Interview“It’s not the end of the world”

Seite: 2 von 3

„Yes, there will be failure“

But still the evaluations are very high. During the last ups and downs we did not talk about he “Unicorn effect”. What it the reason for this? Is there too much money out there?

That’s the only reason. We have $100 billion a year chasing venture capital, that’s why we get those kinds of deals.  But the unicorn effect has been overrated. Because the risk is not to the investors, but to the people who took the money. Most investors put massive down cycle tension in the terms and conditions so that if another round of money is raised, their percentage ownership is automatically protected. Which means that the people who took the money are going to have their share deeply compressed. A lot of CEOs didn’t think through what might happen if there was a significant correction.  

So we will see tears and blood?

Yes, there will be blood in the water. Yes, there will be failure, but at the end of the day, ask me how many of the 140 unicorns will be public companies that are worth more than $10 billion? A pretty good number. The top ten club is $300 billion, so if one of them makes it into that then the investors have won.

What are your favorite unicorns?

Do you have children?


Which one do you like better? …… See, I will not answer this question. You know, me and my partners used to sit around, having a beer and I’d ask the question: “If tomorrow you decided you’d retire and you could pick one company of the portfolio for your package – which one would you take?  We wouldn’t have been right most of the time. Because things are too dynamic.  They change rapidly.

„There are very few unicorns in Germany“

Will we see more unicorns in Europe in the future?

I’m deeply distressed by what’s going on in Europe and more distressed than anywhere else about Germany.


There are very few unicorns in Germany.  Look at the top 50 internet companies in the world.  Germany is number four in global GDP and was a key player in the industrial revolution and the globalization.  But it’s not present in the information age.  Why? There are two reasons. First, the Europeans and especially the Germans do not take enough risk. The EU graduates more STEM (Science, Technology ,Engineering and Math) than the US by a fairly large number.  Germany has a higher percentage of graduates in stem engineering than America, but when it comes to taking risk and building start-ups, their thinking is locally instead of ‘I want to go and build a Google or Facebook’. You’re not going into the number of experiments you need to be running. You need a culture that says “It’s okay to fail”.

What can we learn from the US?

Most of our companys in Silicon Valley fail. So what? We would close that company on Friday and by next Monday, 80% of them will have a new job. Because everybody who has needs for engineers sends out emails, interviews are going on over the weekend, and 80% will work in a new company. Most of those people are probably still under the same carpool.  

And the other 20%?

They’re start-up people and so they can take a couple of weeks off to decide what they’re going to do. We’ve got 50,000 open jobs in Silicon Valley for STEM engineers.

What else does Europe need? More money from investors?

I have attended many conferences in Germany and there is always a panel about the EU government.  Last time I asked: „Guys, I’ve been here for 12 years.  I can’t do this panel anymore. You’ve either got to do something about it or stop talking about it.“ When Rudolph Giuliani ran for president in 2008, they came to Silicon Valley and asked: “If I’m elected president, what would you like me to do?” And we told him two things, “On your first day in office, we want you to get rid of Sarbanes-Oxley”. Sarbanes-Oxley is a very punitive law that does not apply to start-ups. He said, “Okay, what’s the second thing I should do?”  We said, “Don’t do anything and promise never to come back.” We think the government cannot help us, and by trying to put in policies, all they do is slow us down. What the EU government does to European start-ups is it slows them down.  A start-up can run faster and make decisions quicker than other companies. If one of the decisions involves a lot of government rules and red tapes, you are going to have a higher failure percentage of the already smaller number of start-ups that you have.