Do German founders sell their companies too early? | Do I need to move to the USA as a founder to succeed there?

About this episode

Mirko Novakovic is a name that generates significant attention in the German startup ecosystem. After successfully selling Instana to IBM for a nine-figure sum after just six years, he's now founding Dash0 – again in the observability space for developers. But his experiences raise important questions: Do German founders sell their companies too early? And do you really need to move to the USA as a founder to succeed there?

The controversial exit: Was it too early?

The sale of Instana to IBM after only six years raises a fundamental question that concerns the entire German startup ecosystem: Do early exits harm the long-term development of large, market-defining companies from Germany?

Mirko emphasizes that there's no universal answer to when the right time for a sale is. The decision heavily depends on individual circumstances – the balance between growth and financial stability, market conditions, and the founders' personal goals.

After the exit, Mirko deliberately took time off before engaging as an angel investor and helping other founders with his experience. This phase provided him with valuable insights that now flow into his new company, Dash0.

From idea to product-market fit: The Dash0 approach

In developing Dash0, Mirko follows a systematic process of idea validation. Dash0 again focuses on observability for developers, collecting user data to identify and fix problems in software code.

His approach to idea evaluation follows specific criteria: from initial idea collection through validation to developing a functional product. He benefits from his experience with Instana, even though the two companies differ in important aspects.

Product Led Growth vs. Enterprise: Strategic differences

A key difference between Instana and Dash0 lies in their go-to-market strategy. While Instana primarily focused on enterprise sales, Dash0 pursues a Product Led Growth approach. This strategic decision influences not only product development but also the entire company structure and MVP (Minimum Viable Product).

Switching from an enterprise-focused to a Product Led Growth model requires different skills and approaches – from user acquisition through product development to scaling.

USA first: Necessity or luxury?

One of the most pressing questions for German founders is whether you actually need to move to the USA if the American market is crucial for success. Mirko himself took this step and built the US business for Instana.

His experiences reveal both advantages and disadvantages: While proximity to the US market certainly brings benefits, relocating isn't necessarily mandatory. What's crucial is understanding when it's advisable for German founders to go "US-Market first" and what alternatives exist.

Founding team dynamics as a serial entrepreneur

As a serial founder, Mirko brings a different perspective to team building. Incentivizing co-founders and building a long-term functioning founding team requires thoughtful internal structures.

His setup aims to prevent founder conflicts and create an environment where the team can work together successfully long-term. This experience from his first company flows directly into Dash0's structure.

Large software players from Europe: Possible or utopian?

The question of whether you can build large, market-defining software companies from Europe occupies the entire startup scene. Mirko's perspective is based on practical experience both as a founder and as an angel investor.

His learnings from his time as an angel investor flow directly into building Dash0 and help him avoid typical pitfalls while implementing successful strategies.

The sacrifices of market switching

For founders considering switching markets – particularly from Europe to the US – Mirko's experience provides insights into the consequences and "sacrifices" that such decisions entail. The choice isn't just about geography but affects company culture, team structure, and strategic direction.

Conclusion: Experience as a compass

Mirko Novakovic's journey shows that there are no blanket answers to the big questions of entrepreneurship. Whether an exit comes too early, whether you need to move to the USA, or whether Europe suffices as a base for large software companies – all these decisions depend on individual circumstances, market conditions, and personal goals.

His experience with Instana and the learnings gained from it now flow into Dash0, demonstrating how valuable practical experience is in the startup ecosystem. For founders facing similar decisions, his story offers not definitive answers but valuable perspectives on navigating the complex landscape of building global software companies.