Stefan Krause has spent the last 30 years working for some of the most successful and recognizable companies over the course of his career. Krause has served as CFO of BMW and Deutsche Bank, earning a reputation for being one of the top CFOs in the world. He has also served as chairman of large corporations such as Rolls Royce Motorcars, Postbank AG, and BHF Bank. Krause has also led several successful startups, including his most recent at electric vehicle maker Canoo, where he was the CEO and co-founder of the company. In his most recent and current role, Stefan Krause was appointed this April as Velo3D Inc’s audit committee chair, and a member of the company’s board of directors.
Where did the idea for Canoo come from?
When we started Canoo, there were already many competitors out there building electric cars. So we needed to find something that made us different from the others and would provide a competitive edge in the future. Therefore, we decided to create a quite different vehicle that could be built on a unique skateboard that can be used for several different types of vehicles. We wanted to build a vehicle for millennials. And it didn’t need to be sold, but it needed to be a subscription. This was in early November of 2017 when we decided to build this new company.
What does your typical day look like and how do you make it productive?
During the early hours of the day, I have lots of meetings, which, since the COVID lockdown, have moved to Zoom. In the afternoons, I get to work on my email inbox and do some additional phone calls.
How do you bring ideas to life?
I must say, I’m quite a creative and spontaneous person. I don’t have a specific method that helps me create ideas. Very often, ideas come to me during the day or sometimes during the night. There might be something that intrigues or interests me, and then, I start thinking about it or reading about it or start googling it and trying to find out more information. So ideas just come to me.
Sometimes, I think it’s part of the fact that I grew up in Colombia, where one of the most important skills to have is “improvising.” I think this ability to improvise often helps me come up with new ways to do certain things.
What’s one trend that excites you?
Oh, that’s a difficult question because I think that there are many interesting trends going on right now in the world. Of course, the whole change that the world is going through right now regarding how we will move people and goods around cities in the future in a more healthy, sustainable way has been a topic that has kept me busy and interested for the last couple of years.
But it’s not the only trend I’m interested in. I do think that the world is ready for some substantial change regarding how we deal with our planet and each other. I am super interested in interaction with people. I am observing a trend that more and more people are enlightened about our understanding that there is more to life than just working, making money, and enjoying life or being entertained. And that’s a trend that I think is really interesting. Last but not least, obviously, I am also interested in art, especially contemporary art. I find art a very interesting way that people express themselves and send messages. That’s why I like art that not only depicts something but also sends a message.
What is one habit of yours that makes you more productive as an entrepreneur?
I think I have an ability to focus on key issues and not worry about unnecessary details. I also think that I don’t worry about my own benefits and myself when it comes to building companies. I worry more about how we can create a meaningful business by focusing on real solutions and products that are beneficial to customers.
For me, it’s important to treat employees well and empower them to participate in decisions so that we can deliver quality products and services to consumers. I think that I have an ability to distill key issues that are really important and not focus on a lot of details and minutiae and things that don’t really matter. For example, way too many people focus too much on titles and organizational responsibilities. And I don’t think that that is really important. Of course, it is important to get organized when you work with many people, but that’s not what the core focus should be. The core focus is really to deliver something that matters, is sustainable, and helps people.
The second thing that I think matters is how you treat the people in your organization because, at the end of the day, you depend on them to provide quality goods and services to your customers.
I think I also have the ability to focus strategically on what is important for a business and how you can evolve a business in a way that moves it forward. I see too many people focusing on the wrong things over the long term, and I think I have the ability to understand good and bad strategic choices.
What advice would you give your younger self?
I think what I have learned over the years that I didn’t consider as important in the past is to build a strong personal relationship network. What matters in your career or when building a business is the personal network that you have built and the people to whom you have access. As a young manager, I had the opportunity to build many great relationships. But to some extent, as this is time consuming, I always decided to focus on the issues at hand instead of investing time in establishing and cultivating relationships. This is something that I have learned later in life, so this is the advice that I would give my younger self: Spend some time whenever you have the chance to develop and establish relationships that may be useful or important for you in the future.
Tell us something that’s true that almost nobody agrees with you on.
In my life, I have learned that money generally comes automatically when you do the right things and you do them right and treat people well. I have learned that you should not focus primarily on the money you can earn. Rather, focus on doing the right things. Then, money will come your way. It’s sometimes difficult to understand, and sometimes, it requires patience and confidence, but it’s something I learned that many people will not agree with me on.
I also learned, to some extent, that if you spend money wisely, that money will eventually come back. I don’t think many people agree with this either. I see so many people only focusing on how they can make money and giving money a stronger importance than it should have. I believe that people will disagree on this. They think that they have to fight to get more money and save to protect their money.
As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?
I think what I do over and over and can’t stop doing is staying very open and curious about anything that comes my way. I very rarely decline an opportunity, and I’m always ready and willing to learn an interesting fact, hear an interesting story, or spend time on understanding a new product or idea.
So, what I would tell everybody to do is never overestimate the opportunities that come to you and understand that, in every new thing that you are confronted with, there might be a great new idea or opportunity.
I am intrigued and driven by curiosity. When we are children, all that drives us is this enormous force of curiosity. That’s how we learn. As adults, to a large degree, we lose this curiosity. Religions and society norms label curiosity as a bad thing. “Curiosity killed the cat,” as they say. We very quickly give in to what we are comfortable with and what we know, and we don’t use our time on earth to explore the many opportunities around us. So, if I can recommend something to somebody, it is to always stay curious because, at the end of the day, that’s where clues to opportunity lie, and that makes life interesting.
What is one strategy that has helped you grow your business?
I don’t think there is a single strategy that has helped me grow any of the businesses that I have been involved in.
What I did learn quite early is to use strategy as a development process. Good strategy is not to hire one of the big, famous consulting companies to tell you what to do. Get the people in your management team together to think about the challenges you face. Teach them to get clarity of thought. Teach them to identify all kinds of biases that confuse our thinking. Start to imagine how the future could look, and then, describe how your business will fit into this future. Then, formulate how your business will be able to provide superior value and, therefore, be competitive in the future.
I have learned that many people make significant mistakes when evaluating and making decisions about future strategy. I’ve seen so many strategies that basically were not convincing, and I have seen equally as many strategy execution mistakes. When it comes to strategy execution, all that matters is relentless alignment. I am a firm believer in alignment when you want world-class execution.
Once you have formulated your strategy, vision, mission, and purpose, you need everything else to align with it. That includes the company culture, your compensation systems, the skills of your people, your execution plans, your strategic initiatives, your core metrics, your policies and procedures, and everything else in the organization. Then, you really become an execution powerhouse as an organization.
So, for me, it’s not one strategy that matters; it’s developing the right strategy and then using the power of alignment to execute relentlessly.
What is one failure you had as an entrepreneur, and how did you overcome it?
To be honest, I think a good entrepreneurial career will have lots of failures. And it’s more about how you think about and react to these failures.
They should make you stronger in the future as you develop new businesses. I think failure is a great opportunity for learning, but that’s easier said than done. I am sure the people who read this will conceptually agree with me, but it’s hard in the moment. It’s hard when you are disappointed with yourself or others, when you feel depressed and angry, when people avoid you or point fingers, when you lose your job and have to face your fears, or when you’re learning about yourself and accepting your limits. But the pain of this destruction bears the seeds of your next success.
To be honest, if I can summarize the biggest mistake I have made during my journey that has led to many more mistakes, it is trusting people. It’s a sad reality, but in business, trust is something rare. I know that many people think that by writing legal contracts, they can protect themselves against people with the wrong motives, but the truth is that this is of limited value. Contracts are only as good as their enforceability, and that is a big issue.
But still, my advice is always to trust first. But be prepared to be disappointed. Build this into your thinking from day one so that you’re not as emotional if it really occurs. This is, I think, the biggest mistake I have made over the last couple of years in my career. I trusted and was not prepared to deal with the fact that some people care mainly about themselves.
What is one business idea that you’re willing to give away to our readers?
I developed this one idea that I gave away to a student for free that, regrettably, wasn’t used to build a business, which I still think is a great idea.
If you look at modern cities, one of the most expensive real estate opportunities is the road curbside where we park our cars, trucks park to unload goods and services, or buses stop to pick up people. This is a very used piece of real estate in cities. Because it is limited and can be used for so many things, it is a very expensive piece of real estate that exists in all cities across the world.
Today, as cities have become more and more crowded, they have developed all kinds of systems to make better use of curbsides. There are areas dedicated to parking and unloading. There are areas designated for fire trucks, taxis, and buses. Regrettably, these areas are not very flexible because, once you put up signs, these spaces are generally blocked and not used for a large amount of the time.
I had the idea to develop a system that uses cameras and sensors built into the curbside borders, which would allow any curbside to be used in different manners in a more flexible way during the day or week. Smart curbsides. For example, when you leave home, you would book a space where you need it ahead of time. That would eliminate traffic caused by people searching for parking, one of the biggest unnecessary reasons for pollution in cities. When you arrive and someone else is still parked in your spot illegally, that person would, via the curbside sensors, get automatically fined, and you could get a good share of that fine as compensation for your inconvenience.
Therefore, this is a better deterrent for parking violators than the current method, where they often bet on the fact that they’re not going to be caught. In the evenings, when loading zones are not needed, they could be easily converted into parking zones, creating more parking in cities. And certain bus stop areas that are not used very often could be better utilized. They could be used to unload while they’re not being used for bus stops.
It’s a very simple camera, sensor, and computer system with some lights on the curbside to indicate a more flexible use. The idea is to make very expensive real estate smart and flexible. I believe that the technology for this idea already exists, so it would be easy to implement and sustainable.
What is the best $100 you recently spent? What and why?
The best $100 I recently spent was to buy some Pokémon cards from my seven-year-old son. It made him really happy and taught him a lesson on how you can sell used stuff that you may not need anymore but that still can create a lot of value for you. With this small transaction, I embedded in him the idea to become an entrepreneur. He was super excited about the money that he was collecting by selling things that he didn’t need anymore.
What is one piece of software or a web service that helps you be productive?
To be honest, the software that I have used most in the last couple of months that has kept me super productive is Zoom. COVID forced us all to use Zoom and the like instead of traveling on time-consuming business trips for just one meeting.
I sure hope that we will not go back to these unnecessary business trips. I hope that we can spare our world the CO2 that this generates and continue to use Zoom and similar technologies in the future. This would allow us to avoid unnecessary travel, cut our carbon footprint, and spend more time with our family and loved ones. Of course, from time to time, personal interactions are important and will continue to be important, especially to establish trust. But repeated meetings can definitely be eliminated.
What is the one book that you recommend our community should read and why?
“The Power of Now” by Eckhart Tolle. I like this book very much because it gave me insight into a very simple but important rule in life. When you live in the past, you only regret what you did or didn’t do. And that is not very helpful and a waste of time. When you live in the future, you only worry about what’s going to happen to you or how you are going to survive.
The message of “The Power of Now” is to live in the moment and go with the flow. Enjoy what you’re doing today, don’t regret the past, and don’t worry about the future. At the end of the day, you can’t change your past, and you can’t predict your future. There will be challenges that you have to overcome, and they’ll come one at a time and be designed in a way that you can deal with them. Enjoy what you’re doing. Enjoy life as it is. Don’t worry about the future, and don’t regret the past.
What is your favorite quote?
A long time ago, I was a candidate to become Apple’s CFO. I had the honor and pleasure to meet Steve Jobs at his house, and I was there for several hours. We had a very inspiring talk, and I was able to ask him a lot of questions about his company and his life.
The quote that always stayed with me was when he talked about the risk that you have as an entrepreneur to focus on too many things at the same time. When I asked him what he truly believed was behind the success of his company, he said, “One product at a time.” He told me that, as he had hired the smartest people on the planet to join his company, his team came up with new ideas and made new proposals every day. And it was quite difficult to focus (because many of these ideas and products were quite compelling) and convince the team to follow the “one product at a time” principle.
I think that this was very impressive because I see so many companies struggling with this. And I do believe that Apple’s success is very linked to this statement, so this quote is the one that I would say has been my favorite for many, many years.
- Humanity is all about learning by evolving our wisdom and knowledge to hopefully do things better in the future.
- At the end of the day, we have a limited time on this planet, and I think that we should try to get the best out of it.
- Most importantly, be honest and reliable. No money in the world can replace that. Nothing can replace the feeling of looking in the mirror and being assured that you stood up for what you believed in, even though it might have cost you something.
Steve (Stefan) Junge hails from Germany and helps with the day-to-day publishing of interviews on IdeaMensch. While he and Mario don’t share a favorite soccer club, their enthusiasm to help entrepreneurs is a shared passion.