Spotlight: BMWiVentures featured team member Marcus Behrendt
Marcus Behrendt, Managing Partner
What do you focus on at BMW i Ventures?
As I have spent most of my career developing car systems, my main focus is on automotive technologies. I started my career working on driver assistance systems like Adaptive Cruise Control, ESP, steer-by-wire and drive-by-wire system. Accordingly, I have a natural tendency to explore new ideas in everything around autonomous driving, control systems, powertrain, electrification, batteries, and so on. This interest does not stop on the system level though. I also like to dig deep into the tech, including investments in ASIC development or wireless networks. Additionally, I am interested in the interior material space, UI/UX, and virtual reality technologies. In the manufacturing space, I am fascinated by additive manufacturing, logistics, and robotics. If you have a deep tech topic, stop by my office.
What was your pathway into venture capital?
I studied management and engineering at the Technical University of Berlin, so I was drawn to both aspects of deep tech and investing alike. While I spent most of my early career in car development, my interest also lay on the financial side of businesses. In 2018, when our first fund came into real swing, I moved over from BMW corporate to join the BMW i Ventures team in the Bay Area to help bridge the corporate world of BMW and the venture world of BMW i Ventures.
What do you look for in a potential investment?
I believe there are four big pillars for each venture capital investment (and no, I’m not alluding to William J Bernstein’s book). For me, those pillars are as follows:
Product Market Fit: If you have the right product at the wrong time or vice versa, you will not succeed. Your product must solve real problems. Your sales channels must reach potential customers. Potential customers must be willing to pay for your product. Customers must return for more.
Market Size: If there is not a sufficient market size, the company might still have a superior product and might become successful on classical terms, but those undertakings should not seek venture capital for their growth purposes but find other ways for raising capital.
Competitive Moat: The best technology is worthless if it is too easy to copy, rebuild or otherwise replace. In this matter, venturing is very tricky: speed to market counts, timing is everything, and startups need to always show a competitive edge over their incumbents. The less defensible a product is, the faster you have to grow, occupy the market, and create a loyal customer group.
Founding Team: Last but not least the founder team is very critical for the success of the operation, especially in the beginning of the endeavor. Later, you can hire professionals, but early on you need absolute conviction in your journey.
Depending on the product and the market, the weight of each of the four pillars varies, but they are all must-haves. You should not invest in an opportunity if not all four areas are satisfied. Only if these four areas are satisfied should you dive into deeper diligence.
What is your most contrarian view on an existing or emerging technology trend?
It is a constant challenge to determine which trend is a real trend versus just short-term hype. In our business, it is essential but never easy to distinguish between a hollow sales story and a promising opportunity. The most illustrative example for me is the ups and downs of the autonomous driving hype cycle. When I came to Silicon Valley in 2018, everybody thought autonomous driving was right around the corner. The common perception back then was that we would have autonomous cars and robo-taxis on the streets by the early 2020s. Everyone was talking about it, and it was almost inconceivable to ask questions about the how. However, as I had worked in the industry on the tech side for quite a long time, I was full of doubts about the tech being “just around the corner”. Back then, if you voiced that concern, you were quickly classified as the tech denier. Billions of dollars later, autonomous driving remains further away than just the next generation of cars. The venture community has begun focusing on other hype cycles in the automotive sector, and many of the remaining autonomous driving startups have pivoted.
The question in the venture world is often not “will reality catch up eventually”, but rather “can we exit before it happens”. Investing is about riding a wave before it crashes. At BMW i Ventures we see our investment strategy a little different: we strive to create sustainable long term value for everyone.
What advice would you impart to entrepreneurs?
Be focused, be fast, and be bold! Persistence is key for an entrepreneur. The difference between the entrepreneur and the investor is that the entrepreneur puts all his eggs in one basket while the investor puts many eggs in different baskets. Therefore, while the investor is prone to diversify, the founder must be all in from day one. Being a founder is running the long-distance race with no sight on the finishing line. You have to be utmost determined to finish the race without knowing what the trail will look like and where it ends. Always prepare for the worst.
What’s something interesting about yourself that most people may not know?
I have a passion for sailboats of all sizes. The most satisfying activity for me is sailing the open seas in moderate to high-speed winds, anchoring in lonesome bays and coves, and stargazing to the rhythm of the swell in a dark night. Being cast away from civilization on a boat propelled by nature’s forces is extremely calming, and let’s me easily forget the pace of our daily business life.