Raue: "The whole trend towards sustainability is not straightforward"

Raue: "The whole trend towards sustainability is not straigh...

Esade Entrepreneurship Institute

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eWorks is the Esade venture creation program; it provides a series of activities and services designed to foster and support new venture creation by Esade students and recent graduates.

The Esade Doers podcast series, led by eWorks manager Davide Rovera, focus on entrepreneurs from the eWorks Community who present their startups and share experiences, learnings, sources of inspiration and tips with fellow entrepreneurs.

Today, we can learn from Joscha Raue, an Esade graduate who cofounded Think-it, a software engineering collective on a mission to unlock human potential through sustainable use of technology, with a focus in North Africa.

Esade Doers podcast series with Joscha Raue

Davide Rovera: Welcome to the Esade Do Better podcast about entrepreneurs and innovators. Our guest today is Joscha Raue – thank you so much for taking the time to join us.

Joscha Raue: Hi David, and thank you for having me, it’s a pleasure to be here.

Davide Rovera: Joscha, you are the cofounder of a company called Think-it. Can you tell us in just 30 seconds what the company does?

Joscha Raue: Think-it is a global software engineering collective on a mission to unlock human potential with technology. That means we closely integrate with high-growth startups and corporate teams to build cloud data infrastructure and AI solutions that contribute to a more sustainable future. We also foster a more inclusive and diverse tech community by investing in digital talent across the African continent and providing job and growth opportunities – currently with a focus on North Africa.

Davide Rovera: Okay, fantastic. That’s a lot of information, let’s unpack it in a moment, but first let’s go back a few steps and hear your story. What motivated you to become an entrepreneur. Was it something you always wanted and how did it happen?

Joscha Raue: I was talking about this with a friend yesterday. I did not see myself as an entrepreneur when I was younger or even in my early 20s. However, I did start an event-organising company when I was 17 to finance my studies. I didn’t really see this as entrepreneurship – and then I got into something called Enactus which is a student initiative supporting social missions with an entrepreneurial approach. I later started imagining where I could see myself in the future and startups was an industry where I felt really comfortable with the people. I applied to Esade for the master’s in management degree course, but during the conversation with the recruiter, she said to me: ‘Hey, everything great, but you definitely are much better suited for our entrepreneurship programme’. I was thinking ‘can you really learn entrepreneurship’ and I had my doubts. She said come and talk to some people on the course, and that was really a game changer for me. I decided to do MIE instead of MIM. That set me on a different path.

During my time at Esade, my enterprising spirit was sparked. But even then, I didn’t think of myself starting a company straight out of university. I thought I would work at the forefront of technology and at some point, I would use the privilege of having grown up in Germany and having access to a lot of opportunities. And I would use that privilege to solve some of the bigger problems that we are facing as a society and as a planet.

And then when I was in my last semester at Esade, in CEMS, my cofounder approached me and said that an idea we were working on needed someone who can really give it some entrepreneurial input. I said ‘okay it feels like the right thing to do, so let’s give it a try and start it over the summer as a venture project’. That was 2017 and now it’s four and a half years later and we are still at it.

Joscha Raue

Davide Rovera: So you are working at your very first startup after university. You went straight into Think-it and here you are now. Did you know the other co-founder before and did you already know you wanted to do something?

Joscha Raue: I have known Mehemed, the other cofounder, for more than a decade. We both worked together in this Enactus initiative and basically led a team in Cologne back then. So we worked together before we became friends, and because we connected over a lot of shared values, he approached me and said he was working on the business part of his masters regarding employment and education in Africa and had a really rich set of data – and he believed that an approach could work there.

Our third cofounder, Amel, met Mehemed in New York when they were studying there. I did not meet Amel in person until we had been working together for six months.

Davide Rovera: Okay.

Joscha Raue: When we started working together they were both based in New York, and I was in Santiago in Chile finishing my studies. We worked together for 4-5 months and then we say okay, let’s relocate to Tunisia to test the approach and see if it works. And at the airport I met her in person for first time.

Davide Rovera: So your beginnings really were remote-first! What was the original pitch that Mehemed gave you.

Joscha Raue: In the very early days we thought of a platform to connect talent from the global south with job opportunities in the northern developed economies. When we started in 2017, we knew that a very big part of the young population is educated in mathematics and computing and data science. How could we find a way to connect them with job opportunities in the States and the UK? We had an approach like a Q-rated platform and you can think of it as a top tower with an additional physical space where people meet. And we also have learning programmes to help bridge the gap between what people know and what they need to know to be internationally competitive. That was the initial concept. We won a couple of innovation prizes that gave us the money to go to Tunis and start piloting it.

Davide Rovera: So initial financing came from a couple of innovation prizes – did you also find some external investors? Or did you as founders invest in the company?

Joscha Raue: The two innovation grants helped in the beginning. But it wasn’t much money. However, we started generating revenues from day one, although they were not sufficient to finance us. We had a learning programme that helped people work remotely and internationally, and we started plenty of initial projects to generate revenues.

We also put in some of our own money, I think it was some €6,000, but this was more to finance our own living expenses as we didn’t pay ourselves salaries. After one year – in October-November 2018 – we closed our first financing round with six business angels and an accelerator programme. And then a little more than a year later, we took another bridging finance convertible note. Overall, our external financing now amounts to €400,000.

Davide Rovera: And then the rest is revenue driven?

Joscha Raue: Exactly. It’s now well over €3 million in revenues that we have reinvested in the company.

Davide Rovera: Well, okay, congrats. Let’s look at the model. Basically it’s a platform where you get tech talent from mostly northern African countries and then get contracts from European or North American companies. How did you go about finding the people on both sides? How did you find the contracting companies, and how did you find the initial candidates?

Joscha Raue: We started with the talent side. We wanted to first validate three to four core hypotheses. Could we identify really smart people and attract them? Could we get them to a level where they are internationally competitive? Could we get customers to trust us? And would those customers be satisfied with our service after the first couple of months?

We started with the talent, and that meant visiting the main coworking spaces and connecting with people. Amel is Tunisian so she has a network in Tunis. We launched a Facebook campaign with a couple of hundred euros and we reached 50,000 people. And so we started with our first cohort of ten engineers.

Davide Rovera: Was it more from the online or more from the offline network?

Joscha Raue: I would say half-half.

Davide Rovera: Okay.

Joscha Raue: But the strongest candidates were through offline referrals. And I think we just got lucky. The concept and the idea was something that everybody in Tunis liked and they said: ‘yes, that’s exactly what we need’. Some people also said: ‘it’s not going to work – but it’s exactly what we need.’ We were able to attract two or three engineers who were very well known in the ecosystem and who wanted to be part of this. And these engineers had a strong effect on how we proceeded as a company.

Davide Rovera: And what about the contracting companies on the other side?

Joscha Raue: The contracting companies in the beginning came through our personal networks. These were people who knew us from somewhere and said: ‘we are looking for talent, and we are not very happy with our current providers – so let’s test this approach’. Facundo – also from Esade – was working at a company in Berlin that needed some help. That is how we started with the first four or five customers in 2017.

Davide Rovera: Did you have difficulty explaining to companies that you are providing somebody who is remote and on a different continent – although in the same time zone as Europe?

Joscha Raue: That was definitely a worry for some organisations who said: ‘We don’t have the set up to support remote work. All our meetings are in person, and so if someone is joining virtually they might not get the full sense of a conversation, and they might not get much recognition’. We first needed to build trust, right? So, we said: ‘we usually start on a two-month test. If it doesn’t work, it doesn’t work. But trust us that we know what are doing’. And I think until this day, there has only been one case where the client said 'no, thanks' after a two month trial. All the others have said ‘you work really well and we want to do more’. Business has grown as we have built a reputation over the last four years. In addition, nobody now says: ‘we don’t work remotely.’

Davide Rovera: Other things being equal, the current situation has been positive because it helped people understand the model and also created more demand.

Joscha Raue: Exactly.

Davide Rovera: Fast forward from 2017 to now – how big is the company and how is your business doing?

Joscha Raue: The business is going very well – especially the last year or 18 months. We have a lot of repeat organic growth and a lot of inbound enquiries. Our team is now 55 strong – maybe a few more because every month there are three or so new people joining. We have grown quite a bit, and we have been profitable since Q2 last year. We are not requiring any external financing for now. This year we will probably grow our revenues by around 250% and this means there is no need for growth capital as faster growth would not be healthy for us. We are conscious about how we must achieve growth that is healthy and sustainable, and doesn’t dilute our culture and DNA as a team – which is really at the core of our value proposition. We moved away from the platform approach because we wanted our people to have full ownership of delivery as we are a high quality provider and we are handling many deeply technical projects. We didn’t want to be another platform where you just do the match-making. We self-identify as an engineering collective, or you could say a technology consulting company for cloud and AI solutions – and our sweet spot is working on solutions that create a more sustainable future. So, anything around climate action, learning, education, global health, and sustainable infrastructure is what we feel most comfortable with and is where we have built a reputation.

And then the second part is the learning side. We built this side up within the same company for the first three years – which was sometimes quite a struggle. Then we decided to open source everything that we have learnt over the past few years and reach wider audience. Eighteen months ago we started putting these learning activities into a non-profit organisation. This non-profit is now self-run and building a platform where some of our people are contributing as engineer mentors and where we can offer the learning experience to a much wider audience. We tell everyone that once you go through this you may still join Think-it and go through our very in-depth programme, or you might also want to join another company, or do something else, and that’s perfectly fine.

Davide Rovera: So you are providing this free resource to build an ecosystem. Which brings me to the next question: what are your plans for growth? You mentioned being interested in making a positive impact, which I think you are already doing, and that’s great. Your position is in north Africa which is part of a continent forecast to grow very much in the future, especially on the tech side. Do you have any plans for further expansion, beyond what you have already mentioned?

Joscha Raue: It might not look like we are going to open another office, but we are hiring people across the globe. Our team is now based in Tunis and Germany – and we have team members in Brazil, France, Egypt, the Netherlands, and soon in Italy and Bulgaria. Our team is quite spread out already, and we see that if we want to solve global problems, then we must work and collaborate across borders. We will grow the core engineering company, but we are also thinking about our ecosystem approach, because in the end we need to mobilise a lot of technical talent towards tech for good and sustainable solutions. We are uniquely well positioned because we understand both sides, we have a very good understanding of the non-profit space, what it means to build when not much financing is available, and how to leverage a non-profit and a for-profit mix to build the right hi-tech partnerships. We will see this ecosystem growing quickly. We expect to offer donor advice funds and small funds to pilot certain projects. We hope to use the talent coming out of our learning programmes – the people who are not joining Think-it – to form an expert pool of freelancers and we could become the employer of record for other organisations around the globe. Many startups are doing these kinds of things.

There are a lot of synergies created when we have an ecosystem where we share the core principles, beliefs, and core culture; the goal of blending tech and positive impact.

Davide Rovera: Fantastic, Joscha, this is amazing, I’m so happy to hear that somebody is using the startup mentality to make an impact and this whole tech for good movement is great. This may be the last question on this topic. Was offering ‘tech for good’ and providing services only if they have a positive impact something that you had in mind from the beginning? Or did you test the market early on and then decide to make a conscious shift?

Joscha Raue: Most, but not all, of our revenues are coming ‘tech for good’ projects, and we aim to always maintain a good balance. In an ideal case, a contract offers ground-breaking tech plus impact, or it might be ground-breaking tech but without a very clear positive impact – but at least not a negative impact. Those are the types of contracts that we are looking for. For example, we have a big project where we are building a cloud data ecosystem with BMW that is really helping the client reduce its carbon footprint – and those projects are great. We can help a lot of organisations move towards net carbon, and at the same time the solution is highly sophisticated from a technological perspective . If we are building a community or a collective of smart problem-solvers across the world, then what is our responsibility? We are drawn to credible and ethical projects. Such projects are not always the most profitable because a German corporate will always have more money than a small startup working on something related to impact. But we are always looking to find the right balance between purpose and profits. We must address climate change, we must solve these big problems, otherwise we are running into a situation that we cannot even imagine. This is really at the core of our responsibility as global citizens and entrepreneurs.

Davide Rovera: Absolutely agree. And again, thank you very much for taking such action. Let’s move to the last part of the interview where I’m going to ask you quick questions that need quick answers.

Joscha Raue: Sure.

Davide Rovera: So, first things first, what book are you currently reading?

Joscha Raue: I have just finished ‘Reimagining Capitalism in a World on Fire’ by Rebecca Henderson who is an MBA professor at Harvard, and basically puts the course that she has been teaching for a few years into this book. This is an interesting book with clear advice on what to do. I found it quite inspiring.

Davide Rovera: Great. What startup do you think is interesting to follow, of course, beyond yours?

Joscha Raue: One of our customers is very interesting. It is a firm in Paris called Pasqal. They make quantum computing accessible as a service through the cloud. We are building their entire cloud infrastructure with them and this really can be a gamechanger for democratising quantum computing. The firm raised the big cloud recently and we will hear a lot from them in the future.

Davide Rovera: Okay. You mentioned quantum computing. Are there any other interesting trends that you would recommend people thinking about starting a company should investigate?

Joscha Raue: Yes, there is something that is a trend and a wish from my side. The whole trend towards sustainability and clean tech has been around for a long time, but it’s not straightforward. When looking at what’s ahead of us, there will be more and more funds available and there will be more and more brain power as governments realise that something needs to happen. I think it’s a super interesting space to be part of from the responsibility perspective. It is the kind of area I would love to see more young people exploring. Although this might not be a very straightforward platform startup area.

Davide Rovera: Absolutely. Let’s close with a few more personal things. As an entrepreneur and a manager, is there any advice that you often give people but don’t really follow yourself?

Joscha Raue: That’s a good question and you are putting me on the spot there. I hope my team doesn’t hear this (laughs). One is being on time for meetings. Being punctual is a respectful thing to do, but I often also struggle and arrive two minutes late because I’m still finishing another call. So that’s something I’m also trying to improve. And the other thing I also sometimes struggle with is being aware of cognitive bias. This affects our behaviour and the decisions we make, and so being more aware will result in better decisions. But it’s also a really demanding thing to do. So, I often ask myself if I am doing things correctly. I don’t know.

Davide Rovera: Easier to see in others, than in yourself. That’s super important. Very last question. As an entrepreneur, what has been your biggest mistake?

Joscha Raue: My biggest mistake is also a source of key advice that I would give to any founder. Don’t become too emotionally attached to the company. What does that mean? I mean, it’s your baby – but that is not super healthy and sustainable because the company will go through crises and worse. I have been there, I have been super invested and working day in and day out. But that meant whenever the company was not doing well, I wasn’t doing well.

And it became a source of concern and stress for me that I was radiating – and this then affected our team. It led me to make poor decisions and cause many downstream mistakes. I had to find a way to handle this in a healthier manner and this was a really important lesson that I am so grateful for – also to my team for helping me deal with this problem.

Davide Rovera: Do you have a tip for how can people avoid that situation?

Joscha Raue: This starts with awareness that you are deriving your sense of self-worth from your business. For me, it was a process of realising that my friends, my family, and the people that I really care about, see me the same way whether I run Think-it or if Think-it runs into the wall. The business should not be so all consuming that you lose yourself in the process. So we have to find that sweet spot of being invested while realising that sometimes things will blow up and that’s okay. I’m not my company, I’m a human being, and in that I’m wonderful just like everybody else, and yes, there is a company, and this is what I do. And it takes a big of me part, but it’s not me. That awareness took a year for me to slowly acquire.

Davide Rovera: Super relevant message I think, even more so in the times we are currently living and considering the overall stressful situations that many people are experiencing.

Joscha Raue: Yes, definitely, and this is especially true for entrepreneurs. The levels of depression and mental stress for entrepreneurs are much higher than the rest of the population. There is a lot of courage and brain power that can really drive and change things, but if we are then getting sick during the process then nobody is helped.

Davide Rovera: Absolutely. You need to take care of yourself to be able to take care of others.

Joscha Raue: Exactly.

Davide Rovera: Joscha, thank you so much for sharing your inspiring story, for the contribution you are making to the future, and all the best moving forward.

Joscha Raue: Thank you very much David, for having me. Keep up the great work at Esade, so that there are more people coming out who want to do good and do better. It was a pleasure being here, and I wish you all the best.

Davide Rovera: Thank you, bye, bye.

Joscha Raue: Thank you, bye.

Davide Rovera: If you still want to learn more, remember, you can register on our platform dobetter.esade.edu. Now that was all for today, until next time, thank you. Do Better.

All written content is licensed under a Creative Commons Attribution 4.0 International license.