The man with the discoverer gene.
Old and new economy. A traditional furniture store, a website and investments in innovative start-ups - Robert A. Kabs is very successful in three different worlds. The Hamburg entrepreneur is driven above all by one thing: the search for new horizons.
In the story of Alice in Wonderland, a young girl full of curiosity follows a white rabbit into a fantastic world. Robert A. Kabs has chosen exactly this analogy for his investment company Follow the Rabbit. "For me, life is about not standing still, but always trying something new," says the 45-year-old. "Following the rabbit into unknown territory symbolically means broadening one's own horizons and perception. 25 years ago, Kabs has been doing exactly that - as managing director of a family-run and medium-sized furniture retailer, as an online entrepreneur and as a venture capitalist.
It was obviously always in the blood of the Hamburg-born entrepreneur to be active in business. During his training as a banker he had already imported wireless telephones and sold them in Germany. When the apprenticeship was completed in 1992, his father became ill, who had opened a small furniture shop in the Borgfelde district of Hamburg in 1969. "Not life-threatening, but so difficult that he should have closed the deal," remembers his son.
Uwe Kabs asks his sons Robert and his seven years older brother Jens to step in. Möbel Kabs, as the shop was called at that time, at that time consisted of two shops and about two and a half employees. "I got involved with it, but with the thought that it would only be a temporary story of six to twelve months," says Robert Kabs. "I didn't have a plan to sell furniture all my life."
The father recovers, but finally decides to withdraw completely from the business. "This quick letting go was actually the ideal way to hand over the company," his son says in retrospect. "If we had questions, we could call him, but otherwise he let us go our way."
This is another reason why six to twelve months become 25 years. Until now. "In fact, the whole thing went pretty well," says the banker with a slight understatement. After all, the two brothers turned a small furniture shop into Polster Welt, a medium-sized company with 300 employees and annual sales in the double-digit million range. "On an average Saturday, we make as much sales today as Möbel Kabs did back then in a whole year."
This development is all the more impressive because it is taking place in a market that is fiercely contested by 7,000 to 8,000 furniture stores and has been stagnating for some time with annual sales of around 30 billion euros. "The only way you can grow there is by repression," Kabs explains.
The key to this was an idea which the father had already developed and which the sons had then consistently implemented - the return of old furniture. Kabs senior had run his own second-hand shop for the items sold. The sons soon start working with buyers or donating the furniture. "Of course this service costs us money, but this consistent customer orientation clearly set us apart from the competition. So we could grow faster than others."
To this day, this is one of the most important guidelines in the company. "For example, we currently offer our customers a 100-day feel-good guarantee. That means nothing other than that every customer can return a piece of furniture purchased from us within 100 days if, for whatever reason, it does not suit him".
This approach also stems from the deep conviction that only those who offer the best quality and advice can be successful in the long term. "This must be so good that not the furniture, but the buyers come back to us," smiles the managing director. A strategy that he says works. "In fact, we have very little response." In addition, the managing directors could also see from this figure how well the individual salespeople were working - and in the worst case react to it. The PolsterWelt of the Kabs family is now one of the 70 largest furniture dealers in Germany. But that's not enough for the brothers yet. "We want to continue to grow," Robert Kabs makes clear. "This year we want to open two new branches and thus gradually prepare ourselves for eastern and southern Germany."
The history of Robert Kabs could be almost over here, if it weren't for the completely new world of the World Wide Web, in which the entrepreneur sees another white rabbit disappearing at the turn of the millennium. In 2000, Kabs acquires the online domain moebel.de from an Internet company. "For an insanely large amount of money back then, you could have bought a single-family house in Hamburg," the entrepreneur still wonders about himself today. But after that there was simply no turning back.
"I imagined it that way: A customer is looking for a wardrobe in a certain colour and with certain dimensions. The corresponding website offers a selection of furniture that meets these requirements. The customer compares them, selects one and gets the information in which stationary furniture store he can buy this cabinet at what price. So I wasn't interested in offering users a price comparison. I wanted to be a source of inspiration and an information portal for furniture buyers." Today, what Kabs built is called a vertical search engine. An algorithm that gives customers looking for furnishings an overview of the market offer that is relevant to them.
Kabs quickly set to work on the technical implementation. After all, time is a decisive factor in the new world. "I've invested a lot of money again. When we were finished in 2003, I only needed the stationary furniture dealers as partners." But the appointments there are a source of great disillusionment. "They told me at the time that the Internet wouldn't help them. This is something for the wide world, but not for their local business."
This attitude will prevail in the furniture industry for a long time to come. "In fact, that's only beginning to change today. Now the dealers come to us on their own to give us their data." But in the middle of the last decade Kabs was simply too early with his idea. And those who come too early are sometimes punished by the market.
But the entrepreneur does not want to give up so quickly. "So I went to the online furniture stores. And they were actually open to my idea." They give him the data of their furnishings, and so starts moebel.de on small flame. Kabs receives a cent amount for each forwarding to online shops. This begins to pay off when it exceeds the user mark of one million per month in 2007.
This balancing act between the analogue and digital worlds poses new challenges for entrepreneurs. "For example, there was great fear in the industry that moebel.de would prefer the parent company. It was relatively easy to solve this problem, as there was no connection between the companies other than me. No data will be exchanged either. This consequence has now earned us the trust of the industry."
It is more difficult to maintain a balance between opportunity and risk. First Kabs leads moebel.de like he learned it before at Kabs PolsterWelt. That is: rather cautious, conservative. "Looking back, this has certainly cost us growth, but has also prevented us from taking too many risks. Maybe otherwise we wouldn't exist today."
For on the way to the unknown come also the inevitable failures. In the euphoria of his first successes with moebel.de he wants to conquer the USA in 2007. "We were firmly convinced at the time that efurnity.com would make it easy for us to transfer our successful German model to America." But that goes wrong. "At the time, we misjudged the American market, which ticks quite differently from the German market. A success in Germany doesn't count for anything there."
Under Portalis AG, Kabs is now beginning to operate websites such as fashion.de and mysport.de in order to transfer the vertical search engine model to other areas. "We looked for product groups that are taste-driven similar to the furniture industry and where a vertical search engine can be inspiration for customers," he explains.
In the beginning this works very well. Finally, the technical requirements are in place. For the development of moebel.de, Kabs had already founded a software development company in India in 2006, which at times employed up to 60 people. "We have taken this step because we repeatedly come up against limits here in Germany in the search for qualified specialists, especially in the technology sector. There, the algorithm for the search engine is constantly being further developed and improved. "Today's customers don't want to search for long, but want to get the important and relevant information about their search query immediately. And that's exactly what our self-learning algorithm does," explains Kabs.
But soon the development of fashion.de and mysport.de comes to a standstill: "On the one hand we were too cautious, on the other hand we had to realize that we have no core competence in these markets," reflects the entrepreneur: "Later, competitors who copied us overtook us. We missed the opportunity to become the market leader here too." The entrepreneur acts fast and focuses from now on completely on moebel.de. Having recognized the importance of rapid growth, he decided in 2013 to collaborate with the subsidiary of ProSiebenSat.1, which now owns 50.1 percent of moebel.de. "This has allowed us to triple our sales."
The co-operation does not bring moebel.de alone admittingness - the transmitter exchanges portions for free advertising time. Together they also succeed in rolling out the business model in France, where there is no comparable search engine for furniture. "This time the step was better prepared than our US adventure and therefore successful." meubles.fr has been online since September 2016. Every month one million users visit the website - and the number is rising.
Kabs now wants to repeat this success in other countries. He is convinced that the future lies in online trading. "If I had a store for decorative items such as candlesticks or the like, I'd be wondering if I'd like to carry on today." After all, 50 percent of sales there are already made online today.
Of course, this development will not stop at the furniture industry either. There, the market share of online trade is only eight to twelve percent, but the growth rates of sales are ten to 20 percent. Profiteur is naturally moebel.de. Currently more than 250 shops are represented there with their products and every month five million buyers visit the website. "In terms of turnover, we are now the second largest online furniture retailer in Germany after Otto Versand."
But doesn't he also have to worry about the future of Kabs PolsterWelt?
"Of course there will not be forever the stationary retail trade in the current form with its more than 7000 shops in Germany. But he won't disappear completely either. Customers want to touch upholstered furniture, which already has a certain value, and sit on it. However, I have learned from the online world that the Internet presence of a furniture store and the service offered to customers there are crucial for success. They must offer the customer all channels, real as well as virtual. Only then will you have a chance."
Also from the adventures with fashion.de - the website still exists today - and mysport.de has taught Kabs its lessons. "The online world will undoubtedly become more and more important. And if you can't do it yourself, then you should get involved in Internet and technology companies with outstanding start-up teams, a good business idea, a clear strategy, and a scalable business model."
In 2016, he therefore founded the investment company Follow the Rabbit with seven like-minded entrepreneurs who had set up their own companies, are still active there and come from various sectors such as the food and automotive industries. "Of course, I also do this in order to achieve a return on my investments. But above all this area fascinates me. There I get to know a completely different entrepreneurial spirit. The incredible dynamism with which the mostly very young company founders drive their business forward is inspiring."
In their search for investments, he and his comrades-in-arms try to exploit a market niche. "Pure business angels generally invest up to a quarter of a million euros in the early-stage financing of young companies. That's all there is. After all, you want to build up a portfolio. Institutional venture capitalists, on the other hand, usually only start from one million euros. By pooling our financial resources in this company, as a business angel club we can get right into the middle and still spread our capital".
The target companies should benefit not only from the growth capital, but also from the network of entrepreneurs. "We also advise start-ups and help them move their businesses forward."
Follow the Rabbit often participates together with the High-Tech Gründerfonds or Main Incubator, the investment company of Commerzbank. "They have a much broader organizational structure than we do and a very close look at the financial situation of the companies. We can add our entrepreneurial perspective to this and make better decisions together," explains Kabs.
Follow the Rabbit currently has eight companies in its portfolio. This includes, for example, Userlane (see private wealth, issue 4/17), a manufacturer of software that navigates users through other programs. Or Bilendo, operator of a platform for corporate receivables management. The software house MegaDev, which develops a kind of trainer for online games. Or Bookingkit, an online booking solution for travel providers.
In order to achieve a sufficiently broad diversification, ten to 15 investments are targeted in the long term. After all, entrepreneurs know very well that not every start-up can achieve a breakthrough at the end of the day. "But of course we hope that one or the other company will make it to the end."
Even if this were not the case, the companies of Follow the Rabbit's co-partners would still benefit from the technology transfer of the young start-ups. "Of course, this also applies to Kabs PolsterWelt and moebel.de," concludes Robert Kabs: "I have experienced that it is always worth following a white rabbit in the end." ®
Author: Gerd Hübner