Interview with Rene Marius Köhler, founder of internetstores GmbH, currently minority shareholder and financial investor
Interview: Prof. Dr. Andreas Wiedemann in FUS, Edition 3/2017
Rene Köhler is regarded as one of the pioneers of eCommerce in Germany. His creation “internetstores” grew into a leading European online store for bikes and outdoor equipment. In our interview, Rene Köhler explains how he built his enterprise from the ground up and how to utilize the potential offered by eCommerce.
FuS: Mr. Köhler, you left school after 10th grade to join your parents’ bike business. You founded fahrrad.de in 2003 after selling bikes on eBay. What triggered the idea and what inspired you?
Rene Marius Köhler: I always wanted to be financially independent. I had also decided to combine my parents’ existing business with the internet, which was at the time just gaining impetus. I found the idea exciting to get feedback about my performance and commitment directly from the market and not from school. Above all, I could see plenty of success stories of other entrepreneurs all around me in Stuttgart.
FuS: What were the milestones in the development of your startup?
Köhler: The first and probably most important milestone was founding fahrrad.de on my own. Since I was the only stakeholder and therefore dependent on my own limited means and the cashflow from the business for five years, I had to find a way to become profitable right away. In terms of the products it was very important that I marketed store brands right from the start and concentrated on selling complete bikes. In terms of sales, I needed to expand to other countries as quickly as possible. Once the business model had proven to be robust, I started with acquisitions like Votec, a successful mountain bike brand, and Fixie, the inventor of the so-called single-speed bikes. FuS: When did you decide to sell your business and what were the main reasons for that decision?
Köhler: Selling the majority shareholding in internetstores followed the logic that I wanted to be financially independent. It really was by chance that my parents were in the bike business. I still think it is a very exciting sector and I see plenty of potential there for the future. I do, however, want to extend my entrepreneurial activities to other sectors as well and want to find new challenges.
FuS: What did you feel when you sold your majority holding?
Köhler: The sale was a logical continuation of the development over the past years. I had spent some time to ensure that the business infrastructure would allow for others to take the lead and that I would not be needed in the day to day running of the company. Selling the shares has given me the opportunity to grow as an entrepreneur in other areas. Nevertheless, my seat on the board of the company and of course my colleagues that remain there ensure that I continue to be closely connected to it.
FuS: Is it important to the employees of internetstores that you continue to be involved in the business with your 10% holding and in your function as chairman of the board?
Köhler: It was important to me that key staff become shareholders at an early stage. I gradually implemented that idea with various shareholding programs. I do think it is an important signal for the staff to know that I will continue playing a significant role in the company and support their investment in the business in my role as chairman of the board.
FuS: What new strategic options have opened up for internetstores because of the new majority shareholder Signa?
Köhler: internetstores is now a significant part of Signa Sports Group, which also includes Karstadt Sports, Outfitter and Tennis-Point. In addition to the usual synergy potential, for example in terms of purchasing and organization, internetstores will now have the opportunity to explore new sales channels in terms of a multichannel concept. One example for this development would be a presence of fahrrad.de in Karstadt Sports stores. That is just one of many possible scenarios to illustrate this new sales approach.
FuS: What do you think about eCommerce in terms of general market potential and what are the strategic consequences for offline retail?
Köhler: Actually, I think the question doesn’t really address the issue. I really don’t think it’s about which sales channels will be most relevant in future. The question should really be about the influence of digital media on brands in general and consumer behavior in particular. A development has started here a long time ago and an end is not in sight. This is a factor that in my estimation many companies completely underestimate in terms of their cause and effect relationships. I am convinced that a brand that is not present in the digital world will continue to lose relevance in the “real” world as well.
FuS: What business models have shown the most success in eCommerce?
Köhler: Experiences over the past years have shown that basically any product can be sold online. Just a few years ago people would have scoffed at the idea of selling shoes online. A new trend is currently gaining ground: Web-based companies increasingly map only a small portion of the value add chain. They don’t operate warehouses anymore and outsource logistics as well. They only form the link between the value add sector and the consumer and still earn a large portion of the market revenue.
FuS: What are the secrets of success in terms of gaining new customers and keeping them loyal?
Köhler: In my opinion, one crucial marketing tool is still completely underestimated. I am talking about online performance marketing. Simply said, it is important for me as a company to identify relevant traffic and direct it to my platform. Shop design obviously plays an important role here. Online stores should be geared towards the call-to-action element in terms of design focus. Customers must be motivated to take the action the company wants them to take.
FuS: Why does that still seem to be a stumbling block for many online stores?
Köhler: Companies have to invest a lot of money in online performance marketing. The key to success is therefore to convert casual customers into regular customers. Customer retention is absolutely essential for the success of an online sales platform. In addition to the overall performance of the business and the products offered, sales-boosting CRM measures are crucial. This used to be called an “action chain” and is still essential for business success. I would like to elaborate on this with an example. When a customer purchases – let’s say – a racing bike at fahrrad.de, he will also be offered accessories and wear parts.
FuS: You obviously never take off you entrepreneur hat. Do you have any current plans for another company to operate yourself?
Köhler: I was working intensively over the past months on laying the cornerstones for more entrepreneurial work. Important in that context is the formation of Koehler Group Holding and with it the new offices in Stuttgart, the recruitment of highly qualified staff and the founding of individual subsidiaries. I am now ready to go forward and have already founded two operative companies that I run as a majority shareholder. One of these is in the real estate sector. The second business was something that was personally close to my heart. The company is working on the development of a global app for private aviation.
FuS: What are the types of businesses you would want to invest in with Koehler Capital Partners and what are your objectives?
Köhler: Koehler Capital Partners offers financing for other companies. It is a private equity company with particular focus on the European online industry. We have already provided investment for an eCommerce company in the sector for “senior products” and for a hunting and fishing online shop based in Sweden.
FuS: Does Koehler Capital Partners act as a sole investor?
Köhler: That depends on the individual case. I do intend to at least sometimes work with other investors on these projects. I am currently in the process of expanding my network. For that purpose, I have entered into a partnership with other investors and offer my expertise in the area of eCommerce.