“….when you fall, stand up and run again”

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Ritah Ayebare Nyakato/Stefan Kyora

11.05.2017
Peter Shüpbach

While some founders celebrate constant success in their startups, others fail and are forced out of business. After experiencing the dramatic fall of his publicly traded company Miracle , Peter Schüpbach, stood up and started venturing in other businesses making him today’s renowned entrepreneur. In his interview with Swisspreneur, Peter shares his experience and gives tips to startups.

The interview with Swisspreneur starts at the beginning of Peter Schüpbach's career. After deciding against his banking career, Peter studied economics with the goal to start something for himself. Together with his colleagues, they ventured in hardware and later in software. This led to the development of Miracle Software AG with Peter Schüpbach as the CEO.

Schüpbach served in his position for over 10 years, grew it internationally and by the 14th year, Miracle employed 350 employees and offices in 5 countries. Miracle celebrated a remarkable success and continued to grow particularly after new development tools from windows 3.0, and new technologies emerged on the market. The tremendous growth however came with financial repercussions. Miracle required a considerable amount of funding, which conventional funding alone would not sustain. “At that time, software development was heavy technology, heavy resource loaded, which means we needed to have more developers. This required heady-resource spending and investing."

The company consequently decided to go international to raise the required funds to run its growth initiatives and subsidiaries. "We had investors, venture capitalist on board but this was not sufficient.” Hence, the company filed for IPO at the Swiss Stock Exchange SWX on one hand, to boost in the Swiss market and on the other hand, the IPO would give the company more credentials in the international market.

Financial constraints despite an IPO
Following the IPO, the company was valued at $1.3 billion, six times of more than the initial value. Being in this position built a lot of pressure on the company as many people began to raise doubts about the company value. A lot of negative emotions against the company intensified from both the community and from unsatisfied customers.

“This was a crazy ride for which we lacked sufficient economic backing.” In addition, bad PR began to spread, internal management issues escalated as employees became insecure while others turned against the company. All this brought business to a standstill for to six months such that not even a single licence was sold.

 Despite these hardships, the founders sought to make a capital increase and move forward. However, after their house bank denied them the second loan tranche, the company was left without any alternative but to shutdown instantly.

The recovery and the rise of Peter Schüpbach
The sudden shutdown was one of the toughest decisions the founders and employees had to deal with. Regardless, Peter was determined to move on and let go of the past. The invitation from Logitech founder Daniel Borel to address the students at EPFL to share his experience, opened a new avenue for starting afresh. Schüpbach took over the brother’s company which further opened new opportunities for him to build new social networks. Since then, his career success took off rapidly. He invested in StudiVZ,  “the German Facebook” and later was invited to be its CEO in Berlin. He grew the company which was later sold for more than 90 million Euro to Holtzbrinck.

Following this success, he started venturing in his own businesses again. He built Xing in Switzerland. “With StudieVZ I realised how powerful a social network is and we tried to create a business model around the social network. That is when I had the opportunity to step in and take a business model that had community ID and the commerce (“The social shopping coupon”). Based on this business model Schüpbach created Fashion Friends and since then he has continued to prosper. He is currently an active investor, mentor and coach.

Lessons learned and tips to startups
Having started, succeeded and dramatically failed, Peter Schüpach shares his lessons: “Go international once you have your own your market and you own it."

For Peter, the IPO was a bit too early. He emphasises that timing is essential, especially if a company is developing something new. Furthermore, advises founders to learn to let go.

“There are moments in life when you have to make tough decisions especially as a startups. Letting go and moving on to another position or company will help you to self-reflect and ask yourself: am I the right person for this position? Knowing when to give up is like running a marathon. There are ups and downs, bad downs when you even do not think you can make it to the finishing line. In addition, he says: “Starting a business is hard and founders might fail. But this is part of the game and part of entrepreneurship”. But when they fall, they should stand up and run again, sometimes they might get up, but when they cannot, they should let go.”

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