On July 23rd (GMT+8), InnoKOL had a fascinating conversation with Mr. Lorenz Wagener, who is the famous Founder, Investor & Advisor, talking about his unique working experience as a successful serial entrepreneur & investor and the deep insights on the opportunities & challenges of self-storage facing today.
Jokia: How would you describe yourself in three words? What’s your motto?
I'd say self-motivated, compassionate and flexible.
My motto would be "everything has beauty, but not everybody sees it'.
Jokia: Can you please share more about your educational and professional background? And we’d love to hear what brought you to be an entrepreneur and investor.
So my background is in marketing. have a business diploma, and after graduation in 1999, I worked two years in the marketing team of a German stock broker, called Consors.
Then I moved to Shanghai and worked two years with COL | China Online, an IT solution provider. Then in 2004, I co-founded a creative production studio in Shanghai, called Rimagine. I ran that till 2012, when I sold it for cash/shares to a large, stock-listed packaging group from Taiwan, called YFYJupiter.
I left in 2017, did a creative break of multiple months, and then co-founded Vietnam's first self-storage business. a fundamentally different business as what I did before! Running a creative studio in China is tough. the need variety is huge. the product you create is highly subjective. I was looking for an entirely different pond to jump into. something with better fundamentals. And luckily, I had a friend in SH who became my partner and sort of early mentor. I learned a lot from him.
Besides running companies, I love investing. investing in other entrepreneurs, in companies, in stocks, etc. This has always been my passion, and I have now 6x investments in different companies and mainly act as a silent but active partner for those.
Jokia: Some of the figures in your resume are particularly prominent especially the start-ups you founded. Could you share 1-2 typical cases on how to be a successful serial entrepreneur?
So first off, I think key is not to first find a problem in the market. Many entrepreneurs I speak to first create a new tech, and then they look for a problem they can solve with it. It should be the other way around. Put the customer group you really know well at the center of what you are doing, and deeply understand what keeps them up at night. This is prior 1. And if you don't know this, make it your prior 1 to figure out what their prior 1 is.
Further, focus less on the idea, but more on the execution. Starbucks did not invent anything new; they just executed the way of selling coffee in a different way. The "path" is long and hard, you need to have a lot of passion and grit, to go through many valleys. Only if you really really like the space you are in, and the people in it, you'll do well. but it really takes time.
Jokia: As a mechanism for fostering growth and increasing shareholder value, M&A is an important tool in a company’s armoury. Cross-border M&A in particular can be a useful springboard for those eyeing expansion and future prosperity. What’s your opinion upon the risks and rewards of engaging in ventures against making greenfield investments will companies need to weigh as cross-border deal activity continues?
My personal experience is: M&A is really tough. 70-80% post-merger integrations fail. aligning company cultures is just not easy. several real-life examples: When the company I worked for first, Consors, was acquired by BNP, we all felt a certain sugar-high, but reality soon hit us. hard. completely different of managing things. most people I know moved on.
When I sold my company, it was actually pretty good, but for a certain reason. there was no "physical merger", or "physical change" of the environment. what I mean by that is that after the merger, we all kept on doing what we were doing. there was not "combining offices", new managers, etc.
This can make things a LOT easier. once you for example physically merge two teams in two locations into ONE, that's when things get more complicated quickly. it takes a lot of experience of the acquirer's post-merger team to guide this entire process.
Lot of attention and resources are needed to be deployed, and it takes easily 12-24mo to really incorporate the new team into the existing organization.
Jokia: We’ve noticed that you greatly enjoy helping/coaching young leaders to run their operations, what’s your benchmark to select the promising projects? Could you give some advice for start-ups?
I'd say it's 50% about the entrepreneur/team, and 50% about the idea. One does not go without the other. both are key.
I typically trust my intuition. But knowing that I am not the sharpest tool in the tool shop, I am trying to 'triangulate' a lot. get the input from others. Put the team in front of some co-investors, see how they click. By this, I get super valuable insights, and that's when I made my best investment decisions in the past.
The founders need to have a very clear image in their mind of what they want to build.In all facets and details. Essentially, they are 'imake makers’. They need to be able to clearly articulate what they want to build, and have a product that people can understand. It should take not more than 30sec to explain what problem their product is solving on the market.
Jokia: PE in Asia has been shifting from the traditional firm to single or multifamily offices who do a variety of activities from investing across largely different cheque sizes (from angel to in-house hedge funds), to tax optimization. What is the future of private equity from your perspective?
I only have a limited view into the entire PE space. I never worked in PE, and I know it more from the money 'receiving' side of things. I believe money is currently abundant. China now has more than 130x unicorns. compare that with 4x Germany. that's just nuts. I think investors, regardless if VCs, PEs, etc., are sitting on large amounts of cash they want to deploy, hence it's important for entrepreneurs to "speak their language", have the required docs ready, put the right company structure in place, etc.
I believe DAOs will play a more important role going forward. What I mean by that are not fully incorporated investment vehicles, but decentralized organizations that pool funds together, and jointly govern and decide how to invest the funds.
Jokia: Self-storage has proven itself to be a solid investment that can weather COVID-19 not only for 2021 but beyond that too. What’s the opportunities and challenges self-storage facing today? What’s KingKho’s strategy of market expansion in self-storage industry?
We are still very early in self-storage in Vietnam. Almost too early, but I greatly believe in the country and the people. Self-storage is essentially a property play, in which you buy the underlying properties, and then you build an operational business on top. it's very money intensive, and similar to China, foreign entities cannot outright own the land, but just obtain the land use right. The saying goes "in self-storage, the biggest challenge is finding and buying the right property", and I experience that currently first-hand. we are looking for suitable sites since 1,5years, it's just hear-tearingly challenging.
Vietnam has 98 people, with the two major cities, Hanoi and Ho Chi Minh (or Saigon) both having +10 Mio people. we like to have 4x facilities in each. So far, we have one in Hanoi, hence 7x more to go. At a later stage my 2nd tier cities like Da Nang, but not before 2025.