Our investment in Xentral: A short story of being contrarian, finding the essence of truth and the evidence of ambition and focus. ✌🏻
There are many ways to become a successful entrepreneur — but the one of Benedikt and Claudia and their company Xentral impressed us in particular:
While others were trying to compete for best marks at school, Benedikt bought a motorbike and drove 20.000 kilometers through the country in search of opportunities. He started coding and working as a lighting technician in parallel to school before starting an apprenticeship at Siemens where he came in touch with programming microcontrollers. Since programming of those adapters has been complex he developed his own universal programmable micro adapter. More and more friends and colleagues began to like and ask for it so Benedikt soon started to successfully build his own hardware business around programmable microcontrollers in parallel to his university courses.
As the business grew and sourcing of parts and operations became more complex, Benedikt and Claudia were looking for software to streamline their backend processes. When they looked for software solutions, most were out of their reach financially and too big for their purposes. So Benedikt started to write the code himself and their company Xentral was born.
Once again external people got news of the software and started to like it. So over time, Benedikt and Claudia started to build more and more features, speaking to other small businesses, finding out what features they really needed to automate their backend processes and building them accordingly. As people loved the software, in 2017, Benedikt and Claudia started focusing on Xentral full time.
Why Bene’s and Claudia’s story inspired us?
Bene’s past is a story of finding the truth, focus and essence of “what really matters”. To think 100% independently of others. To be contrarian.
What does it mean to be contrarian? It does not mean simply doing the opposite of what the majority does — that’s just consensus thinking by a different guise. The problems of reactive contrarianism are the same as those of following the herd. The most contrarian thing to do is to think independently. It is not without its risks, because there is no cover from the crowd and because it frequently leads to conclusions with which no one else agrees. And that is exactly the path Bene and Claudia followed and why we fell in love with them as founders when we first met in person. True Visionaries!
What others would consider risky or unusual, we see as a badge of honor, evidence of ambition and focus. And the source of having built a beautiful product bottom-up organically, step-by-step, based on demand, unbiased of “learning how to build a great SaaS product at university” or a trend scouted on TechCrunch. (No offense! But sometimes being too long in college can be good for learning about what’s been done before, but it can also discourage you from doing something new. Or as Plato put it: “Knowledge that is acquired under compulsion obtains no hold on the mind.”)
We love contrarian founders with insane conviction over “being founder for the sake of starting a company”. Why? It’s tempting to start from seeing a cool technology and try to figure out what you can do with it, or from noticing a trend and trying to build from there. But if you can point to an actual, living human being who has the problem you’re solving, you may find yourself being much better in finding the essence of product features people really need and building something unique.
A new era of software tools for micro SMEs:
At Visionaries Club we strongly believe in the category of a new generation of lean software tools empowering micro SMEs, as it is the most underserved category regarding professional software, while at the same time the largest and fastest-growing market in terms of numbers of businesses.
We have already backed companies such as Personio, which has become the European leader of HR software for SMEs, Taxdoo which is on its way to become Europe’s leading compliance platform for the digital economy or Choco, the #1 global ordering tool for restaurants and their suppliers.
We believe all micro SMEs will be empowered by lean software in the next 5 years. However, compared to software for large enterprises, software for micro SMEs needs to be lean, self-service, plug & play, API-driven, modular and very easy and intuitive to use — we often call these features “consumerised B2B” within our team, as everyone should be able to use such tools without explanation and complex implementation effort.
Xentral ticks all these boxes having built a lean growth ERP for modern (micro) SMEs automating the mundane and time-consuming backend processes of running a business — from order and warehouse management, packaging, and fulfillment to invoicing, accounting and sourcing.
The boom of e-commerce and why each micro SME needs an ERP?
As consumers continue to move online, e-commerce in Europe alone is forecast to exceed $800 billion in 2021.
In response, hundreds of thousands of businesses are turning to Amazon, eBay, Shopify and a wide array of other platforms to sell online — these platforms enable almost everyone to become an ecommerce entrepreneur starting her or his own online business. Xentral provides the backbone infrastructure for these businesses.
So how does the perfect ecommerce software stack look like in our view?
In the past we have seen 2 waves of software tools for ecommerce:
1) The first wave of tools such as Shopify, Amazon or eBay has enabled everyone to become an entrepreneur and sell online.
2) The second wave of tools provided additional infrastructure features geared towards the frontend such as payment solutions, analytics, cookies & GDPR, A/B testing, conversion tracking etc.
We now believe in a third wave of tools covering all backend operations in one stack as a “single source of truth”. In order to be successful, today’s businesses must have an ERP solution that is customizable to their needs and can scale as they grow.
Compared to enterprise legacy ERP solutions such as SAP or Oracle, Xentral’s “lego like” infrastructure is highly modularized, API driven, lean, agile and self-service. Thereby Xentral builds one single source of truth as most ecommerce companies use a variety of different frontend channels such as Amazon, eBay, Shopify or run multichannel with an own POS, dealer portals or direct sales. In addition, Xentral can be easily connected via more than 60 APIs to other operating software such as Personio or Taxdoo.
While the global ERP market is expected to exceed more than $49.5 billion by 2025, the SME (small and medium-sized enterprises) segment has been heavily underserved as legacy systems are complex, expensive and inflexible, and smaller solutions are too niche.
@Bene, Claudia and Xentral team: We couldn’t be more excited to teaming up with you together with Sequoia, Freigeist Capital and Christian Reber to build another SAP story out of Germany!
In addition we hope this encourages all contrarians out there to find their own essence of truth ;) Visionaries is always there to back you! 🚀✌🏻
