is at 8 percent, which will result in about 4 percent of the gross domestic product by 2016. This sector therefore has higher economic power than the mining or hotel and gastronomy industries.

ICT, a key cross-section industry, is strongly characterized by small and medium-sized businesses; at the same time, young and newly established businesses (e-entrepreneurship) have a specific role to play in driving innovation. The Federal Ministry of Economy and Technology (BMWi) records about 11,000 ICT business start-ups every year – a growing tendency. Experience shows that a number of innovation potentials from large, established businesses are overlooked, especially in the ICT sector – in this context, young and newly established businesses have the economic capacity to put such innovation potentials into practice and to implement them in marketable business models.

So this is not about just any industry, but about one of the most important key technologies of the present and the future. And it is exactly here that Germany is falling behind. What are the reasons for this?

Part 2: More educational opportunities for ICT business entrepreneurs are needed

Proposition 1: Low tendency for start-ups and high risk aversion of Germans combined with the difficulty to get young people enthusiastic about science subjects like Information Technology, damaging ICT start-ups.

International comparative studies such as the Global Entrepreneurship Monitor show that Germany continues to have a low start-up tendency compared to other economically developed countries. In comparison, the Nascent Entrepreneurship Rate (start-up projects) in the USA is, in relative terms, more than twice as high as in Germany.

Also in relation to other European countries we lag behind England, the Netherlands, France and Sweden. The same is true for actual Total Entrepreneurial Activity (TEA). 540,000 new business activities are started every month in the USA, of which 12.2% are in the sector of e-commerce and online activities and 25.2% in the sector of internet publishing.

Start-ups in the high-technology sector fall by 25 percent

In contrast, in Germany start-up activities in the high-technology sector, which also includes the ICT industries, fell by 25 percent, according to a study by the Mannheim Centre for European Economic Research. At the same time, the industry association Bitkom diagnosed a shortage of 35,000 skilled personnel. German graduates are not sufficient to close this gap and in principle prefer activities in dependent employment. As a result, the problem of ICT businesses gets worse, if especially young businesses of this industry are considered.

Proposition 2: There is a lack of development of specific educational opportunities for ICT business entrepreneurs, as general start-up teaching without any related industries is not sufficient for an increase in ICT start-ups.

The education and socialization of ICT experts consistently neglects the development of a business mentality. University and high school curricula are primarily directed towards activity in research and large businesses. As a result, skill promotion at universities is concentrating on business administration programs – it is necessary to increase the number of students who register for information technology degree programs. At the same time, empirical studies have shown that ICT business entrepreneurs are substantially younger when compared to other high-technology entrepreneurs – education must therefore be started as early as possible.

The promotion of business foundation professorships by the Kreditanstalt für Wiederaufbau (KfW) in the 1990s should consequently be resumed again – this time with business interface professorships for example to technical universities, which explicitly educate business entrepreneurs.

Strengthening education of ICT experts

Compare: There are currently about 90 professorships in entrepreneurship at universities, advanced technical colleges and other colleges, of which there are “only” 20 with ICT-related topics or research field and only two with “e-entrepreneurship“ explicitly as the central topic (Göttingen Technical College and Duisburg-Essen University). By contrast, there are over 90 professorships in Controlling and Marketing at universities alone!

Every leading university in the USA now has an entrepreneurship professorship, and in many cases also an incubator, which is often run in cooperation with businesses or private foundations. High-tech start-ups, which also include ICT start-ups, are the focus. An entire start-up industry has partly been established around universities (for example MIT).

Part 3: Lack of innovative forms of start-up financing

Proposition 3: There is a lack of innovative forms of start-up financing, for example the national co-investment program for business angels or university seed funds for university start-ups, needed to increase ICT start-ups.    

In spite of a relatively small capital requirement, a study by the Federal Ministry of Economics has shown that more than 40 percent of ICT entrepreneurs consider business financing to be the greatest problem. Even private involvement in the financial support of ICT business entrepreneurs in the early stages of business development is still relatively small in Germany.

There are about 5000 so-called Business Angels in Germany, that is, informal private investors, whereas in the USA there are an estimated 200,000 active Business Angels. Both countries turn out a comparable potential of solvent and qualified investors, so a tenfold increase of German Business Angels would be feasible. According to the Federal Ministry of Economics, up to now only about 13 percent of young ICT businesses are supported by Business Angels. As a result, start-ups in ICT industries in the USA are provided with x-times more starting capital in half the time than in Germany.

National co-investment programs could contribute further, as far as possible distortion-free, to intervene in this under-developed market and to support and develop this essential investor type. Instead, it pursues the news of the planned discontinuation of tax incentives for holding companies like a bombshell in the start-up landscape. This gives the wrong signal, because instead it needs to think about how positive incentives for more investment could be created, as in the end more investment also means more businesses and with it more employment and tax revenue.

Young entrepreneurs lack financial support

Great Britain is a good example here. The “Seed Enterprise Investment Scheme” enables private investors to make seed investments (no longer than two years) in businesses and then deduct up to 50 percent of their investment – up to 100,000 pounds – from income tax every year. There should also be more incentives for the increase of Corporate Venture Capital. For example there could be a deferment of capital gains taxes (“roll-over”) or a reduction, when these are newly invested in a young business.

It would also be preferable to strengthen participation of universities in start-ups, for example by university seed funds. However studies at Dortmund Technical University show that uncertain legal conditions cause reluctance on the part of universities.

We can also find good examples of this – unfortunately somewhere else… such as the university seed funds in England. The British government set up a funding pool beginning with more than 45 million pounds to convert “good research” into “good business”. From then onwards universities were able to apply for grants of up to 250,000 pounds, to promote commercialization of their research results.

The goal of the seed fund was to establish a start-up culture at English universities and to bring science and economy closer together. It is important to note that it is not research that is promoted, but technology transfer! Therefore research results and/or patents must be there already. 53 successful start-ups, with numerous jobs, are emerging from the funded research projects. And at the end of bridge financing there were further investors available for many university start-ups, contributing a total of over 17 million pounds.

Special university seed funds for specific locations, partly in cooperation with private investors can also be seen internationally: a 6.5 million dollar venture fund has been set up at the University of Rochester with the University Technology Seed Fund, which is funded together by the Trillium Group and the university.

While public universities in Germany continue to take a backseat, it seems that at least the private universities are doing something. The initiative “VenCube” of the Frankfurt School of Finance and Management has collected a million euros, to aid students, graduates and faculty members in business start-ups.

The European Business School (EBS) in Oestrich-Winkel is also creating start-up support. Its strong department “Innovation Management & Entrepreneurship” of 55 members has been building the “House of Ventures” start-up centre since the end of 2011. In the medium term, EBS would also like to create a pool – in the form of a foundation or a fund – to be able to invest financially in promising start-ups. EBS aims to hand out a total of five million euros.

Part 4: Germany should develop a start-up metropolis

Proposition 4: Long-term development of an “ICT start-up metropolis” is still lacking, this would allow Germany to benefit from its Frankfurt/M. finance centre as well as from an ICT capital as an international cluster.

Centres and densely-populated IHK districts are already showing disproportionately high start-up birth rates in the ICT sector. Economic-geographical studies have shown that the innovation potential of a region is increasing disproportionately to the number of inhabitants. In relation to European countries, it can be observed accordingly that three regions (Paris, Lombardy and Madrid) together already make up 10 percent of ICT activities in Europe. The London start-up metropolis is still to be included.

German metropolises such as Berlin or Munich are falling behind and as a result should be strengthened – according to the figures presented by Bitkom, 4,400 Berliners set up ICT businesses, an example of an adequate basis. Whether there must necessarily be only one start-up city can be debated.

Several start-up clusters could make sense

A glance at the USA shows that several start-up clusters make sense and work. Of course Silicon Valley is naturally the hotspot for high-tech entrepreneurs, creating 1202 new businesses in 2011, which received a total of over twelve million dollars in venture capital, but special programs and local politics in New York have enabled at least 390 new start-ups in 2011, receiving a total of 2.75 million dollars. In the first half of 2012 alone, a further 182 have been created.

Proposition 5: An awareness of ICT entrepreneurs and general conditions is still missing, in order for Germany to establish its own innovative ICT business model throughout the world and therefore to give ICT start-ups a place in the global market.

Start-up birth rates in the ICT sector, which remain far behind its real potential, must be accompanied by a focus on the major technological trends in the USA. In order to increase the absolute number of start-ups in the really high potential sectors, it will also be necessary to increase the start-up birth rate through innovative business models. More innovative entrepreneurs go hand in hand with more entrepreneurs in this new field.

Of course “copying isn´t always copying” and it is difficult to compete against the start-up and financing culture of the USA; nevertheless copycats and innovations must not be ruled out in Germany. Successful copycats were important to restart a functioning e-entrepreneurship ecosystem in Germany, but we will never catch up with the others if we don’t also create our own innovations and have the courage to finance them.

Part 5: Conclusion

Against this background, Germany needs a comprehensive ICT start-up agenda in order to reconnect to the digital leaders. As a result, the cornerstones must be:

• Factor I for “Individuality“: Measures for the education of ICT entrepreneurs and ICT personnel as well as image improvement and raising the profile of ICT entrepreneurs in Germany.

• Factor C for “Capital“: Measures for innovative financing and support schemes for the financial aid of ICT entrepreneurs in Germany.

• Factor T for “Transfer“: Measures for technical (broadband) and communicative (network) infrastructure for ICT entrepreneurs within an ICT metropolis.

Furthermore we need a political point of contact in the area of ICT start-ups, in the form of nationwide representatives within the federal government. That would be a strong and important sign for the ICT start-up landscape in Germany.

This article is a direct translation of the a German article that was published in the German Manager Magazine here: Deutschland ist digital abgehängt

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<!–:en–>Germany has been reunified for 22 years!<!–:–>

Today is Germany’s 22nd birthday: Reunified Germany turns 22 years today

I’m happy to live in Germany and I’m proud to be German. Europe and especially the EU has benefited Germany’s reunification and Germany will never start a war again. The Germans have finally learned how to use their resources and economic power to peaceful ends. Happy Birthday, Germany!

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<!–:en–>Google pays more than $30 million to buy Ukrainian start-up Viewdle<!–:–>

The biggest deal in the history of the Ukrainian Internet was completed a few days ago. In the late night hours of September 24, Viewdle’s board approved its takeover by Google. Google agreed to buy 100% of the Ukrainian start-up. Late on October 2nd Viewdle management made the announcement to their staff. Google has a branch office in Kiev.

Viewdle had developed a face and object detection system, which is widely used in search technology. Last year, using this technology, Google launched a search by images service, where the search query uses image files that are downloaded into the search engine. The Viewdle purchase was for an undisclosed amount. According to a source familiar with the negotiations, it is comparable to the money that Google has laid out for similar companies: Neven Vision and PittPatt. As with Viewdle, these startups are developing pattern recognition technology. In 2006, Google bought the German company Neven Vision, according to unofficial sources, for $45 million, and in 2011, the American company PittPatt for $38 million. The founders of Viewdle were planning to generate about $30 million from the sale, but “in fact turned out to be even more” says Forbes magazine . Viewdle founders Yuriy Musatenko and Yegor Anchishkin saw commercial prospects in the development of image recognition software at the Kiev Institute of Cybernetics. They received Angel investment from the businessmen of the American diaspora, among which was the former Odessa resident Yuri Friman – the current chairman of the board of Viewdle. In 2008, the investment fund Anthem Venture Partners bought 25% of the company for $2 million. Two years after, in a second round of investment, funds Qualcomm Ventures, BlackBerry Partners Fund and Best Buy Capital bought an additional issue for $10 million, valuing the company at $13.5 million. In the past, the founders of Viewdle told Forbes that the company was shown interest from a worldwide smartphone manufacturer. As it turned out, the anonymous bidder was Motorola. But when Google and Motorola entered into negotiations for the sale of mobile units, the vendor’s interest in Viewdle was temporarily forgotten. After the deal between the two giants in May 2012, the company has renewed its interest in the Ukrainian startup. Team members of the start-up number just 34. It turns out that each employee cost Google more than $1 million. The corporation has not yet announced future plans for the new acquisition Viewdle. It is unknown whether the employees will continue to work for the corporation from Ukraine or move to one of Google’s R & D centers in Europe or America. Viewdle owns several patents. According to Yuri Friman, in terms of the current patent wars this is a big plus. In addition to Google’s purchase, similar start-ups have been absorbed by Apple and Facebook. In 2010, Apple bought Swedish Polar Rose for $28 million, and in 2012, Facebook absorbed face.com with a transaction amount somewhere between $70 to $ 100 million.

SEO comments: Shortly after I posted this article, it showed up on Google as the second result for the key word ‘viewdle’:

Viewdle English-Team SEO

Viewdle English-Team SEO

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