Interview with Startup Valley News
Please briefly introduce yourself and the startup Circuit Booking to our readers!
Sebastian: Motorsport nerd doesn't necessarily sound flattering, but it's a good description. I'm very lucky to be able to combine two passions in my job - motorsports and digital processes. Not only did I study Computer Engineering at RWTH Aachen University, but as Head of Formula BMW for many years I was also able to live out my enthusiasm for motorsport to the full. As the founder of circuit-booking.com, I have now been able to combine both passions for ten years. Our start-up circuit-booking.com is a digital marketplace for worldwide, exclusive racetrack bookings. In concrete terms, this means that we support car manufacturers, automobile clubs or event organizers and, more recently, private motorsport fans, in all phases of the booking process for tracks that are required, for example, as part of vehicle tests, track days, incentives or training.
Why did you decide to start a company?
Sebastian: Online marketplaces have been working very well for years. What has long been standard for hotel rooms or flights has been completely lacking in motorsports. Business transactions in the industry are still quite analog and also complicated. During my time at BMW, it was therefore often annoying for me to book and commission race tracks. Customer service was not a big deal from a racetrack perspective. A race track costs up to 30 TEUR / day and you were often not taken seriously if you asked for 4-5 days at a time.
There was a lot of wasted potential here, which we, Dr. Carsten Tilke and I, wanted to change - the birth of circuit-booking.com.
What is the vision behind Circuit Booking?
Carsten: With circuit-booking.com, we want to make the track day and motorsport training business more digital, more transparent and simpler and thus consistently expand the value chain.
From the idea to the launch what were the biggest challenges so far and how did you finance yourself?
Sebastian: At the beginning, we financed ourselves and then gradually expanded the business from current revenues. Real investors only came in later. One challenge was clearly the development of new markets. We tried to enter the North American market in the very first year after the company was founded and thought we could finance the market entry from cash flow, via bootstrapping and existing contacts with OEMs. Parallel growth in both countries with a small team and no traditional VC funding was simply impossible, so we had to withdraw from the US market after 1.5 years. We therefore still have a score to settle with the North American market and will be back!
Another challenge: finding good software developers.
Who is the target group of Circuit Booking?
Carsten: We are a digital marketplace for car manufacturers, car clubs, motorsport organizers and, more recently, private motorsport fans who want to live out their hobby on the racetrack as part of motorsport training sessions and trackdays.
How does Circuit Booking work? What are the advantages? What distinguishes you from other providers?
Sebastian: Good accessibility, simple bookability and consistent digitization are decisive competitive advantages for event organizers, but are rarely part of their core competence. This is precisely where the advantage for event organizers lies: with our digital services, we ensure more customers, better capacity utilization, and a lean personnel and cost structure. Trackday organizers can concentrate on their core business and use the data we provide to make their customers even more individualized and thus more relevant offers in the future. The advantage on the customer side is the easy and transparent comparability of the different offers. Booking is done with just a few clicks, payment processes and invoicing are transparent and secure. The customer can optimally plan his entire trackday/training season and has only one contact person during the booking process. Circuit-booking.com is a one-stop shopping solution - there is currently no other like it.
How has your company changed with Corona?
Carsten: Corona has led to a stronger focus on digitization on the part of our customers and an increased demand for white label software solutions.
We have seen a significant drop in sales in the area of brokering exclusive rentals of race tracks, which we have been able to compensate for through our other revenue pillars without having to make any major changes to our cost structure.
The decline in revenue has "only" inhibited our organic growth and has led us to invest in product development and personnel structure with less commercial risk than we would have been able to do without Corona. Compared to other companies in the motorsport environment, however, we are still complaining at a relatively high level.
At the same time, we have seized the opportunity to launch a new product with the B2C Trackday Marketplace, which offers new, professional booking and marketing opportunities for all market participants, which each individual market participant cannot tap into in a hurry.
How did you prepare for this and what changes did you make?
Carsten: We had known for some time that we would need additional investors for any kind of B2C business, as a B2C business is typically very capital-intensive in the early stages.
As part of an existing consulting project, we were able to attract Michael Mücke, Managing Director of Mücke Roth & Company as a new investor.
Through our new shareholder structure, we are now "VC-ready" to start our B2C growth story and have the opportunity to target strategically interesting business angels and VCs through Michael's network and expertise.
Where do you see the opportunity in the crisis?
Sebastian: We assume that racetracks in particular will be open to new cooperation formats, because their previous key source of revenue "exclusive leasing" will decline, so they will have to develop new sources of revenue themselves. Based on our long-term experience in the racetrack market, we have a wide range of concepts for tapping these sources. In 2020, our racetrack and motorsport customers already had more time for the conception of new (digital) cooperations due to the lack of day-to-day business, which allowed us to make faster progress than would have been possible during a normal motorsport season.
Where is the path heading? Where do you see yourself in five years?
Carsten: In 5 years, Circuit Booking will be the world's leading B2C trackday marketplace, deeply anchored in the automotive group ecosystem via a variety of technical interfaces.
In conclusion: Which 3 advices would you give to aspiring founders?
Sebastian: Others have already given the classic tips for founders. So here are the general tips that always help - especially in business.
1.) Sincerity towards customers, especially in the B2B sector, where the personal relationship is an important component. Honest advice is more important than short-term profit taking. It has been shown time and again that it has not been to our detriment to say, for example, "We don't want to program this or that for you, because others can do it better and we don't have to reinvent the wheel."
2.) Patience, persistence and bite pays off, especially in B2B: We have customers who took six years to realize that the IT solution we originally offered them was the best for them - and then signed on. Another customer, after the eighth offer change, signed exactly the offer that corresponded to the 1st offer.
3.) Hire employees who can do things better than you can, because that's the only way you'll really get ahead. Naturally, in the event of an exit, you as the founder will reap all the glory in the external perception anyway, so 'ego' has absolutely no place in the company and in day-to-day business.
Original source (in German): https://www.startupvalley.news/de/circuit-booking/