“Industrial tech harbours a wealth of innovation potential”

Markus Kückelhaus has spent over 25 years driving innovation, strategy and financial topics for corporations – and has worked with many start-ups in the process. The 53-year-old has now joined High-Tech Gründerfonds as a partner. In this interview, he outlines the opportunities that arise when corporations and start-ups cooperate, takes a look at industrial tech trends, and reveals what he expects from start-ups in Germany.

Welcome to HTGF, Markus. We’re delighted to have you on board. Would you like to introduce yourself?

Thanks for the warm welcome, and sure, it’d be my pleasure: I have been working on innovations, finance and strategy topics for over 25 years now, including in my previous role at Deutsche Post DHL Group, where I was responsible for the company’s innovation activities as Vice President Innovation & Trend Research. And since Deutsche Post DHL is a HTGF fund investor, I also got to know High-Tech Gründerfonds really well through our close collaboration. That’s why I’m especially thrilled to have the chance to join and support the team here with the experience I have gained.

Markus Kückelhaus, Partner Industrial Tech at HTGF

How would others describe you?

That’s a good question. They would perhaps say that I’m a really good judge of what will work – and what perhaps won’t – when it comes to innovation. Amid all the hype that so often surrounds the world of technology, we all need to differentiate between which topics are relevant and which aren’t. And I’m relishing the chance to do so at a VC in the early seed stage. HTGF was highly professional in our dealings over the years. I always felt our collaboration was one built on a spirit of mutual appreciation and friendship. It’s this combination that convinced me to join the team.

You still have a somewhat external perspective to draw on. In your previous role, what did you value in your collaboration with HTGF?

As a HTGF fund investor, Deutsche Post DHL Group – and also myself as a representative on the investment committee – gains a great deal of insight into the start-up ecosystem. The screening performed by HTGF here in Germany is quite unique, and it presents major corporates with an excellent opportunity to discover technologies and trends. At Deutsche Post DHL, we frequently cooperated with HTGF portfolio companies and conducted proof-of-concept testing for innovative solutions – from cleaning robots to inventory drones – to explore their use in logistics settings. Thanks to these tests, it quickly became clear which technologies would hold up in the tough world of industry, and how the specific costs and benefits would stack up.

You said at the start of our interview that it’s important to evaluate what will work and what won’t. What does that mean for start-ups? What does work when collaborating with corporations?

Start-ups need to understand that corporations are interested in systemic solutions, not just technological components or a piece of hardware. They want to realise efficiencies, expand their portfolio or facilitate new business models. In my experience, it’s something that a lot of start-ups struggle to grasp, especially in the industrial sector, and they run the risk of focusing on a single technological component they’ve developed rather than thinking in terms of systemic solutions. Corporations need solutions that can be deployed for a number of years. And with everything that entails, of course.

What do start-ups need to consider when they begin working with corporations?

At the start of a collaboration project, large companies ask themselves the following questions: How far do we want to go? How much do we need to invest? Innovations that optimise internal processes and thus reduce costs, for example, are of course quick wins. In this field, this is one of the easiest ways for start-ups to start doing business with corporations.

When do things get tougher?

When corporations want to use a start-up idea to tap a new market, things can quickly become more complicated as they have to set up new structures. It becomes even more challenging when they want to integrate a new product that falls outside of their core business. Both sides – corporations and start-ups alike – need to be aware of these processes. And this needs to happen at quite an early stage so that they can gauge what will – or perhaps won’t – work, like I said before. Moving forward, this is something that I’d like to help both sides with, by sharing my experience.

In your previous role, you worked with start-ups from around the globe. What are your thoughts on the scene here in Germany?

It’s quite incredible to see what’s coming out of Germany, especially from the research being conducted at universities and institutes. At the same time, though, I’d like to see more courage to launch and scale good technological solutions at a faster pace. I sometimes feel that this courage to scale is in somewhat short supply in Germany, especially compared to other countries. But the bedrock of good ideas, technologies and business models here in this country really is great.

You’ve taken on the role of partner for industrial tech. What are the major trends you see?

Robotics coupled with automation remain a huge topic that is relevant for the entire manufacturing industry. Robot gripper technology has really come on leaps and bounds in recent years, but there’s still some potential to be unlocked, such as in combination with computer vision. We’ll also see a lot of advances in human-machine interaction, such as with bionic enhancement. It’s less a matter of “human or machine”, but rather “human and machine”. How can smart glasses, exoskeletons and other technologies help humans go about their work? On top of that, you also have the Internet of Things (IoT), which will remain a relevant topic. And in this field I’m hoping to see developments moving away from silo solutions.

Could you share some more details?

There’s been a been a great deal of hype over IoT for years. But so far there’s been lots of individual solutions. We now need to come up with an answer to the following question: How do we take this combination of hardware, software, new transmission technologies like 5G, and analytic capabilities, for example with the aid of artificial intelligence, and leverage it across value chains. Especially in the industrial sector, which is a lot more fragmented than the consumer market, we still need to find good answers. And that’s why this is an area that, much like the entire industrial tech space, harbours a wealth of innovation potential.