Stea­dify: It won’t work without numbers #DHDL

A camera tripod that is portable, quick to use and not very bulky: for many ambi­tious amateur photo­graphers and profes­sio­nals, this is certainly an abso­lutely great product. This was also the opinion of the lions when the foun­ding team of father and son presented their start-​up Stea­dify to them.

Ever­yone seemed very inte­rested, there was a lot of praise espe­cially for the 83-​year-old former photo­grapher Gert, who presented breathta­king pictures from his career. So, the profes­sional compo­nent regar­ding the product could not even be ques­tioned.

But those who know the lions know what comes next: the numbers. And they were to turn the tide.

Ever­y­thing was still going smoothly with the produc­tion costs and the sales price, and the high margin natu­rally pleased the lions. The foun­ders also proudly mentioned their turnover via a Kick­starter campaign of over €200,000. However, the first surprise came imme­dia­tely after­wards when they had to admit that they had hardly realised any further sales since then.

The reason then caused the first big frown: they had been „finan­cially exhausted“ after the crow­d­fun­ding.

Only after repeated enqui­ries a reason­ably clear picture emerged: on the one hand, there was probably an adver­ti­sing partner who started working and after­wards invoiced a high price. This alone, however, was not very convin­cing, because from such a high margin as the foun­ders had previously stated, there should still be something left, even with quite elabo­rate adver­ti­sing. Other­wise, they should have taken coun­ter­mea­sures in time, because customer acqui­si­tion costs that are too high can destroy an entire busi­ness model. And foun­ders tend to forget that every customer costs money first.

Then the foun­ders added the expla­na­tion that they had had 5000 units produced in advance in order to be prepared for a big rush. However, „only“ 1500 units were sold during the campaign. So, they had a full stock, but no more money to market this stock.

This can happen in prin­ciple and is not a deal-​breaker for inves­tors. However, as a founder, you should always be aware when arguing with numbers that your coun­ter­part will start calcu­la­ting almost imme­dia­tely.

Also the lions don’t have their note­books for deco­ra­tion. At the $20 produc­tion costs quoted by the foun­ders, the 5,000 pieces would have cost $100,000, so with a turnover of over €200,000, there should still be something left over, even with a really expen­sive crow­d­fun­ding campaign. So, either they overdid it with the marke­ting (as they did with the pre-​order), or something is not quite right.

Which also makes inves­tors wonder: If they had sold the 5,000 pieces at 130 € each (the price is calcu­lated from the 1,500 pieces for a total of 200,000 €), they would have raised 650,000 €, which is an extre­mely high amount for a German crow­d­fun­ding campaign. An addi­tional over­sized adver­ti­sing campaign would strongly indi­cate to most inves­tors that the foun­ders want too much too fast and do too little risk manage­ment.

So be careful: inves­tors are used to making a few quick calcu­la­tions and thus constantly carrying out quick checks to see whether what the foun­ders are telling them fits toge­ther halfway.

It probably didn’t, because one after the other dropped out because of too many open ques­tions regar­ding the numbers. Carsten Masch­meyer then asked again what the total turnover had been over the three years on the market. But the foun­ders didn’t even have an answer, which visibly disap­pointed all the lions. Nico Rosberg expressed it as a lack of confi­dence in the busi­ness manage­ment skills, Dagmar Wöhrl as too many ques­tion marks in the figures.

After­wards, the foun­ders expressed surprise that they had to answer these ques­tions at all. They were probably „not prepared to have to give such precise figures“. That’s surpri­sing, since it was about figures that inves­tors always, but really always, ask for, and which you could probably hear 100 times in „Die Höhle der Löwen“, as Dagmar Wöhrl also aptly remarked.

But foun­ders can derive a central lear­ning from this: When prepa­ring for invest­ments, whether in a team, with a coach or other spar­ring part­ners, you should do at least one run-​through in which you manage comple­tely without aids. Espe­cially on the phone, the person on the other end often has no idea whether you are reading the numbers or know what you are talking about.

Numbers aren’t ever­y­thing, but without having them under control, you don’t even need to dream of an invest­ment. After all, inves­tors have to have a chance to assess the busi­ness model. This really has nothing to do with „corne­ring“. As a founder, you should always reflect thoroughly on criti­cism that you don’t have your figures under control and not allow yourself to dismiss it too quickly. Because you can’t do it without numbers, no matter how great the product is and how much you love what you do. The bitter truth is that you need both, but one cannot compen­sate for the other.

The investor perspec­tive was then summed up precisely by Judith Williams: „Numbers are the core essence from the lion’s cave.“

Photo (above): TVNOW / Bernd-​Michael Maurer