Aunt Emma for Innovative
Dr Michael Thees & Jens Scholz
Medium-sized companies clearly feel at home in Chemnitz. Four companies from Chemnitz are even among the TOP 100 German SMEs. These include the software provider prudsys, which received the award in the innovation competition at the end of June. CEOs Jens Scholz and Dr Michael Thess explain how their company has grown in Chemnitz and what their software has in common with Aunt Emma.
With software companies, it's always a bit difficult to explain what they do. Perhaps the best place to start is with your customers. Who uses your software and how?
Jens Scholz: Our customers are all major retail chains throughout Germany. We support retailers in personalising their customer relationships. In e-commerce in particular, you can imagine that online offers are often very impersonal. There is a lack of personal communication, especially when it comes to advice. In most cases, search results are the same for all customers, although this does not mean that all customers have searched for the same product using the same search term. We personalise these processes by incorporating past data and current end customer behaviour. We can personalise product results or the appearance of the website in this way. We are bringing the corner shop principle back into retail.
An antique cash register from the 1920s, which stands in the reception area, also tells of this philosophy. It is an exhibit for trade fairs. In the corner shop, the till was used to register purchases. "It can't even do maths," explains Jens Scholz, who is one of the founders and has been a board member for ten years. "Whoever operated the till in the corner shop knew their customers," he chats. Today, standard software, the prudsys Realtime Decisioning Engine (prudsys RDE for short) - the real-time decision engine - is able to do this. This is linked to the transaction systems, such as the web shop or checkout system.
So you want to make the online world a little friendlier again?
Jens Scholz: This primarily concerns the online world. We have been working on this very intensively since 2000. However, we are also seeing how digitalisation is progressing in traditional retail. This opens up many opportunities for us to make customer relationships more interactive. These could be consultant tablets used by the specialist consultants or real-time customer support via mobile devices. The prerequisite is that the customer consents, as we are ultimately working with personal data. This is also referred to as "data for service". We help to tailor the service to the customer as well as possible.
How do you know that you are the technology leader?
Dr Michael Thess: Ten or twelve years ago, we were the first company to provide recommendations completely dynamically. Our system adapted the recommendations in real time, whereas with Amazon, for example, the recommendations were still static and only generated overnight. It is possible to measure exactly how successful the adverts are. Here too, our system is more successful than our competitors. We were the first in Germany to play out personalised newsletters. We were the first in Europe to have the topic of price optimisation in retail on our radar eight years ago. We were the first to offer many of the things that are taken for granted today.
Jens Scholz: Ten years ago, we would probably only have talked about personalised product recommendations. Nowadays, it goes much further than that. For example, we support customers in automating the pricing of products with a limited life cycle. This applies, for example, to calendars that are in the shops until February and are difficult to sell afterwards, but also to fruit or fashion. Sales are to be managed in such a way that companies do not have to destroy anything. And the customer receives the product at a fair market price. In economic terms, selling a product definitely makes more sense than destroying it.
Who are your key customers?
Jens Scholz: These are mainly the top 100 retailers from German-speaking countries, such as Baur-Versand, Otto, Bon-Prix, Klingel, Douglas, Thalia and Conrad. However, many international customers also rely on our software, such as freemans.com in the UK, ePrice in Italy and n11 in Turkey.
Has it always been your dream to run your own company?
Dr Michael Thess: Actually, yes. We had a joint company quite early on. In 1994, we developed and marketed various programmes for small businesses. But that wasn't enough for us. In 1998, we met computer scientists from Chemnitz University of Technology who had similar ideas to ours. So the founding team of today's company consisted of mathematicians, like us, and computer scientists.
Jens Scholz: We were eleven founders. We actually started out as a group of students who regularly went out to eat together and liked to brainstorm ideas together.
So how did the company get off the ground?
Dr Michael Thess: We applied for a federal funding programme called FUTOUR. This is a state start-up programme that still exists today in a comparable form. The first two years were financed by this programme. We applied with the topic of data analysis and were successful at the second attempt.
Why did you found the company in Chemnitz?
Dr Michael Thess: We were all from Chemnitz at the time. We studied and lived here. There was no question of going anywhere else.
Jens Scholz: We also didn't have the impression that the company would have been better founded anywhere else. We have our roots here and the cooperation with the university is very good. Ten of the eleven founders were from Chemnitz University of Technology. We still work closely with the university today.
The prudsys founders are still closely connected to science. Since 2000, they have been organising the DATA MINING CUP, in which students worldwide can submit ideas for intelligent data analysis. In 2016, 120 teams from around 88 universities in 30 countries took part. The best teams were honoured at a special conference for omnichannel personalisation in Berlin, the prudsys personalisation summit.
How important is the connection to the university for you?
Jens Scholz: That is a great advantage of Chemnitz. We benefit from our good network with Chemnitz University of Technology and Mittweida University of Applied Sciences. We regularly have students in the company who are writing their Bachelor's or Master's thesis. This provides us with new ideas and potential employees. Anyone who wants to stay in Chemnitz and work in this field will very quickly come to us.
What other conditions do you find at the location?
Jens Scholz: The available space is also good. We have 800 m² of office space here. And very close to the city centre. It's difficult to find something suitable in other major cities. Some people may find the vacancies that can still be found here unpleasant. This is ideal for us, as we have the potential to grow here. The fact that we don't have to worry about space has the great advantage that we can concentrate on our core business. We would much rather work on content and think about innovations than look for new office space.
Do you have to encourage the people of Chemnitz?
Jens Scholz: Yes. The people of Chemnitz are very busy apologising for their city. That's not necessary. Of course there were many breaks. The city used to be called Karl-Marx-Stadt. That's actually an interesting, exciting story. Some people in Chemnitz seem to find it uncomfortable to identify with it. They tend to be dissatisfied because they compare themselves with developments in Leipzig and Dresden. And you can only lose. Sure, it would have been great for industry if BMW and Porsche had come here. But if you compare Chemnitz with similar cities in the old federal states, the city is doing well.
Dr Michael Thess: Definitely. The city should have more architectural confidence. Unfortunately, resistance immediately forms, nipping any form of experimentation in the bud. You can't make progress like that. The city shouldn't think in such a petty-bourgeois way, it should take more risks. It should reflect on its historical strengths - its great industrial history - and build on this to define itself as a modern industrial city. This also includes radically focussing on innovation.