Merkel Tours Berlin Start-Ups: ‘People Pay Money for That?’

03/08/2013 01:43 PM

Merkel Tours Berlin Start-Ups

‘People Pay Money for That?’

By Annett Meiritz

Merkel Visits Berlin Startup Companies

In a show of support for Berlin’s burgeoning Internet start-up scene, German Chancellor Angela Merkel ventured into a strange new world of employee-friendly tech offices on Thursday. Though she showed a lot of interest, Berlin still has a long way to go in supporting the city’s growth as a tech hub.

Two hours into her tour of Berlin’s digital wonderland, a place where business is booming and “feel-good managers” tend to the well-being of their employees, Angela Merkel was finally confronted with a bit of cautious criticism. Sitting across from the German chancellor, California native Holly mentioned that there are “barriers” for young Internet companies like Wooga, the social gaming developer where she works.

Merkel interrupted, asking: “What kind of barriers do you mean?”

Holly told the story of how she is actually a musician who initially came to Berlin on vacation, but stayed because she found the city so appealing. Then she found a job at Wooga, and the bureaucracy horror began. At municipal offices where residents are expected to register, one is “lucky if someone speaks English,” she said, adding that the authorities don’t even provide forms in the global language.

“We don’t want money from you, but we want a more welcoming atmosphere,” said Jens Begemann, one of Wooga’s founders.

The chancellor thought for a moment, then asked: “Have you spoken with the mayor about this?”

Yes, said Begemann. “But everything that you do to help Germany develop a more welcoming culture really helps the industry,” he said. Merkel nodded.

Lots of Questions

For now, the effort to do this came in the form of Merkel’s visits on Thursday to two exemplary young Berlin tech start-ups, Reasearch Gate and Wooga, the latter of which attracts some 6 million people in Germany with games like “Brain Buddies,” “Pocket Village,” and “Bubble Island.” Merkel’s visit to these start-ups benefits both sides. The start-ups get publicity, while Merkel can show that she’s not afraid of the digital future. But making that impression didn’t go entirely seamlessly on Thursday. When presented with the popular game “Diamond Dash,” Merkel looked at the flashing touchscreen, but declined to play.

It’s difficult to imagine Merkel downloading social games onto her new smartphone, an addition that was widely covered by the German media this week. The chancellor clearly found herself in a strange new world, but seemed genuinely interested, asking questions with scientific rigor as she toured the brightly decorated loft office. “Who takes care of the work contracts?”, “How many can play the game?”, “What are the characters called?”, “What did you study?” And what about setting time limits for development, she asked. “We are more interested in setting quality targets,” Begemann answered. “The game has to look fantastic in the end.”

As Begemann explained how the company earns money with premium versions of its games, the chancellor wanted to know more. What exactly are the benefits when a player buys these features, she asked. Begemann answered patiently that one could, for example, get magic dust more quickly to help beat opponents. Magic powder. “People pay money for that?” the chancellor asked. Apparently they do. Wooga is profitable and hires two new employees each week.

Keeping Things Casual

Merkel, who was a scientist herself before she entered into politics, appeared to feel more at home at her next stop, a social network for scientists and researchers called Research Gate, where some 2.6 million members exchange and discuss formulas, lab results, experiments and ideas. In honor of their illustrious visitor, the company cleared out its game floor, where employees usually play air hockey and Playstation. But Merkel wanted to keep things casual. “Do they have to be closed?” she asked about the window blinds as she entered the stifling open-plan office. They were apparently closed due to security concerns. “I wouldn’t mind if you opened them again,” Merkel said. Then she briskly asked one of the investors whether he had put his own money or his parents’ money into the company.

Playing host to Merkel was co-founder Ijad Madisch, who was wearing a green beanie, Nike pullover and geek glasses. The Harvard researcher prepared his best stories to impress the chancellor, proudly telling her of Rick, a Filipino student who developed a biofuel and found a buyer in Spain through Research Gate. Only success stories would do here — anything else might damage the image of Berlin as a European start-up dream.

Understanding the Industry

It remains to be seen whether Merkel’s visits will change anything. Berlin has been promising better conditions for young Internet companies for a while. During this week’s CeBIT digital technology trade show in Hanover, Merkel called for a new “culture of entrepreneurship.” Economics Minister Philipp Rösler also recently toured Silicon Valley, though the creation of a globally recognized company like Apple, eBay or Facebook still remains a long way off for Germany. Last year, Merkel met with a group of Internet company founders and investors to be advised on the issue, but little has happened since then. The industry is struggling with a shortage of skilled workers, sluggish broadband expansion, and, of course, the legendary bureaucracy that makes it difficult for young creative workers to do anything but paperwork.

Merkel remains vague when it comes to promises. Right now the issue isn’t Germany’s future as an IT hub. First, there must be a fundamental understanding of the Internet industry and the possibility of an alternative working culture — one in which meals are catered for all employees and the “feel-good managers” keep their staff happy with yoga, basketball and language courses. But it’s clear that some of this seems strange to Merkel, who is more easily associated with her vacation hiking tours and eating plum cake.

As the chancellor concluded her visits, everyone was nevertheless happy that she’d come. Wooga founder Begemann later gushed about how pleased he and his employees were with her visit, even though it “wasn’t the most important appointment this week.” No, that was on Tuesday, when Wooga released its latest new game.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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