The following is an article I wrote for Stanford in Berlin’s annual newsletter, regarding how some of the Berlin-based startups I’m involved with have not only persevered but also flourished amidst the tricky circumstances of the past year.
In mid-January of last year Pauline Koehler was having a routine dinner in Berlin with a group of friends. One, who was planning to get married in May, posed a seemingly inconceivable question at the time: “Do you think I’ll actually be able to have my wedding due to this Covid thing?”
“That was a pivotal call to action for me,” Koehler remembers. She called her brother and co-founder Daniel and said, “We need an immediate plan for this.”
The two siblings had good reason for concern. They are co-founders of a 2 year old wedding planning site called WeddyPlace that connects some of the 400.000 couples marrying each year in Germany to more than 6.000 vendors providing ceremony and reception services. How can an event planning startup operate if events themselves are indefinitely on hold?
Berlin is indisputably the startup capital of Germany. More than 500 startups are founded here every year, and 3,7B Euros in venture capital funds flowed into Berlin startups in 2019 alone, representing 59% of all VC funding into Germany.
WeddyPlace is one of a dozen Berlin tech startups where I’m an angel investor or marketing advisor. I’ve been closely involved with all of them throughout the pandemic and recently talked to a few in more detail about how they managed their businesses during this tumultuous year.
All the startups that I contacted faced both some common and company-specific challenges due to the Coronavirus pandemic. But they’ve also demonstrated some remarkable abilities to adapt, refine, and pivot their businesses to weather through and even thrive during the current challenges.
Nearly all the founders I spoke with immediately applied for a German government program called Kurzarbeit, or “short work,” when the first wave of Corona appeared, lockdowns were enforced, and overall business uncertainty skyrocketed. The program allows companies to reduce the days per week their employees work – and are paid – and the government makes up for about 2/3 of the remaining salary difference.
By April, more than 6 million German employees were receiving some of their wages through Kurzarbeit, an all-time high. The program remains an ongoing option for businesses and can be activated or stopped again as the macro environment and commercial necessities warrant.
Another quickly-implemented program by the government distributed cash subsidies to businesses that have employees and could demonstrate a business loss due to Covid. Several startups told me that from the time they applied online, funds were received in their accounts only two days later.
“We were actually blown away with the German government’s speed and efficiency in this case,” one founder admits. Those are two descriptions not often heard when describing government bureaucracy anywhere.
The Koehler siblings, of WeddyPlace, mapped out immediate business changes they’d need to make to confront the new reality. They shut down all online marketing, but they also hired additional writers to quadruple their site content. They realized that even if events were postponed – and 91% of couples did postpone their planned spring weddings – the planning and research for events would still continue.
“Marriage isn’t like a discretionary vacation trip that you might just completely forgo,” notes Koehler. “Obviously this is a life-defining event that stays top of mind for newly-engaged couples. So we developed even more planning and resources to help with that.”
The strategy worked. Traffic to the site doubled and user engagement increased 10-fold over the last 6 months. Many couples are going ahead with a small civil ceremony for their marriage now but postponing their bigger reception to the same season in 2021. “They’re researching and planning for even longer now, and we’ve tried to meet that need,” Koeher explains.
“We also saw a silver lining with so many potential vendors – photographers, bakers, florists, venue operators – working from their homes,” Koehler notes. “We were able to reach more of them to tell them about our services during this time when their business had slowed.” The company ended up signing up new vendors at five times its historical rate.
WeddyPlace also had some inquiries from couples that they couldn’t have imagined a year ago. Some couples are requesting a live video feed of their ceremony so that Covid-susceptible grandparents can virtually attend. Others even want to create custom-embroidered face masks with the bride’s and groom’s initials.
Despite all the Covid challenges, potential investors took notice of WeddyPlace’s progress and ongoing potential. The company recently completed a growth-funding investment round, a counter-intuitive vote of confidence for the future of a sector hit hard by current restrictions.
Bazil Azmil, CEO and co-founder of Breakthrough Health, faced a different challenge. In 2019 Breakthrough launched an app called Emilyn that helps people living with Multiple Sclerosis to manage their symptoms, receive better care, and contribute to research by volunteering for clinical trials.
“Starting in March, suddenly clinical trial recruitment for diseases like MS were paused with the focus shifting exclusively to Corona vaccine trials,” Azmil points out. “What do we do now?” he asked his team at the time.
There was an unexpected benefit, though. The heavy media coverage of vaccine research increased the public’s understanding and appreciation for clinical trials in general. Patient interest in participating in future MS studies has subsequently increased. “To our surprise, we now have more patient volunteers in the MS volunteer pipeline than ever. So we’re in good shape once these trials resume.”
Azmil’s team also identified another opportunity. MS patients already have a higher propensity to feel isolated, and recent lockdowns exacerbated that risk. So the company introduced a new app feature facilitating one-on-one chats between matched patients. Weekly app usage increased as patients connected with one another for support and companionship. The new feature capitalized on the fact that more people were at home and using their mobile devices more intensely than ever. And their need to connect with each other had only grown.
The company’s customers weren’t the only ones feeling isolated. Accustomed to the camaraderie and close ties that come with a small startup environment, employees were struggling to adjust to working from home and missing their daily office routine. “We realized that beyond just utilizing video conferencing for work meetings, we needed to use it for non-work socialization and stress relievers as well,” Azmil adds. “So we have regular online catch-ups together that have nothing to do with work.”
Fundraising also changed. Active conversations ongoing for weeks in the early spring with potential investors suddenly ground to a halt. When talks slowly resumed over the summer, it took adjustment from everyone. “Both companies and investors had to get comfortable with virtual-only investment decisions based on Zoom calls rather than multiple in-person meetings,” Azmil says. But it ultimately paid off: Breakthrough Health closed a 1,4M Euro round of new investment in late summer.
Talentspace is a platform connecting job seekers and employers for both online and live events throughout Europe. Co-founder Marco Eylert had long planned the company’s signature April career event in Berlin. More than 2.500 job seekers and more than 20 employers, among them Google, Porsche and TikTok, were already registered to attend.
“But in the first week in March, we realized that there was no way that this event could happen as planned given the Corona developments and associated restrictions,” Eylert says.
The company was determined to still host an event on the same days but now in a completely virtual format. They immediately put together a 4 week dev plan to change everything. “We tried to recreate the various aspects of a live event as closely as possible, so we now facilitate one-on-one online candidate screenings and interviews, ‘drop-by our booth’ informal virtual chats, and more traditional company presentations, workshops and speeches.”
The pivot worked: all but one of the originally participating companies signed onto the new virtual format. Over the summer months, Talentspace was then approached by institutions and companies across the globe to use the platform for their own recruiting events – and Talentspace transitioned from being an event organizer themselves to offering a platform solution for others.
Customers now include some of the world’s leading universities including Stanford, Brown and the German business school WHU. Those customers have in turn used Talentspace to host custom virtual events with more than 80.000 job seekers and 1.000 employers who are recruiting for talent.
“This whole crisis, while disruptive and stressful, actually served as a catalyst to accelerate a trend that was happening anyway: making traditionally harder-to-scale live events into very scalable and equally attractive virtual events,” explains Eylert. “It provided a clear short-term goal for us, and our team rose to the challenge.”
Investors seem to agree. Talentspace recently closed a fresh fundraising round of US $4M.
Some startups in sectors like travel or hospitality face such formidable obstacles at the moment that even agility and ingenuity may prove insufficient to survive the current environment. But others, like the companies profiled above, have faced their own unique challenges and yet still adapted surprisingly well. Using a combination of effective government assistance, adaptability and openness to seize new opportunities, they’ve shown they can adjust quickly, continue to prosper and attract new investment.
It’s been a privilege to be involved with so many talented startups in Berlin and to witness first-hand how they continue to innovate and thrive even in today’s challenging environment.
Kelly Ford Stanford in Berlin and Krupp Internship Program 1988/1989 BS Electrical Engineering 1990