Bernd Zipper sits in a room in an old factory building in Essen. Johannes Kautz and Philipp Hofmann from Abihome are joining the group of three. Bernd knows the two of them and their Abihome project but wants to know what is currently behind it and how the whole thing is developing. The company tends to be underestimated, and it’s easy to dismiss Abihome as an online print lightweight: “They just make a school newspaper”. That’s true about the school newspaper, but there are several thousand of them – and there’s a lot more.
Bernd Zipper: Johannes, you founded Abihome, didn’t you?
Johannes Kautz: Not quite. I founded the predecessor company. And that was when I graduated from high school and realized: We needed to have an Abi newspaper and Abi shirts printed. I did that for two years, then I went to university and started the business again in 2013. We took over Abihome from a Berlin developer in 2017, ran both companies in parallel and quickly realized that we had to merge the two. Since 2018, we’ve been called “Abihome.” And the app also emerged during the reorganization.
Bernd Zipper: And you are responsible for the app, Philipp?
Philipp Hofmann: Exactly. I joined Abihome in 2016 and basically manage all digital adventures for us.
Bernd Zipper: But why an app? Actually, a newspaper like that can be managed via a website, can’t it?
Philipp Hofmann: Our target group is essentially graduating seniors. These are very young people who are used to doing almost everything on their cell phones. They have their photos on their cell phones, communicate via WhatsApp and organize themselves via cell phones. For them, a website is already a total media breakdown.
Bernd Zipper: You only thought in terms of apps right from the start, didn’t you?
Johannes Kautz: What we had taken over was an online form for collecting Abi newspaper content. But we wanted an App to be able to adequately map all the other services related to Abi.
Bernd Zipper: When you hear “Abihome,” you probably think of a small target group. But there are an incredible number of people who graduate from high school every year.
Johannes Kautz: Yes, about 300,000 high school graduates.
Bernd Zipper: In 2019, you produced about 100,000 Abi shirts and about 300,000 Abi newspapers. That’s something!
Johannes Kautz: Normally, an Abi newspaper is sold at the Abi ball. Accordingly, the number of students had to be multiplied by three or four. Due to the pandemic, graduation balls are currently being celebrated at an appropriate distance or not at all. As a result, the average number of tickets sold has dropped by almost half. So far, there have been around 1,200 orders from 1,200 schools each year.
Bernd Zipper: As a management consultant, I would say: “Too narrow a target group, too narrow a market. But when I read in your media fact sheet that you have about 150,000 active users, I get the impression that the app wasn’t built for a school newspaper editor to put something together on his cell phone, but that people also work together in collaborations.
Philipp Hofmann: Yes, it’s a niche market, but we’ve occupied it through the app in such a way that we don’t just reach two or three people from school who organize the school newspaper later. We get the entire class to register. This creates a huge market position in this niche market. We now have two-thirds of all high schools and comprehensive schools in the app, and they are actively using it. That’s a huge lever, all products besides the Abi newspaper.
Johannes Kautz: Basically, it’s an organizational app. One of the most frequently used features is surveys – and it also only makes sense if all students participate in the survey. That’s why at least 95 percent of a class is usually registered.
Bernd Zipper: That’s an incredible investment, A) to develop such a platform, B) to operate it and C) to keep it alive. It doesn’t help to make a platform available and say, “Well, now you can digitize just fine, dear students”. In principle, everything has to be moderated, doesn’t it?
Philipp Hofmann: The investment for development costs and community management is high. And of course, everything has to be moderated. Nevertheless, the app is a sustainable approach. In order to reach students, competitors always have to use traditional social media channels and Google Ads and spend six-figure advertising budgets every year to acquire a one-time customer. Then the students graduate and are lost as customers again. And the next year it all starts again, even with the same insane costs.
Our app is a much more sustainable model. Students sometimes register with us two or three years in advance and start organizing things. Those are practically free leads.
Bernd Zipper: Was that planned from the start? Or did it develop over time?
Johannes Kautz: We were quite ambitious, because we wanted to offer all services related to the Abi, such as for the Abi ball or for the Abi trip, in one app. However, we went into this development very naively. Philipp was still a student intern at the time, and I had – to put it mildly – no idea whatsoever. In any case, we paid a lot of dues and went through one crisis or another.
Bernd Zipper: Then you were very lucky that Madsack took a stake in you. When was that again?
Johannes Kautz: Yes, but that’s already outdated. We bought ourselves out again and have now found a new partner with whom things are much more relaxed. And the cooperation works perfectly because he also has experience in the industry.
Bernd Zipper: Who is behind it?
Johannes Kautz: Part of the NOZ shareholder family, the Elstermann family.
Bernd Zipper: In the meantime, you’ve also looked around quite a bit in the printing industry in Germany, because you’re always on the lookout for the best and most reliable print production that can stand by you during the peak season.
Johannes Kautz: This year, we will produce around 1,400 to 1,500 runs in June alone. And since experience shows that something can go wrong with anyone, we now have a broader network.
Philipp Hofmann: The peak season is of course a challenge. In order to handle the enormous volume in a relatively short time, we have to precisely coordinate the external production network and the internal process including workflows. In order to be able to map this, we have invested a lot in internal software over the last few years. And of course, you have to cover the growth generated by B2C somehow without having to hire new employees for every new order.
Bernd Zipper: You have a huge office here in Essen. You occupy two floors plus storage. How many people do you normally have here?
Johannes Kautz: There are 28 in Essen and we have eight developers at the moment. They are located remotely in Portugal and Brazil.
Bernd Zipper: So, across the globe.
Johannes Kautz: Exactly, completely remote.
Bernd Zipper: With the developers Corona was probably not such an issue, because it was remote. But with the team? This is a very creative space here. When you stroll through, you’re greeted by four-legged employees, there’s a big horse somewhere – not a stuffed one, but one made of plastic – it looks like a creative apartment.
Johannes Kautz: That’s my old apartment. And the horse is called Horst and is a lamp.
Bernd Zipper: Impressive. This is a creative space. What you do has a lot to do with creativity. How does that feel with Corona?
Philipp Hofmann: It has become more difficult. Nothing has changed in development, that’s where we work remotely all year round and that works well. But when you’re used to working together in an office environment like this on a daily basis and discussing things in the shortest possible way, working in a home office is already a huge change. Nevertheless, it worked out well. We were completely remote from one day to the next, everyone was at home. That works well. There are just more phone calls. But of course, something is missing somewhere.
Bernd Zipper: How do you communicate internally? With teams or Slack or what do you do?
Philipp Hofmann: We use both. But some things also get more complicated.
Johannes Kautz: There is a meeting with everyone every afternoon at 4 p.m., which lasts about an hour. There we discuss what was going on during the day.
Bernd Zipper: But Abihome is not just newspapers and a bit of textiles. Maybe many people think of a stitched magazine and a T-shirt that falls apart after being worn twice. Far from it. In the meantime, you have entire collections. The service around the Abi newspaper practically starts with the selection of different print types, there are different formats and a choice of finishes. I can download InDesign templates and get all kinds of help. It really is a great community service you guys have built. When you browse through here, you see textiles of all different qualities. This raises the question: There is Spreadshirts, there are countless textile finishers, printers and this and that, Flyeralarm does something, Cimpress too – what is the differentiation between you and the others?
Johannes Kautz: Basically, we finish wholesale goods with partners in Germany. We have been working well with a large textile printer for years. But we also sell products that we improve. And the only way to improve a mass-produced textile product is basically to make it up yourself. If you buy piece goods in Germany, you have the option of screen printing or maybe embroidery. Otherwise, it’s already limited. If someone now says, “I want to have my own labels,” there are suppliers who make fashionable cuts from organic cotton, where you can then sew in labels.
Bernd Zipper: Those are the labels in the back, which are always so scratchy.
Johannes Kautz: Exactly. But you can hardly do much more than that in Germany. For the super-creatives, we have to take one or more steps back in the textile production chain and start where textiles are made and fabrics are knitted, where the goods are made up. Because with “goods before ready-made” you have a lot more finishing possibilities.
So sometimes you’re amazed at what’s possible: Terrycloth embroidery or 3D screen printing, 3D embroidery, these are all things you can buy from brands like Adidas, Nike, or something. For merchandise, that doesn’t exist. But that’s where we want to go. That’s why we’ve put together a large construction kit with which you can make up all the standard products yourself, such as hoodies, zippers, polos, and T-shirts – unisex and also tailored – with all the options.
Bernd Zipper: Do all the options mean that I can define the color for the cuff?
Johannes Kautz: Exactly. That is the basic idea. If the school color is RAL 9000, the rest should also be colored that way. And then it really starts with the high school graduates. “Our Abi motto is Abikalypse, so I’d like to have Abikalypse embossed or lasered on the eyelets for my sweater. And then I would also like the eyelets to be colored neon pink. And to make it pop as much as possible, I want the cords to be pink, but the cord ends to be neon green. Then the inside color of the hood should also be neon green and the hoodie pocket at the bottom as well, but the cuffs should rather be in neon blue”.
Bernd Zipper: But that’s priceless, isn’t it?
Johannes Kautz: Not anymore. But we had to tinker for quite a long time and do a lot of convincing. But since we have, firstly, quite high print runs and, secondly, a lot of ancillary business for universities, and merchandising for the police in North Rhine-Westphalia and some larger soccer clubs, the lot sizes are profitable.
Bernd Zipper: How is that supposed to work? If there are 120 boys and girls in a high school graduating class, they need 120 different hoodies in sizes S to 6XL so that every backside fits into them, which in turn makes the runs smaller. So, it’s almost impossible to work with extra dyed fabrics?
Johannes Kautz: With dyed fabrics, we can do 150 pieces or more, and in a pinch we could even do 100. But there is a wide range of fabrics that we can use. Most of them are black. And with embossed eyelets, special color with cords, our own hoodie interior color and with a 3D embroidery: we’re talking about under 30 euros per piece!
Bernd Zipper: You just mentioned police, soccer clubs and so on. So you are also jumping into other markets?
Johannes Kautz: We grew into it because we support many companies, universities and schools with their marketing. We bring customers together. We also place print ads in high school graduation newspapers – in the traditional way. If we get 100 euros from X or Y, the Abi newspaper is correspondingly cheaper. And in the meantime, we offer many in-app services, in-app banners, we do newsletter marketing, many challenges where students can win money for the graduation fund. We also do individual challenges. We just had a sports challenge where over 400 schools submitted videos where they had to compete against another school. And then they could win 1,000 euros for the graduation fund. We got involved. And since we already have a lot of partners in school marketing, it quickly became much bigger. In the meantime, we are considering outsourcing it completely so that there is no distortion in our core business.
Bernd Zipper: Yes, that’s my next question. When you’re so committed to working with a target group, in this case high school graduates, and the business then develops like this, it’s quite a balancing act to get everything under one hat. Doesn’t that distract from the actual goal?
Philipp Hofmann: We don’t rest on our market position, but always try to innovate. This then gives rise to new points of contact. And that’s where we have to constantly reorganize ourselves internally, prioritize and structure things clearly.
Bernd Zipper: What about the competition? Is there anyone who is slowly approaching you? Because whenever someone is successful, competitors also come up.
Johannes Kautz: There is a lot of competition, of course. But we have invested an insane amount, so the hurdle to overcome is not proportionate to the size of the market. According to the BWLer handbook, we shouldn’t have done what we did.
Bernd Zipper: So, you would have lost in ” The Lion’s Den”?
Johannes Kautz: Yes, because the market is too small. But if you ask me now: Would you do it again like that? If I were to advise others, I would say: “Yes, if you have fun doing it. But otherwise, it is a challenge to exist in such a small market. That’s why I hope that no big player will go in. He would have to invest massively, and we’re talking about a seven-figure sum, to attack us.
Bernd Zipper: They would also have to understand how it works first. Here in Germany, the model obviously works. Would it also fit in Austria or Switzerland? Are there any ideas for scaling up internationally?
Johannes Kautz: Definitely. But it’s not so trivial, because every country has a different school system. There are similar products in most countries, but they are not organized in exactly the same way. We will internationalize anyway! Next year, we will try to enter the market in three countries and first see: Is there a market and will the product be accepted? So first go in with the app, an organizational app for a yearbook and graduating classes. And then follow up relatively quickly on the product side if it goes well. Austria is a rather small market. We now have a few Austrian customers, but that’s also difficult this year, of course, and a Matura newspaper may not have the same status as the Abizeitung in Germany. The old yearbook markets are more interesting: USA, England. But the Turkish market is also exciting. That’s definitely where the journey will go.
Philipp Hofmann: In Germany, the markets are limited. We have few high school graduates. With the 300,000, we’re slowly reaching the limits of the market. Besides, there will always be the local print shops that sometimes print the Abi newspaper locally.
Bernd Zipper: And what about the other markets?
Philipp Hofmann: If you look at the USA, the markets are simply so much bigger. Nevertheless, we have already spoken to printing companies in the USA. However, they are still completely in the Stone Age. They work completely via inquiry forms on a Year Book page. There’s no big service concept around it, and there’s no platform like the one we’ve set up. We would have a relatively good market entry already, but we would have to build more flexibility. But it will definitely be one of the next steps.
Bernd Zipper: For me, it would be a logical step to now tackle the volunteer fire departments or the allotment gardeners. In other words, to identify markets that are considered unattractive per se at first. On the other hand, these are also the ones who do newspapers and festivals and need textiles. Are there any ideas for scaling in this direction?
Philipp Hofmann: In the German market, we are currently focusing first on scaling in the education sector. We are looking at universities and other educational qualifications.
In the case of the Realschulabschluss, similar graduation traditions have now developed. In other areas, such as clubs, fire departments and so on, the leap is still too big for us. We would have to reinvent everything.
Bernd Zipper: This year we still have Corona. You would think that there are no newspapers being made, wouldn’t you?
Johannes Kautz: Fortunately, that’s not the case. What we do notice quite clearly, though: The average shopping cart of our customers for both newspapers and textiles is much smaller. We don’t even need to talk about graduation balls and trips. Of course, it’s no fun when a total of 203,000 orders for textiles and newspapers come in this year, but 500 to 800 euros are missing from each order. We’re missing out on a lot of money. But overall, we can still consider ourselves lucky that we might get off lightly.
Bernd Zipper: You are out and about a lot, also with print shops. That means that people also talk about you. I can well imagine that one or the other of the big players is waving a checkbook, or that there are offers to take you over?
Johannes Kautz: We have found a great partner. Let’s leave it at that for now. But if we talk about our print runs, outside the Abi business, we’re talking about 600,000 books – with strong growth rates. There are many universities that still produce study books and, since they already work with us in student marketing, we are more likely to be asked for other products as printing experts for Abi newspapers. We grew very strongly last year – but it’s still very manageable.
Bernd Zipper: Nevertheless, this is a model from which you can learn a lot. And I maintain that in the future, the digitization of print will essentially depend on how it is explained to the target group. Online print took quite a while to really take off. Now people have slowly understood how it works and islands are emerging that are very special but still lucrative, because something happens every year and you know exactly what the calculating factor is.
Philipp Hofmann: Online printers could theoretically also offer our product. But there is this access via the community, via the app, via the market. Our users appreciate the huge range of services that we offer via the app and also with the team around it. The students are supported, they have a fixed contact person, they can get a lot of organizational help via the app. They get templates and layouts. No online printer can offer that in this spectrum, because they don’t have this market access.
Bernd Zipper: I know that you are very meticulous. I recently saw Textildesigner. That’ s about producing ready-made clothing or your own ready-made clothing. Do you have any experience, and does it work?
Johannes Kautz: Yes. It’s a project that was created by Philipp and his developers. We hope to be finished with it this year. We need this app and we need a native creator to target the under-30 Instagram-story-like audience. It’s fun, fast and can be implemented by someone older.
Philipp Hofmann: We’re taking a two-pronged approach to textiles because we’ve noticed that there’s a lack of innovation in this industry. If we look at the printing industry, what is happening there in the area of web-to-print and app-to-print – My Postcard is just one example of this – you won’t find anything similar in the entire textile sector. The big on-demand printers like Spreadshirt are all exclusively pursuing web-to-print solutions. That’s a philosophy we don’t live by at Abihome – also driven by our very young target group. We once set up a web-to-print solution with Online Creator, but no one used it. After a survey, we were smarter. The feedback: “Why can’t I do this on the move? I have all my photos on my phone, I want to transfer them. Why can’t you do that?”. For us, this is confirmation that web-to-print, even if it is mobile-optimized, will not be a long-term solution.
Bernd Zipper: For this target group.
Philipp Hofmann: Yes, especially for this young target group.
Bernd Zipper: Was that the strategy right from the start? A tool that brings the community together, gives the community the opportunity to design it themselves, and then produce it in a more or less standardized way?
Johannes Kautz: With Abihome, yes, because we knew the product and how it worked in Germany. But we noticed that some of the services that we offered more or less casually are attracting very broad interest.
Philipp Hofmann: The service idea existed even before the app. But when you’re on the phone with students all day, you only realize how many problems actually arise in the process. They’re doing it for the first time, and no one has any experience of how to lay out a 200-page book or how to get the content together at all. They worked with pieces of paper, Excel spreadsheets and other things. A huge chaos! It took a year until the book was actually delivered. Constantly phoning the students, explaining, helping and so on is not a process. It became clear to us relatively quickly that digital solutions would make our work easier and, in the end, increase sales and conversion. We are continuing to pursue this concept, expanding it and trying to make the process easier and easier.
Bernd Zipper: To what extent? Do you also have experts from the graphic arts industry? Or are they all already digitized and automated away?
Johannes Kautz: No. We have 22 people who work in the core business every day. These are communication designers and media designers who implement every customer request in terms of design. Of course, we have an archive of 10,000 or 15,000 newspaper drafts. We also support this manually. But we also have a lot of responsibility. Whether we have to pick up and deliver newspapers somewhere at night, or sometimes have to deliver them in 24 hours, and so on. We really feel responsible and at the same time we tell the customers: “We know you’re not professionals. We’ll provide you with cool software capabilities, but if you need professional support: We are here for you”.
People only graduate from high school once in their lives. They expect the quality of their T-shirts and newspapers to be right. And when someone digs out their old graduation newspaper at some point, they’re happy if it’s cool.
Bernd Zipper: The story is cool, but for me, as someone who also works as a consultant, it’s an invitation to do some quick extrapolation. The bottom line is that I see personnel costs of 1.2 million. I see fixed costs. Okay, this is not a glass palace, but an old factory building. A very, very nice one, by the way. It all costs a lot of money and if you also have to earn something to reinvest again. Are you talking about numbers, Johannes?
Johannes Kautz: I hope that we make this year with everything we do, so between 4.5 and 5 million euros in sales. Fortunately, we have several mainstays.
Bernd Zipper: So, on the one hand you are very pointed by the target group, on the other hand you make this target group all around happy, which I really think is a clever idea. Especially the topic of mass customization plays a big role. I think we will see more of that in the future. Johannes, what do you see as the challenge for the future? What do you have to be prepared for as an entrepreneur?
Johannes Kautz: That’s really an incredibly difficult question.
Bernd Zipper: Exactly, that’s why I’m asking Philipp.
Philipp Hofmann: First of all, I don’t think the saying “print is dead” applies to our target group. There have always been attempts at a digital Abi newspaper. None of that worked, and there’s a good reason why. Because it’s an emotionally charged product, and this haptic feeling of having it in your hand is becoming even more important. And what we’re also seeing over the last few years is that the products are becoming more premium. We have more hardcovers, more finishes, even in the direction of gold. On the other hand, of course, we are also looking at digital interfaces, augmented reality, digital content, QR codes in print ads and so on. These are things that are developing in the market and where we can create innovations. Basically, I believe in a growing trend of print. But more and more products are being built around it: Baccalaureate tickets, flags, bottles and whatnot. The high school graduates want to print as much as possible – whatever the budget allows. These are also exciting follow-up markets for us in the future.
Johannes Kautz: Augmented reality is certainly a topic, especially now with the new options we offer, with the new finishes or also with the modular system. It is an additional benefit that does not yet exist. We have to continue to think about the issue of internationalization. But there is also a tendency for graduation balls to become larger and larger and more and more expensive. In the next version of the app, there will certainly also be the option of making content public. By the way, one pilot project was that every student can promote their graduation party – if it can take place – with us free of charge within a radius of 50 km around their location. We had calculated that ten schools or so would do that. In the first week, 247 schools promoted their parties immediately, because it’s a great way to get in touch with other students. I think we will play out the community idea even more internationally.
Bernd Zipper: We could discuss this for a few more hours now, because I have a few ideas bubbling up in my head right now. At least I understand that your job is a mixture of publishing house, digital agency, software company, printer, organizer and print procurement.
I’d give you the Beyond Print Oscar – if we had one – for tailoring your offering to a target group. That’s what will make for successful business models in the future. Understanding my target group, getting on their side and offering solutions rather than products. I think that’s worth noting and I’m keeping my fingers crossed that it will continue to work. Thank you for sharing your impressions with us so open-heartedly.