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.