What does it take to propel your start-up from a local operation to a global one? Meet Co-founder and CEO of German Entrepreneurship Asia, Claus J. Karthe who accelerates cross-border start-ups between Germany and Asia.
Claus shares his take on the unique characteristics of Southeast Asia’s start-up scene, the sectors and markets to watch, and how his unabashed passion for sailing has taken him around the world.
5 July 2021 / By SGN
Claus’s motto is shaping the future. He uses his experience as a startup founder and his understanding of Asia and Germany to help up-and-coming startups succeed and scale into international markets.
For most, attaining the role of Vice-President in a widely recognised organisation such as Nokia or launching their own start-up successfully is as close as it gets to an ultimate end-goal. For Claus, who helped built Nokia Philippines Inc. from scratch in the 90s, these endeavours were only the start of many other journeys.
One of his most significant roles since is his current one as co-founder and CEO of German Entrepreneurship Asia (GEA), an innovation service provider running cross-border start-up accelerators funded by the German Federal Ministry for Economic Affairs and Energy (BMWi) and supported by Enterprise Singapore. An organisation he has steered from an initial concept paper for German Accelerator in Southeast Asia for BMWi to fruition, from their first class of German start-ups in 2018, to now offering programmes from India to Japan and South Korea.
Claus states, “My vision for the company was always to build a bi-directional bridge for cross border innovation between Asia and Germany. There are many fantastic companies, people, and tech from Asia, which would do well in Germany.”
GEA’s position as a non-profit driven entity allows Claus to occupy a niche space in start-up acceleration – the objectivity he offers can make a world of difference for those looking for impartial advice in a start-up scene clouded by personal, collective and conflicting motivations, where stakes are often high for founders betting their life’s work on the execution of an idea.
Start-ups & Sailing are a Team Sport
An electrical engineer by training, who had his first career stints in space communications in and out of the military, Claus’s fascination with radio transmissions in his youth sparked a lifelong passion for sailing when a colleague, aware of his technical background, invited him to take on the role of navigator in an expedition at sea.
Claus finds strong parallels between sailing and running start-ups. “Sailing is very much a team sport – everyone present on the boat has a designated role and purpose. We all work together to keep the boat going, which means, the captain rolls up his sleeves to fix a leaking toilet and the navigator also cooks. You never know when we will encounter an unexpected storm so it’s ‘all hands on deck’ 24/7 – very much like in the start-up world!”
This inquisitive spirit for adventure and knowledge, and openness to collaboration has led Claus through various pursuits around the world. He currently sits on the boards of a few companies, one being a venture capital instrument that is investing in social enterprises, another being Innovis Telecom Services – an intermediary for network services active primarily in the MEA and Southeast Asia region, and Wireless Services Asia Inc, a company he founded in 1999 which is providing ICT services. Outside of work, he has also co-founded a foundation in the Philippines (Munting Kawan ng Sagrado Corazon Foundation Inc.) to support victims of domestic abuse.
Home is a Mental Concept
The scope and geographical range of his roles seem immense, but for Claus who espouses a nomadic outlook, it comes as second nature. Born in Munich, Germany, Claus has lived in Finland, Taiwan, Korea, Japan, the Philippines, Singapore, and New York, where he went to high school at the age of 15 after his father’s passing. He states, “Home has always been a mental concept for me because I moved so much, for me it is a decision you make when you call a place home.”
He has been living in Asia since 1993, thanks to his job with Nokia. “Twice I just decided a place is home with my wife, Carol, I built a house and a business and that was Singapore and the Philippines.”
In fact, due to pandemic travel restrictions, Claus has spent the past year, which he would have spent travelling, putting the finishing touches on their new home in the south of Manila.
Their house is built on a golf course – “nature is my backyard, and it also offers a lot of great vistas and green space for my dogs to get their daily exercise. My wife Carol runs a design firm and played a big part in the design of this new house.”
Carol and Claus previously owned a shophouse in Singapore at Tembeling Road that was featured in Expat Living – the first home they built and decorated together in Singapore.
Ongoing Success at GEA
GEA’s recent projects include two German start-ups supporting the fight against COVID-19, which Claus is excited to be accelerating.
The first is Prime Vector Technologies, which has developed a safe viral vector platform that enables the fast generation of vaccines against infectious diseases such as COVID-19 and various types of cancer. They have produced a viable vaccine candidate and have the initial financial support of the BMWi and the support of GEA’s programme to secure international partners in Asia and the U.S. for ongoing clinical trials.
The second is Wingcopter, a drone technology start-up which raised USD22 million in January 2021 and recently announced a collaboration with Japanese airline All Nippon Airways (ANA) to research and develop drone delivery infrastructure, particularly for medical supplies and consumer products. Wingcopter is one of the World Economic Forum’s most promising Technology Pioneers of 2020 and have worked with UNICEF on vaccine deliveries to health clinics in remote places.
To get a better understanding of Claus’s work with cross-border start-ups, the regional tech start-up scene and his career trajectory, we’ve sat down with him for an in-depth Q&A. Below are excerpts from our conversation that have been edited for length and clarity.
What inspired you to work in the start-up scene, and what was your first foray with start-ups?
In my 12+ years with Nokia, I was challenged as an engineer to run country operations, tech units and many other things, however, I eventually felt like I hit a glass ceiling by not being versed in Finance. I decided, at 36 years old, to do an MBA with IMD at Lausanne and 1 year after that I started my first company, Wireless Services Asia, in the Philippines – a Reseller and Systems Integrator of technology and business solutions, formerly a mobile VAS provider – which is still in existence today with about 60-70 people employed.
Around that time, a friend of mine died of cancer. It opened my eyes that life is short and carpe diem is important. So in 2005, I decided to join Uniquely Singapore which was a campaign to sail around the world from England, and back.
My next start-up was sparked during my 18 months on a 70-foot sailboat, where I realised how difficult it was to communicate out at sea. The idea was to bring GSM (Global System for Mobile Communications) to ships, and in 2007, we raised $50 million, built up a technology and an operator to look after communication for seagoing vessels. It was a brilliant solution that met with terrible timing because of 2008’s financial crisis.
All the ships were lying in front of Singapore instead of plying the oceans, and that meant our revenue went down and we had to sell the company. Since then, I have worked with and co-founded 7 start-ups in Singapore and in all kinds of fields, from payment processing to machine learning and early stages of AI.
What are the fundamental signs of a great start-up? What do you lookout for in start-ups here in Singapore or SEA hoping to cross into Germany?
As an engineer, I always look for the ‘soundness’ of the technology offered, whether it solves a real problem in a new market, especially in a highly developed tech market like Germany.
As an investor, the founding team is another fundamental sign of a great start-up. It is often not enough to have founders that are strong in technical aspects, it must be balanced out by knowledge and the ability to take this product to market to generate revenue.
Lastly, a sign of a great start-up is in the leadership’s coachability and willingness to act on advice from those who have either succeeded or failed in a market such as Germany.
What about those from Germany hoping to enter Singapore? Are the pre-requisites different, why?
I would say the pre-requisites are the same, but for German start-ups coming to Asia, there is an additional consideration of culture. Singapore is ‘Asia light’ and there are actually more similarities than differences in terms of business culture – high respect for research-based technology, punctuality, and open, direct conversations.
However, the finer details such as the art of ‘small talk’ and the longer and more social nature of building relationships would be something German founders would need to get acquainted with, the locals here can be more straightforward in conversations than expected.
Which market(s) in Southeast Asia (SEA) do you think has the most infrastructure and market access for start-ups to accelerate in?
Singapore is without question the top location for start-ups within Southeast Asia when it comes to providing government support, infrastructure, financing, talent, and ease of access to the region. It provides a great landing pad for foreign start-ups and serves as a springboard into the region. This is the very reason why German Entrepreneurship Asia is in Singapore.
The other SEA countries that start-ups should pay attention to would be Indonesia, Thailand, and Vietnam, as these are the top 3 countries whose internet economies are growing exponentially.
Special Purpose Acquisition Companies (SPACs) are emerging as a popular initial public offering alternative for firms, are you generally for or against this considering its advantages against its lack of regulations?
I am for it. It will accelerate technology because it’s another funding structure. For some companies, it’s hard to go public because the regulations are so tough. With SPAC, you have the opportunity to run your business and achieve a reverse listing from a buyout, which means you spend energy on developing the business rather than on tedious procedures. We are currently in discussions with some of our German alumni to explore SPACs as an option.
Trade tension between the United States and China, a global chip shortage and a world still reeling from COVID-19; the regional start-up scene still seems relatively healthy – why is that?
In the past, countries like China or Vietnam were often seen as the workbench for Western countries, producing products that go to Europe or the U.S. Although trade tensions are real, it is less of an issue for Southeast Asia as intra-Asian trade has increased. There are more goods and services moving within Asia.
In that sense, Asia is no longer the workbench of the west, and its economy can be self-sustaining. There has been enormous economic growth in the region, coupled with a burgeoning middle class and increasing GDP that is forecasted to grow even more in the next few years. This creates demand within the region, and a good foundation for start-ups to thrive.
What is one advice you have for local start-ups hoping to go regional or international?
Many start-ups have the misconception that what has worked in their home market will work in another market or region without much adaptation required. To succeed sometimes requires an entire shift of your business model, or a change in the value proposition for the new market.
My advice – don’t do it alone. Whether it’s getting help from GEA’s programmes, or via an existing partner with connections in the new market, don’t be afraid to ask for help. Finding a good partner, and the right partner, for expansion into other countries will make the journey much easier.
And finally, what do you love best about Singapore?
Without a doubt, the food! And the convenience of the city – everything works, it’s compact and very liveable, clean, and neat. I also enjoy the cultures here – Singapore has so many in one place. I like that you are easily transported to India with just a short trip to Little India. I’ve lived in many countries and there are not many places like that in the world.
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Co-founder and CEO of German Entrepreneurship Asia (GEA), Claus J. Karthe is an entrepreneur, engineer, philanthropist, architect, and adventurer who has sailed across the world and made his mark with career stints in Europe and Asia, most notably Nokia, and has worked with and co-founded start-ups in Singapore, in fields from payment processing to machine learning and AI.
GEA is an innovation service provider running cross-border start-up accelerators funded by the German Federal Ministry for Economic Affairs and Energy and supported by Enterprise Singapore. Their mission is to enable high potential start-ups to scale into new markets by offering an unbiased, non-investment driven approach in their advice and support.
Connect with Claus here.