Identifying Technical Risks: A Q&A with TechMiners Co-founder Thomas Frieling
When it comes to investments, powerful technologies call for powerful due diligence. That’s the idea behind TechMiners — a new service brought to life by former kaufDA CTO Thomas Frieling and former movingimage Head of Software Development & Infrastructure Christoph Beckmann.
The TechMiners vision — to enable investors to make smarter decisions based on facts and insights related to a company’s technology — seems like a no-brainer in today’s tech-driven ecosystem. And yet, many investors overlook the benefits of systematic risk analysis.
The TechMiners due diligence tool leverages deep automation and smart data analysis to identify key risks, which the team is then able to examine more closely.
We caught up with co-founder, Thomas, for a quick Q&A about the essential role of tech due diligence and what it might look like in the future.
TechMiners is described by the tagline, “tech due diligence as it should be.” What are the unique factors of your business that are helping to change this important process?
Everyone values technology and acknowledges it to be a strong driver for business success. Yet investors mostly overlook technology during their due diligence process, and therefore miss out on critical success factors.
TechMiners solves this by offering state-of-the-art tech due diligence that provides three main elements to investors:
- Identification of severe tech risks (the infamous “red flags”)
- Findings workshops with CTOs to unlock hidden potentials
- Provision of tech KPIs for regular shareholder reporting
What aspects of your background helped you create TechMiners in the way you envisioned?
The most important learnings are probably those that we made as CTOs, especially while ramping up kaufDA’s machine room from 1 to 50 developers and growing the company to 40 million page impressions per month in six countries.
Being startup consultants and business angels, we constantly see how new methodologies and technologies can be applied properly to fuel business success.
There’s often more that meets the eye in every deal. What are some benefits of tech due diligence that people might often overlook?
That is a very good question. Usually, people tend to focus primarily on finding so-called red flags that prohibit investing in a company. But even though those dealbreakers exist and need to be identified, they are very rare.
More often we come across areas that are not dealbreakers but definitely need to be addressed so as to not become them, like inevitable knowledge churn or a non-scalable tech stack.
Identifying those areas of improvement and assisting CTOs in addressing them is probably the biggest impact a good tech due diligence can have. This huge benefit is rather unknown and therefore often not valued appropriately.
What’s the most surprising thing you’ve learned on this journey so far — whether it’s from your own findings, or through customers/clients?
We are always amazed at how much you can learn about a company by understanding their tech data.
GitHub, for example, lets us know how much code was written by developers that left the company — in other words: how much knowledge has left the company over time. This, subsequently, slows down development and might put business plans at risk.
Jira, on the other hand, will tell you how efficient communication flows within the company. Logfiles know how stable the systems are and how well they scale.
According to the deck, TechMiners utilizes a combination of data-driven technology and in-person assessment. How much focus do you put on evolving the actual technology versus other areas of the business? Which is most important to you in the long run?
Yes, our data-driven approach is what really makes us unique. We constantly invest in our product, TechMiners 4D (4D, by the way, stands for “Data-Driven Due Diligence”). TechMiners 4D extracts data from various tech sources, analyzes that data automatically and offers comprehensive visualizations. With those insights, we know where to manually drill deeper and what questions to ask instead of sampling around blindly.
How do you envision tech due diligence 5 years from now?
In 5 years, tech due diligence will be a standard element in every process, in the same manner as tax or economic due diligence is today.
Looking at recent engineering trends that favor standardization and data-driven approaches, I expect tech due diligence to also move towards both those things. There will be specialized tools that collect all available data, utilize AI to deduct insights and serve as a out-of-the-box solution for a standardized tech due diligence process.
That also means that tech will no longer be a magical black box, but will be as measurable and steerable with KPIs as other business areas already are. It will be a long way until then, but we are here to accelerate and professionalize that process.
Want to learn more about the tech due diligence process? Visit www.techminers.org. As always, drop us a line with any questions at hello@join.capital.
