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 in New York. It also exists in a virtual format. STEP USA prides itself on having created a network of more than 360 STEP USA alumni, around 65 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”.
“The STEP USA program has opened many doors for us!”
Located in the heart of Hamburg, Nitrobox GmbH was founded in August 2012 and currently employs 40 people. In February 2020, the successful fintech company won Porsche Ventures and NeueCapital Partners as investors, raising a first institutional investment. Nitrobox is growing rapidly and has just won the Deloitte Technology Fast 50 Award – being one of the Top 10 growing software companies in Germany. In March 2019, CEO Henner Heistermann joined us for our STEP USA program in New York. Today he talks with us about their U.S. market plans and their most valuable take-aways from the STEP USA program in New York.
GACC NY: Henner – congrats on your investment! Tell us about what Nitrobox does and what makes you so successful?
Henner Heistermann: Good seeing you again – it’s been a while since we were in New York. Generally speaking, we are a fintech company located in Hamburg. We develop a SaaS solution that enables our enterprise customers to monetize digital business models such as subscriptions or pay-per-use very quickly. Nitrobox is a smart technology that combines all the necessary functions in a central platform and thus enables companies to handle their digital revenue and accounting processes from anywhere in the world – almost in real-time and very cost-effectively. Customers love about our product that they can integrate our software into their existing systems. We use state-of-the-art API interfaces that make it possible to quickly extract and process the necessary data from existing financial systems and providers.
GACC NY: How are things working out for Nitrobox in the current economic crisis?
Henner Heistermann: The Corona pandemic is taking its toll on all of us, both in our private and business lives – no doubt about that. In the beginning, our greatest concern was what impact the crisis would have on our customers. Because if they were affected, so would we. Some of our most important customers are well-known automobile manufacturers and mobility providers. And as we all know – the crisis had a massive impact on this industry. On the other hand, however, the crisis has boosted many digital projects in the automotive world.
GACC NY: Are there things going better for you than you expected?
Henner Heistermann: Oh yes, this also surprised us at first. Our customers’ digital projects, in which we had already been involved in the planning and expansion, all of a sudden experienced a real boost. Even additional projects such as online car sales were brought forward so that the crisis did by no means have a negative impact on our business. We are of course very pleased about this.
GACC NY: That’s really wonderful to hear. What do you consider the greatest success in your company’s history?
Henner Heistermann: About two years ago, we won Porsche as a new customer. Porsche recognized the importance of digital business models early on and saw our solution as a strategic building block for their company. During the initial talks, it very quickly became clear that we share the same ideas and visions. The implementation of various projects went very smoothly. It’s a great feeling that such a renowned company has chosen our product, believes in our vision and continuously handles further digital business models via our platform. In early 2020, Porsche together with a US venture capital fund invested in our company This is, of course, a fantastic success for the Nitrobox and a tremendous vote of confidence.
GACC NY: Looking back, is there ‘a lesson learned’ that you can share with us?
Henner Heistermann: Sure! For our product, we initially had a completely different target group in mind. At first, we didn’t offer our solution to the large enterprise companies that we count among our customers today. We were very active in the midmarket segment. But that was not as successful as we had hoped, because our solution suits large companies much better. Our product-market fit was simply not ideal. When we realized that, we had to completely realign our marketing and sales processes. That was a tremendous challenge, which we, fortunately, managed to master in a short time. In retrospect, we should have focused on large enterprises right from the start. That was an important learning experience for us.
GACC NY: Thanks for sharing this! Can you please tell us why the U.S. market is important for you?
Henner Heistermann: Well, in Germany, many companies are very reluctant to adopt new business models – although they should do so particularly right now. They still tend to rely more on so-called “good old German engineering”.
Companies in the U.S., however, are generally more open to new ideas. This is probably due to the fact that they recognized early on that new business models will establish themselves very quickly because customers are increasingly demanding flexible digital services. The most important thing on the US market is 100% customer happiness, a unique selling proposition that every company strives for: returning, happy customers who are then also willing to buy more.
Companies like Uber, Netflix, and Amazon are excellent examples of what the subscription economy has produced and made successful. We at Nitrobox are going a step further. We are enabling “pay by use” business models. Conventional American software products in that segment tend to usually be cumbersome, often too expensive, not very flexible, and designed for only one use case. Nitrobox, however, can be used worldwide in any language, in any currency, and with high flexibility to adapt – for any new business model. The best part is that there is no need for lengthy and cost-intensive adaptations to the client’s existing software systems.
As a result, we help our clients save up to 75% of their costs in the order-to-cash process – money they can invest in new digital business models. Many American companies are quick at starting innovative projects. In my estimation, Germany still needs about one to two years in this process.
GACC NY: Is that why you joined our STEP USA program in March 2019?
Henner Heistermann: Yes, absolutely. When we heard about the STEP USA program, my co-founder Sven and I were immediately thrilled. Within that one week I spent in New York, we got an excellent overview of the U.S. market. In the course of the STEP USA program, we got important introductions to potential partners and investors. When we came to New York, we already had the first customers using our product in the U.S. and it was clear to us that we wanted to enter the world’s largest market for business software in the medium term.
GACC NY: What is your most valuable takeaway from the STEP USA program as an entrepreneur?
Henner Heistermann: The STEP USA program was a great experience for us as entrepreneurs. We had the chance to learn firsthand what is important when establishing a subsidiary in the States, where the special challenges lie, and where to get support. A real highlight was the STEP USA Pitch Night at the “Deutsche Bank Labs” directly on Broadway in New York. As a comparatively young start-up from Germany, we had the unique opportunity to put all the experience and input we gained from participating in the STEP USA program directly into practice in order to convince potential partners and investors at the pitch. And, this much I can say, exciting discussions and contacts have developed, which now need to be intensified. We are therefore very confident about our business activities in the U.S. market.
GACC NY: In your opinion, what do startups generally underestimate when coming to the U.S.?
Henner Heistermann: I am convinced that the best way to be successful as a German company in the U.S. is by having a sustainable network with good local partners. I think that is underestimated by many entrepreneurs at the beginning of their U.S. business start. In all industries, the companies there are very well connected and form alliances to benefit from each other. As a German company, it is often not easy to find the right “door opener”. In addition, as a non-American, you first have to learn and understand the market, the culture, and the way of doing business. The U.S. market has many rules of its own and many unwritten laws that you have to know and understand. A local business partner can be very helpful and save you from unnecessary harm.
GACC NY: Is there a success story that has its roots in the STEP USA Program?
Henner Heistermann: Whenever we talk to potential customers from the U.S. today, the knowledge from the STEP USA program is of great benefit to us. In the course of the program, we have learned a lot of practical tools that work very well, such as: How do you pitch your company to an American investor? How does a conversation with an interested American business partner work? What legal hurdles could there be? This knowledge in the back of our minds helps us a lot in business conversations today and has already opened the door for more projects. I believe that without this important experience from the STEP USA program, we would have learned things the hard way much more. We are very grateful for this.
GACC NY: Wow, that’s wonderful to hear! So, what are your next steps?
Henner Heistermann: We have many plans for the upcoming year. Among other things, we will focus more strongly on the U.S. market. To this end, we are planning on opening an office in New York City. This is of course a big step for Nitrobox. Besides Hamburg, Stuttgart, and Cracow, New York would be our fourth location. That’s a big deal for us, and one in which we could certainly use some know-how and support. We also looking into strategically expanding our network in the United States, creating awareness for our company and our smart solution. We appreciate very much having the opportunity of being part of the STEP USA Ambassador Club. Thank you – that makes us very proud.
GACC NY: Henner, thanks so much for taking the time for this interview and all the best for Nitrobox!