Munich Startup: Who is Multiconnect and what do you do? Please introduce yourselves briefly!
Manfred Artmeier, Multiconnect: Multiconnect is a medium-sized company from the ICT-area. On the one hand, we are a telecommunications service provider, a carrier, a truly solid one, and have been listed with the Federal Network Agency for 20 years. On the other hand, we are also a software manufacturer. This means that we make phone calls smarter with our software applications. We belong to a technology group with three locations in Munich, Vienna, and Milan. As Multiconnect, we handle the B2B business and generate around EUR 30 million in annual revenue from this.
Munich Startup: How exactly do you work with startups? How long have you been doing this?
Manfred Artmeier, Multiconnect: We've been working intensively with startups in three areas for three years: First, we serve as the carrier for many startups' applications, especially when they rely on cloud telephony right from the start. Why do startups choose us? We're dynamic, flexible, have our own startup commercials, and everything we do is built on APIs. Essentially, you can integrate telephony seamlessly into your CRM landscape or customer service strategy with us. This is, of course, supported by our Solutions team. We help integrate telephony into the startups' communication solutions, so to speak.
“Product sparring is the most interesting thing for us”
Second, we enter into strategic partnerships with startups. Put simply, this means that founders who are doing something in areas that interest us want us as sparring partners – especially in sales, marketing, and product management. This product sparring is the most interesting for us because it's where new things are emerging. This is especially exciting when bundled with our core products. We then enter into a strategic collaboration with these partner startups. They are often located here in our office right in the city center at Platzl.
The third point is that we ourselves actually have a startup mentality in many business areas. This is evident in our mobile sister company Spusu, which, with a small, young, and dynamic team in Milan, is now attempting to conquer the Italian mobile market with disruptive approaches, after having already achieved great success in Austria.
Munich Startup: Which startups have you hosted in your office?
Manfred Artmeier, Multiconnect: A very good example is CX Labs, founded by Robert Klein at the beginning of the year. This startup has set itself the task of developing B2B communication solutions on their side to 'shopify'. We now have online shop systems for almost everything, but they're relatively rare in the B2B sector – and even rarer when it comes to telecommunications services. If you go to one of the major providers, it's difficult to put together a cloud telephone system with a phone number, a video call application, chat functionality, etc. in just 5-10 clicks. Then there are such archaic things like setup fees or ridiculously high tariff models for telephony. This is where CX Labs offers real added value. They manage to make the entire cloud telephony system fully productive in ten minutes. This is, of course, extremely exciting for us as a carrier. And not just for us; CX Labs now also has several startups as customers. It's really nice to see how they're growing.
The collaboration between Multiconnect and startups
How do we work with CX Labs? First, by providing them with the necessary and representative infrastructure in our office. The team is given office space here. This allows them to make their investor and customer pitches here in our very representative office right in the center of Platzl. We also act as a bit of a regulator, because many good ideas that are technically feasible are unfortunately not legally feasible in the telecommunications sector. We naturally have the necessary insight and experience to support our partners accordingly. And thirdly, of course, is that we develop products together. For example, CX Labs' technology is based on a large part of our basic technology from the field of Voice over IP. This makes us nothing other than their telecommunications backbone. The fact that a startup makes progress, a leap in innovation, a new product, and our technology forms the basis for it, is, of course, the most wonderful thing for us.
Munich Startup: How did you come to work with startups in this way?
Manfred Artmeier, Multiconnect: Quite simply: We don't have a traditional product management department in-house that dictates product pipelines. That's why we're interested in what's going on "out there." We want to be flexible and agile in prioritizing products based on market demand, rather than sitting in a product management ivory tower. To do this, however, we need to spar with external players – especially startups. Of course, this can also turn out that the idea or solution of our sparring partner makes no sense for us at all. I recently had a long call with a startup in the smart city sector where this was the case. They told us they liked our initiative kommunen-werden-digital.de. After an hour, we decided that we wouldn't be able to work together because the application areas are simply too different. But that's okay, because that's the only way we learn.
Support in the first steps of market development
Munich Startup: What happens next with the startups after they have been with you?
Manfred Artmeier, Multiconnect: The one area where we can really help each of our startups is market development. Marketing a communications solution in the B2B sector is no small feat. This is also because there are so many large players and established medium-sized companies that have been doing this for decades. Small, innovative companies often have little breathing room. What you often need are quick sales successes to build a reputation. We support startups here with a sales partnership. Opening the door to startups, especially with our over 300 existing customers, can speed things up.
The first customers that CX Labs, for example, acquired through us were owner-managed medium-sized companies, which we introduced to them. Since I did the intro, they also got an appointment with the owner or decision-maker. The effect was that the sales cycle lasted nine days rather than nine months. Of course, we also have a small network of VCs and business angels. We're happy to help there, too, but the focus is definitely on marketing and sales.
Munich Startup: What type of startups are you particularly interested in?
Manfred Artmeier, Multiconnect: For all startups active in one of these three areas. One is customer relationship management and customer service. The topic of customer experience is particularly important to us, regardless of the contact channel. For example, we would also be interested in an AI company approaching us that is capable of automating customer inquiries across all channels.
Multiconnect is interested in startups in the areas of customer service, voice commerce and telecommunications
The second field is voice commerce. That's where we come from as a telephony provider. A lot of exciting things could happen there for us. Voice control is simply a mega-topic.
And the third area we're interested in is telecommunications. If someone dares to venture into this "old-school" field and simply wants to do something dynamic and cool, we're very interested. Like CX Labs, which has managed to make cloud telephony and cloud unified communications completely online for companies.
Munich Startup: Do you scout for promising companies yourself?
Manfred Artmeier, Multiconnect: No, actively reaching out doesn't make much sense for us; as a medium-sized company, we simply don't have the resources for that. A good 80 percent of startup contacts come from our personal environment or our partner network. For example, we're a 3CX Platinum partner and have a relatively large number of contacts in CRM companies like Zendesk, Freshdesk, and others, and this environment often leads to corresponding contacts with talented founders. I don't want Multiconnect to become too much of a pacesetter, because we don't know everything better either. Instead, we want to exchange ideas on equal terms and spar intensively.
Munich Startup: At what stage do startups ideally approach you?
Manfred Artmeier, Multiconnect: When we think of startups, we think of the transition from the seed to the startup phase. Early stage, that's when this type of partnership makes sense for both sides.
Munich Startup: Who do startups approach when they want to talk to you?
Manfred Artmeier, Multiconnect: You can almost always reach us by phone. We've even set up a dedicated number for this: +49 89 44288 666. We also have a dedicated page on our startup program, MUC-Up. You can also sign up for our regular get-together there—the Augustiner beer is on us. So it's definitely worth a visit!
“We rely on a can-do mentality”
Munich Startup: Tell us the knockout criterion for the pitch!
Manfred Artmeier, Multiconnect: We're really keen to spar with startups, but we need to recognize a can-do mentality. Nothing against dreamers, quite the opposite, but we don't have the time for mere meta-strategy debates. That's why I want to know exactly what you're using to solve which and whose problem, and what the outcome is for the customer. But don't worry, we're not interested in reviewing a business plan. We simply want to know if the pitch is concrete enough for us to want and be able to help. And yes, of course, the startup should come from the three verticals I mentioned: customer service, voice commerce, or something related to telecommunications – that's where we're best versed and can provide targeted support.
Furthermore, they should genuinely need at least two out of three of our support services, either in sales and marketing, the aforementioned "downtown office as a service," or our carrier services. And what's also important to me: They should be able to do their own thing with us. We're not watchdogs or drivers, but "partners on request" – and on an equal footing. By the way, because this is also important to me: if someone doesn't want to apply directly as a startup partner, but is perhaps interested in a half-day workshop on a specific topic that they picked up from us or through us, we'd be happy to do it. Even if it's just for a coffee, a beer, or a fruit juice, they can always approach us directly.
There is a lack of networking between startups and medium-sized businesses
Munich Startup: What do you think the Munich startup scene is doing right? What could it do better?
Manfred Artmeier, Multiconnect: Looking back over the last few years, I have to say that Munich is a functioning startup ecosystem. However, in my opinion, the problem is that there is a lack of networking with SMEs in the city and the surrounding area – especially in the IT sector. Companies like ours were something like startups two decades ago, even if they were called something else here back then. A great deal of knowledge was generated on many topics, from which young entrepreneurs and companies can certainly benefit.
And I know from conversations with owners and managing directors that many medium-sized companies of our size, i.e., in the range of 10 to 100 million euros in annual revenue, would like to engage more with startups. However, this exchange is still far too rare. And this is due to both sides: Medium-sized companies often only have their industry trade fairs and conferences on their schedule, while startups have their own events and trade fairs. Especially during the coronavirus pandemic, it would be time for new, virtual formats. In my opinion, we should address this as soon as possible, because I highly recommend this exchange.
