On Friday, January 27, we had a fascinating session by Dr Mario Schimdt, Managing Director of Lingel Windows.
About Dr Mario Schmidt
Dr Mario is Managing Director of Lingel Windows, one of the top 5 fenestration companies in India. Dr Mario came to India in 2006 from Germany and has managed to expand the presence of Lingel in 30 major cities in India. He has also contributed to the introduction of new products in the Indian market, such as Smart Windows. Under his leadership, Lingel has won numerous awards for its innovations, including Franchise India's Magpie Estate Awards, Realty Fact, the ZAK Award for 2017 and 2018, Inex Awards etc.
Dr. Mario is the president of the UPVC Windows and Doors Manufacturer Association, or the UWMA. An ardent reader and an eloquent orator, he can speak on almost any topic related to the industry. Dr. Mario is also passionate about music and enjoys attending live shows.
It is Dr Mario's core belief that a leader should set examples for his team by practising what is preached. An innovator, pioneer, and leader par excellence, Dr. Mario is a man with a great mind.
Why do some businesses and fail and others succeed?
Many businesses fail. Think of Nokia, Blackberry and Kodak. The average life of a startup is less than 3 years. As Darwin mentioned, it is not the strongest or most intelligent species which survive. It is the most adaptable.
As far as Lingel is concerned, its product is more than a thousand years old. The functions of a window have not changed over the years: ventilation, light, privacy, safety, security, comfort and protection from water, dust and wind. In this kind of an industry which is vulnerable to commoditisation, Lingel has thrived by being innovative, expanding its product range (including wood, PVC and aluminium) and meeting the choice of the customers effectively. For Dr Mario, the success mantra is: Does the product solve a valid problem?
The success of Lingel India
Lingel India started in 2006 with just 5 members. Today, Lingel India has 300 people (directly employed on the payroll, indirectly associated and channel partners) and is financially independent of the parent company. One of the key success factors has been the company’s ability to retain people. Dr Schmidt is clear that human capital is far more important than machines. He provides an environment where the employees can explore new opportunities and grow. So it is not necessary to leave the organization. Many people who joined the organization in 2006 are still with the company.
Lingel complies with all the government regulations and even goes beyond them. The company offers a good pay and job security to workers. Lingel provides people who could not pursue higher education, an alternative career path with suitable upskilling and reskilling and along with good pay and career opportunities. The Lingel Academy provides various kinds of training to help employees to upgrade their skills.
Every Saturday, Dr Mario has breakfast with groups of employees. More than 100 sessions have been held so far. These sessions enable Dr Mario to update his employees about key developments and listen to their views.
One area of concern is that unlike Germany where craftsmen are respected and receive higher pay than people working in the offices, in India the situation is the reverse.
Three key factors
- How frequently do you undergo a stress test?
- Can you sell your product?
- Do you know yourself?
It is important to find a mentor or advisor who can explore our vision along with us. Someone with whom we can connect and who will push us forward.
The importance of visibility
Dr Mario feels that we should not hide ourselves. Rather, we should remain in the front and make ourselves visible. People should know us, and we should know them. Only then we can learn more, expand our reach and grow our business.
We should look for opportunities to expand our influence. Dr Mario has been sharing content with many trade publications who are always looking for such material. He has 15,000 followers on Linked In.
Dr Mario feels it is also important to join industry and trade associations. This way we will keep ourselves updated on the latest trends and developments. Lingel is collaborating with the association of UWDMA and the government of Rajasthan to upgrade skills. Dr Mario is also a committee member of BIS and closely involved in upgrading quality standards and removing inferior products form the market. By being part of these associations, he believes we can contribute to industry and society and build our reputation/brand.
Marketing
Much of Lingel's success has been due to big ticket sales through relationships and recommendations. About 70% of revenues come from repeat business, creating a high degree of predictability.
Lingel's marketing strategy has evolved with time. When it entered India, it found an emerging market. 2010 was a golden time and by 2015, many new players had entered the market. After 2016, Lingel has discontinued sales to high rise buildings and focused more on individual residences. Today, there are some 3000 companies in the fray. So innovation has become important.
While it is primarily a B2C company, Lingel works closely with architects and construction companies to promote its products. The company also sponsors events and exhibitions. The company tracks Google enquiries carefully. Since buildings are visible structures, it is quite easy for the sales force to keep track of the emerging opportunities in the locality and identify where the products can be sold. Since the company offers a package deal, i.e. product, installation and service, it can make a good impact on customers and generate favourable word of mouth.
Dr Mario thinks of Lingel as industrializing a carpenter’s work and offering a quality German product at an affordable price to Indian customers. Recent innovation of Lingel Panzer Glazing and Lingel Safe Box is a perfect combination of glazing and hardware, more innovations are in the pipeline.
Tips for budding entrepreneurs
If we are not giving our 100%, we will remain second best.
We must start with small steps.
We must find our target audience.
We must never lose our vision.
We must have the highest expectations from ourselves.
We must demonstrate self-discipline. For entrepreneurs, there is no work life balance. It is work and work. People looking for work life balance should not try to become entrepreneurs. Dr Mario himself works 6.5 days in a week.
If we are too kind or good or innocent, we will fail.
We should identify the right customers who will be profitable and avoid those who negotiate too hard.
We must enjoy the success.
Success should not make us arrogant and failure should not break our heart.
Success today does not feed us tomorrow. It only provides the foundation for future growth.
Q&A
Dr Mario trained as a master craftsman in windows, then did his MBA. Then he went on to become an entrepreneur. In 1989, East Germany collapsed and in 1990 the German reunification happened. The entire east German economy was disrupted. The biggest opportunities were in construction and that is how Dr Mario entered this space.
Since 1994, Dr Mario has specialized in making doors and windows. By 2006, Dr Mario realized that he loved what he was doing but there were no major challenges in Germany. That prompted him to move to India. He saw a big opportunity. His plan was to spend 3 years in the country, get some overseas exposure and go back to Germany.
But in 2008, Dr Mario realized that there were many things still to be done in India and he decided to stay back. Lingel India has grown from a baby to a wild teenager and Dr Mario is now trying to shape it into an adult. Dr Mario loves the business, loves India and has decided to stay here.
Dr Mario was awarded with an honorary doctorate for his immense contributions on skill development in India
As a founding member of the industry association since 2007, Dr Mario has been closely involved in introducing new standards and upgrading quality. The aim is to eliminate cheap products and safeguard the consumers’ interests. Going forward, Dr Mario expects to see many innovations driven by sensors and IOT. Intelligent windows that can measure the temperature inside and outside and the atmospheric air quality will be the order of the day. Another example of innovation is windows that can close on their own during monsoons.
Indian entrepreneurs are very hard working. India has many young people. Germany is an ageing society and thinking of a 4 day week. Whatever is expensive in Germany, Indian entrepreneurs can make in India and export. It will help a lot if Indians can learn German. There is a big opportunity to tap the German market especially in the area of services (architect, 3D rendering, etc). Some of Dr Mario’s colleagues have already learnt German and are working with the German team.
Lingel ships its products to its offices across the country and then instals them at customer premises. When it began operations, the advice Lingel received from tax lawyers was to open branch offices & to do stock transfers of the ready made product to the branch offices. So Lingel began to pay taxes locally where it commissioned its products. Later, the company realized that this was a wrong interpretation of the law. It had to pay taxes to the central government once again. This was a costly mistake.
The lesson for Dr Mario was that we must understand the laws of the land carefully, get the advice of the right professionals, and engage with them and even challenge them at times so that the right decisions are taken.
In the past the windows were fabricated at the site. This was a time-consuming process. Lingel arrived at the time the industry started shaping up and new technology ensured that windows and doors got fabricated in factory set ups. This ensured windows and doors quality improved and thanks to prefabrication and the scale of the company’s operations, the construction process was considerably speeded up.
Dr Mario feels that going forward, the real opportunity lies in the smaller towns of India rather than in the metro cites. Entrepreneurs should think of going to their native place and offer something relevant there. Wrapping a service component around the product with warranties is a good idea. The regulations are moving in this direction, with five year warranties being introduced. It is important to make sure the ecosystem exists, and the risks are manageable.