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Photo Gallery: Germany's Internet Kings

The Need for Speed The Samwer Brothers Find Global Internet Success

The Samwer brothers are among the most successful businessmen on the web -- and the most unpopular. Oliver, the leader of the trio, has only one goal: to capture an even greater share of the world's online marketplace.

Oliver Samwer is sitting in his Munich office talking about how much of his life he spends on airplanes, his 18-hour days and the constant trips between Singapore, Moscow and São Paulo. Sometimes, he says, he make several different reservations for the same route, to be sure that he won't lose any time in case of scheduling snags. Just listening to him describe his schedule is enough to make you dizzy. And then his wife calls.

The mobile phone buzzes twice, and he ignores it both times. He answers the third time and murmurs a term of endearment. He gives her 20 seconds, and then he says he'll call her back. The sound of his wife's protestations is so loud that it's even audible on the other side of the table.

Samwer hangs up, smiles and continues where he left off: with his high-speed life.

A fast pace is important for this successful businessman. Anyone who interacts with him is forced to adjust to his velocity -- including his wife.

For Samwer, everything is about speed, and about reaching the finish line before everyone else. In the German Internet business, he and his brothers Marc and Alexander are always the first to show when there is money to be made. And they are often gone shortly before the party is over.

Even their very first coup was a speed record. In 1999, they founded Alando, a German clone of the online auction house Ebay. Only 100 days later, they sold the company to Ebay for about $50 million (€38 million), making them legends early in their careers. Later on, they became involved with Jamba, StudiVZ, Citydeal, Groupon, Facebook, Parship, eDarling, MyVideo, Wimdu, HelloFresh, GlossyBox, Zalando and many other Internet up-and-comers.

Conquering One Country after the Next

The brothers usually get out and cash in just as the companies start getting big. Some of these deals produce hundreds of millions of euros in profits, and they have likely made Oliver, 39, Marc, 41 and Alexander, 37, into billionaires today.

The Samwers have grasped the principle of e-commerce better than almost anyone else in the world, and they are just as active in Brazil as they are in Indonesia, systematically conquering one country after the next. Most recently, they have shown a preference for investing in highly populous markets with moderate economic infrastructures and a poorly developed Internet business.

The Samwer brothers ought to be stars in Germany, role models for anyone hoping to make money on the Internet. But outside of management schools, people tend to acknowledge them with reluctance -- and certainly not with the amount of attention normally paid to Internet heroes in Germany and abroad.

In the last few decades, the United States have produced entrepreneurs like Apple co-founder Steve Jobs, who even designed a vision for the Internet television of the future from his sickbed, and philosophized about death. Or people who, with their ideas, have changed the Internet and the world, like Facebook founder Mark Zuckerberg and the Google duo, Larry Page and Sergey Brin. And whom does Germany have? The Samwers.

Oliver Samwer, the trio's driving force, did very well in school, as did his brothers, and he presumably has an IQ well above average. He could probably come up with a few slogans about how he intends to make the world a better place, to make people happier or, at least, to make everyday life a little easier. But would anyone believe him?

Traveling within the Galaxy

Their vision is to grow and attain "a bigger share of the Internet," says Oliver Samwer. He draws a diagram on a piece of paper showing all of the family's companies in Italy, each represented by a small box -- just under a dozen altogether. Then he connects them all with lines and says: "It's hard to fight against that. It's a fixed entity." And Italy, he points out, is only a part of the whole. The same structure exists in Thailand, Brazil, Russia, France and Chile. All the companies support one another, he says. Each Samwer company is "a star" and "they make up a galaxy worldwide."

He's constantly traveling within this galaxy. He makes a relatively inconspicuous and minimalist impression, dressed in jeans, a shirt and a gray sweater, carrying an Apple laptop and pulling a trolley case. It's hard to grasp Oliver Samwer. He almost never talks to journalists and avoids red carpets, and even people who have worked with him for years say that they have no idea who he is.

Samwer's emails rarely consist of more than a few words. When he travels, he makes sure that he arrives in the morning and is gone by evening. He doesn't like to stay in a country for "more than eight hours," he says. "We love speed -- just like Formula 1." It's something he says a lot.

The brothers allegedly agreed to form a joint company when they were only 12, 14 and 16, respectively, but they didn't have a business idea yet. Later on, they admired the founders of airlines Ryanair and Virgin Atlantic. But buying an aircraft would have been too expensive. And then came the Internet, and it changed everything. The Samwers saw their opportunity, and they developed a business model that could only function in a country in which the digital economy was just emerging.

Beating Everyone Else to the Punch

Germany, like Russia, Brazil and France, is in the shadow of the primarily English-speaking Internet. Normally this would be a drawback. German competitors play only a secondary role to US companies like Amazon, Ebay, Google, Apple, Facebook and Microsoft. But this also has its advantages. For instance, when a new company establishes itself in the United States, it usually isn't paying much attention to countries like Germany or Russia yet.

This is the point at which the Samwers like to make their move. They launch a German, Brazilian or Italian copy of the original, beating everyone else to the punch, and when the original gets around to expanding globally, the Samwers will have already occupied large parts of the rest of the world.

They turned this basic idea into a sensational coup with their Alando-Ebay deal, and they took a similar approach with the German social networking site StudiVZ. The only difference is that they didn't sell it to the original, Facebook, but to the Stuttgart-based Holtzbrinck publishing house. The network, seldom used today, was valued at €85 million. The Samwers pride themselves on having resold several dozen companies for a profit in the last 12 years, in many cases by selling the clones to the originals.

Samwer doesn't like the word clone. "It's a mistake to think that the idea is the decisive factor," he says. "Ideas are nothing special. There are thousands of ideas. But of thousands of ideas, only one succeeds. And that's the real point." The most important thing, he says, is to bring this idea "onto the street," as he calls it. And it's with this approach that the Samwers are, in a sense, global market leaders.

In Germany, the Samwers have been involved in the founding of many important Internet companies by way of their Berlin-based incubator Rocket Internet. The Russian-born US billionaire Leonard Blawatnik reportedly just invested $200 million in the company.

Cold, Hard and Dismissive

Its name is telling, and the example of Zalando provides a perfect illustration for how Rocket Internet works. Originally an online shoe store, Zalando was founded in 2008, and already has a reported €500 million in annual sales and 1,000 employees at the online shop in Berlin. Having since expanded into clothing, a giant shipping center is currently being built in the eastern German city of Erfurt.

Zalando is growing at such a breakneck pace because the people working for the Samwers shoved the company into the market as though it were the size of Amazon. Although Zalando's ads -- which depicted women screeching while buying shoes (one slogan reads: "Shout with joy, or send it back") -- were unnerving, they were also catchy.

The Samwers had also used a torrent of TV ads to help Jamba, a ringtone company, grow quickly. At the time, it wasn't an obvious marketing strategy for Internet companies. TV advertising was seen as a waste of money. The Samwers, however, tried it on a grand scale with their companies, first spending $10,000, then $100,000 and then a million. In 2005, they spent $70 million on worldwide television advertising in a single quarter.

For someone who only travels with his laptop, there is a surprisingly large amount of paper stacked up in Samwer's office. Spiral-bound company dossiers litter the carpeted floor and stacks of paper on the desk. In the middle of the mess is a grease-splotched paper bag, which probably once contained an edible from the bakery.

It's time for a teleconference with his managers in Asia. The conference is scheduled for about 30 minutes, but it ends up lasting an hour and a half.

Vicious Rumors

The teleconference is also a race of sorts. Samwer rushes from startup to startup, country to country and topic to topic, questioning his employees like a coach. Those who are well-prepared are treated well. Samwer's tone changes slightly and he seems more satisfied after they have spoken. But employees who are not up to speed are taken to task.

Samwer dominates most of the teleconference. He lectures his employees on the delivery times of online merchants and experiences from other countries, and he tells them that he has no plans to run TV ads at the moment and that he wants them to come up with something else. Samwer rushes through his agenda, as he alternates between barking at his employees and speaking more calmly. Everyone is on guard around him. But he isn't truly malicious, just demanding.

There are many vicious rumors about the Samwers making the rounds in Berlin. Oliver Samwer denies that he threw a hole-puncher at an employee, but aside from that he is proud of having assembled a staff consisting of a relatively homogeneous elite. A former assistant to Mathias Döpfner, the CEO of German publishing house Axel Springer, already works for Samwer, and the former assistant to Deutsche Bank CEO Josef Ackermann will soon join the team.

The Samwer brothers are the sons of an attorney from Cologne. They grew up in a world in which efficiency is highly valued, and they all studied at prestigious universities. Their resumés are flawless, reflecting no time off from career building. They seek out the same types of people to work for them.

The Samwers are especially fond of fishing for talent at management consulting firms and investment banks, like McKinsey, Boston Consulting and Goldman Sachs. These are the types of people who are accustomed to putting a clearly delineated plan into practice, rarely complain about having to work overtime and don't want too much freedom. They are the polar opposite of people who are normally attracted to the Internet sector, the creative types, tinkerers and nerds.

Only Interested in Speed

The Samwers' worker bees are extremely productive. No one on the planet does it better, says the founder of an internationally successful Internet company who normally has nothing good to say about the brothers. They perfect and expand every website they create, working very quickly and making few mistakes.

This is why what is happening with Groupon is so unpleasant for the Samwers. The company negotiates discounts with manufacturers and retailers, and then sells coupons for the discounts online. Groupon keeps up to 50 percent of the proceeds for itself.

The discount site is a classic example of the brothers' business strategy. The US startup Groupon had hardly been founded before the Samwers, together with Holtzbrinck, started their own company, called CityDeal, in Berlin. Groupon founder Andrew Mason bought the German clone from them, paying the Samwers with about 10 percent of Groupon's shares, according to industry estimates. At the best of times, that is, when the US company went public in early November 2011, the shares were worth about $1 billion. It would have been the ideal time from the Samwers to clear out, but for legal reasons they are required to hold on to their shares -- and must look on as the share price drops, from $28 on the first day of trading to about $10 last Friday. Samwer doesn't talk about Groupon, citing an ongoing investigation into alleged accounting irregularities by the US Securities and Exchange Commission.

In addition, Groupon's business model is faltering. Customers are dissatisfied with some questionable discounts, while companies that use the site are complaining about its aggressive business methods. It appears that Groupon is a company that grew too quickly.

The Samwers are faced, once again, with the old suspicion that they are only interested in speed, good for the business world's version of a quickie, but not a long-term relationship. Very few of the brothers' deals have been long-term, with the exception of Zalando.

Sometimes this strategy ends up costing the Samwers painfully large sums of money. For instance, they sold their shares in Facebook when the company was valued at $50 billion, likely because they thought it had hit its peak. But then the value doubled in the next few months.

'I'll Die to Win'

It isn't these mistakes that irritate people who have worked with them, however. Rather, many complain of their aloofness, of a pervading sense of detachment.

There are few photos depicting the three brothers together. In one photo, all three are wearing light-colored shirts open at the collar, and they all have similar haircuts, as if designed to emphasis their high foreheads. In another, they are wearing red shirts and black ties. In both photos, all three have the same Samwer look: cold, hard and dismissive.

Oliver is seen as the coldest of the three, the agitator. He sometimes writes his employees nasty emails. In one such message, he mentioned a corporate "blitzkrieg" and wrote things like: "I'll die to win." He also wrote that he expected strategies from them, "signed with blood." Samwer later apologized for the tone of the email.

Many people who helped him grow companies like Alando, Jamba and StudiVZ, as well as Rocket Internet, have long since parted ways with Oliver Samwer. They say that business is more important to him than people -- with the exception of his brothers.

Only a few months ago, several senior employees left Rocket Internet. "The three brothers will never let anyone be their equal," says one person who worked with the Samwers for years.

When Oliver Samwer talks about himself and his brothers, he is quick to draw comparisons to famous names like Fugger, Rothschild, Medici and Goldman Sachs. And, in the end, perhaps this isn't entirely incorrect. Who today, after all, asks whether they were popular, the Fuggers, the Medici and the Rothschilds?

Does he ever pause to reflect? "At night," says Samwer. "That's when I think a lot." And do he and his brothers ever celebrate things like their last coup or the next billion? "Of course we're pleased about every success, but we tend to celebrate in little ways. Perhaps my brothers and I will go out together to have a burger in Munich. There's a place right around the corner from the office. Otherwise, we usually have food delivered to the office."

Translated from the German by Christopher Sultan