In business, you need to have vision and the courage to follow your instincts, says business advisor and multinational entrepreneur Reinhold Karner.
As his plane approached Malta and started its descent, Reinhold Karner looked out of the window. It was his first flight to Malta and he wanted to see what the island looked like.
“In the sunlight, the limestone buildings shone like gold. Even before the plane had touched down, I had decided that I wanted to buy a house in Malta,” says Karner, a business advisor, multinational entrepreneur and co-investor.
Karner’s wife accompanied him on the following visit and they bought an old village house. That was in 1999 and since then, Karner and his wife have settled down well, spending several months a year in Malta.
“I know of several others who fell in love with Malta and decided to settle down or set up a business here,” says Karner. “Malta’s attraction, together with its geographical position, good flight connections and quality human resources who have a good command of the English language, makes the island an excellent place where to do business. However, you need the structure to support businesses and keep them here.”
Karner believes that start-ups play an important role in any economy, including the local one.
“There are two kinds of start-ups: those started by young people and others which are launched within an already existing corporate environment. Both have so many opportunities in Malta. First of all, the island is a good testing ground for translating ideas into products or services and taking them to the market. Another advantage is that, given the local market’s size, start-ups immediately start to plan their expansion into other markets.
“Start-ups are also favoured by the availability of resources, which makes setting up a business cheap and low risk. Start-ups can also share resources and invest according to their growth – by going in the cloud, they can scale up as they grow.
“That said, start-ups need support. Government, venture capitalists and public-private partnerships should come together to create a fund that supports start-ups. Fast-track support should also be available – the ICT sector moves so fast and in such a disruptive way that start-ups need fast-track administrative support. They simply cannot afford to wait for weeks or even months in sorting out their legal or administrative obligations in setting up a business.
I’m always amazed at the level of expertise that is available locally
“Malta can also offer a lot of expertise. I’m always amazed at the level of expertise that is available locally. There are a lot of experts who have settled down in Malta, or Maltese people who have worked abroad and have returned to the island with valuable experiences. Young start-ups usually have great ideas but don’t have the experience in running a business. All this expertise should be made available to start-ups.”
Start-ups add ideas and growth to the economy. However, the bleak truth is that as many as nine out of ten start-ups fail. Karner also experienced failure but learned valuable lessons from it.
“From a young age, I was always interested in ICT. When I was 16 years old, I wrote my first business package software. Then I joined various manufacturing, services and distribution companies and worked my way up to management. At 27, I set up my first software and consulting company. I was quite successful – the company had the biggest clients in the German, Swiss and Austrian region and was growing rapidly.
“Then at the end of the 1990s, I started experimenting with Java software, which was still relatively unknown. In 1997, I had the luck to meet the CEO of IBM, Louis Gerstner. At the time, IBM was on the brink of bankruptcy and Gerstner was hired to turn the company around. When he asked for my opinion on what was wrong with IBM, I told him that the company was old fashioned and had the worst software. Gerstner then introduced me to IBM’s software manager and I was asked to help.
“Then the internet came along and I knew that it would revolutionise everything.”
Karner, a European pioneer of web compliant business software, wrote his own enterprise resource planning software using Java. It was groundbreaking.
“The software had 15 million lines of Java code and its own browser. This was a world first. We also invented completely new technologies such as in-memory computing.
“The development cost a lot of money but it had massive potential. So I asked one of my clients to join me as an investor and we started planning to float the company on the stock market. Before our initial public offering, the company was valued at €200m. Then what was a very exciting development turned into a nasty game. Basically, my partners wanted to squeeze me out. In the end, after a successful 21-year career as an entrepreneur, I lost millions of my own money and had to file for bankruptcy.
“Luckily, I managed to pilot my team and software into the safe harbour of another company, which is still very successful. However, I had to start again. I had lost everything, had to live on €700 a month and could not support my children, who were studying in Shanghai and Scotland.”
Yet Karner took this experience as an opportunity to change.
“I lost 50kg, got fit and changed my outlook on life. I’m no longer a workaholic.”
Nowadays, Karner is doing very well and has a business network worldwide.
“My past experiences have taught me valuable lessons. First of all, you have to adapt and be prepared for the unpredictable. When bubble wrap was invented in the 1950s, it was first intended to be sold as wallpaper. However, as wallpaper, it was a disaster. Then IBM came along and started using bubble wrap as packaging material – this changed the material’s fortunes. It’s a story which shows how failure can be managed and turned into success, thanks to the willingness to adapt.
“Moreover, you have to be enthusiastic and visionary. And don’t invest everything – including health and family – in one project because you never know how things will turn out. Follow your instincts and don’t listen to everything you’re told – after all, there is no golden rule that applies to everyone. And if you fail, get up quickly and try again.”