Mario Lippoldt, DataCollect
Since 1993, two roads have led to DataCollect: a dirt track and a country road on which a display panel shows the speed of oncoming vehicles. DataCollect developed this so-called DSD system itself, and it displays a laughing or sometimes a furiously flashing smiley – depending on whether the driver has observed the permitted speed limit. The speed display systems from the medium-sized company based in Kerpen near Cologne, Germany, form one of two divisions in its product portfolio. They are used wherever immediate driver behaviour feedback for road users and warning of potential hazards can save lives. These not only include obvious areas such as kindergartens, schools and 30-kph zones, but also shipping lanes and busy factory entrances that are difficult to see. Systems for traffic counts and classification of vehicle types, travel time, dwell time and the movement of vehicles through the city form the second product division of DataCollect. The company makes this data available via a dedicated cloud solution, for instance, for generating noise maps, prioritising traffic construction plans, or simply making decisions regarding traffic planning and control.
The peaceful surroundings of Kerpen in no way reflects current events at the company. From here, DataCollect serves its core market of some 13,000 local authorities in Germany while ensuring timely deliveries to its international distributors. Apart from this, the company has spent the past six months selectively identifying potential partners in individual markets – primarily in the EU, the UK, Canada and the US. To this end, the sales department has been reorganised and extra personnel hired.
The planned diversion from country roads onto the highway of global players is the brainchild of investment shareholder “Engelhardt Kaupp Kiefer“, which joined DataCollect along with “family member” Mario Lippoldt in 2016. Eight years previously, they offered him the position of managing director (via a headhunter) with engineering company actiro, which is based in Suhl, Germany. For Lippoldt at the time, it represented a welcome professional challenge – thanks to which he was even able to return to his home town. After both parties resolved to continue working together following the exit from actiro, they found the ideal company in DataCollect: It had already developed to an impressive degree, but the founders wanted to step back from the business. After appointing Lippoldt as a managing director that could trust, Engelhardt and his team integrated the new portfolio company into the family as a matter of course.
Rather than having to leave DataCollect at a moment’s notice, this allowed the founders physicist Dirk Overzier and businessman Christoph Herrlich to enter retirement at the ripe old age of 50. They each retain a 20 percent stake in the business, which allows them to participate in the future development of the business, the dividends and the exit. The constructive cooperation that exists today between the founding and new shareholders is the result of extensive negotiations during the initial phase, which were not entirely free of tensions. Controversy arose in particular during the development of the term sheet. “The transaction was on the brink of failure on two occasions”, recalls Tobias Engelhardt, who puts the initial conflicts down to differences in expectations and empirical values: Whereas the investment company had completed countless similar transactions, Overzier and Herrlich were electing to hand over parts of their company, their “baby”, to strangers for the first time.
However, the handover within the company proceeded “noiselessly” – as new managing shareholder Mario Lippoldt puts it. The employees were thoroughly prepared for the change in ownership. The new man at the helm was welcomed aboard a celebratory meal of fresh bread rolls and “Maurermarmelade” – an endearing term for minced meat used in the Rhineland. For two months, Overzier and Herrlich continued to show up for work every day. At that point, Mario Lippoldt suggested that they take a holiday to allow the staff to adjust to the new situation. “When I talk to both of them today, they say that they did the right thing back then. Now, they can spend time with their families and enjoy their hobbies and can go off on their travels five to six times a year”, he remarks with a wink. By mutual request, they also continue to support projects that they have selected, and are involved in decisions taken at strategy meetings.
In the meantime, they are also happy to discuss complex and fundamental considerations in a relaxed and familial atmosphere. In this way, the old and new shareholders would discuss in detail, for example, where they saw the company in five years’ time – until it finally dawned on everyone: DataCollect should become the market and technological leader in the area of traffic data collection. Over the next two to three years, they plan to “really go hell for leather” and expand the company’s R&D and its sales activities. “Now these are major ambitions. And we’re going to have to work hard to achieve them. But those who work hard will at some point achieve their goals”, says Mario Lippoldt.
This sense of assurance is not the result of unlimited naivety or overconfidence. With the backing of experience shareholders, it is simply easier to make giant leaps. In this regard, Engelhardt Kaupp Kiefer is much more than just a financier. It supports its companies with management expertise, acting as a field office that offers assistance with organisational and legal issues. It also assists on a human level and through a broad network whose outstanding quality is due not least to that of the various investments. Lippoldt appreciates the continued presence of “family” in the back office, “which develops strategies and is aware of topics that could affect DataCollect”. He adds that he is able to relax in his role without bearing the entrepreneurial risk because the burden of responsibility for decisions is shared across several shoulders. He is also given free reign to immerse himself in day-to-day business matters without losing sight of the corporate strategy.
Strategy is discussed on a monthly basis with the shareholders and investment manager Stefan Mertel – it’s a regular meeting that provides an opportunity for a collective check on progress, and for which Lippoldt naturally prepares. Unlike owner-managed medium-sized companies, this allows DataCollect to save time and significantly reduce any risks. In concrete terms, this is reflected for instance by the investment in a new Enterprise Resource Planning system (ERP), which will in due course be linked to the existing Customer Relationship Management (CRM) system. Once introduced, the goods distribution system will ensure seamless workflows by automatically controlling the production orders.
Once again, it is clear that Tobias Engelhardt and his team are thinking outside the box in order to explore new possibilities, rather than simply accepting that “we have always done things this way”. He explains that this is also necessary, stating that DataCollect had neglected to develop certain aspects its products in recent years. For instance, the company had relied for too long on radar technology alone and had not devoted sufficient attention to new technologies. Systems for optimising parking or recording complicated traffic situations such as roundabouts could long since have been added to the portfolio. On the other hand, decisions that were correct at the time now needed to be re-examined. For example, the founding partners had outsourced the manufacturing activities. However, Mario Lippoldt has calculated that bringing the external service provider including its workforce back in-house would now pay for itself after just one year.
The metaphorical motorway slip road that DataCollect is building at its gate is therefore taking shape. Nonetheless, to keep pace with global players such as Swarco, Telekom or Google, the company will have to draw on additional resources from the investment company. For example, Lippoldt has recently been invited to attend strategic meetings at another Engelhardt Kaupp Kiefer portfolio company in order to gain valuable insights into its measurement technologies. DataCollect for its part can assist in the area of cloud solutions, as the other company is still working with desktop solutions. In this way, both the learning curve and level of risk for both parties are kept low, and synergy effects are optimally supported. Although people are generally reluctant to reveal their cards to others in a networking situation, Engelhardt and his team, who have well-founded insights into their various companies, know how experience can be exchanged. They enjoy the trust of their partners – not just because of their shared interest in promoting all parties, but also thanks to the close personal ties that develop over time between them and the companies. “Therefore, we are extremely happy that we have been able to keep Mario Lippoldt as part of the family”, emphasises Tobias Engelhardt once more.
But for all the momentum that DataCollect is currently gaining, Lippoldt is nevertheless aware of the dangers. These include the risking of losing people along this high-speed path because they feel left behind or because they don’t understand what is going on. Their working conditions change, processes require new processes, which in turn make demands on them. At this point, Lippoldt states emphatically that the investors are no interested in growth at any cost. He goes on to explain that they see themselves much more as partners who take a holistic view of the company and who reward long-serving employees with loyalty on their part.
Out in the fast lane, the wrangling to answer the fundamental questions faced by the large number of incumbents and newcomers on the market will soon begin: Rather than delivering raw measurement data, how can one cater selectively to the information requirements of individual customers? Customers, for example, that want to optimise their traffic light control systems to save ten percent of the current stop time, or so that trucks are given priority to minimise their burden of noise and exhaust gas on the city. Ultimately, all of this comes down to the fundamental question as to how traffic levels, which continue to increase, will be monitored and controlled using flexible criteria in the future? DataCollect also wants to provide an answer to this question – and is defying with chutzpah the demands associated with such a complex market. Mario Lippoldt remains unfazed: “We will identify our USP and compete with the major players based on speed, flexibility and a healthy dose of opportunism.”