About STEP USA:
STEP USA is a 5-day startup boot camp launched and organized by the German American Chamber of Commerce New York (GACC NY). A highly successful program, it focuses on facilitating U.S. market access for young innovative companies and takes place four times a year. It also exists in a virtual format. STEP USA prides itself on having created a network of roughly 300 STEP USA alumni, more than 60 U.S. incorporations, and 35 investment rounds. It is tailored to the needs of startups who intent to scale their business internationally.
The GACC NY is featuring selected STEP USA Alumni, calling these founders “STEP USA Ambassadors”.
“Forget Silicon Valley! New York is the best place for German startups to start their business in the U.S.”
STEP USA Ambassador Dimitri Gärtner is the CEO of Framen GmbH. The company was founded in 2018 and currently employs 8 people. Located in Frankfurt am Main, Germany, Framen offers a geo-local and context-sensitive software thus enabling customers to hyper-target their clientele. In March 2020, just before the outbreak of the Corona pandemic in the U.S., Dimitri Gärtner joined us for our STEP USA program in New York. Today he opens up about his U.S. market plans, his most valuable take-aways from the STEP USA program, and has a word of advice on raising money in the early days of being a founder.
GACC NY: Dimitri, it’s great to see you again. How is Framen dealing with the effects of the current economic crisis?
Dimitri Gärtner: As you know we were part of the last STEP USA program in March this year – just before the borders were declared shut. We made it back to Germany at the very last moment, that was quite an unusual experience. Just like many other companies, we are working hard to keep our business up and running in these difficult times. One of our greatest challenges is that our customers postponed promotion campaigns and we cannot generate the revenue we are used to. However, the upside is that many restaurants, bars, gyms, and hotel chains request our solution exponentially – to display public information to their guests and thus generating revenue with their screens.
GACC NY: What does Framen exactly do?
Dimitri Gärtner: Our company schedules advertising campaigns on TV screens of hotels, co-working spaces like WeWork, bars, or gyms. Framen specializes in targeted advertising through screens in semi-public venues. Moreover, we work with many business partners, such as hotels, restaurants, offices, coffee bars, fitness studios, etc. Our purpose is to develop hyper-targeted advertising tools to connect with the matching audiences more efficiently and enhance sales.
GACC NY: It’s really impressive that you were able to get WeWork as one of your customers. Tell us how you managed to get them on board.
Dimitri Gärtner: Back in the third quarter of 2019, we started the first conversations with WeWork’s European management. We have proven the win-win-win for more infotainment and relevant offers for the members, more revenue for WeWork, and access to the screens through our software.
GACC NY: Is that what you consider the greatest success in your company’s history?
Dimitri Gärtner: Yes, we are very proud of this success. But I am also really happy to have met my co-founders Alexander Gärtner, Sveatoslav Podobischi, and Magdalena Pusch. As a team, we function so well and are able to tackle the challenges we have. It is uplifting to have people around you who take our business as seriously as I do. And to have some fun too, when our work is done. I am absolutely convinced that only if you have a firm fundament, you can build a stable business on it. With regards to recent success, we are super happy that during the Corona time, a hotel chain bought our solution for their TV screens as well. We love enabling our customers to grow their business.
GACC NY: Looking back, is there ‘a lesson learned’ that you can share with us?
Dimitri Gärtner: Absolutely. In our early days, we were looking for an investor and talked to several ones. We came across a business angel who wanted to give us EUR 100.000 for 30% of our company. My advice to founders in the first phase is to bootstrap as long as you can and to think twice which investor or business angel you want to take in. Consider your options carefully. Don’t go for the first offer that comes along, unless it’s a fair deal for both sides.
GACC NY: Thanks for sharing this, Dimitri! Please tell us why the U.S. market is important for you?
Dimitri Gärtner: We are always looking for new clients and ways to bring our software to life. I absolutely wanted to check out Times Square in New York and contact as many New York-based hotel chains as possible. And since WeWork is our customer and we believe in the scalability of our product, we felt it was about time to target the biggest market in the world. However, we just did not quite know which steps to take when. It is a major decision to start a business in the U.S. On the one side there are so many opportunities, on the other side, it can go wrong big time if you want too much too fast.
GACC NY: Is that why you joined our STEP USA program in March 2020? What were your most valuable take-aways from this 5-day boot camp in New York?
Dimitri Gärtner: Yes, absolutely! Taking part in the STEP USA program was a no-brainer for us, as we were approached by the German American Chamber of Commerce New York directly. Being located in Frankfurt, we were able to receive a 50 % funding from the federal state of Hessen. That was truly helpful. At this point, I want to say a big “thank you” to the IHK Frankfurt and the Wirtschaftsministerium in Wiesbaden! I hope that many more Hessen-based companies will make use of this funding option.
My biggest take-away from the STEP USA program is that New York is the perfect spot to start out your American business. So many times, founders think that only Silicon Valley is the place to be, but New York offers it all: an excellent investor environment, a city full of potential clients, business opportunities everywhere and exciting cultural scene as well as the “proximity” to Europe by being only six hours behind German time. That helps tremendously with doing business. It’s a very mature and fast-paced world and ideal to scale your business fast – if you have done your homework.
GACC NY: In your opinion, what do startups generally underestimate when coming to the U.S.?
Dimitri Gärtner: I guess our cultural differences are underestimated. It’s quite interesting to see that Americans tend to be very enthusiastic when talking to you directly. For a German founder, it sounds promising and like an ‘easy sale’. But in actual fact, this is how Americans treat you in a polite and nice way, nothing more.
Another thing to keep in mind is that investment rounds in the U.S. are usually much bigger than in Germany. The reason for that is twofold: First of all, there is more venture capital in the market, and in general American investors seem to be ready to take more risks. And second, building up your business in the U.S. is very expensive. You just need more money, because rents, salaries and the costs of living are quite high.
GACC NY: Could you share a success story that has its roots in the STEP USA program?
Dimitri Gärtner: Sure! I was very satisfied with the meetings the German American Chamber of Commerce had set up for us in New York. Still to this day, we are positively surprised by their impressive business network. The scheduled meetings with German media agencies in New York proved to be a real success. We are still in touch with them and are planning our first joint projects.
GACC NY: That sounds great! So, what are your next steps in the U.S.?
Dimitri Gärtner: We are looking for more business contacts over there and would love to get more introductions to suitable partners. Once the travel situation allows for it, we want to be back to meet these leads in person. Of course, one day, we are also planning on opening a subsidiary in New York as well.
GACC NY: Dimitri, thanks so much for taking the time for this interview and all the best for Framen!
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