Absolventum Member Dr Fabian Kracht studied business administration at the University of Mannheim, graduating in 2005 with a degree in business management (Diplom-Kaufmann). His main areas of study were marketing, controlling and production management, and auditing and fiduciary studies. After that, he worked for the family-run company PERI for sixteen years, becoming a managing director there in his mid-thirties. He completed his doctorate while working. The idea of founding a company had crossed his mind time and again during his studies, but it was not until May 2021 that he and his co-founder Richard Ritz, a former colleague from PERI, founded mesakumo, a company that offers the conception and implementation support of digital transformation strategies for medium-sized businesses. In the interview, he tells us why now was the right time for him to start a business.
How did you come up with the idea for mesakumo?
The foundational idea was a bit older. My co-founder and I worked together at PERI and took a trip to the USA together in 2019. At that time, we were already relatively advanced with digital transformation and said to ourselves: „We will probably soon have to decide which of the major public cloud providers we mainly want to work with in the future“. Back then, it was specifically about Amazon Web Services or Microsoft Azure, as we were already using both. To make this choice, we then spent a week together in Seattle to have them explain to us at the respective Executive Briefing Centres what the corporate world will look like digitally transformed with AWS or Azure in five to ten years„ time. That was totally impressive. In the evening, over burgers and beer – which is why there's a burger on our website – we discussed the insight behind our company's founding today. We realised that “the cloud„ will become immensely important for industrial companies in the future, because alongside the traditional, engineering-driven development of product and business models, a great deal of innovative power will come “out of the socket". And then translation skills are needed to identify and exploit the potential of modern digital technology for existing and new business models in successful medium-sized companies.
„mesakumo“ is certainly an unusual company name. How did you come up with it?
Since the cloud was part of the founding idea and something of an awakening moment, the term had to appear in the name. However, the term „cloud“ is already very frequently used in the names of companies and products, so we had to get a bit more creative. My co-founder is a big fan of Asia. „Kumo“ means „the cloud“ in Japanese, so that part was sorted.
Then we considered that Greek prefixes have worked well for us in the past, and „peri“ is one of those too. So, quite classically, we looked in the dictionary and came across „mesa“, which means something like into. Put together, that means „into the cloud, off to the cloud“ – mesakumo.
What prompted you to start your own business now, after several years in a successful job?
To be honest, I kept having startup ideas even while I was at university. However, after finishing my studies, I decided to work as an employee first. That ultimately turned into 16 years at PERI, though I kept having business ideas there too, which I never actually followed through on.
For the past seven years I was then CFO at PERI and, as Managing Director, responsible among other things for the area of digital transformation; my co-founder was the CIO or Head of IT. During this time, our idea was born and we said to ourselves: „With our knowledge and experience, we can really offer something relevant to entrepreneurs in the upper mid-market.“ Because a great many find it difficult to tackle digital transformation comprehensively for their company. There are basically two questions that are decisive for this: How do you design digital transformation in terms of content so that it really achieves something? And with whom do you carry out digital transformation so that it moves the company forward and not just the consultant? That means there is a competence deficit and a trust deficit, which makes many entrepreneurs hesitate. And with our background, we reckoned we had a good chance there.
Our idea was that we could address both points because we have simply done it ourselves operationally before, specifically in the mid-market sector. This means we can tell real stories about real projects and demonstrate genuine experience, including times when things went wrong, and we can share those experiences too.
The difference is that, thanks to our many years of professional experience, we are not overly theoretical, which is sometimes accused of consultants, but rather act and think in a very practical and pragmatic way.
Your customers are medium-sized enterprises. How does your acquisition work?
Actually, we have built many customer relationships through recommendations so far. Of course, our advantage was that we already had a good network, due to the fact that I was the managing director of an upper mid-market company for a few years and my co-founder was an IT director. The first projects came about because acquaintances approached us directly, having heard that we had founded our own company. The subsequent projects then arose through new contacts from the network and word-of-mouth recommendations.
Which customers / companies are you targeting precisely?
Our customers often find that an app has been set up here, or a digital process there. But after a few weeks and months, they realise that these are all isolated silos that are not connected to one another and that there is no overarching concept. As a result, the initial enthusiasm quickly wanes. This is where we step in, working with our clients to develop a comprehensive concept for their digital transformation, always derived from their specific business model and concrete corporate goals.
Other customers are already quite far along with their digital transformation and have already established digital, data-driven business models on the market. However, they sometimes lack the back end for this, in other words: the linking of their IT with the digital outside world in the market. That's when we help them to develop the appropriate IT strategy to match their existing digital strategy.
With this offer, we are targeting customers primarily from the upper mid-market, with annual revenue roughly between fifty million and a billion, which is roughly the size bracket in which we feel at home. This is because, in this size category, we simply have a great deal to offer, having seen a lot and done a lot thanks to our previous operational experience. We enjoy working for family-run businesses as we are familiar with their specific characteristics. Otherwise, our clients are mostly industrially oriented, have products that require explanation, and develop and manufacture these themselves.
What was special about the idea behind mesakumo and what is your competitive advantage?
There are many good consultancy firms that support businesses in their digital transformation. What sets us apart is our „been-there-done-that“ experience. This is something that is strongly reflected back to us by our clients and prospective clients: „You've actually done both the design and implementation. Not just as consultants, but as people with operational responsibility in an industrial company. Although you're never truly finished with digital transformation, having dealt with it for 7 years means you've been through a lot and gathered useful experience.".
I think what also sets us apart is our duo of founders. Because on the client side, you usually have managing directors and IT heads, and we mirror that with our experience on the mesakumo side. This allows us to find common ground for discussion and mutual understanding very quickly.
What does your staff structure look like at mesakumo?
We are now thirteen employees, 7 men and 6 women, and that after a year and a half. We are growing quite rapidly. We tend to hire experienced people, with between 5 and 30 years of relevant professional experience. We’ve just hired a new colleague who has already been an IT Director in various medium-sized companies for over twenty years. This goes down very well with the clients. The client feels in safe hands, as it is clear that sitting there is someone who has already dealt with this exact issue.
Did you fund yourselves or work with investors?
No, we consciously didn't bring any investors on board. The only thing we made use of was a start-up loan from the L-Bank. It was very important to us to build our own company and not end up in a position where we had to answer to anyone. I think especially at the beginning you have to give away a relatively large amount of shares for little money.
Our advantage was of course that we had well-paid jobs beforehand and could take a risk. We said pragmatically: „We can manage to try this for a maximum of three years until all our reserves are used up. But if after three years we haven't managed to build a business that can pay us a salary, then we aren't good entrepreneurs either. Then we'll go back to being employees.“
And do you have any special tips for students who want to start a business?
I would certainly say that it helps to gain some work experience first before starting a business, in a stable context, because you simply don't have to make many of those mistakes yourself anymore, but you can already take those insights with you. Be it in a large corporation, a medium-sized company or even a startup. Then the time can come when, on the one hand, I have sufficient experience, but on the other hand, also still enough energy, enthusiasm and strength to take the plunge into founding a company. You can still take that step in your early 40s.
You have also been a mentor at GRADUATE, right?
Yes, I have been several times already. I would also be happy to act as a mentor again in the future, including for discussions in the field of business creation or startups. I think it is interesting for anyone who has a business idea to discuss it with others.
Fabian Kracht, Simone Fioretto