Top pieces of advice for startups seeking impact-focused partners/investors/collaborators.

Werner Pamminger is the CEO of Business Upper Austria, as well as chairman of the board of directors at tech2b, one of Austria’s oldest and most successful incubators. He has been at the helm of these institutions throughout the volatility of the pandemic, and now helps shape the next generation of businesses in the region.

One of the main focuses in Upper Austria today, as well as in many other European countries, is encouraging impact enterprises, basically businesses that help drive social change in an economically sustainable way. For Werner, “impact focus means that startups make a difference in the region and in society.” Impact startups tend to fall into two main categories: climate action, meaning they offer a product or service that helps Europe achieve carbon-free status; or they offer a product or service that helps transform regional industry to be more carbon neutral. Upper Austria is a historically industrial region, and over 32 percent of its GDP is manufacturing. The regional strategy Werner is working to implement is to help this sector go green.

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We see this as both a big change and a big opportunity. Two thirds of our economy comes from exports. As we are so close to eastern Europe, we are in a very internationally competitive market and environment, and have the opportunity to be leading edge in an important sector that will be vital to our future.

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In order to accomplish this, Business Upper Austria is working to bring together startups and regional corporations. They rely on the UN’s Sustainable Development Goals (SDGs) as well as the latest EU green regulations as guides. “We see this as both a big change and a big opportunity. Two thirds of our economy comes from exports. As we are so close to eastern Europe, we are in a very internationally competitive market and environment, and have the opportunity to be leading edge in an important sector that will be vital to our future.” Unlike other countries, Austria doesn’t see the move towards carbon neutrality as a threat, but rather an opportunity to lead. Austria’s history as a leader in both heavy industry and environmental politics plays to its strengths today as a leader in the transition from traditional industry towards a more sustainable future. Werner is proud that they have a lot of non-software startups, with a focus on hardware and equipment, as well as industry-focused startups. This plays to the region’s strengths. For startups that want to go into manufacturing and B2B, Linz is one of the best places in the EU. There is a concentration of high-precision manufacturers for machinery, auto equipment supply, medtech, etc.

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Increasing energy efficiency and reducing costs is one of the more common issues that Werner works on with impact startups. Werner points to impact success stories like ecop Technologies GmbH, a company founded in 2011 which has developed a completely new generation of heat pumps for industrial use. This new technology makes it possible to overcome the hurdles of previous heat pumps in terms of achievable temperature levels and temperature differences to be bridged. Ultimately saving users on energy costs by boosting efficiency, one of the most important factors for traditional industries moving towards carbon neutrality. 

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If you are an impact startup focusing on B2B, industry or hardware, then I would say our region is really top-notch, not just in Europe, but in the world.

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All the steps to launching an impact startup are a bit different to launching a non-impact one, including finding funding, investors and collaborators. Despite the focus on meeting certain guidelines, like the SDGs, “impact startups still have to prove, more than conventional startups, that they can create value and capture profit; you really have to explain and defend your business model,” says Werner. However, the caution and scrutiny from partners and investors is often much greater, especially when federal or EU funds are on the table, and impact startups need to demonstrate that they are real businesses with scalability potential. This is one of the reasons why Werner stresses the importance of leveraging the regional ecosystem and connecting with local stakeholders, such as tech partners, suppliers and complementary companies, as early as possible. This is especially true for international founders moving to a new area. Business Upper Austria’s dedication to the country’s innovation landscape also takes a more practical approach by offering new entrepreneurs entire support networks when relocating through partnerships with The Welcome2Upper Austria Service center, which offers the most comprehensive view on the practical steps of moving and starting a business in the region.