myflexbox: revolutionizing last mile delivery I part 1

Corporate Entrepreneurship Stories #4: myflexbox – A corporate venture of Salzburg AG – Part 1

Part 1 – The birth of myflexbox: Utilizing Salzburg AG’s internal innovation capabilities to rethink urban last mile deliveries 

A conversation with Jonathan Grothaus and Lukas Wieser, the two co-CEOs and founders of myflexbox and Michael Obrist and Michael Lunzer from Pioneers. 

Jonathan and Lukas are well-known figures in the Austrian (corporate) startup scene. Together with their CTO and co-founder Peter Klima, they established myflexbox as a significant player in the smart city logistics sector thanks to their last-mile delivery solution. In our conversation with the two, we aim to highlight the success story and individuals behind myflexbox.

In this first part, we explore the origins of the venture, the experiences and backgrounds of Lukas and Jonathan, their successes in Salzburgs AG’s “Innovation-Challenge”, and early strategies for expanding their startup idea within the corporate structure.

Hi Jonathan, hi Lukas, great to talk to you! Why don’t you start by telling us what myflexbox is and what’s the current status of development?

Jonathan: Nice to meet you! myflexbox is a smart city company that was founded as a corporate venture of Salzburg AG. The aim is to minimize CO2 emissions across Europe in the last mile caused by unsuccessful doorstep deliveries in cities. End customers can receive, send, and return parcels conveniently and contactless 24/7 with myflexbox.

Lukas: Since our foundation in 2018, we have established ourselves as the largest independent smart locker network provider in the DACH area. We currently have around over 85 employees, most of whom work at our headquarters in Salzburg. Overall, we have around 800 parcel stations to-date and are represented in more than 40 cities in Germany.

Your entrepreneurial roots already date back to a young age. Can you tell us a bit about your background?

Jonathan: Sure! I studied economics in my bachelor’s and worked at a marketing startup while still in school. At the Munich University of Applied Sciences, I later deepened my innovation knowledge with a degree in Design Thinking and participated in an EU accelerator whilst building more startups, also in exchange with investors.  A native of Salzburg, I eventually wanted to return home and initially worked in product development at Salzburg AG. This was also the time when the first venture idea around a smart locker system was born.

Lukas: My entrepreneurial path also started early: At 24, together with a good friend, I took over an inn with a theatre, where I gained my first hands-on business experience. Later, I co-founded kurzzeitwohnen.com, an online portal for furnished business accommodations, and simultaneously co-created an organic beer brand with a well known organic brewery. At 30, I sold my shares and moved to San Francisco and London to deep dive into social entrepreneurship. In Munich, I helped transform a health food chain with 700 employees, which deepened my understanding of business building and management. The journey through different industries and cultures showed me how important it is for me to develop sustainable, socially responsible business models that are beneficial for all stakeholders. After working with social entrepreneurs in Kenya and Uganda, eventually I ended up at Salzburg AG where Jonathan was already working on the business idea around a depot box, so we teamed up.

Jonathan: It’s also important to mention our third founder, Peter, our tech lead. As one of the first employees of Runtastic and a developer of a payment startup, he brings extensive experience in software development to the team. He thinks in very open software systems and manages to conceive and build complex software from scratch.

Lukas and Jonathan from myflexbox in conversation with Michi and Micha from Pioneers

The birth of a new venture is often marked with many uncertainties, yet fast progress in key areas (vision, customer understanding, team, funding) is enormously important during this phase. What were your first moves to bring myflexbox up to speed?

Jonathan: The myflexbox journey started in 2018 during a phase where I engaged a lot with the topic of “scalable impact through product innovation”. The initial spark for myflexbox then came from a conversation with an IT manager at Salzburg AG who was struggling with a logistic issue: the time-consuming process of handing over IT devices to other colleagues physically. That’s when we thought: “How about a locker system for these kinds of handovers?”. I instantly saw the vast potential of this concept.

With Tobias Wiener, head of corporate development at the time, we pinpointed about 50 use cases for a smart locker system, both for Salzburg AG’s internal processes and external applications. Our idea won the Salzburg AG Innovation Challenge, allowing us to continue our project through an intrapreneurship program.

Lukas: A critical step was validating the business model. We needed to ensure that our idea was not only theoretically convincing, but also practical. We thoroughly tested and validated the 50 use cases, paying special attention to understanding users’ needs and habits in parcel management. Our unique selling points – numerous locations, direct access to end customers in Salzburg, and our role as a neutral network operator – were key parts of our value proposition. Our goal was to establish a functioning parcel infrastructure at five locations within one year and our funding request was ambitious: four staff members for a year, five lockers, and proprietary software development. We viewed the software as our unique selling point, creating a future investment case. 

Jonathan: Also timing-wise we had great momentum: Lukas and Peter joined the company at this crucial early validation stage and were able to dedicate themselves 100% to the project. This early phase laid the foundation for myflexbox, and I am particularly proud of the combination of vision, team, and strategic alignment that drove us forward.

The logistics industry is a highly competitive market with substantial international competition and many stakeholders involved. What were your primary challenges and initial successes?

Lukas: Absolutely! We understood early that the challenges in the logistics chain are enormous. Everyone we spoke to share our frustration with the existing parcel delivery processes. However, we didn’t just want to bring another product to the market, but to create a solution that fundamentally improves the whole end-to-end parcel management including customers, parcel deliverers, and commercial partners. This goal required our full commitment and a deep dive into the business. We were not logistics experts at the time, but we quickly acquired the necessary knowledge and plunged full force into this industry.

Jonathan: Regarding our success, it’s fair to say that the early collaboration with UPS 2021 was a turning point for us. They were our first major customer and the collaboration demonstrated that there was “real music” behind our idea. Not just financially, but also because of the huge impact we could have on all of Austria. The phase in which we realized that as a team we could achieve something special was incredibly motivating.

Lukas: We’ve always considered ourselves like a professional sports team, where daily performance matters. This attitude fueled each other, allowing us to optimally use our strengths. As we gradually won more customers like DHL, FedEx, and GLS, and gained the trust of big names like Lidl and Billa in Austria, it became clear that we were on the right track.

Salzburg AG has a stage gate process for the development of internal venture ideas. How well did your idea fit into that development funnel? With your fast-paced development, you were probably also reaching some limits of a classic corporate stage-gate process?

Jonathan: Well, first of all, the Inno-Challenge of Salzburg AG provided us with a valuable platform where we could develop our idea, also regarding the strategic anchoring. The stage gate process was key to advance in a structured way. This process involved frequent evaluations of our progress in short 6-8 week cycles. These short cycles were essential for swiftly responding to feedback and adjusting our strategy. Key questions included: how to measure success, especially during phases where financial figures weren’t significant yet, and data generation was the main focus.

Lukas: However, it’s true that the speed at which we progressed sometimes posed a challenge. We were often faster than the company’s internal processes. We saw this also as a positive challenge and tried to further develop the innovation process and acceptance within Salzburg AG ourselves, making it more flexible to the individual development of ideas. Support from top management was also essential in this context. Regular meetings and direct exchanges with the executives provided us with the opportunity to present our progress and secure necessary resources. 

How crucial was the C-Level support for you in particular?

Jonathan: A continuous exchange with the board was important. Some decisions needed to be pushed quickly, so the 6-8 weeks cycled helped a lot there. However, despite the detailed business plan, clear targets and budgets, smaller decision points played a crucial role in maintaining focus on technology and the market. Sometimes there were also clarification needs with some departments of course – for example marketing, as we pushed myflexbox with our own brand and pace. They were not overly enthusiastic when we launched our own LinkedIn presence overnight, even though we should have waited according to the corporate guidelines (laughing).

Lukas: I think sometimes you need a certain rebelliousness when driving your own agenda, as it can clash with corporate structures. Problems may escalate even to the top in such situations. However, our aim wasn’t just to resist and do as we pleased. We consistently stood up for our cause, our venture. There were heated discussions, but over time, people understood and respected us because we believed in myflexbox and fought hard for it.

We also deliberately used the expertise and the network of the board to our advantage. Once, for example, we went into the office of Mr. Schitter, our former chairman of the board, with a list of 15 companies that were crucial for the establishment of our locations and asked him for introductions. It worked out and the same morning he was supporting us personally with sales calls, utilizing his personal network.

This was part #1 of our conversation. Check out part #2, where we discuss myflexbox’s substantial investment for its expansion in Germany. We also delve into the company’s ownership, growth plans, and vision to reshape urban delivery with sustainable solutions.