"Founders who do everything themselves are just wasting valuable time"

HQLabs boss Tobias Hagenau has built a start-up within a start-up. He explains in an interview how this works and where pitfalls lurk.

It was almost ten years ago that Tobias Hagenau founded HQLabs together with fellow students. Today, the company has around 15,000 users with its agency software and Hagenau has completely different plans: over the past two years, he and his colleagues have built up a start-up within a start-up. But that's much more complicated than he thought, partly because backers are confused by the design. Here he reveals the pitfalls and gives tricks for founders who want to know it a second time. Because all beginnings are difficult - even the second.

Mr. Hagenau, you have built a start-up with awork in the start-up HQLabs. Why did you do that?

We saw in our team that HQ is now established and profitable. We serve 15,000 users and 700 agencies, but we are also no longer growing at 100 percent every month, partly because HQLabs has reached a certain size and scope. And then we asked ourselves: how long can we continue to modernize the technology, how long can we update it, and when do we simply need to make a cut? With 15,000 users, you don't just make a cut like that, so with awork we created a playground where we are back-to-basics, i.e. simply to time recording and project planning as was the idea of HQ in the past.

How much space does this second project take up now?

That's the crazy thing: there are 40 of us now, and half of us are on awork, where we're growing rapidly at ten to twenty percent a month. That's actually a bit annoying now, because we didn't see that coming. The structure leads to the problem that VCs we talk to are confused. Because we have a large, established company and a start-up in growth mode and - then also in an internationally interesting market with many exits. Together, however, they can't do anything with us. Then they ask questions like: Why didn't you directly found a second start-up, what's the point of that? That's why we're considering spinning off awork.

My tip: Separate the organizations as quickly as possible, otherwise the companies will have completely different focuses that don't fit together.

Tobias Hagenau, HQLabs founder

That sounds easier said than done. What does it look like in practice?

Honestly, we don't know at all. Over the years, we have also collected capital and company endings, and this raises the question: Do we keep the company endings for both companies? Can we buy out some of the company ends or do we even bring in an investor who buys out old company ends from one of two products? What does that look like? We have so many questions that we all still need to figure out. We are in a luxury situation, but no one has an easy solution.

Would you still advise founders to launch a second startup?

We were very inspired by this second time. I would therefore definitely recommend it to anyone. Many founders say they would do everything differently if they could. They can then prove it. My tip is to separate the organizations as soon as possible, otherwise the companies will have completely different focuses that don't fit together.

Can you give an example?

At HQ and also at awork, we are both in the software-as-a-service business. But at awork we are growing mega fast and are still looking for the "market fit", so cancellations from customers are totally normal. So we do sexy growth marketing, which of course our colleagues at HQ also find interesting. But if they were to copy that, we would have a huge problem, because with 700 agencies you also have to maintain intensive contacts. You have to be able to set the right focus and prioritize.

What we achieved with awork took two years. With HQ, it took us six years or more.

Tobias Hagenau, HQLabs founder

How did you split up as a founding team?

We went completely on the new project because we said: We've done this before, we can do it again better and faster. We left HQ completely in the hands of the employees, which is not always easy. It's difficult to let go, especially when things go wrong, and we still have to learn that.

What are you doing better today than you did the first time around?

What we achieved with awork took two years. With HQ, it took us six years or more. So we're doing everything much faster because we're not taking any more forks in the road, no extra loops. We know the way and we don't have to work everything out ourselves and experiment a lot like we did when we first started. Now we have the speed in, which is good financially and also pushes the mood, which is currently really fun.

What advice would you give to founders to achieve this speed?

The ultimate tip is to get as much advice as you can in the beginning. It sounds trivial, but a lot of people don't do that. We didn't do that either. We were busy 24/7 and didn't take the time needed to also talk to experienced founders, entrepreneurs or business angels about next steps. But founders who do everything themselves are just wasting valuable time.

As a second-time founder, do you have the problem of repeating old mistakes?

We have a bit of the Günter-Netzer syndrome, that we want to substitute ourselves because we've done things before. That was already the case at HQ, and is still the case at awork. We still have to learn to let others do things. Apart from that, we have noticed that we have fallen into old patterns. That's not a problem because we're building something new in the same segment again, but if we wanted to revolutionize the software-as-a-service market now, that would probably be the worst approach by far.

Thank you very much for the interview.

Tobias Hagenau is the managing director of HQLabs GmbH and co-founder of awork. He has been building software for project work with his team in Hamburg since 2012. In the meantime, HQLabs has grown to over 35 employees. The first product, the agency software HQ, is with over 700 agencies and 15,000 users one of the most common solutions on the German-speaking market to bring order to the agency process. In 2019, the project management tool awork was added.