Interview with Kai Buehler
Founder & CEO @ KARMAKARMA, Investor

Kai has successfully started, managed, and sold businesses in the digital media, loyalty, and mobile application space. Before founding KARMAKARMA , Kai was CEO of Watchpoints (acquired by Viggle – VGGL), Mobile Messaging Solutions (divested out of VeriSign in 2009), Mindmatics USA (merged with mms Inc.), and plan_b media (acquired by mopay – now boku). He holds a Master Degree in Business and a PhD in Economics from the University of Paderborn, Germany, and Hong Kong. He also teaches Digital Entrepreneurship at the RFH University of Applied Sciences in Cologne.
Hi Kai! Could you please introduce KARMAKARMA and what led to your founding the company back in 2012?
Hi, In 2011 I actually sold my company a mobile application company in the Mobile Voting space to video which was a NASDAQ listed company. And after that I wanted to do something good. So in 2012, we set out to found KARMAKARMA and what KARMAKARMA is, is basically it's a social impact community to everybody in the world can see and track their impact on the world. And we went down and negotiated with over 150 charities specific social impact so that people can see where and how they actually driving a measurable tangible impact in the world. So for example how much does it actually cost to plant a tree in Kenya or how much is costing if one day of water in Haiti or has to vaccinate a child against rubella and measles in Afghanistan. So all these social impacts are now listed on our platform and people can make a specific social impact and then track that and share that with their community.
As somebody who toes the line between investor and entrepreneur, how do you approach investing in new startups? Has your own entrepreneurial experience helped you to better understand the investment world?
My approach in actually evaluating startups is based on what I call the 4T model which is something which we actually set out here at the university as well. At RFH university in Cologne and basically, 4T stands for timing, traction, technology, and product and then, team. So, team, I think now is obviously one of the core assets of the company. And so what I'm looking for there is a complementary skill set in the team. The traction means it's showing creativity actually of the team, so how much has that team achieved with little. And so I think that's important so you know this is the idea of being scrappy and doing more with less. The technology and product looks at what is actually the business model, and how is there a product market fit already in that idea. And the fourth T is then timing which I think is crucial in the overall success. So it's really looking at what's the sentiment for certain business at a certain time, and will it succeed. And then I strongly believe chance at the second question, yes that you know having that empathy and having been an entrepreneur before is actually very helpful in helping others because you've been through that entrepreneurial rollercoaster the ups and downs. And so I do believe that it is a real asset for a startup to have experience enterprise on their team as advisors for example and they are actually a number of studies showing that entrepreneurs are actually the better investors as well, having a better track record.
What digital sector do you prefer to invest in? What makes a startup stand out for you?
I actually look at companies that are creatively destroying an industry or other companies as Schumpeter put it right. So the creative destruction process whilst we call it these days disrupting an industry. And so from a sector perspective, I quite often invest in high tech companies and e-commerce companies especially, and so what I'm looking for in a startups is really two components that I think are very decisive and crucial for the success next to what I call the 4T model but two I think especially stand out. One is really obviously the team and you're looking at a complementary skill set of the founders, are they a team actually that that can really bind together is an innate drive to make something happen you know is there a passion for that business, and the second thing is really you know what has a team achieved really, in terms of traction. So you know the scrappy-ness. Are they doing more with less. Are they creative. Can they drive really change in the industry and I think those are decisive factors that drive success. And that's something I'm looking for personally.
What do you think are some of the biggest pitfalls in the world of investment today? How would you like to see the field change?
Well as an investor I think you know there's a number of things that you need to consider as well right. For starters, it's never a smooth ride. Right. So there's never that one venture you know you invest and then it goes through the hockey stick model and everything is fine. It's always a bumpy road it's always an up and down. So that's definitely something that you have to keep in mind, and then I think the second thing as has had often been pointed out is it's really just time to market right timing especially and also quite often you know the anticipated idea will take a lot longer to get to a certain inflection point and would really drive successful business. So it's it's always a rocky road. And the third thing I think maybe from an investor perspective is you've got to try to keep emotions down or keep them as little as possible because that's often something that will cloud a judgment on a specific investment field. And then I think you know moving forward I'd like to see especially in Germany, for example, a lot of what tax breaks for investors, that's one thing I'd also like to see a lot more being done for scaling companies. A lot has been done for promoting startups but I think the next phase and looking at a lifecycle concept you really got to think about how can you promote companies at a later stage in life and what can we do there. And I think there's a lot that can be done and there's a lot more also on a political and regional level that can be accomplished in the next few years. So I'm looking forward to helping that and supporting that process as well.
What's next for your work with KARMAKARMA, as well as your academic and investment career? What are the main projects and courses you'll be focusing on throughout the year?
We're super proud of the KARMAKARMA community. Together we have done and accomplished over one million social impacts around the world, literally from everything you know creating a new world, planting trees everything so that's fantastic. So we're looking to increase our footprint there overall and driving more social impact. On the entrepreneurial side and also on my academic side. I'm looking to teach more entrepreneurialism also to other students, not only business students but also to breath and that and to widen the scope and especially getting computer engineers and other departments to really adopt an entrepreneurial spirit and hopefully drive more potential startup founders and drive more startups overall in this ecosystem here in Germany so I'm looking forward to that. Thanks.