Founding a start-up with an innovative idea is one thing. Successfully developing it into a scale-up, i.e. leading it through the growth phase and establishing it as a strong company, is another. In this interview, Matthias Kraus, co-founder and Managing Director of Xpublisher GmbH, based in Munich, talks about the challenges on the path from start-up to scale-up [1] as well as the benefits of the strategic partnership that he and his team have been enjoying since 2019 as part of the Fabasoft Group.
Matthias, how did Xpublisher come about, what was the "innovative business idea" behind the start-up?
Matthias Kraus: I recognized my enthusiasm for IT at an early age and started my own business after completing my training as a computer scientist, including my first professional experience. As an IT consultant, I worked for many years for SMEs and private individuals in the areas of process optimization and automation as well as website creation. During this time, I noticed that publishing houses, associations and industrial companies were increasingly publishing content on different channels. For example, customer and team magazines or catalogs appear as print copies, e-publications, via social media, apps and on websites. What was missing, however, was a powerful tool with which the content created could be "reused", i.e. distributed efficiently and automatically on a wide variety of platforms – keyword: multichannel publishing. And that's exactly what I wanted to bring to the market. With this "innovative business idea", to stay with the wording of the question, I founded Xpublisher GmbH in 2011, together with my former colleague Thomas Werzmirzowsky.
What happened after you founded the company in 2011? What were your biggest challenges as entrepreneurs?
Matthias Kraus: Thomas developed and programmed, I used my network and IT practice to win customers for Xpublisher and acquire orders. At that time, we could have made it easier for ourselves to just offer services and earn a lot of money comparatively quickly. But we wanted to create our own innovative products. And in the beginning, these were even more in demand in the U.S. than in Germany: We succeeded in concluding a contract with the Executive Office of the President of the United States and consequently in opening a local branch office. Looking back, the biggest challenge was always to finance our ambitious goals. For a long time, we struggled to do this on our own. With a workforce of more than 20 employees, we realized that we needed greater economic stability and the ability to plan in order to move forward. We were aware that a pure financial investor was not enough to achieve this. And so, in 2018, we actively started the search for a strategic partner.
Financial investor or strategic partner: This is the fundamental question entrepreneurs face on their path from start-up to scale-up. What considerations were the basis of your decision for a strategic partnership?
Matthias Kraus: We wanted a partner who would not only move us forward financially, but also strategically. The decisive factors were know-how, contacts, and assistance with organizational and operational structures, recruiting, certifications, and, of course, customer acquisition. Long-term strategic involvement offers considerable economic gain for both sides, i.e. it is a win-win situation. On the one hand, this requires trust and mutual appreciation; on the other hand, the products must fit together and complement each other perfectly – as is the case in the Fabasoft PROCECO ecosystem.
Why did you choose Fabasoft as your strategic partner? What are the advantages and what are your common goals?
Matthias Kraus: Fabasoft stood out as a strong brand, well-known and leading in our target markets, from the total of four candidates on the shortlist. The listed software manufacturer and cloud service provider from Linz convinced us with its enormous know-how, excellent network and state-of-the-art technology – and joined Xpublisher as a strategic partner with a majority stake in 2019. Since then, we have been working together as equals, dealing with each other openly and seeing the company's success as our joint task. With our products Xpublisher and Xeditor, we are striving for market leadership in multichannel publishing. This requires not only growth but also sustainability – and here we benefit particularly from Fabasoft. We were able to generate a significant increase in revenues because, among other things, we redeveloped our software in the PROCECO ecosystem based on the multi-certified Fabasoft Cloud. We would never have achieved that on our own.
What advice can you give ambitious entrepreneurs from your experience?
Matthias Kraus: Do not wait too long to enter into a strategic partnership. Only with the expertise and "infrastructure" of a strong partner it is possible to quickly reach a higher level and jointly create new leaps in development and expansion. This results in mutual benefits: Scale-ups can advance their ideas on all lines through cooperation and achieve great economic success. Established companies have the opportunity to increase their innovative strength and secure their future capabilities. Ecosystems such as Fabasoft PROCECO lead to decisive competitive advantages for all partners due to the different, selected, powerful solutions and the complementary resources. And we have been enjoying these advantages since 2019 as part of the Fabasoft Group.
[1] Start-ups are young, not yet established companies with an innovative, growth-oriented business model. Scale-ups are companies that record at least 20 percent sales and personnel growth per year over a period of three years.
