While this model, which is the focus of Reid Hoffmann´s excel­lent book Blitzsca­ling, can pro­duce excep­tio­nal win­ners, such as Ama­zon or Face­book, it can also des­troy large amounts of invest­ment cap­tial when it does not work, such as in the cases of WeWork or per­haps Uber. Alt­hough we rea­lize the jury is still out on the lat­ter exam­ple, we believe that this land-grab­bing and heavy-loss-making-in-the-early-years approach is being employed to create value in more mar­kets than actually lend them­sel­ves to suc­cessful value cap­ture. At least the magni­tude of value cap­ture is fre­quently not ade­quate to appro­pria­tely com­pen­sate inves­tors for the capi­tal deployed and the large risks taken. Actually, this that are cha­rac­te­ri­zed by extre­mely high net­work effects (Face­book) or mas­sive invest­ment (Ama­zon) which create sus­tainable bar­riers to entry.

In Thü­rin­gen, we do not have suf­fi­ci­ent capi­tal to fund such large-spend busi­ness models, nor do we have many com­pa­nies which are focu­sed on large-scale B2C oppor­tu­ni­ties, nor do we have the type and quan­tity of available labor that could pur­sue such models. Ins­tead, due to the highly inno­va­tive and disci­pli­ned engi­nee­ring and tech pro­wess with which Thü­rin­gen is bles­sed, we take a dif­fe­rent approach that focu­ses first on the ele­ment of value cap­ture. We do this by deve­lo­ping truly ground­brea­king tech­no­lo­gies and pro­tec­ting those tech­no­lo­gies from direct com­pe­ti­tion and sub­se­quently, once the tech­no­logy is ready to scale, pur­suing value crea­tion on top of a strong foun­da­tion of highly dif­fe­ren­tia­ted pro­ducts and solutions.

His­to­ri­cally, the value crea­tion part of the equa­tion was an area of weak­ness for our region; howe­ver, over the last decade com­pa­nies here have become more adept at pack­a­ging their tech­no­lo­gi­cal breakth­roughs into attrac­tive and easily con­su­ma­ble pro­ducts and solu­ti­ons and com­mer­cia­li­zing on incre­asingly lar­ger sca­les. In fact, we stron­gly believe com­pa­nies in Thü­rin­gen are gene­rally well posi­tio­ned to pro­duce excel­lent cor­po­rate results and invest­ment returns in the years ahead as our world-class, breakth­rough tech­no­logy incre­asingly seam­lessly aces­ses the glo­bal economy.