Entrepreneurs strike it big in cellular
Founders, Shortcut Ventures, Hamburg, Germany
The modest office of Dirk Freise and Thorsten Rehling’s venture capital firm belies their rich experience as successful entrepreneurs who have started and sold two companies since meeting at Berkeley Haas.
It was 1998 when the two first crossed paths, not quite the crest of the dot-com bubble. “The majority of our class wanted to live the spirit of entrepreneurship and launch their own startups, and we simply had to soak in this atmosphere,” Freise says.
Shortly after they met, Freise and Rehling knew what kind of startup they wanted to launch: They teamed up with a friend to turn a web domain name into a sales channel for a booming cellphone market. The name of the domain: handy.de, translated to cellphone.com in English.
At Haas they forged a business plan, prepared for market entry, and faced reluctance only among potential investors in Germany, who couldn’t believe the trio was unable to provide market studies to back up their expectations. “Some investors did not buy the fact that it was we who created a market,” Freise says.
The opposite was true in California, where their instructors saw the startup’s potential and even allowed the pair to turn in a joint independent work-study project. “We were among the few who were allowed to miss a lesson—otherwise it would have been impossible to simultaneously launch handy.de on another continent,” Freise says.
While still in school, the young men alternately traveled to Hamburg, went from the airport straight to the office to manage the new corporation, hired and trained new employees, negotiated rights with the music industry for ring tones, and created funny sounds and other gimmicks for a rapidly growing cellphone market in Europe’s biggest economy.
The lucrative sale of handy.de in 2002 rewarded the founders, who were ready to think even bigger. Freise, Rehling, and their friend bought a shell company, named it “blau Mobilfunk,” and created one of Germany’s first cellphone service providers to offer its products both online and in stores. While overcoming all kinds of unexpected problems, including tremendous liquidity shortages, the company always remained crystal clear in its promise to customers: cut obscenely high mobile phone bills by 50 percent, Rehling recalls.
In 2008, the highly profitable sale of blau to Dutch telco KPN, one of the big phone carriers in Europe, laid the foundation for the mobile troika’s next move: After developing a track record for turning an idea into a profitable company, why not change sides and help other entrepreneurs?
The new venture capitalists put in their own money, raised funds from investors, and four years later started Shortcut Ventures, with KPN as the biggest investor. Shortcut’s four mobile-related investments include Munich-based startup tado, which offers a mobile heating app similar to that of U.S. company Nest Labs, acquired by Google for $3.2 billion.
Next up? Confident that profitable exits are looming within 24 months, Freise and Rehling would not be surprised if they are attracted by another new idea. What’s most obvious about these two sharp entrepreneurs working out of a nondescript office space in one of Hamburg’s hottest business districts: Nothing makes you happier than watching your own baby grow. —Winfried Konrad