Claas Kauenhowen - xchange.eco

Welcome to another Founder Wisdom Podcast. We have Klaus, uh, Kohenhauwen with us today. Klaus is the co-founder at, uh, Xchange. Uh, I had his co-founder the other day. He's also founder at XCamp, uh, One Health in Berlin, Germany. Uh, term sheet signed, joiner SPV, building the future of AI is the LinkedIn headline. So let's dive into this. Klaus, welcome to the pod. Tell us a bit more about yourself and what you've been up to.

Thank you for having me, Charles. Good to be here. Um, yeah, well, we are, we are building, um, basically an infrastructure for something that's called Web 4.0, the Symbiotic Web. And in a nutshell, imagine that we are all connected on data level and operationally within a given context. And XCamp is one of our startup verticals that we built based on our deep tech, and it's basically a startup ecosystem. It's a place where founders are supported to being built through an operating system, a navigation system, and then through a crowd of mentors who can support you by receiving virtual shares for their work. And of course, we are building KPIs for the investors then to lean back and, uh, watch the startups grow based on real data instead of watching pitch decks and evaluating possibilities.

Nice. And before that, you were a professional kite surfer.

Back in the days. So the stream is just until here. So back in the days, I was a professional windsurfer and kitesurfer. Not that fit anymore, but still going out when it's really windy and yeah, when I have the time to enjoy some waves.

How did you discover that sport? And is it mostly about adrenaline? Does that fit on like why you're starting these companies as well? I mean, Mark Zuckerberg was on that, I think. Founder of Oracle to some degrees, if I remember well. Tell me a bit more.

Yeah, uh, you know, I was— back when I was a professional and studied, uh, business and economics, I did an internship in Cape Town, um, years ago. Well, many years ago. And I had the pleasure to go as much windsurfing as the forecast and wind permitted. Um, and on the other hand, I was through its internship learning how to build startup. And, you know, I had this fascination in, in water sports and in building startups. You have to have a certain kind of resilience. You have to get to the state where things fall together, you know, things have to align. And whether this is on water or in the startup environment, I really enjoy that, you know, to see what's coming, how I can, how I can ride this wave and hopefully, uh, not having it break on me.

And what startup wave are you riding right now? What market wave are you riding?

You know, there's, there's, um, there's a whole, a whole big conversation around what's happening after, um, agentic AI. What is it actually, and where's the boundary of it? And if you look into, um, something that we call in Europe Web 4.0, And in, in the US, it's called the symbiotic web. That is basically thinking, how can, how can AI support us in being almost like in a digital twin on relationship level, connected online as we are offline? And, uh, this, this is, it's not even a problem-solution question. It's more like an innovation upgrade on how we use the internet. We are building an operating system as an infrastructure for that. It may sound complex, it is, it is not really once you have wrapped your head around it in terms of what becomes possible if you don't think, um, solution as in my solution, your solution, but if we think collaboration, if we think that we can co-create on data level operationally, again, in the given context that we are operating in, can be an industry can be, uh, as for example, you know, joint— jointly building a startup. So how can I do this with strangers? That is the most fascinating question. How can strangers support me that I don't even know?

So what, what are you building exactly at the Exchange?

From— at Exchange, we are, we are building the core technology, the infrastructure, and from that, with that, we are building industry vertical startups standalone in direct investment like startup M&A succession. Uh, in health, we are having a, we're having a very, um, promising startup in the direction of femtech, menopause. Um, and we are, we are always starting with, with a little niche, and when once this is adopted, we are growing the use case, you know, in a copy and paste kind of style, bit by bit.

And are you like a venture studio? You said that you closed the term sheet and you talked about the SPV, so Yeah, what part is investing, what part is actually you doing, and what part is, uh, collaborative, uh, venture studio?

Yeah, yeah, we are, we are in a way, um, very untraditional when it comes to, to being a startup building other startups. So I could answer yes, we are a startup studio, but then I must say no, we are not, because we are only building the startups that are based on our technology. Um, and then yes, we are raising, uh, quite a substantial amount of money, at least for, for the current times we are in, because we also co-invest into the verticals we are building, which have unique founding teams, usually a cooperation with a, um, with a corporate partner, an expert partner. And therefore, we are building the startup, co-building the startup, we are co-investing in the startup, but it has to be built on our technology for us to make, to make sense.

So Tell me about a couple of founders that you attracted so far. What kind of profiles are you looking for?

We're looking for domain experts. They do not need to be digital founders as we, you know, as we all aspire to find. They need to be domain experts. If you are not able to build a digital product for us, it doesn't matter because in a way, you as a founder, as an expert for what you want to build, are the, the first proof point. If we can translate our technology to a front-end solution, to a use case solution that the founder is actually able to use for his or her own traditional business, then they transition and go full digital and basically market what they have built as a solution within their industry. And, um, what we, what we need from the founders to step away from this thought of, I have a, you know, I— there's a problem, I create a solution. For us, now our thinking is really, once you understood the deep tech and collaboration and what it is to be connected operationally on a data level, what, what happens then in your industry? How would that look different? If you as a, as a potential founder are interested and intrigued in that thought, then that's the point where we want to go into conversations. And we have One I cannot disclose yet, but, um, basically, basically that, that person felt so limited in traditional startup building and traditional technology, seeing that the technology, um, is more than ripe to, to kind of break down the, the traditional barriers of starting up, um, which are fine, of course. You need, you need to protect your IP, you need to protect, uh, protect, uh, or to, to win the race and building and scaling. But he understood how in his industry, in his field, if he would open that up, the potential becomes manifold. And that is something we look for. We look for people who kind of on a systemic level rethink the narrative as we do.

Right. And what's— so how much have you deployed so far? How much have you raised? Give us a bit more about like financial statistics here.

Yeah, um, no, on the financial side, I cannot, I cannot disclose based on the contracts we are in on the, on the founding round we are in because there are some investors aligned that do not want to be public. But we are in a traditional seed round and we are raising in the first step around €7.5 million, but more than that I cannot disclose. I can say the, the term sheet is signed and it's, it's a good, it's a good and interesting group of, uh, investors. Um, no VCs, but the, the more in the direction of LPs. It's again more of the people who understand that, um, or who want to understand the future of, of, uh, our technologies, also in terms of, of investment opportunities, let me say it like this, right?

And the startups that I see, right, I have XCamp and there's OneLife and there's Next NextGen, right? Is that like what you're— what you started?

Yeah, yeah, it's basically— there are 3 startups in the Direct X Games, our startup ecosystem that is also catering for M&A and succession. OneLife— in OneLife, the startup Menolife is positioned, which is for femtech and menopause. And then the next generation, there's one startup in that cluster that is also already on the market, and it basically rethinking how— that's what I'm specifically rethinking— how our children need to be educated on the inside in terms of awareness, in terms of knowing themselves in order to be able to perform in school and, uh, yeah, not burn out or being totally overwhelmed there, which is a cool concept. And we, we found them as an NGO, and we are now building the for-profit side, uh, also with a digital product. They are more analog traditionally. And, um, yeah, that's, that's our 3 main startups at the moment, more in the making. Something in defense I cannot talk about yet either, but, um, you know, NDAs suck, but I can't. That's going to be also very interesting.

In defense in Europe, or—

yeah, in Europe.

Yeah, interesting.

It's of course one of the hottest also investment topics for, for many investors. Of course, no one likes it, but it is, how to say, one of our business angels is more deeply rooted in defense, and his approach in combination with another founder that we are talking to could be very interesting when it comes down to our deep technology.

And how do you treat GTM for your, your port calls? What's your best strategies to help them grow fast.

Yeah, um, we, we take— we always say on the, on the deep tech side and exchange, it is okay to, to, um, you know, to experiment and to find the right solution. On the startup level, not so much. There we follow a very, a very clear trajectory of growth, and we are very, very strict on proof points as well. And we don't— how to say— we don't We don't betray ourselves. There's no, no fairy dust when it comes to the industry verticals. And our main approach though is to find a founder expert in that domain, either with an own business, or we have a co-partner, like a pilot partner, who is in that industry before we start building so that we build it together with the industry. That is one of our main um, how do you call this, uh, that's the must-have that we, that we want when we are, when we are building a startup. And then from that nucleus, um, we always build in a multi-stakeholder thinking. That means if there are different stakeholder groups, we build basically companion apps for them. And based, based on the first traction, we widen that in, in, uh, in terms of feature sets, but also in terms of more stakeholder groups adding to the ecosystem.

And how do these collaborate together? Do your founders talk with one another? Like, how can they contribute to the ecosystem?

Um, well, every founder is representing a different theme, a different topic. Like, the, the health founder is different from the education founder. They all benefit from us evolving the deep tech but, um, you know, they know each other but they don't have any operational ties. So they support each other on a personal level, but those ecosystem cases are not interlinked.

That's maybe the concept of, uh, equal exchange. Is it, um, newish? Have you seen reproduced elsewhere? Where did the idea come about?

Well, what we haven't seen yet is another startup that is building the deep tech and deploying it through own startups. And we have called, well, very ambitious, too crazy to do it like this. In our mind, building industry verticals is the way to prove the deep tech, for one thing. And the other thing is that we of course are building up market barriers already if the startups succeed, although we always there also think collaborative. So anyone who would like to join the ecosystem with their own technology, we would do this. And through that, it's— it could potentially become something like, like a maker market, right? So if you have an app, if you want to come on board and be connected to the, to the Deep Tech, um, AI brain, then yes, then, you know, be on board, come on board. So it's, uh, it's, uh, it's not very traditional how we, how we do it. And we have seen first approaches of our technology approach, um, in you know, different points of the world, but that's probably like 3 startups where we see, okay, this is very similar thinking. Um, I mean, I, I believe though in 12 months we will definitely have bigger competitors. So for us, the race is on.

And in Europe In Europe, tell me about like the current state of venture capitalism via startups. I feel that we're— yeah, that the numbers were kind of slow, but they're sort of picking up with new startups like Lovable, right? Like, do founders get much more funding nowadays? Is that improving via the US?

I mean, you know, being in the middle of I mean, major world crisis is causing in Germany, and I think all over the world, kind of a, you know, the handbrake is still on. You know, it's not, it's not really easy flowing. Um, for, for us as a deep tech startup, meeting the right investors in Germany is difficult for sure, especially when you don't come from a traditional problem-solution thinking and go into an innovation level thinking. Um, we, we have a lot more positive conversations, definitely, in the United States. Um, what we are doing is to, to basically, um, how to say, go to the investors, is that we are building up SPVs per country. Um, and this is possible because we work with a family office in London that are basically having that business model around that. Who are really, really supportive and open their network and doors. For us, it is important to, um, how to say, to really find the right investors at the beginning. And we want strategic thinkers as investors. So we want either them to have been in contact with the use cases personally, to commit to, to the, for example, to the startup ecosystem, to use it themselves And through this, we are right now in a very, very cool conversation in the UAE with an investor. It's basically a conglomerate of investors who will become the pilot partners, at least on that level of investment. And, uh, that is, that is more the relationship building that we are focusing at the moment. So funding, definitely big issue. Tickets are not, not, you know, term sheets are not easy to get at the moment. The wars are in the way. Even our family office contact, when you talk about club deals, are a bit frustrated at the moment. I think it's gettable. And on top of that, the culture in Germany is, uh, I would say, rather coming from a, um, you know, safety-thinking mindset, um, very traction-based. And when we go overseas, we find an easier approach to innovation. Based thinking. But no, no judgment. I understand, you know, both sides very well. And, you know, in our industry verticals, we invite the traditional VCs to join because we can basically match their requirements also in terms of traction. But if you want to go, you know, on the deep tech, on the IP side, then what you need to do is to be really come on board to our, to our story and understand the narrative. Before judging. And that, that is always a great conversation to find people and investors to open their minds to something that is, um, maybe futuristic until you understand it well, right?

Yeah, I don't think collaboration is futuristic. It's actually, yeah, the— how most startups are gonna survive AGI, right? Like, what are your thesis about, um, AGI and what skills will survive, uh, super intelligence, what human skills that is.

You know, that is, that is how to say, um, as I'm not the tech guy, I'm the business guy, um, the answer is, um, is, uh, from a business perspective, probably, probably a little bit, how to say, boring, but If you can save money in some company, you know, that's what's going to happen. People are going to use the tech. If you can widen opportunity, that's what's going to happen. People are going to use the tech. For us, or for me, the question is, okay, but if you cannot protect your business well because technology is basically taking over your business model, then what's going to happen then? And there I see, and it's happening in the industries for years, It actually started probably over 15 years ago that you talked about that we need to break down the silos. That was a big thing in Europe. And at some point they understood, no, silos cannot be broken down. Silos are safety for the people in it, so you will not break it down. So I think it's the shift of how we work and how we use technology is going to be immense. That's inside of a company and in an economy. I do believe that collaboration is, uh, at the collaboration economy is gonna be the shift that's coming up in the next 10 to 15 years, which is also disrupting traditional business models. Um, you know, it's gonna, it's gonna go from being a company, um, to being a conglomerate of companies working. Hey, Jose, nice! Working, working on projects together, having a collective economic stream where also distribution of value may look different. And for that, or that you can foresee it if you look at, at production value chains, right? Companies work together there in a very traditional way. But what if you go to the service industry? What if, if there's going to be a mix of services happening? You, you could see, you could also say in the open source or in the, in the DAO theorem that has been seen, but What if you adopt this thinking to, to real-world scenarios? And I think that's going to be the— or the potential is there to be a very big economic shift. Also, I believe that in the future everything we do will be an asset. It's going to be in some form a token and a value. And I welcome that because I think it's a great shift in terms of prosperity for an economy or a company if you could or if you would measure value and contribution on market level but on individual market level. And this is, this is going to be very interesting.

What's next for you? What are your main goals for this year?

Um, well, definitely fundraising above all. Um, I do look forward though, I'm seeing, um, projects lining up that would actually put us in the spotlight internationally. Where we can really go out and showcase the great technology in action that we have built. And that's, that's, uh, how to say, I think this is a very important milestone for any founder to actually see, you know, years of building up and working, and then you see how it goes into fruition on the market. And that's those go-to-market scenarios and those big partnerships that are lining up at the moment. I'm looking really, really forward to that this year.

What are your tips for partnerships when you reach out cold? How do you identify the right partnerships and what's your offer/language when you speak to them?

From my, from my not only experience but attitude is never bullshit the other one. Never, never overpromise. Really come in with the idea of a synergy, the idea of I have a value that you need to have. But you need really to, to be careful that you really address a sweet spot. You know, if you don't have a value, then don't propose that you do. So be really clear about what you're offering in the partnership, and also be clear on the business model— what would be a fair, fair business model when you're going to partnership. I think those, those two things are, are very important. Almost like, allow yourself for a little bit to, to step into their shoes and You know, keep, keep thinking that partnership over the next phase, you know, months, years, how should it look like and why should it remain valuable? That's how, how I go about it. And I, I also pitch it like that, you know. It's, it's, uh, for me, having the economic conversation about, you know, how much is it and what does it cost and what does it bring, um, what does it bring us first? Oh, your microphone is off.

Klaus, thanks for being connected, uh, today. Where can people find out more about you and Xchange?

Um, well, if you go to our website, xchange.eco, um, first glimpse, and please contact me on LinkedIn, get in touch. I'm happy to, to find anyone who wants to collaborate, of course fund us or who has an idea of where collaboration would make sense in the world, we're happy to look at it.

Alles klar. And Charles, for another founder