Hinterland of Things: "We must move from recognition to action"

Despite ambitious goals in the coalition agreement, the state is “miles away” from adequately supporting start-ups, said Dominik Gross, co-founder and CEO of Founders Foundation, at the “Hinterland of Things” conference, which took place in Bielefeld this week. As an example of stalled reforms, he cited the planned 24-hour company formation, whose nationwide launch has been postponed to 2029.

Instead of waiting for the federal government, Gross presented the “Bielefeld Shortcut,” the start-up package of the city of Bielefeld. Together with Mayor Christiane Bauer, Volksbank Ostwestfalen, the Teuto Seed Club, and other partners, it is intended to make it possible to found a company in Bielefeld. This includes an operating company, bank account, tax number, holding structure, and a funding commitment of up to 64,000 euros. Within 24 hours.

Gross also outlined steps for Europe's new “economic miracle.” In the area of AI, Gross advocated for specialization – not the large language models, but specific models make Europe stronger. As a robotics example, he cited Neura Robotics, whose funding round shows that Germany still has a chance; some funds will flow into so-called “Robotic Gyms,” i.e., training environments for robots. On the topic of energy, he called for an infrastructure that supports both AI and wind and solar and referred to start-ups like Proxima Fusion and TerraLayer.

"Missing Link"

What's missing: In the fast-paced world of technology, we often don't have time to sort through all the news and background information. At the weekend, we want to take this time to follow the side paths away from the current affairs, try out other perspectives and make nuances audible.

• All our the "Missing Links"

Germany leading in many areas

“In the Defense Tech sector, we in Germany are actually world-leading, even beyond the Munich location,” said Gross. This is because “in the Defense Deck area or in a defense area, a lot is moving from hardware towards software.” In the future, there will be topics like “Military AI, for example, cloud systems, meaning a European Palantir is of course a wish.” He referred, among other things, to space projects and also to ERC System, which delivers emergency medication by drone.

“Founders from the SME sector are also start-ups for the SME sector at the same time,” said Gross. He also pointed out the funding gap compared to the USA, where companies like OpenAI receive high investments without being profitable yet. Gross referred to the AI company Anthropic, which raised more in two rounds in the first half of the year than all of Europe invested in venture capital in a year. In fact, Anthropic initially raised a rumored around 28 billion US dollars at the beginning of 2026 and further capital in the billions in another round in the spring; the valuation thus climbed to around one trillion dollars. From this, Gross concluded that venture capital is “not just a question of finances, but also a question of economic and technological sovereignty.”

Mode of action for an economic miracle

On the occasion of the conference, we spoke with Gross in advance about the demanded “mode of action” and Germany's situation for start-ups.

You say the insights are all there. What exactly do you mean by that?

We all actually had a feeling of what would happen if Trump became president. You don't have a crystal ball – he changes his mind daily – but what was clear was: Europe must become more self-reliant and independent. We must invest in our own security policy; there are major geopolitical challenges. And this will continue in the post-Trump era.

It is not to be expected that one will suddenly say, he is gone and everything is as it was, so to speak. Time does not stand still, we are constantly moving forward and should not look exclusively to the West, because changes are happening globally. This means that Europe relying more on itself is a clear insight that already existed before.

Similarly, with technologies, especially Artificial Intelligence: that AI will change everything or much of everything is not a new revelation. That we have demographic change is also nothing new. Unless we suddenly have huge population growth in the country and the next baby boomer wave arrives, that's relatively clear. So: we know the dynamics, changes and challenges – geopolitical, technological, social and economic. The only thing that hasn't happened is that we have switched to the mode of action. That we have said: Now we have the insights, now we implement.

Why is that? Why isn't this step happening?

That is the real core question. For years, for example, we have had the challenge that we are strong at universities and in basic research, but we are not good enough at transferring this to products and companies. Everyone actually knows this. The money is also already available – also through the new billion-euro packages. That may not even be the main problem. The main problem is rather that the state does not always use the money intelligently – but that is another story. The fundamental question is: What do we actually do now? What do we start with? And how do we manage to build the new models in the sense of a new economic miracle?

When you talk about an economic miracle, isn't that a bit optimistic given the current situation?

I advocate looking less at the failures and more at the successes. If you constantly focus only on failures, you don't incentivize anyone. What are our strengths? What should we focus on? What will ensure our prosperity in the future? We should devote much more energy to that than to reviving things from the past.

A good example is the so-called “Klemmen-Valley.” This is here in the Ostwestfalen-Lippe region. These are all the plug connectors. They are in every power plant, in every transformer box, in every machine worldwide. Companies like Phoenix Contact or Wago – these are hidden champions that hardly anyone knows, but they generate enormous economic value. This is exactly the logic: we must be world market leaders in certain areas – even if they are sometimes niches. This is the weight we can bring to the table. And by the way, a topic that should be at the center of our discussions, especially in times of AI. Because the numbers show: While the large LLMs are developed in America, in concrete application, we in Europe, and especially the founders, are ahead. We are building business models for concrete, sometimes niche, but real use cases.

But looking at the solar industry – Germany was once a leader, and yet the value creation migrated to China. Why should it be different this time?

That is indeed the case, that's true. Looking back, it's clear that Germany was a leader there and that this value creation migrated to China. And today there are similar analyses, for example, in quantum computing: Germany is still at the forefront, but it struggles to invest in things that cannot be capitalized immediately.

But I think we have to stop looking only in the rearview mirror. No one at this table can say they have a crystal ball and see what will work in the future. The question is what we do now. And there are certainly areas where we still have the chance to be at the forefront. In the area of AI infrastructure, we are indeed one of the countries worldwide that are currently investing the most in building data centers.

Nevertheless, many promising German start-ups are eventually sold abroad...

Yes, the migration of this value creation is definitely a problem. Because it means that we no longer benefit sustainably from the innovations that arise – except perhaps for the exit money, which in the best case would be reinvested into the system. In terms of the sustainable cycle we desire, this is a core problem.

I know the model from Israel. Israel has a proper start-up pipeline, but no middle class. They are all sold abroad, and then the founders do something new again because they have this immense hunger. So, per se, it's a model that can also work. In Germany, we need both: the established middle class as the backbone of our economy and hungry start-ups.

How can this be solved?

We cannot complain that other countries find our start-ups so good. That would be the wrong signal. What we need is, firstly, a greater willingness from established companies here to invest in start-ups, to collaborate with them, and also to implement joint projects and developments. And yes, the truth also includes that we need to activate more capital in Germany. At the same time, we must also dare to move away from the idea that it always has to be the classic exit or an IPO (Initial Public Offering). With regard to the number of company foundations, this is still the rarest case.

And secondly, in my opinion, we need further development of the capital market in Europe. We have a very fragmented stock exchange system, and these exchanges compete with each other in Europe. If we want to rebuild the European Market, we should aim to develop common trading platforms and harmonizing regulations, so that something comparable to Nasdaq can be achieved at all. If Mistral, as a European AI company, really wants to grow and aims for the European market as its home market, it needs the corresponding capital for that. OpenAI is reportedly burning hundreds of billions of dollars before reaching break-even. This simply cannot be raised on the European continent.

Can Europe even keep up? The US tech giants dominate everything.

Frankly, I don't think it's likely that the next Google or the next Microsoft will come from Europe. I can't imagine that from the structures – in the scale of Google, Amazon, and Microsoft. But as I said, that's not what we should focus on exclusively: The next generation of successful, technological SMEs, Applied AI – these are the topics we should be discussing!

Wouldn't that perhaps even be a problem of the EU Commission, which is already moving towards more regulation?

Even then, you naturally have markets and infrastructure. Imagine if you banned Microsoft in Europe. Theoretically, that sounds consistent, but you would paralyze the German economy at first. Everyone who somehow has their SharePoint, Microsoft 365, and so on, and there's simply nothing to replace it immediately. I also don't think that's the most productive discussion. We don't want to create closed economic areas.

America will not function as a closed economic area, neither will Europe, nor China, even if there are certain efforts in that direction. It's more about what we build under these framework conditions. We will still be able to develop world market leaders – perhaps not the all-dominating platforms, but in a sufficient number of areas and niches.

But isn't there a danger that questionable investors will buy up the promising companies in the end?

That is a legitimate question. In the defense tech sector, it helps that politics can create continuity here. One knows that in the next ten years, three to four hundred billion euros will flow into this sector because everyone wants to achieve the NATO goal. This means that not only American systems will be invested in, but solutions will emerge in France, Germany, Sweden, and the Netherlands out of their own economic logic. The Bundeswehr has consciously decided against using Palantir and is instead opting for its own solution. And I think we need to get to the point: How competitively can we achieve our own solution?

Looking at the defense tech sector, you can see that something is already emerging: Helsing, Quantum Systems, Stark from Berlin, Istro – these companies are emerging everywhere. The question is how we create economic framework conditions so that they can stay here.

And what about chips and semiconductors and the unstable geopolitical situation?

In the semiconductor industry, the world depends on Taiwan. And I wouldn't even go so far as to say war yes or no. We could imagine similar scenarios in terms of escalation without a shot being fired: that the important chips worldwide are no longer distributed to Western markets.

What would be the answer to that?

Ultimately, it depends on what we can actually bring to the table so as not to be cut off from supply chains. Someone would only stop supplying us if our negotiating positions were weak, or if we couldn't say in return: Then we won't supply you either, and your problems will be much bigger. There are already such levers in the economic structure. The “Klemmen-Valley” is one such example.

The logic must be: We build up an economic power where we are so good in certain areas – sometimes even in niches – that we are world market leaders, this can be the case in areas like industry, robotics, and energy. This is the weight we can then bring to bear in such negotiations. And this comes from the hinterland – whether from this region, from Heilbronn, from Nuremberg, from Oldenburg, or wherever. These are exactly these companies here, and they will also be the new start-ups that will ensure that we can bring this weight to bear.

We simply have to start doing things. It's not worth philosophizing any further. We all have the insights. Now it's about what we actually do and what we start with. The combination of everything that is new and the existing things that we can preserve – that is the strength and the weight that we can bring. And that is also what we are trying to reflect with the conference: to put examples on stage that embody this. That show that it works. Here, now, in Germany and Europe.

(mack)