Who hasn't seen them? The green coaches that can now be seen on all German highways, their striking design immediately catching the eye. And who hasn't been delighted to find themselves stuck next to one of these buses in a traffic jam and tap into its Wi-Fi? FlixBus has long been fiercely competing with Deutsche Bahn and other companies, or even outpacing them.
The Munich-based company now offers Europe's largest long-distance bus network, with 120,000 daily connections to 1,000 international destinations. In 2015, FlixBus, with a total of 20 million customers, carried more passengers than domestic German air traffic for the first time. But how did founders Daniel, André, and Jochen turn the former Munich startup into such a market giant that is inexorably on a path to success?
Daniel and André are old school friends, having known each other since childhood and both studying in Franconia. In 2005, they founded a company together, which they sold after two years. Both studied abroad for a while, specifically in China, before Daniel moved to the USA, where he worked for an automotive supplier. He then returned to Bavaria and worked for Microsoft in Munich. At the same time, he also completed his master's degree in organizational and human resources development in Erlangen. The friends met again in Germany, and it quickly became clear that they wanted to start something together again. Jochen, whom André knew from football, was also on board.
“We put a lot of thought into it and collected thousands of ideas, from knitted socks to various online portals, everything was there,”
remembers Daniel.
"One day, André came with the information that the passenger transport law was going to be relaxed, and we got started right away. We thought: If a market opens up like this, we can definitely build something cool with technology and a new approach."
“Money alone is not everything”
Ideas for the FlixBus project began to take shape as early as 2010. A GbR (German Civil Code) was founded in 2011, which was later converted into a GmbH (limited liability company). In 2012, preparations for the project intensified, with the relaxation of the law set to take effect in early 2013. This is exactly what happened, and in February 2013, the first FlixBuses hit the streets.
However, it took several months to agree on the model to be used: Should they rent, lease, or even buy buses outright? Or perhaps they would prefer to work with partner companies? According to founder Daniel, making this decision was the most important point in the company's early history:
“The three of us spent a year looking for partners and traveled all over Germany to talk to bus companies.”
The next step on the agenda was to find capital.
“Of course, there is always a lot of luck involved,”
says Daniel. They met their first business angel, Dr. Heinz Raufer, founder of hotel.de, through the Northern Bavaria Business Plan Competition and made further valuable contacts through him:
“Just under half a year later, the second Business Angel round came and with GoLife the first VC round,”
explains Daniel and at the same time emphasizes:
"But money isn't everything. When you find an investor, it's very important that they're a good fit for you and your company. Know-how and a good network are also important."
Another business angel who is well-versed in the industry can help with these two important points: Harald Baumann of Baumann Bus. A professional who can provide support not only with money but also with expertise.
At that point, it was slowly but surely time for their own office. So, Daniel, André and Jochen applied to LMU ECHowever, the available capacity there was quickly exhausted, and when they began hiring interns who also occupied the offices of other lab residents, their time at the LMU EC was numbered after less than half a year, and they sought new premises on Theresienstraße. By the end of 2012, the company already had 30 employees.
The story with MeinFernbus
But as always, the competition never sleeps, and the biggest competitor is none other than Berlin-based MeinFernbus. The founders have about nine months' planning ahead, which gives them some advantages. Daniel recalls:
"MeinFernbus was always a bit bigger than FlixBus, but it was more of a transport company, while we were more of an IT company and were more aggressive in our marketing."
For a year, the two startups put each other under pressure until they realize that this is putting their own existence at risk.
“We didn’t want a laughing third party to emerge from our competition,”
says Daniel and so a consensus is reached:
“We wanted to combine the best of both worlds so we could focus more on Europe instead of fighting each other on the home market.”
The two parties agreed to cooperate under the internationally more applicable name FlixBus, in the bright green of the MeinFernbus brand. Thus, the two competitors became one company at the beginning of 2015.
What does the Munich resident say about Berlin?
When Berlin and Munich are mentioned in the same breath, questions about the differences between the two startup hubs quickly arise. Daniel says:
"In Munich, the startup market isn't as hot as in Berlin. The scene is tighter and smaller, everyone knows each other, you have access to the university entrepreneurship centers, and you can gain relatively quick access to political circles. All of this works very, very well."
And further:
"I have the impression that people in Munich approach everything a bit more seriously when it comes to starting a business. In Berlin, there's a lot of trial and error involved."
The infrastructure in the state capital is probably even a bit better than in Berlin,
“Berlin has a larger ecosystem and attracts more people who have the mindset to want to work in a startup.”
Do a lot of things yourself, but not everything
It's no secret that building a startup always involves certain risks. It's therefore important to make the right decisions and make the right decisions at the right time. Daniel is very pleased with how he and his co-founders approached the FlixBus project:
"It was right that we chose an asset-light model and actually created synergies between our bus partners from the regional SME sector, our technology share, and our marketing expertise, allowing everyone to focus on their strengths. This is the only way we were able to grow so quickly."
It was also extremely important and crucial to bring all the key assets in-house, from online marketing to IT development. Initially, they worked with an agency on development, but in retrospect, Daniel would advise against it. His tip is:
"What's really super relevant to your business, you should do yourself. This gives you better control and makes it more conscientious and ultimately better."
But that doesn't mean you have to do everything yourself. Quite the opposite. The FlixBus CEO considers topics like finance and legal matters to be extremely important:
"You shouldn't overestimate yourself, but rather consult a lawyer or tax advisor sooner rather than later to make sure everything is set up correctly, otherwise it will catch up with you at some point."
FlixBus becomes the European mobility provider
At its current location in Munich's Hirschgarten district, FlixBus now boasts a proud 300 employees, working in modern offices spread across five floors. Many more are spread across cities such as Berlin, Paris, Milan, Zagreb, Copenhagen, and others.
In the recent past, FlixBus has made headlines primarily through groundbreaking acquisitions. For example, the Munich-based company took over the European continental business from megabus.com and PostbusThe company is thus expanding its influence throughout Europe and driving its business forward with seven-league boots. The recent announcement of expansion into Scandinavia followed. It's safe to assume that it will soon be impossible to travel through a European country without encountering one of these green buses. And if that's the case, quickly activate Wi-Fi on your phone!
