There's always this fear within

organizations of not hiring IBM,

of not going with the blue chip

that is already available and

existent and betting on a player

that may not be around a couple

of months or years from now.

You need that backing and that

halo from the leadership of the

C-level to say, "You know what?

We want you to do that because

that's what change will look

like for us. That's what's going

to make us competitive five

years from now."

That's Jeannette von Fürstenberg,

the founding partner of La

Famiglia, a unique venture

capital fund based in Berlin.

Unlike traditional VCs, La

Famiglia looks to connect old

economy giants in Europe with

young digital disruptors. So far,

the fund has raised more than €

100 million and invested in

almost 50 companies, 3 of which

are unicorns. Before La

Famiglia, Jeannette worked for

Ernst & Young, Synthesis and AXA.

She also founded AMAZE, a

shopping app for smartphones

geared toward fashion bloggers.

Not only is Jeannette active in

the startup ecosystem, she also

has a deep understanding of the

historical trends that drive

business and holds a PhD in

philosophy and entrepreneurship.

In today's episode, we'll hear

how Jeanette and her team at La

Famiglia are transforming the

way traditional companies and

startups build networks and work

together to create radical

change. This is Daniel Saks, co-

CEO of AppDirect, and it's time

to decode new innovation in the

old economy. Welcome to "

Decoding Digital," a podcast for

innovators looking to thrive in

the digital economy. I'm your

host, Daniel Saks, and I'll sit

down with other founders, CEOs

and changemakers to decode the

trends that are transforming the

way we work. Let's decode.

Jeannette, I'm so honored to

have you on Decoding Digital.

Welcome.

Thank you, Dan. I'm honored to

join you today.

We first got to know each other

as you graciously hosted the Y

NOW conference in Germany

connecting multi-generational

industrial leaders to tech

startups. Many of those startups

are disrupting or striving to

disrupt the incumbents, so it's

pretty interesting that you

brought these two groups

together. Can you share your

vision for why bringing these

groups together would be

beneficial?

Yeah, I think there's actually a

lot that they have in common.

It's entrepreneurs that are very

much in the process of running

and growing their own companies.

What's interesting about that is

if you put entrepreneurs face-to-

face, they may have grown in a

different generation, but they

always have the best interest of

the company at heart. If you

put them together in an intimate

environment, where all the

management levels below that

fade away and it's all about

ideas, and it's all about

progress, and it's all about

change that everybody opens up.

That's how you bring them closer

together and that's very, very

needed driver to make digital

transformation in reality here

in Europe.

It's very powerful and I was so

grateful to be there and some of

the relationships I've built end

up being business contacts,

friends, and it's an incredible

network. Many times in

technology, we interface only

online especially in this era,

but the importance of deep

relationship is important. Can

you tell me when you're advising

your companies and the people

you interact with across Europe,

how did they build this network

and how did they get to know

each other?

It's an interesting question. A

part of the reason why Renee and

I got together and said we need

to do something about the

ecosystem there is that they

seem to be very separate for a

long time. There was not many

interfaces where they would

actually meet. Question is

always, if you put two groups

together, one has everything to

lose, because they're at the

height of their success and

every potential change or

disruption could mean a risk to

the company. If you look at

startups, it's a very different

dynamic. They have everything to

win and everything to gain.

That's where in those different

speeds and those different modes

of emotion you can create

friction. It's very important

that you have a trusted

relationship environment, where

you can interact and where

everybody opens up to actually

embracing change and embracing

potentially new or even

disruptive ideas. I think the

idea was very much born from the

way that we host friends as a

family, where it's about

intimacy, it's about trust, it's

about also having fun together,

it's about sharing memories.

That's the base as to how, we're

now came into being and also,

the way we try to now have our

portfolio companies be connected

to potential customers, connect

to potential partners. It's a

very necessary aspect of our

European ecosystem to bring

these two groups into a closer,

codependency or core

relationship, simply because I

think Europe will only survive

if we manage to shift the

existing value creation that is

very much existent in our many,

many industry fields, from

process industry, to

manufacturing, to automotive,

etc. These are very, very

native and rich industries where

a lot of the knowledge is locked

up in processes and industry-

specific knowledge that is now

being transitioned and being

formed into digital products.

The more those two generations

of entrepreneurs intersect and

the more they cooperate, the

stronger the outcome will be for

Europe eventually.

Certainly. We have a fundamental

belief that digital

transformation is not just about

technology, it's about the

people. Oftentimes, it comes to

those human relationships. The

example that you gave, you

mentioned René. For those

listeners, we had René Obermann

on the podcast earlier in the

season. He was formerly the CEO

of Deutsche Telekom and is now a

partner of Warburg Pincus and

chairman of Airbus. René and

Jeannette hosted Y NOW, which

was a conference bringing

together these different leaders.

It's such an example of how

people are able to open up. René

and I got to know each other

when we were innovating at

Deutsche Telekom and enabling

them to digitally transform to

offer cloud services. Those

relationships are what drives a

proliferation of technology.

That's what Jeannette did with

La Famiglia. Can you tell us a

little bit more about how you

became a venture capitalist and

your vision behind it?

Yeah, super happy to. I was

always driven and motivated by

entrepreneurial vision as a

major force of change, in a way.

What's interesting, especially

about seed-stage companies, is

that they're almost like a

seismographic anticipation for

societal change and for what

will manifest into an economic

reality three to five years from

now. By being very close to

that pulsing element of what the

future will become, you're

automatically in a position

where you have some degree of

influence. I don't want to

overplay it, but you take at

least ownership of what this

future could look like. That's

from a very macro philosophical

perspective. That's what would

drives me into the sector. Next

to working alongside very

talented entrepreneurs, they

have incredible energy and

incredible vision that deserves

so much respect and deserves all

the support they can get. Now,

that brings me to the support

angle. When we first started La

Famiglia, now almost five years

ago, the idea was very much to

see where we could build bridges.

Especially for B2B founders, we

could enable them to speak to

partners in the industry to test

their product, to run initial

PoCs, get customer feedback and

validation on the products that

we're building. Initially, what

you see within the start-up

ecosystem, you typically have a

strong founding team and

potentially great technology.

You have what seems like a great

and big market, but you're

always missing investment in

seed stage. You're always

missing these initial revenue

validation points that larger

investors are then looking for.

The earlier you can bring those

to the table, the faster these

companies typically get to early

product market fit and from

there to scale. Doing that, by

helping them build these bridges

early on, is a better use of the

capital invested. Time is money.

Also, for these founders, the

earlier they can actually get

their product into motion, the

more chances they stand. Also,

from an international

perspective, to become the

winner in there, the finance

sector. That's why La Famiglia

was created. It's very much the

essence of our platform, is to

connect established industry and

the startup ecosystem, making

sure we use the tail-end to

prevent for both sides to make

bend the change, for what's

possible in Europe.

I've been proud to watch La

Famiglia grow over the years.

You've built up an incredible

portfolio. Can you share some of

the companies that you have in

your portfolio?

Yes, sure. I'm happy to. One of

the more notable ones would be a

company called Personio, which

is an HR platform for SMBs,

similar to Workday in the US,

but for smaller and medium-sized

businesses. That is doing

incredibly well. Another one

would be Forto, which is a

freight forwarding company

essentially digitizing logistic

workflows, or the freight

forwarding services. Mainly, now,

between Europe and Asia, but

potentially also, going global

as a next step. We've pre-seeded

them. Especially for this

company, it was so important to

get connections and warm leads

as they scaled from the initial

Amazon power seller to a smaller-

sized business, to medium-sized

businesses, to larger-scale

businesses. It's important you

get the volume right. You

initially needed the trust of

entrepreneurs who went to their

freight forwarding department

and said, "You know what? We may

not give them 100 percent of our

rate capacity, but we can give

them 10 percent." I'm just

curious to see what it will do

to the transparency in my supply

chain, what it will do to my

freight cost, and what it will

do to the overall transparency

and views we get from a shipper

perspective." Hadn't we had the

buy-in of these founders

initially, that made sure they

elbowed this into their

organization and work that

muscle, it probably would have

been a lot harder for these guys

to get to initial customers.

There's always this fear within

organizations of not hiring IBM,

of not going with the blue chip

that is already available and

existent, and betting on a

player that may not be around a

couple of months or years from

now. You need that backing and

that payload from the leadership

of C-level to actually say, "We

actually want you to do that.

That's what change will look

like for us. That's what's going

to make us competitive five

years from now." That was a win-

win. It was a win for the

companies that embraced Forto

early. It's a win certainly for

Forto as well, because they've

now become a big player here in

Europe and continue to scale at

a massive speed. That would be

another example. I could keep

going and going. There's so many.

These are two great examples to

start with.

Forto is such an incredible

example. We've noticed, when

we're trying to drive digital

transformation within an

enterprise, is that it takes a

certain set of characteristics

of an individual in order to

drive that transformation. We

call those people digital heroes.

Those digital heroes can exist

at any part of the organization.

In many cases, they can be the

CEOs or the owners. In other

cases, it could be people on the

ground that are going to

champion this innovation. To

have a culture of innovation at

a large enterprise, it does

require some level of risk-

taking and alignment. 10 years

ago, when we were working with

businesses in Europe, there were

very few companies that had the

commitment of both the executive

leadership as well as the

innovators on the ground to take

that risk to work with a startup.

What I found is that there's

definitely been an acceleration

in innovators in Europe

recognizing that they need to

disrupt themselves. Is that a

trend that you've seen? How

often do your companies still

face disruption or challenge?

It's interesting to hear your

perspective. You are obviously

very established. You've been

around for many years now.

Looking at the learning curve

that I had when we first started

out five years ago, a lot of B2B

companies we went to and we

confronted with a problem, they

were like, "Well, that is all

B2C phenomenon. Like Uber and

everything you're telling me

about what's happening and

disruption on the consumer side,

has nothing to do with my

business, right? We're going B2B."

At the time, it was very hard

for them to embrace the idea of

how software is eating the world.

Now, five years forward. what

we're seeing is that is no

longer even a question. It's not

even a question of whether

software is eating the world. It

has eaten the world. Everything

is being defined by technology

these days. It's no longer a

single vertical, but actually

completely horizontal and going

a lot across all layers of value

creation. That's where some

people, and that goes to your

point then around innovation

mindset and culture, if you're

open-minded. Most entrepreneurs

remain curious until they're

very, very old. They drive that

curiosity into the DNA of their

company. That's what makes them

remain competitive. We have a

couple of people we work with

where the founding entrepreneur

is still very much up and

running. He's maybe above 70,

but they're still embracing

change. They want to learn

about what's going on. They may

not understand the full depth of

it, but they want to make sure

that part of the people get it.

To your point about the digital

hero, that's one group.

Certainly, you have the other

camp that sees that as well, but

is in denial with regards to

what it will mean for their

business. It's still not

sensible. It's a little bit like

popcorn. You put it into the

microwave and for 5 minutes,

nothing happens. All of a sudden,

everything explodes. That whole

disruptive element, it's very

hard for them to sense because

they've come from a motion.

That's an interesting historical

fact. They've always grown by

capturing markets. The whole

innovations always geared to

conquering something new. They

were never confronted with a

disruptive innovation force they

just had to react to all of a

sudden, that just put the whole

organization under pressure. For

them, it's much harder to get

to that level of change.

Another aspect of the mindset

that I've observed in many cases

is that if you look at post-war

Europe, a lot of the companies

that we see now being really,

really successful were formed

then. They were formed in a very

decentralized fashion.

Especially in Germany, we have

these hidden in the rock market

champions that sprouted in the

middle of the Black Forest. You

would find a world market leader,

the brand you know, but you

would never find your way into

that little village, which is

great, right? It certainly has

nurtured our so-called

Miittelstand that is so globally

well-perceived. What also is

interesting about these types of

companies is that they have very

much grown from an idea of

patent-driven innovation. Like I

come up with an idea of anybody

wants my new screw. Because the

screw becomes a huge success, I

patent it for 20 years. I milk

the cow. I develop the next

screw. I damn well make sure

that I have the walls up. Nobody

sees the drawings while I think

about my third screw. I

definitely don't want to share

any insights about that because

that's where my bread and butter

will be born. For these people

to transition in their mindset

into an open innovation

ecosystem, it's terribly hard.

It's a technique so deeply baked

into their DNA that when you

tell them about a platform, even

if they get the other platform,

they go, "We need to build our

platform." No. You're not

building your platform because

it's very hard for you to build

your own platform. Try to

understand what part of your

value creation do you actually

think you can retain five years

from now and what part will just

go away. What is it may be

about what you're doing right

now that there's so much core

understanding and knowledge in

the process that could

potentially transfer into some

degree of digital service,

digital revenue? Where is it

that you may want to partner

with a startup or invest into a

platform and to then partner

with my next? This whole mindset

and ecosystem of innovation is

something that is utterly

foreign to them. That needs to

change.

A lot of enterprises that are

cash flow rich and used to

generating cash flow have a hard

time taking bets and investing

in partnering with third-party

platforms that may not see a

return in the next year or two.

Do you see that across the

industrial companies? Is that a

barrier to their innovation?

Yeah. That's definitely a part

of it. Even though that is even

stronger within traditional

investors, what's interesting is

that the US ecosystem has

produced so many winners already

that there's a very broad base

of investors that have seen

success of the asset class over

and over again. They just are

very eager to participate and

are very much attuned to the

of the future

discounted cash flow. In Europe,

it's very much not the case.

Everybody that did an industrial

company, or private investor, or

an institutional, they're always

used to the notion of cash-flow-

based investing. They will buy

the running company. They will

potentially buy a competitor,

but then they want to have a

multiple that is somewhat in a

size or range that they feel

comfortable with. I've heard

this over and over again, "Oh,

my God. Valuation is crazy." Why

are you trading at a 10x

multiple to revenue? That's

insane. People have said that

over and over again. This grand

slam nature of large tech

platforms and how they have

evolved over time and how they

keep getting bigger once they

hit scale and escape velocity is

something that is very foreign

to our understanding. We haven't

seen that many in front of our

doors yet. Think, you look to

the US, and you feel like this

is a very different kind of

unicorn landscape if we even

want to call it that. What we

have here is substantial

production companies that know

how our products are shaped and

done. For them, this whole

digital nature of products and

the way they work is nothing

that they've seen manifested yet

in success stories to the same

degree.

It's interesting. I've observed

many more companies in Europe

becoming global leaders, very

much so, because of your local

investments in cultivating of an

ecosystem. Is that something

that you see on the ground as

well as more efforts to start

global companies from Germany?

Yeah, if you look at the

founders we're backing, a lot of

them are...Actually, I think

maybe one-third are guys that

maybe they're underground in

Germany or Europe, but then they

all went to the US. They were

semi-US educated, went to

Stanford, and then work one of

the Big Five's, if that's where

they smell the air of digital

products and scale. They've all

come back to Germany or Europe

to double down on the

opportunity that we have here.

For us, the opportunity is very

much based in the fact that we

have a very strong university

landscape. We have an incredibly

strong educational ecosystem

across Europe. It's not a

centralized as in other

countries. Especially if you

looked in Germany, we have at

least 15 technical universities

that have been or absolutely

global significance in the

research that they do. That is

one fundamental building block.

The second fundamental building

block that these founders relate

to is the fact that you have

these companies that we

mentioned before and all of them

are either nurturing talent

within them through the

apprenticeship programs that

they have. Also, then go again

in these universities and

partner with them and they have

co-development programs. That

just creates a very specific

process understanding and

process knowledge that is needed

in order to build a digital

product in the space. I don't

think you would have the same

degree of understanding or the

same degree of ability to

potentially disrupt like the

chemical industry or automotive

manufacturing, because it's so

complex that you really have to

understand what you're doing.

Technology is not so much a

differentiator. The

differentiator then becomes that

process know-how. Then you build

it on top of TensorFlow maybe,

or you have toolsets and

infrastructure, but that is more

of just the enabler or the

building block. The core

differentiator of what will make

them successful and what will

give them defensibility is that

degree of understanding and

being able to translate that

into the nature of digital

products. I think that's what

we've seen mainly, is that being

the fundamental driver for our

ecosystem build-up here.

Very powerful. On your website,

it says, "We believe contrarian

investments outperform

conformist investments." Why do

you believe that's the case?

I believe that if you look

at a lot of the

founders, if you look at great

leaders in general, they have an

ability to see 10

or 15 years into the future.

They have a fundamental...I

would almost call it a reality

distortion field around what the

future should look like. Then

where they become strong leaders

is the ability to break that

complexity down into something

that we can grasp today that we

think we can somewhat follow

them, not only us as investors

but also the team and potential

customers. What's interesting

is that if you listen to some of

these ideas now, they seem

almost surreal, and I think lots

of people maybe listened to them.

It's a little bit like an art

painting, right? If you look at

a Picasso drawing, some people

will say, "Oh, my God. This

doesn't look like a bird or like

a woman." But then you could

also look at it and say, "Well,

there's actually just a new

language there. There's

something that's being created

here that is utterly unique, and

that hasn't been done before."

That's what you do as a seed-

stage investor. You have to tune

into the vision and always

assume there is the stupidest

person in the room. Then these

people have something very, very

unique to what they're doing.

Obviously, you're mindful of

asking all the right questions,

but typically, the best

entrepreneurs have thought about

them 10 times over before you

even ask them. That's what I

find incredibly unique and

powerful, and that's where I

think often these ideas seem

contrary in the beginning,

because in the beginning, not a

lot of people will be willing or

able to follow them. That's

where the stage is particularly

exciting, particularly

interesting.

I love your art analogy. I know

you did your dissertation on art

and entrepreneurship in the

Renaissance. Are there any

timeless lessons that were just

as true then as they are today?

There's so many, to be honest. I

really think we're living almost

through a new Renaissance now.

One thing that I thought was

incredibly interesting is the

notion of the word disegno which

is a term that was originally

used by artists to describe

their just grab a drawing. They

would call it the disegno. What

they also meant by it is the

transformative process that you

actually do whilst taking an

idea that is very ephemeral at

the beginning. Then, you

transform that into something

that others can see, or can feel,

or can touch. I then thought

that is actually in essence what

an entrepreneur does. When in

the beginning, it all feels

ephemeral. It all feels like

it's building blocks and little

facets of something that could

become a reality. That's one

term that I've always loved and

I've taken to heart since my

dissertation. Going a little

bit more concrete into the

Renaissance, what was

interesting or what spurred this

whole ecosystem at that time was

very much the fact that they

lowered the barriers to entry

for different crafts. Before,

if you were born into a wooden

craftsman family, then you would

only do wooden craftsmanship.

You weren't allowed to paint.

You weren't allowed to weave or

do other crafts. In that sense,

Leonardo da Vinci's the best

example of what happened when

you unleashed someone and

allowed them to take a different

skill set and give them a

profession that they have

learned in one field and apply

that idea to other areas that

intersect with other areas.

Therefore, you had this very

strong boost of cross-

pollination. That spurred trade.

That made them a lot more

innovative in selling and buying

goods. From that initial wealth

that was generated, they had the

urge to say, "Hey. Now, we are

also rich. How do we make sure

we can show that in an

appropriate manner?" Art was in

the beginning, definitely, the

initial instinct was one like, "

We just hire the best artists."

By being wealthy and by then

inviting these global-wheeled

artists into Florence and Sienna

at that time, you all of a

sudden have this incredible

density of talent that was

rapidly innovating. If you look

at the whole way art history in

the time evolved, it made a huge,

giant leap step forward. By

having this increasingly dense

competition of artists, you also

had a higher intersection or a

lot more meetings that took

place between patrons and

artists. At that time, the

artist was not so much

considered the genius yet. He

was more the craftsman that was

hired by the patron. Patron, in

that sense, was often the

entrepreneur. The Medici then

are a great example of how they

almost became, there's a term in

German, we say congenial. I

don't know how that would

translate into English. It's

almost this way of...there are

many letters between Cosimo de'

Medici and Donatello, for

example, where they talk about

the nature of the painting, what

they want it to be, and what

they want it to look like or a

given famous door, that type of

relationship that unfolded there.

There are many letters stating

of how they spend the whole

dinners together and how the

dinners were always populated by

people that were not purely

bankers or not purely artists.

It was this wild mix of

scientists, craftsmen, artists,

and entrepreneurs. If you then

look what that did to the way

the Medici operated as

entrepreneurs, it was

interesting. They didn't invent

something new. The bill of

exchange existed already 150

years ago before they actually

said, "Hey, we were not allowed

to officially give out credit,

but that material, that bill of

exchange would allow us to give

out credit without this being

considered a sin." Which is why

before that everybody would turn

to just Jewish community for

credit, which was very much

forbidden. All of a sudden, they

took this invention. They saw

how an existing product could

basically be used as a means and

as a lever to accelerate their

own business. That was the key

element that boosted their

entire banking system and

banking infrastructure across

Europe. Taking that analogy,

it's interesting to see how

artists operate in exactly the

same way. Say a painting, while

it's always paint and canvas or

whatever, you think the

materials don't necessarily

change so much. It's more about

what is it that they actually

see different. They have a

different perspective, a

different passage with which

they view the world. That's what

made the Renaissance. That is

also essentially what defines

our tech ecosystem now. It's all

code, if you like. It's the way

they used that as a means to

express something new and to

redefine the way we live, the

way we work, the way we interact

as humans. I find that

fascinating.

It's so fascinating. In Silicon

Valley, we saw people coming

together in an interdisciplinary

way. There's a technology and

entrepreneurial renaissance. Now,

I definitely feel it's much more

global. Do you believe that the

location still matters? Do you

believe we're seeing a global

renaissance in terms of

innovation, creativity, and

technology?

I actually think it's a

completely global renaissance.

That's what's so exciting about

technology. That is somewhat

like code is lingua franca. It's

a way to tie talent together

in a global fashion, in a global

way. That's one of our thesis,

is also having fun. We've been

investing into future of work as

we call it already since five

years. Looking at a company

like deal within our portfolio

that promotes or allows you to

hire employees all over the

world, tie them into your

payroll infrastructure, and just

making sure you're compliant

with local rules, etc., which

has always been an impediment

with this type of global scale.

It's the rapid growth of that

company is basically just an

index of how fast this global

workforce and this global talent

is becoming a reality. I find

that actually really beautiful.

It's a great way to see teams

that interact from all over the

world, from India, to Israel, to

America and across different

time zones, across different

continents with different

cultural backgrounds. They're

all unified by a common mission

and a common vision, which is

what is so great about strong

founders, they can do that. They

can rally these very different

people behind them and give them

the North Star to which they're

bringing in the entire

capabilities. It's a beautiful

evolution to see.

Jeannette, you're such a

pleasure, chatting with you on

so many topics. I could see your

passion for connecting people,

for entrepreneurship, and for

creativity all coming through.

Our viewers are going to enjoy

this. Thank you again for

joining.

Thank you so much, Dan. It was

good to see you.

Good to see you, too.

On the next episode of Decoding

Digital...

When you go deep on a vertical,

there is huge opportunity to

expand wallet share and expand

your average revenue per

customer over time. Furthermore,

what's become really clear over

the years is that you can drive

much more efficient customer

acquisition economics in a

vertical plate versus a

horizontal plate.

Co-founder and CEO of Clio, Jack

Newton.

Thanks for listening to Decoding

Digital. Make sure you never

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visit decodingdigital.com. Until