The Industrialization of Global Internet Start-ups: The Klaus Hommels Model

In spring 2010, Klaus Hommels, a leading European business angel based in Switzerland, was at his Zurich office reading another news article on the tremendous growth potential of U.S. online group-buying company Groupon. Klaus was inspired by the Groupon business model and wanted to invest in other companies in the developing group-buying market. However, he recognized that there was a major problem with starting and growing technology businesses in Europe, compared to the United States or big emerging markets: "Europe was a market which was too fragmented and too slow. Unless a European business had a global focus from the beginning, it could never grow fast enough and big enough." Over the past two years, Klaus and his team have therefore been developing a new non-traditional concept to enable the rapid rollout of Internet start-ups out of Europe across various geographical markets. The idea was to select a business model which had already been validated by an early mover, usually in the United States, and replicate it as quickly as possible in the growing emerging markets and only partly, if at all, in Europe. Klaus' team had already successfully applied this new concept. Since 2008, Klaus had invested in seven Internet companies, in eight different countries, with a revenue run-rate of more than $300 million. All of these companies were launched by replicating the same business model as the French Internet shopping club Vente-Privee. Now, Klaus' team wanted to apply his new concept of global rollouts to the group-buying business model originally invented by Groupon. The goal was to create a network of Internet group-buying companies around the world, and there were several complex decisions that needed to be taken in order to quickly roll out the companies to win markets ahead of Groupon or any other copycat competitors.

Collection: IESE (España)
Ref: F-861-E
Format: PDF
Number of pages: 20
Publication Date: Feb 13, 2012
Language: English

Description

In spring 2010, Klaus Hommels, a leading European business angel based in Switzerland, was at his Zurich office reading another news article on the tremendous growth potential of U.S. online group-buying company Groupon. Klaus was inspired by the Groupon business model and wanted to invest in other companies in the developing group-buying market. However, he recognized that there was a major problem with starting and growing technology businesses in Europe, compared to the United States or big emerging markets: "Europe was a market which was too fragmented and too slow. Unless a European business had a global focus from the beginning, it could never grow fast enough and big enough." Over the past two years, Klaus and his team have therefore been developing a new non-traditional concept to enable the rapid rollout of Internet start-ups out of Europe across various geographical markets. The idea was to select a business model which had already been validated by an early mover, usually in the United States, and replicate it as quickly as possible in the growing emerging markets and only partly, if at all, in Europe. Klaus' team had already successfully applied this new concept. Since 2008, Klaus had invested in seven Internet companies, in eight different countries, with a revenue run-rate of more than $300 million. All of these companies were launched by replicating the same business model as the French Internet shopping club Vente-Privee. Now, Klaus' team wanted to apply his new concept of global rollouts to the group-buying business model originally invented by Groupon. The goal was to create a network of Internet group-buying companies around the world, and there were several complex decisions that needed to be taken in order to quickly roll out the companies to win markets ahead of Groupon or any other copycat competitors.
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Year: 2010
Geographic Setting: Suiza

Learning Objective

During the first part, we will discuss the differences of an Angel Investor, a Venture Capitalist and Klaus Hommels. In the second part, we will discuss Klaus' model on how to start and grow Internet start-ups globally.

The Industrialization of Global Internet Start-ups: The Klaus Hommels Model

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"The Industrialization of Global Internet Start-ups: The Klaus Hommels Model"