The President is visiting Celonis

Unicorn

True Pioneers

President Hofmann walks up a flight of stairs.

22. Oct 2021 |

Reading time Min.

President Thomas F. Hofmann visited the founders of Celonis at the company's Munich headquarters on Theresienstrasse (Photo: Magdalena Jooß/TUM).

A study project at TUM sparked their idea: Today, the company owned by TUM Alumni Bastian Nominacher, Martin Klenk and Alexander Rinke is worth 11 billion dollars, making it one of the most valuable start-ups in Europe: Celonis.

In September 2021, TUM President Thomas F. Hofmann visited the Munich headquarters of the company. With TUM Alumni, entrepreneur and Co-CEO Bastian Nominacher he talked about creativity, technical expertise and perseverance – or in short: about how business ideas are developed.

Mr. Nominacher, how important is perseverance in the development of good ideas?

Bastian Nominacher: Very important – and also for being a business owner. One day, everything works and the customers are happy. The next day something is changing and you have to adapt the technology, rethink everything, look for other ways. Perseverance and consistency are the hallmarks of most entrepreneurs. If you have a vision and want to drive it forward, you can never go in a straight line.

Thomas F. Hofmann: Yes, frustration tolerance is a very important quality for successful talents in science and entrepreneurship. The easy paths have usually already been worn out by others; true pioneers, on the other hand, venture into unmapped territory with all its ups and downs. Success and innovation happen when we are willing to give new ideas a chance and keep experimenting with alternative approaches, even if many of them may not work right away. In addition to technical expertise and creativity, true inventors, explorers and innovators therefore need a healthy dose of frustration tolerance, and instead of being afraid to fail, they are able to learn from their mistakes.

The story of the innovation on which Celonis is built starts at the TUM University Library: While searching for a solution for your study project, you came across a book by Dutch professor Wil van der Aalst, which led to your first encounter with the ideas of Process Mining (see box) and Workflow Management.

Bastian Nominacher: When we stumbled upon these groundbreaking ideas, we were able to make a crucial connection. We recognized the connection between the process data we were examining as part of our study project for Bayerischer Rundfunk and the possibility of solving it by developing our own process mining software. In other words, without Wil’s research, Celonis would probably not exist in its current form.

What was the decisive factor that made you recognize this high-potential connection in that moment?

Bastian Nominacher: I am sure that our education was a major factor here. Our studies provided us with a broad knowledge base from which we could move forward. I believe that good knowledge of the field you are moving in is important in order to come up with good and fresh ideas. The creative part on our behalf was recognizing that the transfer between the theoretical algorithms of Process Mining and the data of Bayerischer Rundfunk was possible. To this day, we are continually establishing new connections between academic research and practical application and are continuously developing our product.

Thomas F. Hofmann: I can only second that. Really good ideas and high-potential approaches rarely fall from the sky. Increasingly, they materialize at the interfaces of disciplines through the interplay of differing knowledge, tools and working methods, especially when the “chemistry” between the team members is right.

Due to its strong growth, Celonis is always on the lookout for new talent. That’s why the company is doing a lot to make itself attractive to young professionals: The company’s own studio is used to record podcast episodes (Image: Magdalena Jooß/TUM).

During the tour, President Thomas F. Hofmann did not miss the opportunity to challenge Bastian Nominacher to a little round of table football (Image: Magdalena Jooß/TUM).

The best ideas come from exchanging ideas with others: President Thomas F. Hofmann and Co-CEO Bastian Nominacher agreed on this (Image: Magdalena Jooß/TUM).

Celonis has rented several floors of office space on Theresienstrasse. Employees can retreat to the small telephone booths if they want to be undisturbed during a meeting or a phone call (Image: Magdalena Jooß/TUM).

Celonis is the world market leader in so-called process mining and is expanding into the world with its software. Bastian Nominacher explained how it works to the president (Image: Magdalena Jooß/TUM).

You are three founders in the founding team. How do you go about exchanging ideas in the brainstorming phase?

Bastian Nominacher: Our team is very complementary. Alexander Rinke is a mathematician, Martin Klenk is a computer scientist and I am a combination of finance computer scientist and business computer scientist. For us, it is important that everyone brings in their different perspectives. On the one hand, we are different in terms of our academic backgrounds, but also in terms of what we have experienced, what professional experience we bring to the table. Especially in the beginning, when it was just the three of us, it wouldn’t have worked otherwise. I still remember the first three months, when we virtually locked ourselves into my apartment. Every day brought new challenges. Sometimes we almost despaired. But one of us always had the idea that saved the day.

How do you prepare young entrepreneurs to cope with these ups and downs and stick with an idea in the face of adversity?

Thomas F. Hofmann: Our start-up-oriented students are already highly motivated when they come to us. They are eager to learn, to create something new and to bring innovations to business and society. In doing so, they make every effort to find solutions to the problems they face. However, their motivation quickly diminishes if they are thwarted by disciplinary silo thinking, red tape or unnecessary legal overregulation. Universities need to be “enablers.” They have to help students follow their visions and motivations, overcome outdated divides between disciplines, develop creative collaborative formats and create the best conditions for young talents to turn their ideas into marketable innovations.

Bastian Nominacher: The network plays a big role. It was good that we had many mentors at TUM with whom we could exchange ideas when we experienced setbacks or when we were facing new challenges.

Thomas F. Hofmann: The foundation here is to promote top-level science, because outstanding research constantly spawns new approaches for ingenious founders. Then we have to powerfully support the young talents throughout the entire start-up process all the way up to the growth phase, which we do very systematically and with great passion together with UnternehmerTUM, our affiliated Center for Business Creation and Innovation. With our spin-offs, we promote the transfer of technologies or services from our laboratories, think tanks and workshops into commercially or socially relevant applications.

Bastian Nominacher: Due to TUM’s start-up support, we have a very strong ecosystem here in Munich. You can learn from other founders and exchange ideas. You don’t have to make every mistake that someone else has already made. And at university, we learn how to tackle a problem.

What do you mean by that?

Bastian Nominacher: A university with a very high performance level, like TUM, primes you well for handling intricate problems. Whether it’s a complex mathematical problem or the question of how I, as a founder, can attract new customers, is of secondary importance. It’s about analytically working through a situation and breaking it down into individual parts. That’s why we place great value on applicant’s ability to persevere and knowing the tools of their trade.

Thomas F. Hofmann: Methodological competencies are at the heart of the training. These are a constant that you can fall back on throughout your entire life. Detailed technical knowledge changes, becomes obsolete and is permanently updated – in times of technological leap innovations within just a few years. However, anyone who has learned to think analytically and to work methodically can apply this effectively for a lifetime. This applies to a top scientist just as much as to a board member or an entrepreneur.

Success and innovation happen when we make room for the new.
Prof. Dr. Thomas F. Hofmann
„

What do you do when you are faced with a problem that you can’t solve?

Thomas F. Hofmann: Comparing notes with others. For me, this is the most effective way. Good questions and new perspectives from other people often help me to take a step or two back in my own thinking and to look at the problem from a different angle. Staying on track towards the goal while exploring different ways of solving the problem – this often opens up completely new possibilities for action that were not apparent to you before.

Bastian Nominacher: I like exchanging ideas with other entrepreneurs or with my network. Just last weekend, we were thinking about how to break into a new market and were a little stuck. We talked to someone on our advisory board and came away with a new perspective. In the end, I thought to myself: You could have thought of that yourself (laughs).

President Thomas F. Hofmann has known Celonis since its early beginnings as a founding idea of three young students (Photo: Magdalena Jooß/TUM).

Since its last financing round, Celonis is now worth more than $10 billion, making it what is called a decacorn (see box). What are Celonis’ further steps in its development?

Bastian Nominacher: It is important for me to emphasize that our goal was not to become a decacorn, but that we have a mission. We have developed a technology that enables us to improve every process in the world. We use it to help companies help their customers. The investment rounds are just there to help us on that journey. Last year, we launched the sixth generation of our software – called the Execution Management System. There is enormous demand for it from companies. That’ s why we need to invest even more in both the technology and the customer service. So far, we have tapped less than one percent of the available market. So there is still a lot of potential.

Thomas F. Hofmann: Many young entrepreneurs think about selling their company too early. Have you ever thought about selling your shares in the company?

Bastian Nominacher: No. We have no plans of selling. Personally, I am driven by the fact that here at Celonis we have the opportunity to create one of the largest and most important technology companies in the world. It’s exciting, we enjoy it, and that’s why we’re still passionate about it.

Thomas F. Hofmann: That’s a great attitude and should be a model for others. This is exactly the kind of attitude that Germany as a business location needs, because this is how companies are created that are, of course, globally active, but create new jobs here in Germany and maintain the county’s export strength.

Bastian Nominacher: It is said that approximately one in 100,000 start-ups becomes a unicorn. That also means that the other 99,999 will not. People often ask us why we are so successful. I think the reason is our passion for the cause. Just aiming for a lucrative sale is probably not a good reason to start a company.

Thomas F. Hofmann: If you have developed a groundbreaking technology, the greatest motivation for you surely has to be to see the company grow and prosper. By the way, this also applies to my work as president: I do everything I can to make TUM even more successful. Success can’t always be measured in just numbers, publications, patents or start-ups. It is equally important to me that the university is not an isolated ivory tower of excellence, but becomes an integral partner of society, moves with the times and acts as a catalyst for responsible, trustworthy and socially viable innovations. Only then can we prevent science from becoming disconnected from the needs and values of our society. That’s what motivates me in my role as president. If that were not the case, I would probably not do it at all.