What are entrepreneurial children

Entrepreneur children: You're lost without us

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Robin Huesmann stands on the roof of the paper mill in safety shoes and a suit. His tie is blowing in the wind. In front the Oder meanders deep blue between the green meadows of the river valley, behind the chimneys of a refinery rise. If Huesmann, 39, has his way, more companies will soon be visible from here. The entrepreneur wants to attract start-ups to Schwedt an der Oder with an innovation campus. After the fall of the Wall, his uncle bought what was once the largest paper factory in the GDR and made it the production site of the family company Leipa, which is now over 170 years old. Now the nephew wants to learn from young companies in order to lead Leipa into the future.

Such openness is not a matter of course in medium-sized businesses. The image of the hidden champion who dominates the world market from the depths of the German province without exchanging ideas still applies to many. But this strategy will work less and less in the future. "Digitization has the potential to permanently destroy many business models," says Professor Nadine Kammerlander, who heads the chair for family businesses at the WHU University of Economics and Business. In addition, there are new customer requests, such as those awakened by the sharing economy: If people no longer want to own things, but only want to borrow them, entire industries have to rethink. "Reacting to these extreme changes with an established team and also managing day-to-day business is almost impossible," says Nadine Kammerlander. In studies, WHU scientists show how important the collaboration between family businesses and start-ups is - for both sides.

The corona pandemic is increasing the pressure to open up. Kammerlander assumes that a deep rift will open up in the next few years: between the companies that have reorganized and are profiting. And those who failed to do so - and for whom it may soon be too late. "I'm afraid that many medium-sized companies won't make it," says the scientist. At the same time, it has good news: The WHU researchers asked family companies before and during the Corona crisis about their willingness to work with new partners. The shock of the pandemic and its consequences have made many companies more open to new alliances.

Some show how cooperation with start-ups can work. For example, the heating manufacturer Viessmann and the logistics company Fiege, who opened the so-called machine room in Berlin-Mitte at the beginning of the year. In the back yard of an old Wilhelminian style building is the chic old shoe factory, from which 20 medium-sized companies network with each other and with the capital's start-up scene. Another example is Katjes: with the investment company Katjesgreenfoods, the company is building a group of sustainable food start-ups. Often it is the young successors in family companies who build bridges into the start-up world - with an openness and curiosity that their parents lack.

Model 1: Attract suitable start-ups

Robin Huesmann from Leipa has been looking for new partners for a while. Leipa employs over a thousand people in the Schwedt plant, a total of 1700. The entrepreneur is now in production next to a gigantic system that fills an entire factory hall: the PM 5. It's hot, humid and loud. Rollers turn, squeeze water out of paper mud, turn the finished paper into a huge roll, brown on the inside and white on the outside: a printable surface for corrugated cardboard. The PM 5 used to be a machine for newsprint - until the newspaper business collapsed dramatically because the media went digital. "Every year we as an industry lose six to eight percent in graphic papers, ie papers for printing or writing. That is a lot," says Huesmann. Where old business areas fall away, Leipa has to expand existing ones and open up new ones.

75% the successor under 40 find cooperation with start-ups important in order to develop digital solutions.

In order not to stick to "traditional thought patterns" and actually find new business models, as he says, in 2016 Huesmann co-founded Rising Generation, an investment company through which Leipa invests in young companies - such as the Munich start-up Adnymics. The paper producer makes almost 40 percent of its sales with advertising brochures, while Adnymics sells the next generation of print advertising: personalized flyers as package inserts. To date, Rising Generation has invested 1.2 million euros in the start-up. Huesmann and Adnymics founder Dominik Romer know each other through a mutual acquaintance. A stroke of luck. "Family businesses find it very difficult to find suitable start-ups," says the expert Kammerlander. "Unfortunately, there is no tinder for this area yet."

Huesmann wants a breath of fresh air for his venerable company. "We have to open our heads," he says. This also applies to himself. When Romer and Huesmann visit a Leipa customer together, both sides benefit. Romer, because as a young entrepreneur he would hardly have a chance of getting his foot in the door of a large discounter. Huesmann, because he receives free training in modern sales from start-up founder Romer. This worked for medium-sized companies for many years through personal relationships and the price - it was only through the collaboration with Adnymics that selling became a systematic process.

Experience and contacts are the most valuable that Leipa Adnymics can offer. "Most family businesses will not be able to beat other investors in the market, such as private equity firms, only with capital," says the researcher Kammerlander. When Adnymics tried to enter the US market and fired employees, Romer was glad that Huesmann and his fellow managing directors from Leipa not only supported financially. "The experience of entrepreneurs from our group of investors helped us more than the advice of our lawyer," says Romer.

What if there is a problem? Huesmann can still remember the moment when his phone rang while on vacation: Adnymics had received a large, urgent bill; an ongoing capital round must therefore be completed the next day - earlier than planned. Start-ups need quick decisions, says Nadine Kammerlander, but family businesses are better partners than corporations. In any case, with Adnymics, the money was in the account on time.