startup slump

No Risk, No Gain

GERMANY - JANUARY 01: Industrialist Alfred Krupp (1812-1887), founder of the Krupp Dynasty, in riding dress. Canvas by Julius Gruen. (Photo by Imagno/Getty Images) [Alfred Krupp, im Reitergewand. Gemaelde von Julius Gruen.]
Industrialist Alfred Krupp (1812-1887), an early advocate of the motto, "Think big."
  • Why it matters

    Why it matters

    German companies used to dominate many industries, but most innovations today come from the United States.

  • Facts


    • SAP was founded in 1972, making it the last global player founded in Germany.
    • The number of startups in Germany is shrinking each year.
    • Industrial pioneers from Germany used bold strategies to become successful.
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When Dietmar Hopp first set foot in a chemical plant in 1972 it changed his life. All around him machines were spinning nylon fibers, to be made into fine nylon stockings, and they set Mr. Hopp’s head spinning – with business ideas.

Mr. Hopp, today an internet tycoon and founder of Germany’s youngest multinational success story, used to work for U.S. Internet firm IBM. It was a secure job but the young Mr. Hopp wanted more.

Again and again, the communication engineer programmed tailor-made software for German companies. But most firms wanted the exact same thing. Mr. Hopp, together with four of his colleagues at IBM, contemplated developing a standard program. After all, many other things in life were standardized. People weren’t getting their suits from a tailor anymore, they bought off the rack. So why was there no standard “off the rack” software that all companies could use?

The head of IT at the nylon factory liked the idea and allowed the programmers to work on their software after hours.

Just weeks later, Mr. Hopp and his companions founded their company, called Systemanalyse und Programmentwicklung, German for system analysis and program development. SAP was born, today a global player listed in Germany’s blue-chip DAX index, with more than 75,000 employees and sales totaling €20 billion per year.

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