Many startups aim to internationalise their business once they have established themselves on the German market. Zentral is taking exactly the opposite approach. With its software solution, the company has struck a chord particularly on the US market; now, from its base in Hamburg, it also wants to attract major clients here in Germany.
Zentral – it all began with international success
If you ask the founders of Zentral about the origins of their startup, they talk of a ‘party trick’. What they mean by this is that, in the beginning, there was merely an open-source project, but one with which they were able to make enough of an impression to secure consultancy contracts. Many software startups operate using this sort of trick. They make promises they can’t actually keep at that stage but are then quick and competent enough to fulfil their commitments.
The software expert at Zentral is the Frenchman Éric Falconnier, who, as he himself puts it, ended up ‘stranded’ in Hamburg at some point. After studying engineering with a specialisation in telecommunications, he spent years working at an online bookshop that was intended to be an alternative to Amazon. His friend Henry Stamerjohann encouraged him to delve deeper into Apple’s Mac ecosystem and software development, which led to the open-source project mentioned earlier. At the time, Henry was still working for the Hamburg-based Apple specialist Apfelwerk. Together, the two founded Zentral and ran it es an IT consultancy for several years.
From friends to founders
One day, Eric told his mate Johannes Schüller about this. The two of them used to meet regularly in a mysterious pub in St. Pauli. Johannes had originally studied business administration and dreamt of a career as a music producer. To a certain extent, he has fulfilled that dream. For nine years, he was part of the cultural takeover of Hamburg’s Gängeviertel district through the collective ‘Komm in die Gänge’. During that time, he also co-founded the techno club Moloch. After five years, it was in need of refurbishment, and when the pandemic then broke out, the lights went out there for good. On the side, he also ran a corn schnapps startup. So, he had already demonstrated his entrepreneurial spirit on several occasions, but the world of IT was uncharted territory for him.
However, the open-source project and the response to it seemed so promising that the three decided to transform Zentral into a software-as-a-service company. By spring 2022, the time had come. What they all lacked was sales experience. They underestimated the effort involved in acquiring new customers. To make matters worse, they temporarily lost one of their two existing consultancy clients. For almost two years, the remaining client was their sole source of income. These teething problems ultimately led to Henry’s decision to change direction.
Zentral is for IT nerds
The initial difficulties with sales stem from the fact that Zentral’s software product is a rather complex affair. According to its own description, Zentral “helps IT teams to quickly transition into GitOps-driven device management.” This is followed by a series of other technical terms that only computer nerds can really make sense of. Take GitOps, for example: this is a system designed to automate the process of deploying IT infrastructure – particularly modern cloud infrastructure – as far as possible. It is based on Git, a freely available software for distributed version control of files. And a version control system is a tool for logging changes to files, which makes it possible to revert to earlier versions.
Another technical term used in connection with Zentral is MDM (Mobile Device Management), which makes the concept a little easier to understand. It describes a solution that enables companies to centrally manage, secure and configure smartphones, tablets and laptops. This allows security policies to be enforced and company data to be remotely wiped. To put it even more simply: Zentral offers a kind of control centre – hence the startup’s name – which enables access to a company’s IT devices.
The US is the most important market
The next sales challenge is that the solution only really pays off for companies with several thousand employees. The target audience is therefore relatively narrow, and corporations of this size are not always known for flexibility and quick decision-making. However, some sectors, such as the financial sector or the pharmaceutical industry, which must be particularly sensitive when handling data, have an urgent need for a solution like Zentral’s. Trust and confidentiality are key factors for the startup’s success, which is why the founders do not disclose the names of their clients and describe their number as ‘a handful’ without giving a more precise figure. By the way, the consultancy client that had previously pulled out is now back on board.
One thing is certain, however: none of the companies that place their trust in Zentral are based in Germany. Yet another factor that does not exactly make sales any easier. This is because the Hamburg-based firm specialises in the Apple world, whereas Microsoft dominates the software and operating systems market here in Germany. The situation is different in the US, the UK and a number of other European countries. Zentral is focusing increasingly on the latter markets, as it is the only company in Europe in its field and thus offers an alternative to American providers. Reducing dependence on them is a frequently stated objective.
There is therefore justified hope that Zentral will soon be able to secure its first German customer. And it will do so with software that, bucking the trend, manages entirely without artificial intelligence, even though AI is certainly used in its development. For a team consisting of just four people in total, such a tool is particularly useful, but in order to really grow, the company is looking for experienced professionals in the fields of sales and software.
They would be reinforcing a company that has so far kept a low public profile – a sort of ‘hidden champion’, in other words. This is reflected in the office, which is located in a basement. Zentral has grown entirely without grants or investment capital and has only loose ties to Hamburg’s startup scene. The ecosystem in which it operates is otherwise firmly in American hands. That doesn’t mean the founders don’t appreciate Hamburg. Johannes grew up here and Éric has made this his adopted home. In principle, a software startup can be set up anywhere in the world. But it’s best to do so in a city where the quality of life is particularly high.