A distinctly international buzz about doing business in China holds big implications for the connection between the bustling Berlin and China startup scenes. Local murmurings on this topic stem from a recent Start Alliance trip organized through the IHK/CCI who sent an economic delegation including Berlin startups, to Beijing and Shanghai. One of those participants was Next Big Thing’s CEO, Harald Zapp.
According to Harald, there’s a “tectonic shift for China in Internet of Things and even more in Internet of Service adoption: smart fleets of bicycles, electro-scooter & buses and trains embedded with IoT technologies are making urban transportation more accessible, smarter, and environmentally friendly. In the slipstream of internet giants such as Alibaba, Baidu and Tencent, numerous IoT startups – in cooperation with large service- and technology providers; this shows a new entrepreneurial zeal.”
Continuing he adds: “One driver of China’s IoT ambition is the Chinese government, who is behind a ‘Made in China 2025' masterplan with the focus on IoT and launched in 2010. To support that, a new special fund requires public entities to have an IoT initiative, and for the private sector, the government policies provide preferred tax breaks to IoT manufacturers.
It’s clear the Chinese government’s top-down IoT policies would not work in many European countries, but let’s not underestimate the role governments can have in stimulating important technology markets like IoT. The role of governments as agenda setter and technology adopter in IoT can be profound. On top of that, we should call for state incentives, more public-private partnerships and private investments to assert ourselves between the two powers markets, USA and China.”
Although exchanging tech solutions flows in both directions between China and Germany, it takes local knowledge and a solid network to achieve progress in either location. Tuning in to experts who know these two target areas yields helpful insights for startups to expand internationally. These arrangements are definitely in ‘beta,’ as startups sort out what works most effectively.
Harald’s trip was designed to exchange good ideas between German and Chinese startups as well as share best practices in IoT technology. After founding successful Industrial IoT platform company, relayr, as well as IoT-blockchain company builder NBT, and IoT-blockchain venture, Weeve, Harald has deep industry insights to offer.
He indicates that because China relies heavily on imports, there’s a particular interest in the autonomous advantages that the Internet of Things (IoT) provides. IoT stands to impact healthcare, smart building, supply chain and agriculture, to name just a few industries. These areas and beyond, are in fact where Next Big Thing (NBT) itself is actively building companies.
Bay Day in Berlin
In line with this international trend, NBT co-hosted part of Bay Day, where Bay McLaughlin from Brinc came to Berlin to explore connections between China’s Greater Bay and Germany. The action-packed day included a roundtable at NBT of startup mentors and experts on healthcare, strategy, concept, UI, and sensor technology. After earlier demos demos at Signals, Bay and other hardware tech experts gathered at NBT’s new office at Factory Görlitzer Park, where NBT is a partner with Factory and Fraunhofer Institute. (Together, they effectively form the trifecta of the de:hub for IoT, part of a federal digital initiative with a network of 12 uniquely-focused tech centers across Germany.)
Brinc’s Bay McLaughlin on Countering Risks
Bay McLaughlin is a trusted voice in the international IoT scene, especially as a contributor to Forbes on IoT investment and connected-tech in Asia, as well as a source for engaging social media, where he supplies tech and startup tips and solicits thought-provoking ideas via his #QOTD, or Question of the Day Videos. (Simply use #AskBetaBay if you want him to respond to your question with a video.) As Co-Founder and COO of Brinc – a global IoT accelerator, manufacturing studio, and online hardware community – his experience in international operations makes complexity sensible to companies involved in IoT from around the world. To date, Brinc has invested in IoT companies from 26 countries.
His visit to NBT was part of a bigger vision – a day in which major players in the IoT and hardware scene could cross-pollinate ideas to advance the industry.
In his introduction to the gathered group, Bay explained that the idea behind Brinc’s investment is to beat out the “repeatable risks for IoT development that can be dealt with proactively.” Everyone in the room, seemed to nod in agreement: Yes - these risks can be mitigated with proper skills, expertise, and execution. The way to deal with the risks is through effective collaborations between capable team members: investors, business developers, tech experts, and hardware experts, such as Brinc’s factory partners in Shenzhen and China’s Greater Bay Area.
Bay gave advice for startups pitching to investors, namely: pay attention to the ‘hierarchy of messaging’, ensure that the pitch highlights the most powerful stats up front. This hooks the investor into listening further. If you can remove any natural doubt about your startup that any investor enters with, and increase trust as fast as possible, this will help you increase the chances of getting a second meeting.NBT’s Jasmin Skenderi on Ecosystem & Product Development
In that spirit of sharing expertise, NBT’s CTO Jasmin Skenderi, presented a brief history of NBT as accelerator, incubator and operational VC and its ventures across industries. Jasmin explained why NBT is focused on building a whole environment to support new ventures.
Franka Birke, CEO of NBT’s PropTech venture, METR, delivered a short presentation about her startup’s IoT infrastructure solutions for the housing industry.
Factory’s Chief Innovation Officer also dropped by to explain the role Factory plays in fueling more innovation in the German capital.
Jasmin addressed the importance of operating within an ecosystem and the sobering fact that by 2020 there will be 50 billion connected devices with unimaginable quantities of data. As a company builder in IoT and blockchain with its own tech stack and engineering team, Jasmin explained the NBT approach to product development: NBT guidelines include strategies on security, price, zero-configuration compliance as well as attention to the emotional response that IoT devices developed here solicit from the user. These ingredients make up NBT’s successful IoT recipe; each aspect is vital to the overall design. To elaborate, hardware must be reliable and secure, affordable, easy-to-use, and generate positive emotions in the user.
NBT builds a chain of compliance tests that challenge each of their startups during incubation and acceleration. Jasmin discussed how the ventures move from Proof of Concept, to Demonstrator and MVP, towards a customer-focused product. In each step, they rely on actual use cases, and aim to solve real problems.
Networking for IoT Hardware Exchange
From Bay’s side, he shared that Brinc has also learned a lot about navigating risks and increased transparency. Both Jasmin and Bay agree that that ‘companies need to be free to decide’ their fate. The group was unanimous that ‘hardware is only hard when you just have software engineers.’ Instead, you need a range of talents and the the right network both in Europe and Asia.
After the roundtable, the event continued at Rocket Tower for a Bits & Pretzels session on hardware led by Stefan Hermann from Geeny, and a panel moderated by Stefanie from Red Lab. Bay Day symbolized how the connection between China and Germany is getting strengthened, and we are happy to be a growing part of it.
Are you working at the intersection of Berlin and Beijing? We want to hear about it. If you'd like to expand your network of IoT hardware specialists, click here to find out more about how we frame the IoT ecosystem in Europe.
Attending CUBE tech fair in Berlin? Visit the CUBE stage on 15 May at 16:50 to catch a talk by Harald Zapp, NBT’s CEO.