Leadership, Grit, and Entrepreneurship with Martin Schilling of Techstars Berlin
Based on the Chaos Theory, small changes can have a significant impact. The goal of the Butterfly Effect Studio is to uncover how leaders and change makers developed their purpose, competencies, and community to have a great positive impact. Each episode is packed full of ideas you can apply to your life.
In this conversation, Christian Rebernik speaks to Martin Schilling, Managing Director of Techstars Berlin, angel investor, serial entrepreneur, and author of the book: The Builder’s Guide to the Tech Galaxy – 99 Practices to Scale Startups into Unicorns Companies.
[00:00:01.740] - Christian
Welcome to the Butterfly Effect Studio. I'm your host, Christian Rebernik. As we know, small things can have a big impact. And the goal of this session is to uncover how leaders and change makers develop their purpose, their competencies, and their community to have a great positive impact. And if the episode is packed full of ideas you can apply to your life, in this conversation I'm speaking to Martin Schilling, Managing Director of Techstars Berlin, angel investor, serial entrepreneur, and author of the book The Builder's Guide to the Tech Galaxy: 99 Practices to Scale Startups into Unicorn Companies. Really great to have you here, Martin.
[00:00:39.930] - Martin
Hi Cristian, thanks for your invitation, love to be here.
[00:00:42.900] - Chrisitan
So, Martin, you mentioned your passion is accelerating companies that make the planet a better place for humanity. Tell us a little more about your purpose and what is driving you in your life.
[00:00:54.760] - Martin
Yeah, sure. So look, I have been an entrepreneur all my life. This is a bit of the ingredient that flows through my veins and which excites me. I co-created a youth parliament in my Bavarian hometown at the age of 16. Totally exciting story. I found a foundation in Argentina, then my first startup in Berlin during my Ph.D., and joined after this, McKinsey, where I had many McKinsey clients and credit companies, but I was never really super happy as a consultant. So at one point, the founders of N26 called me and at this point, I was at a point where I said I would never want to work for banks or insurance. But I actually committed to joining N26 and helping them scale the company from 300 to 1.500 employees in a bit more than two years. An absolutely amazing scale-up story. I took them time off during COVID as well, to be there for my two sons, as well as to write a book as I just alluded to. And I literally tried to condense the learnings we had at N26 together with more than 100 international experts in a book on supporting startup builders to build unicorn companies.
[00:02:17.060] - Martin
To your question of purpose, which really drives me, I want to be personally involved in co-creating ten European unicorn companies in the next ten years that make the world better. So that's very important for me. This is not only about great large companies, this is about companies that do not necessarily deliver to you milk in ten minutes to your doorstep, which is cool, no question, but really work on the big problems of our time. Climate change, quantum decentralized finance, you name it.
[00:02:54.940] - Christian
Why is this driving you? What is the motivation for you?
[00:03:02.740] - Christian
Your inner need to have this energy, actually, to do this, to support this, to be an entrepreneur, because eventually it's a journey, it's like a roller coaster.
[00:03:13.240] - Martin
So look, there are two themes behind them. The one is a private one. I have been an entrepreneur myself. I know how difficult this journey is. I know how stressful it can be if you literally have a payroll and you don't know how to pay your people from the middle of the month to the end of the month. And I know as well how it feels like you are creating something. You have an idea. Everybody at the beginning says, hey, what is this? I don't believe this. I don't believe you at all. And then suddenly, if it works, everybody jumps on the train. That's why I'm very sympathetic and have deep respect and appreciation for everyone who engages in a builder's journey of building a company because these are the pioneers of our time. These are the people who put their professional lives at stake. Whereas many of us, others I include myself currently in this have a relatively secure job with relatively well paid. And I just respect this builder's journey a lot. That's the private side and there's a more societal impact side to this as well. I believe that tech entrepreneurs in Europe have the potential to build more than ten million additional jobs in the next ten years.
[00:04:33.180] - Martin
There are many studies on this and they are a driver of the technological sovereignty of our nations in Europe, we are still too dependent on a particular US infrastructure. When you think about payments working in a supermarket, 95% of the transactions go via the Visa Mastercard network. And that's just one example where you literally go into public administration. 98% of our computers run Windows. So we are very, very dependent on US tech infrastructure and we as Europeans should change this.
[00:05:06.710] - Christian
Wow. Okay. So makes sense to understand this big purpose, to change this. You have 2 kids, you mentioned that now? Has anything changed in your purpose with actually having kids, and having a family?
[00:05:20.660] - Martin
Good question. I always thought about family and professional life as two things with two different purposes. Of course. Having two boys and a wonderful Argentinian artist wife is something amazing. And I'm even more committed to creating a world of equal opportunities. Having a family will be an important topic in many dimensions. Being employed, being a really inclusive world. These are topics that now matter even more to me after having a family.
[00:06:07.420] - Christian
Yeah, I think my purpose has also developed over time, actually. So if you're thinking back and you managed so many different challenges, what have been the skills eventually? You mentioned that you have been an entrepreneur from the beginning of your life, literally. But what have been the skills and confidence which help you actually the most in your journey? Have they changed eventually as well?
[00:06:34.160] - Martin
When I reflect on this, I see three key competencies and maybe a bonus topic. The first is what really helped me and is having me now is the ability to create a clear direction for organizations. The so-called North Star. I've seen this working brilliantly. I've seen it working not very well. There's nothing more powerful if literally wake up the team you're working with, particularly your leaders, in the middle of the night, and they can all tell you the same direction to walk, for example, here at Techstars, we have a new CEO and she put forward our objective and our North Star. We want to build the best and largest pre-seed investor in the world with more than 5.000 investments. And that's tier one. IRR internal rate of return. That's a really clear and great not star when you think about Elon Musk being very good at this. Yeah. Humanity is a multi-planetary species. It's really a strong North Star. Many people criticize him. For many things I understand. But his ability to think back and having a strong North Star is something totally amazing. I think that's one, or two, aspirational goals setting aspirational goals as an impossible is nothing mindset.
[00:07:54.810] - Martin
This is something really really impactful. So you should not settle for rather underpromising and delivering something typically done here in Europe but rather say hey, no I am trying with my team to make the impossible possible, unreal real, and I've seen this happening so often that then teams really get into their potential. If this is, of course, structured carefully there are things you need to put in place. So think about the Moonshot Speech is a very kind of stretchy example but a good one. John F. Kennedy said we want to put a man on the moon at the end of the decade and the US did it. Everybody thought it was totally impossible and they did it. That's just one of these things and many entrepreneurs we're working with do this and then the third skill learns it all without knowing it. I think this is a particularly important skill the things we learn in university early in our lives matter less and less. It is more about constantly reinventing yourself and keeping the courage and the ability to jump into the deep end of different waters.
[00:09:11.400] - Martin
So when you found a company, I found many other companies. This is always a jump into the deep end. Or I then joined McKinsey relatively late with six years as well as a jump in the defense. Then I totally switched positions from a consultant to an executive. And at one point, I had 800 people — a very different type of skills that you need there. Now I'm currently an investor. That is, well, another change. So these constant jumps into different waters keep you alive to a certain degree, professionally, and, of course, make you learn.
[00:09:52.610] - Christian
How did you learn that? This is actually for you, important, this North Star. When you graduate, when you graduated from school, do you really know where you want to go? How do you say how do you start learning that?
[00:10:10.840] - Christian
It's a very good question. I consider myself as some kind of misfit as many others in particular in the startup ecosystem do. So misfit in the sense that there wasn't a good existing path. So I need to craft my own path and when I talk about particularly with graduates, people are literally just embarking on their careers and they have the impression, hey, there is this I could go to consultancy, I could join a scaleup, I could literally do a Ph.D. I'm not sure I don't feel anything is really made for me. That's a typical syndrome for a potential founder. Literally, you should craft your own path.
[00:10:59.740] - Christian
If you craft your own path, we have a couple of other students here who don't know yet what the path will look like, but so how do you find out their next step? How did you find out? What's now the minimum? Why now McKinley? Why now? N26 — actually what's the decision-making here to actually find out your next step?
[00:11:21.090] - Martin
Yeah, so first I think everybody should recognize there is a big, big chunk of luck and chance involved here. So I think you should have a very clear purpose and long-term direction which you need to find and buy over time. Nobody has this, very few of us have this very naturally, and then it's similar to what you do in an early-stage startup. You need to experiment, literally dare to experiment. And so if an opportunity arises, then to literally take the opportunity and test it and ideally put yourself in a position where you can test things. Maybe you can do 3, or 4 months of work there. There might be a temporary thing so you could try it out. It's about failing fast and learning fast. Not the certificate thing. We recommend startups, but it applies to your post-career as well.
[00:12:19.320] - Christian
So you say like, let's go for internships, and let's see, figure out if is this a role that works out for.
[00:12:26.190] - Martin
That might be a bit of a Gen Z thing which I'm currently observing. If you have these opportunities, I would always recommend doing them wholeheartedly and for a limited time rather than, you know, okay, I'm committing here two days in the week and I'm doing 10x in parallel. Do this experimentation, but do it one experiment at a time.
[00:12:59.260] - Christian
So at Techstars, you're assessing founders, you're looking at who can invest in and if I tell you these are also the attributes you're looking into the founders having an author being aspirational, really quick learners, really fully jumping into it and then eventually you see that this have the 100% commitment. If you don't have any of those, you would say I don't go into invest. This is correct?
[00:13:31.010] - Martin
That is correct, this brings me to the bonus topic I mentioned before. There is one thing that really is often totally underrated and this is grit. It is difficult to translate words that stand for stamina and perseverance. Literally, the ability if you get punched in the face, you stand up and try again. Every no you receive makes you stronger.
[00:13:59.440] - Christian
So how do you test that? How do you find out if somebody is actually great?
[00:14:06.260] - Martin
It's very difficult to test but if you ask someone what's the most courageous thing in your life you've ever done? Then someone tells you, hey look, I have run an ironman or I have founded this strange company in Madagascar, a very weird circumstance. You see it partly from the CV. Okay, yeah. Or if you ask someone what's your plan B? And then you get an answer.
[00:14:42.560] - Christian
And how do you learn grit? Is this something that comes to you naturally? Is it like oh, you're born with grit and you have it or not? Or is it something you actually can learn?
[00:14:57.790] - Martin
So I think actually there's very, very little skills at all which are literally born with. I think the vast majority of skills are about training and training how to do this 10,000 hours. So this is really good news. I think almost everyone can do everything if they’re committed enough. One thing which matters in developing grit is this concept that psychologists call self-efficacy, the belief that you can achieve your goals. I think this is how you can nurture it. You need to put yourself in situations where possibly the goals at the beginning, not the very, very big moonshots, but things you can actually achieve. But if you set yourself on a path, then really don't give up. It's a mindset you can nurture. I've seen this over and over again if people try to imagine a new future, Steve Jobs was the most famous one, but there are many farmers who can actually do this. So literally you think about the future and there is a very clear picture that you have in your mind. If you totally believe it, you will be able to influence reality around you to literally bend through your vision field.
[00:16:18.710] - Martin
There is some negative connotation around the person speaking after this, but this needs to be done carefully with values and it can be done over the top. But that's a very powerful force.
[00:16:34.600] - Christian
Yeah, self-efficacy is a very important competence to have really. And it's something I think if you want to solve challenges, there is always resistance if anything is information. So it's something which is very important.
[00:16:54.580] - Martin
And we talked about children something as well, which connects education. You should praise effort, not talent. So if you tell a child, hey, you are so intelligent or you're so beautiful, this is usually not the right thing to do, you should praise effort. Hey, you have now the whole hour of training math or you have taken the whole hour to paint this picture. It's so great that you do this and that you stay on top of it and this requirement on this appreciation for effort and dedication and commitment.
[00:17:38.210] - Christian
This is also true for grownups and for companies' efforts or results because there is always the discussion OKRs also coming up. It's nice that you've tried hard but in the end, there is no result. So how would you see that?
[00:17:51.780] - Martin
Yes, it's a good question, a very good question. So I would see this differently in companies, with adults, and with children because that's just a little bit different. Of course results matter but this connects a bit to the discussions we have around OKRs in tech companies' objectives and key results. You want to bake in very ambitious goals but also allow failure. So it's not only about results, it is also about your willingness to commit to high-level and ambitious goals and do everything possible you can to achieve them. If you then only achieve 70% it's still okay.
[00:18:33.110] - Christian
So it's really about this 100% commitment you are in or actually the wrong person. Amazing. So if you're looking at your career to the end, who has helped you the most actually in your career? What are the biggest supporters? Who were the most important people actually to go through this rollercoaster? Because I think they're not just challenges but have you done it alone or was it like a support network? How was this?
[00:19:08.060] - Martin
So, what helped me most was getting into several tier-one networks. My personal story is I don't come from a family, from a very privileged family. So we certainly had enough money that I could literally pay for some extra education. But my mother is a nurse and my father is a chemical engineer, but we're certainly not connected. My father's not connected to any kind of tier-one network. And I had the opportunity during my studies in literally year two to join the Foundation of German Business. It's a network of scholarships literally seen by people globally but in a very broad sense, for people who want to foster entrepreneurship with a dedication to society. So that was the first network that I ended up in which provided me with pivotal connections. Then I studied Landscape Economics which was another network. McKinsey was, of course, a global network and is a global network. Techstars provides a global network, so these kinds of networks, were pivotal for me in my career and I would, you know, I'm always recommending to join networks.
[00:20:32.400] - Christian
How do you have to help you? What was like the help from the networks? It's like an individual, it is like regular sessions. How is it working?
[00:20:43.310] - Martin
Working and let's say partying and getting to know people with high aspirations.
[00:20:51.070] - Martin
So that's probably the single most important thing where I then suddenly saw here is a group of people who as well briefly come back to grit, working hard with high expectations and aspirations, and as well we come back to purpose with thoughts around how we make the world better. And this inspired me in changing mindset and developing the mindsets we just talked about.
[00:21:21.110] - Christian
And if you look at the challenges you had on your path, were those networks that you have then reached out to and asked for help, or is it like there have been other people additionally who helped you?
[00:21:36.210] - Martin
Yeah, it comes back now to get to grit with what we said before, so this will not just happen. You need to actively search for them, apply there, and try to get in there. There needs to be an effort to get in and then certain network effects kick in. It is very important for me. I want to learn about giving first. We Techstars have this very nicely phrased value, give first, the willingness to help others in our case particular entrepreneurs without asking for something in return. If I ask for that one piece of career advice that would probably be, give first, so try to hand out as many favors, professional favors as you can without directly asking for something in return. So I'm seeing this from time to time that people ask way too much about what is in this for me? Okay, you asked me to recommend you or you asked me for an introduction, or you asked me for information. Why should I do this for you? For my book, for example, it's very interesting to see, the majority of people respond and say of course I'll give you an interview. It's a great thing you mentioned to me, but what is in it for me?
[00:22:54.420] - Martin
And if you do this really, give first, you are building up reputation capital on which you can draw at some point. Because of course if you ask at 1 point one of these persons who do the favor for a favor, they will return it. But the key is about really not I give you a favor and you give me something back. I give you something unconditionally first.
[00:23:17.440] - Christian
Amazing. Thank you so much. I think this is really important. I think helping others without expecting but actually eventually like a black swan phenomenon, eventually, this can become a really big opportunity. Who would be your role model? Actually.
[00:23:38.360] - Martin
I don't have many roles actually but one which I would probably pick is Arnold Schwarzenegger. You're from Austria so you know Arnold Schwarzenegger inspires me. I'm coming from a small Bavarian city or town and he was portrayed there but he has reinvented himself several times and he's a brilliant example of grit. This man became one of the most famous bodybuilders in the world. You can only do this if you really have grit and train. Then he reinvented himself, the actor. Then he became an investor. And then he reinvented himself as a politician, becoming the governor of California. At one point there was even a discussion of changing the US constitution so that he could be elected president. So at this end, when I look at his post and what he's doing, he seems to have a vital purpose as well. And he's a very value-driven person.
[00:24:46.950] - Christian
Yeah, I think he also changed and advanced his North Star in that direction. I think as he mentioned, it must be very aspirational. I can do it. I want to achieve that, very clear where to go.
[00:25:05.210] - Martin
Great. That you mentioned again, Christian. He combined why did he achieve this? Probably because he combined this ‘impossible is nothing’ attitude. There is this boy from an Austrian village, totally unknown, becoming one of the most known Hollywood actors. This is true but this is really a big step. But he envisioned this, he wanted this. In the beginning, everybody laughed at him, but he really didn't believe it and he worked literally his ass off to get it done.
[00:25:36.220] - Christian
It is, but not for everybody. It's like the journey is right, the next big step. There are failures, especially for startups, and we also know many startups actually fail. And this is a frustration. So if you set yourself high goals, you sometimes fail. You mentioned you need to stand up again, but how can you keep going? How do you deal with frustration? What's your way of feeling frustration?
[00:26:04.390] - Martin
This is a very important conversation. I'm having this quite a lot with founders as well, with founders who failed and who then partly tell me in private, hey, I'm actually feeling ashamed. I stepped down from my public appearance at LinkedIn because I failed. And the nice message is it has become totally normal and totally accepted in Middle Europe and Western Europe to fail and to try again in the US. It has been for decades the case. It becomes more and more a very normal thing that you do things and then you fail and then you literally make it better the next time. So really in these moments of failure, I know people within it should go to break, go to Thailand, do some riches there, so recover and then do the next thing. So I think the key is first to see it as a particular entrepreneurship, as a sequence of experiments. The nature of experiments is that they fail. And you must not really you must not take this person, you just rather react fast, change things and try it again. And if it totally fails, you run out of money. This is really kind of an obvious failure to recognize it and particularly think about your mental health.
[00:27:24.640] - Martin
And then they should try it again.
[00:27:26.960] - Christian
So you talk quickly about mental health, but you mentioned how you take care of your mental health. Because it's an issue in today's society. I think overall, I think it's even bigger if you issue the more successful you are.
[00:27:41.660] - Martin
Yeah, that's a very important topic. We had three burnouts on our last Techstars program. I feel personally responsible for this. We haven't taken enough care of mental health. One was on our team on the founder's side. I personally had burnout myself as well at one point at McKinsey. And there are a couple of things which you can do. So first you need to take care of physical health, taking care of your body, sleeping enough, sports enough, and eating healthy enough. If you don't do those things in a very regular and careful way, that is really critical. That's the shadow basis we talk about here. And you talk a lot about purpose. If you find something which is close to your purpose, it's a very good way of staying mentally healthy. Because you can answer the question of why I'm doing what I'm doing. Yeah, that's another really critical thing. And then it's about literally doing regular check-ins if what you're doing now is the thing you were enjoying in the long term. So I have a question that I'm always asking myself in literally every quarter, professionally related. If ten is the best job in the world and one is I quit tomorrow, where do I stand now?
[00:29:08.890] - Martin
And if the answer is too long, five or lower, I need to change something significantly.
[00:29:16.840] - Christian
So what's your number now?
[00:29:18.790] - Martin
I would say now when I think about the Techstars job, it's certainly a strong 8. And then the logic is always you ask yourself not how can you get from five to 10, but rather one small step ahead. But when I think about my current job, I would say it's a very, very strong 8. The cluster would say, how can I get to nine? I would probably love to scale Techstars Berlin even broader and have a larger team so that we can have even more startups. That would be my step.
[00:29:46.910] - Chrisitan
Thank you so much for sharing. That's truly a very insightful story for our students, maybe for yourself. If you now look back at your life, what is the one thing you would recommend? Your 18-year-old self.
[00:30:17.510] - Martin
I wasn't sure, for almost a decade, if this was the right decision directly after university to build a company. Because you can always argue, go first to someone else, and let some others pay for your error. Don't do it yourself the first time. When I reflect in particular on the great work we're doing in Texas with many founders, if you have the passion and the drive to build a particular company, or it can be as an initiative at NGO or anything your heart drives with, and you compare this with other career paths. I'm joining an organization. I'm doing a Ph.D. or anything.
[00:31:02.960] - Christian
So amazing. Is there anything else that you would like to share with our learners?
[00:31:13.240] - Martin
I would love us to work together, particularly in these difficult times we currently face in Europe with still a war raging. I would love us to work in particular together as Europeans in building and scaling up the European tech ecosystem. I think this is a big theme we need to take to the next level. I'm very hopeful for this decade. I'm seeing this even these days we have in our teams and have people from Ukraine, people from Russia. I see this builder's mindset as a mindset that unifies us across countries, origins, ages, across education levels. This is something that unites us. And I would just love us all as Europeans to work even more together to build an amazing European tech ecosystem.
[00:32:11.140] - Christian
Thank you so much, Martin. Thank you very much for tuning in. This was a great favor for me. Yeah, I really enjoyed the discussion. And yes, thank you.
[00:32:21.270] - Martin
Thanks, Christian. Big pleasure.
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