Venture Clienting at Lufthansa with Daniel Weber

0:00At some point, we ripped out passenger seats from our passenger airplanes and converted them basically into cargo planes. Personally, I did a couple of flights to Asia. There was just, on the way back, boxes of protective equipment. We did repatriation flights for the German government. Countries were closing left and right on short notice, and the government was scrambling to get German nationals back to Germany, or at least have an option for them to come home, because they were stuck.

0:33Welcome to the GlassDollar podcast. Today I'm speaking to someone super exciting. Daniel has been a pilot within the Lufthansa Group for the last couple of decades, and next to that is building up venture client. You can really feel from this conversation how much he believes in his colleagues to want to drive the organization forward, and exactly that is the reason why he's driving venture client. Daniel, hi. Great to have you. Thanks for having me. Pleasure to be here.

1:02Super excited about our conversation today. I want to start out with introducing you to our audience. I already know a bit. I know you're a pilot. How did that come to be? So that's actually one part of my job, not maybe the main driver while we're talking today. I work for Lufthansa Group. I'm leading the venture client unit in a group called Startup Gate. And as you said, I am a pilot. That's actually how I started with Lufthansa Group back in the day.

1:33I'm the poster child of wanting to become a pilot early on and actually making it happen. I was quite fortunate that it worked out. I've been with Lufthansa Group for 18 years. Started off as a pilot, did the classic pilot cadet program, and then things happened along the way, such as moving into some management positions up till now. What made you want to be a pilot in the first place? There are some family genes in there. My dad was a fighter pilot for the German Air Force, so I was very exposed to aviation early on.

2:10He actually moved on to work with the Lufthansa Group at some point, for one of the airlines within Lufthansa Group, in a management position, not as a pilot. To be honest, while my dad was flying as a fighter pilot, I never wanted to move in that direction. I'd like to fly one at some point, I would just simply fly one, because I bet it's a lot of fun. I can do stuff I probably can't and shouldn't do in a commercial airliner. But I always wanted to become a commercial pilot.

2:38There was never this desire to fly in military aviation. It was always commercial aviation. I watched a documentary on Lufthansa, a couple of them actually, in preparation for our conversation. Right now there are a bit more than 100,000 employees at Lufthansa, is that correct? How many of those are pilots? And what are the other big buckets? That's a good question. I can't really say to a hundred percent degree of certainty, but roughly, within Lufthansa Airlines itself, so the Lufthansa branded airline itself, it's around 5,000 pilots. Obviously, then we have a lot of other airlines, our colleagues at, for example, Discover Airlines.

3:25Lufthansa City Airlines. We have, of course, Austrian, Brussels, ITA nowadays, right? So I would say, I can't really say, but it's a five digit number for sure. I might be wrong, but probably around 25, 30,000 pilots across the airlines, I would reckon. Crazy. I mean, still, aviation has this lure. This special, dreamy place, I think, for many. But just to imagine the amount of aircraft, then the planning out of the routes, having the maintenance system behind it, it's such a massive operation.

4:16Oh yeah. And I'm still excited and amazed by it. There are a lot of industries that are quite regulated and also complex, but aviation is definitely one of them. It's heavily regulated, it's super complex, and operations, managing and steering an operation, that's a different ballgame. This is quite a challenge, because stuff happens daily. If you were to ask my colleagues in the operations control centers, they have aircraft diverting, which means they're not able to land at their destination for whatever reasons, whether it's weather or something happened along the route, it could be a medical incident. We have it happening daily.

5:01All those small or big disruptions are happening daily. And there's this team in our operations control center just managing and making sure that the small disruption or bigger disruption, to the best of our abilities, doesn't have a huge impact and doesn't have the ripple effect across our operation. It's amazing. But it's also one of the opportunities where I believe technology actually will be a real game changer, because of this complexity we have. We have a lot of experts, and a lot of times the human factor is still quite important. Sometimes, just by experience, an experienced operations controller can make a really, really good decision. But there's so much data flowing into the operations control center and sometimes it's disjointed, right?

5:57So you need to look at different sources, and it just creates complexity. For us as humans, I think we can do probably a better job in supporting colleagues, in making sure that the data that is feeding in there is, to the best of the technology's capacity, being delivered in a way that the human in front of a screen can actually make the best decision. And then set up a scenario, if they come up with different scenarios, choose one, but have different scenarios already calculated by technology. I think this is a huge leap that we will see in the next couple of years. Also in managing complexity.

6:37As we go into the use of technology within the Lufthansa Group: how did you broaden your horizon? Initially you started out in your Cessna and then upgraded your planes as you went up the ladder. When was the moment? Did you get asked, or did you initiate to broaden your horizon beyond flying towards the whole holistic model of the Lufthansa Group? So, once again, with careers in aviation in general, there's no one straight line. Mine is probably also an example of not your standard career path.

7:20I used to work as a paramedic for 20 plus years. Already during high school I went into emergency medicine and got super hooked on medicine. And this was also my plan B, just in case I couldn't make it to the flight deck for some reason. I was like, okay, then I might just go to medical school, become a doctor, or go maybe to a fire department. So I've been working in that capacity for 20 plus years, and I continued doing it even though I was flying. I always did it on the side, three to four shifts each month as a paramedic. Also after having moved to Berlin.

8:00I was fortunate enough to actually work at the fire station next to Berghain, which was quite interesting for me, coming from a smaller town in Germany, and actually having a Monday lunchtime call to Berghain, where it's like, that can't be true. It's Monday around lunchtime. But that's true, it's not closed yet. Oh, it isn't. Oh, wow. I'm wondering who you might meet at this time of day on a weekday, after having the weekend behind us. You did that in parallel to flying? Like you were already flying, and then when the autopilot was on, you would check your books?

8:42Almost. It was more in the hotel. There was quite a period in my life where, actually, I can remember, back in the day we were flying to Kuala Lumpur, a really nice destination by the way, and we had a couple of nights in Kuala Lumpur. I usually went out with my colleagues, with the crew. We went out for dinner, maybe one drink, then they moved onwards. Given the time difference, it was very easy to stay awake during the night, during the local times. So my colleagues might have gone out, having a good time in Kuala Lumpur, and after dinner I left, I went back to the hotel and I studied for a little while, at least for a little period. Can't really recommend doing it constantly, because it is also a little bit lonely at some point.

9:29But that was the trade-off. So I did it basically when I was in layover or I had my off days. And then ultimately I became an instructor pilot on my fleet and then started doing additional work in the training department within my airline, and then moving on to different jobs from there. I was fortunate enough to be part of a project team that founded Discover Airlines, one of our youngest airlines. So I was heavily involved in that one, and had the chance to move to one of our executive board offices to work also on a very different flight level, so to speak, on a very strategic flight level within the group.

10:12And then before ultimately now having joined Lufthansa Innovation Hub about a year ago, taking over the leadership for the venture client team. Can we dive a bit deeper into that? How did that come to be? Why were you asked, or did you hear about it and saw, hey, this is something that I want to do? Because that really is then a full mandate across every single element of the value chain. It all started actually in the project team that was tasked with founding this new airline, which is nowadays Discover Airlines. Some of my colleagues from Lufthansa Innovation Hub back in the day, around 2020, were involved also in that project team. As you will recall, those were challenging times.

11:01They were exciting times for us as a project team, but they were also very challenging times, because the pandemic kicked off. It was basically the midst of the pandemic, really tough. So a different set of emotions happening. And obviously there were more than once where the project itself was probably at risk. But it was very, as Lufthansa, very strategically relevant. We needed an airline that is able to also offer our customers looking into more leisure, vacation and holiday travel, a good opportunity. We didn't have that anymore. So for whatever reasons, we got lucky and the project just made it through the pandemic, and the airline was founded and is operating very successfully already. But that is where I met them.

11:53So you're a co-founder of an airline. A founding member, let's put it that way. There are so many other people, there's no one that could do it by themselves. So many people were involved there. But I was one little puzzle piece, I was fortunate enough to support that. And that's actually where I met the colleagues from the Innovation Hub. Sometimes you just bond with people, whether it's because you share the same mindset or the same culture, or it was just a special time to work together.

12:27You have something that kind of bonds you to those people. And we just stayed in touch. As I said, I used to work in the executive offices, and the executive board member that I worked for, Lufthansa Group innovation was basically always in that executive office, so that executive board member was responsible for innovation. So there was also this connection always. And it remained, this connection to innovation in general and also to the Innovation Hub in particular. And then it was pure coincidence that we talked randomly around a different topic. I believe back in the day it was a supervisory board topic around innovation that I needed to clarify with my colleagues here in Berlin.

13:11And in that conversation, it just came up that they're actually looking for someone to take over that team and scale it. And I was like, wait, that might actually be interesting for me. We should talk. That's how it ended. Wow, super cool. And then what were they saying? Okay, we're looking for someone to scale this team. But in the end, what's the mandate, or what's the task that you have received? What does Lufthansa want from you?

13:45So Lufthansa, first and foremost our colleagues there, they had obviously also years back already this, I mean it wasn't new, right? Venture client has been around for a while now. And whether you want to call it venture client or partnership management or whatever, they had this vision to promote and scale up basically the partnership between Lufthansa Group and startups. And then it moved into the terminology of venture client, and basically looking for someone to take over and actually scale it across the group. Because the vision was there, the belief was there that there's huge value to be gained for the ecosystem, for all parties involved, but especially also for us as an airline group. We just didn't have the structure or the resources in place to that extent yet to actually create the impact that makes it relevant for the whole group. So with a corporation as big as ours, if you pursue innovation in a

14:51very niche, small environment, it doesn't really create the impact for Lufthansa Group. It needs to scale, and it needs to create an impact that ideally translates across the different business units. So if you try something out in one place, ideally this scales across the company and then actually creates the impact that within one business unit it wouldn't have had. So the mandate, that's a really good question actually regarding mandate, because we're in really interesting times. Lufthansa is also really looking into how we can best set up our internal innovation ecosystem currently. There's some stuff happening and we're really excited about what's going to come out of it. We're hoping to have some more clarity in autumn.

15:39But our mandate for us as a venture client unit is: create more impact. Just make it easier for our colleagues within Lufthansa Group to work with startups and vice versa. Really make sure that it's as smooth as possible for everyone involved. It should become a standard. It should be a no-brainer, so to speak. It should be that simple to get in touch and work with a startup, and vice versa. And that's basically what we're trying to pull off.

16:06When you say the task was to scale it, I heard two things. On the one hand, okay, we tried something out in small and that worked well, now we want to roll it out, scale it across the entire group. Versus, you can also say, now when you say it needs to be easy for everyone, okay, we want everyone in the organization, those 100,000 people, or maybe a subset of those, to be able to try something out in small.

16:37Is it both of them, or how do you think about these two dimensions of scaling? I believe one leads to the other. I'm a strong believer and advocate for the latter. I believe you should have centralization to the extent that it's necessary and beneficial for a cause, whether it's in innovation or in operations or whatever. And you can see this within the group already. We have different airlines. They have their own brand. They are very recognized in their own home markets.

17:09But there are some things that are happening very centralized. So managing, for example, the network, making sure that not every airline of ours is flying to the same destination at the same time. It might not make sense. Maybe it makes sense to align a little bit on that one and steer it maybe a little bit more centrally, to ensure that we have the best offer for the customers and also don't create any redundancies. But then again, maybe it makes sense to have something that you experience that's very unique to your airline, such as the brand, or maybe also the food and the beverages that you experience on an airline, that might make it really unique.

17:47So Swiss, for example, might, or not might, they definitely have a very different catering setup, a different product. If you fly with Swiss, you will immediately know, okay, this is Swiss. This is not a German company, even though it belongs to Lufthansa Group. But this is a Swiss company. Same with Austrian. Belongs to the group, sure, but it's very unique in the sense of the culture, of what it's offering. And it might actually make sense to leave this within the airlines, not to move it centrally, because they know best.

18:19They know their home market. They are deeply rooted in their country, in their hub, whether it's Vienna or Zurich. And I would say this also translates a little bit to innovation, I believe. So maybe there are some benefits to having some central elements, to just make sure that we don't create any redundancies and inefficiencies. Also to make sure that it's simple, that we can measure it, so we actually know, does it actually make sense? Because just because I believe that might be the right move, a couple of years down the road we might look back and look at the numbers, like, well, this didn't work out. Then you need to If you have draw a conclusion.

18:58Because if you don't have them, you can't even draw If you have the numbers, yeah. And so we have this belief that moving some of it decentralized, enabling, empowering colleagues in our business units, because they are closer to the problem, they are closer either to operations, or they have their own network in their business unit. Right? And a lot of times this is a key enabler for innovation: managing your stakeholders, your colleagues, just getting people on board. And who could do it better than people that are in that business unit?

19:31But what we can maybe offer and support them with is the tooling, the knowledge, making sure that we have a governance in place. As boring as it sounds, but something that enables it for them, so they know they don't have to worry about it. We provide this centrally because it's applicable to everyone. We get the feedback, we try to improve it. But basically we can provide tooling, we can provide, as I said, knowledge, training, everything. We ensure that we get the main processes in place so that it is as smooth as possible, as easy as possible for colleagues decentrally to work with startups. For example, if you talk about venture client, there are other innovation tools obviously at our disposal, venture client just being one of them.

20:17So that's why I personally believe there is a central element that is creating value. And then most of the value is probably decentralized. So it's a hypothesis for now, because we're not there yet. I've got to be quite honest that we're not there yet. So we're moving into that direction, but it's work in progress. I don't know, if we speak 18 months from now, I might have a different view and I might have some numbers to show. But for now, it's a hypothesis.

20:50It's our working ambition, and we need to prove it. So Lufthansa Innovation Hub is a separate entity, right? The Lufthansa Group at one point decided, okay, we're going to create a lab in Berlin as a separate entity, so that we can do innovation there. That somewhat is this centrally, or like this place where something can be organized centrally. But at the same time, I've heard often, especially from the people that are sitting in the main organization, that, ah, these people in white sneakers over there in Berlin, doing some stuff of theirs that never is going to reach our main operations. So from that perspective, I can also imagine that the Lufthansa Innovation Hub people were quite happy to get you on board as that very necessary bridge into the organization as a whole. And I think also the hypothesis very naturally comes from you, because you believe in your colleagues.

21:59You know who they are, what they need, and that they themselves have a motivation to improve the way they work, that maybe they're just limited by how complex it is for them to try out and bring new improvements into their work. Honestly, someone from the Innovation Hub, from before they hired me, needs to testify as to what the reasoning behind it was. But I would probably agree that one of the elements is probably, besides the mindset, you need the right people, the right mindset.

22:35It's obviously quite valuable to have someone who has quite some experience within the group, also in different functions. Because it's not only about the network. Network is a big part of it, it can be quite an enabler, but it's mostly also having the understanding, the empathy of what is actually happening within the group, what is on people's mind, when is there an opportunity or a good time to speak about stuff, and maybe when it's not. So we're really focusing on trying to create value and solving pain points within our group. We shifted basically from also creating solutions maybe for the ecosystem that you could potentially spin off, which we did, right? But now we're focusing completely on making sure that our group can achieve a sustainable competitive advantage with the innovation that we provide.

23:30Lufthansa Innovation Hub is moving way closer to the group over the past couple of years already. But this is particularly true for our team. So we need to be definitely super close to the company, right? The ecosystem is super relevant to us, the startup ecosystem as well, but we need to balance it, because mainly we need to understand: where are we hurting? Where do we have an opportunity? Where should we leverage something, or where do our colleagues need support? And this is not happening by just sitting in Berlin and waiting for someone to pick up the phone. So we need to talk to our colleagues.

24:06We need to be engaged with them. We need to be where they are. You mentioned the Innovation Hub changing its proposition ultimately towards the Lufthansa Group as a whole, right? And I do feel that the time at which these were initially started was still from a mindset of, look, all of these startups or all of these new companies are creating massive businesses. We don't want to lose out on that. Not an aviation example, but WhatsApp, and then all the telecoms companies realizing, oh, we should have built WhatsApp.

24:41Back then, still, the mindset was very much of, corporations are competing with startups and they need to adopt the startup methodology in order to build their own startups so that they keep having control. It's like an improved way of doing R&D, in a way. And I think now, and very much also with venture client, the perspective has changed a bit. Not anymore of corporate and startup are competing with each other, but actually, no, it's one ecosystem. And it's also not separated.

25:12There's not an invisible line between the startup ecosystem and the corporate world. Instead it's just the economy and the world developing, and corporations then realizing that they need to be able to tap into what comes out of the startup world rather than compete with it. There's fluidity, I would say, more so than ever before. Probably also because times changed. That's true for us, probably true for a lot of companies that have corporate innovation units, or are thinking about corporate innovation in general. And it's way more structured now.

25:56There's way more opportunity now to collaborate in a structured way. So it's not purely opportunistic, because someone within the company learned about a young company that is doing something quite innovative. It's way more deliberate, I would say. And then there's always this question, and honestly, to me personally, this question is nowadays again super relevant: how much should you build in-house versus procure? Or maybe you can't really distinguish or decide at the beginning, but maybe you need to try it first and then decide, after having tried something, whether it actually makes more sense to continue pursuing that direction by doing it in-house, or by actually trying to use someone from the outside, from the ecosystem, to support you on that journey.

26:55And this is especially true nowadays with where LLMs and AI in general have progressed. Probably a couple of years back, if you would have asked me, should we build or should we buy, it'd probably be more buy than build. Unless we're super, super good in building it, or we have this unique advantage, for whatever reason, where it just makes sense to build it in-house, simply because we need to protect the IP, we need to protect the data.

27:26So if I just go out there, take for example computer vision. We actually have had multiple computer vision cases within one of our business units, in the logistics sector. So picture this: you're a logistics company. So you move shipments from A to B basically. And you, as Fabian, might be a customer, like, hey, you know what, I have this package, those are the dimensions, I'm going to pay online, I'm going to send you my package and you just transport it.

27:58Then every now and then the company realized, well, Fabian booked that dimension, but actually the shipment is a little larger than expected, but nobody really realized that. That Yeah. Right. Right. So it just happened, just by checking in randomly. But if there's one, there are more. So we realized there are multiple shipments that might have exceeded their booked dimensions, so to speak. Obviously, since most of it is transported in planes, us being an aviation company, space is super limited and super valuable on a plane, whether it's in the belly of a passenger plane or in a dedicated cargo plane. Either way, it's limited, so it's expensive. So if your package takes up more space, okay, that's fine, but then at least pay for it, right? So one of the use cases was: all right, we can actually recharge. We'll transport it, no worries, but at least pay for the correct dimensions. We didn't know that before. Now with computer vision, everything is

29:09being measured. We know the dimensions. We can check it against the papers. And if it is exceeding what you've booked, then we just add that to the booking. Right? That's one use case. A great use case, actually, because it generates revenue directly. You can do it on a small sample once and show, okay, look, this is actually like 10% extra that could be charged. 100%. Which means 10% extra revenue across the board. Any parcel that is exceeding the booked dimensions basically, you can charge for that one. It's immediately adding to your incremental revenue.

29:51Yeah. The second use case: if you know the dimensions, you can kind of plan already how to build up the pallets that need to go onto the airplane. So it's basically 3D Tetris. And that was done a lot of times manually, by quite some experienced colleagues that needed to check. Okay, so some parcels, obviously you can also transport dangerous goods. So if something is a little bit radioactive, it can only be transported if it's, for example, far away from anything that is living, right?

30:31So you can't transport it in the same container, obviously. There are strict rules that need to be followed. Also, if something is super heavy, it might not make sense to put it on top of the pack, but rather maybe on the bottom. Mhm. For obvious reasons, right? But those are some of the thoughts that go into it. And then obviously you need to check weight and balance of the plane on that particular flight. That can't be exceeded. So there are certain weight limits.

30:58You need to make sure that the aircraft itself remains in balance. So a lot of stuff to factor in. And it was done mostly manually, after having done some previous checks obviously. And nowadays, if you know the dimensions, if you know everything that is going onto your flight and you measure it, you can already have technology calculate the best loading plan. Freeing up capacity by another, whatever, 10% again, that costs, that you actually save. The loading will still be done, and many people will actually move the process onto the plane. But at least you know exactly where it goes.

31:38You don't need to think about it. You can immediately just follow the plan that has been calculated and just go with it. And that's the second use case that's coming out of this one. And this will ultimately now be scaled across different warehouses, because that company has multiple warehouses at our hubs and destinations. And this is a huge improvement, obviously, right? And that's just one example. A couple of questions about that. Initially the packages land somewhere and there they get measured, right? It's not as they go into the airplane, because then I guess It's on the conveyor belt basically, right? So as they are being transitioned through the warehouse, at different stages you can set up cameras.

32:25How much does it actually happen that I'm flying on holidays now and I'm in my plane? It's not my plane, I just booked my seat, but fair enough. Still with me. Exactly. Still with me comes that radioactive package. How much of that whole space actually gets used for the cargo business? It's still quite a lot. Talking commercially about it, you could, a route could be positive in terms of revenue even just by cargo. Just by the passenger tickets it might not be the best route, but adding the cargo to it, that's obviously a huge lever.

33:15So then you might still be profitable when I sit in one of those planes where everybody has three seats for themselves. Yes. In general. Obviously I don't have the commercial background, my colleagues in the commercial department could explain it way better, but generally yes. And then sometimes it's also the diversification of what you're offering. Take the pandemic, for example. That was an absolutely extreme example, right? Let's not hope that will ever come back in the same way again.

33:50But back then, cargo was the name of the game. Obviously we couldn't have survived purely off cargo, otherwise we wouldn't have needed support from the government. But still, cargo skyrocketed. The demand for cargo air travel skyrocketed. Was it because of masks and the Yeah, personal protective equipment. At some point we ripped out passenger seats from our passenger airplanes and converted them basically into cargo planes. Obviously you didn't have a cargo door like a cargo plane, but basically we moved non-heavy equipment such as masks, for example, back from the sourcing countries to Europe. So I personally did a couple of flights to Asia without any seats in them, with most seats removed, where basically there was just, on the way back, boxes of protective equipment.

34:56And you did some of those flights. One or two, actually two. Countries were closing left and right on short notice and in short intervals. And basically the government was scrambling to get German nationals back to Germany, or at least have an option for them to come home, because they were stuck, because air travel was just canceled on them. So we had flights for the government as far as Australia and New Zealand, South America, Central America, the Caribbean, because there was so much demand.

35:33And we weren't the only ones. Obviously Lufthansa Group took a huge part in that, but there were other German airlines that also contributed to that. And it was happening in the shortest possible time, sometimes within days. So you can just imagine how many people in operational functions came together to plan and manage those flights. And then the crew was basically just the last puzzle piece to actually get the task, get the mission, fly there and fly back.

36:05And during those times, those operations weren't always the easiest on the crews, because sometimes you couldn't spend a night, sometimes you were allowed to spend the night, but only if you stayed in quarantine in the hotel. So you were not allowed to exit your room. Those were the extreme cases, where you entered your room, you were basically accompanied by some local representative of the state, or at least someone that was tasked with accompanying the crew to your room. And then it was basically not locked down, but basically that's it.

36:44And then maybe one or two days later, whenever it was time to fly home, you would exit the room again. So that was obviously really challenging for people that probably chose aviation for the freedom that it also brings, along with traveling places, going out, experiencing the world. And then you find yourself in this really rare situation where you fly somewhere, but you move into a hotel room and you stay in that hotel room for the next 48 to 56 hours.

37:14Were you scared on some of those flights? I mean, with the pandemic I can imagine less, but if it's real geopolitical At Lufthansa Group we have a really, really good corporate security department that has a really good network, that is highly professional, that assesses basically whatever is going on in the world and how it's impacting our operation, how it's affecting our crews at that destination, if something is happening at that destination. We are trying to connect cultures and economies.

37:52So it's all about freedom of movement. And this is obviously being limited by some of the recent geopolitical situations. The corridors where you can actually fly through certain regions have become very narrow. And then obviously everyone needs to go through those. And our colleagues in corporate security assess exactly where we can fly. And sometimes there are airspaces where there's just a minimum flight level where it's okay to fly over, and others are simply no-go. So you trust that team? When you get put on a mission, you trust that this has been figured out, and you're going to do your part.

38:33Yeah, I trust my flight operations department. Our flight operations department, tremendous team, and our corporate security team, they work jointly together and they make a decision. And I trust that decision. I could go so much deeper into this, but we're also here to talk about venture client. Still, maybe we can make a bridge between the safety that you talk about a lot, right, which seems like one of the, if not the top value that you guys strive to embody. How does that work together with innovation, that by default is going to at times compete a bit, or be a bit inconsistent with that safety?

39:18Yeah, that's a very fair question. So first of all, that's why, we talked about it a little bit earlier, maybe we're now in an era where innovation, especially with startups, is happening in a more structured, more consistent way. Take the computer vision example. Huge value, perfect, amazing. So if it didn't work, what would be the risk? If it failed, what happens? The scanning didn't work, or maybe the build-up of the containers didn't work to the same extent, but it's double-checked anyways. So no real risk to operations.

40:06But now take something that is close to flight operations, right? Where if you add a technology, make changes to a system. We're striving for a really high degree of safety in what we do. And there are so many people, so many resources working on making this happen, unknown to the customer usually. If we just make changes to that, we can disrupt operations, right? And we're not just talking about putting safety in jeopardy. Sometimes it's just about an IT system shutting down in operations, but it's a centralized IT system. So maybe you can't board or check in any passengers.

40:48Then your entire operation is being disrupted, with a huge financial impact. That is a way different danger, I would say. So we need to be very deliberate and obviously also more mindful. And we take even more planning when it comes closer to operations, I would say. Even in today's cabin, in the new cabin that we have on board of our Lufthansa airplanes, you can do more with your own device already. And this will just, with Starlink coming on board now, since we just introduced the first airplane, we're starting again, innovative technology.

41:26Not the first ones to put it on a plane, right? Others have done it before, but then again, it's an innovative technology and it will create ample opportunity for use cases on the flight deck, because now you can have more data sources. You can leverage that bandwidth to actually do something with it. Or on the passenger side, whether people are now engaging more with each other via their phones, more integration in the cabin. It could be interesting use cases coming up.

41:58I think also it's interesting that you bring up Starlink, because SpaceX, are people going to call that a startup? I mean, now they are publicly traded, but they are not that old yet. So from that perspective you could say it's a startup. I think overall it just shows that the whole conversation about startups is unproductive. Like, we're doing this for startups. In the end, we're doing this in order to validate new innovations that can come from anywhere. Startups are a huge source, true. But in the end, to determine this one yes, this one no, that's not the point. It is about the validation of the innovation. That's the real mandate and purpose.

42:40I would agree. Cancel out all the terminology around it, it's basically exactly that. And you can ask them, okay, so what is a startup to you? And sometimes we ask that question to our colleagues, just to tease a little bit. So what is a startup in your perspective? What do you picture when you picture a startup? You could have like two dudes in a beanie hat in a garage, that's one extreme. And then you have other companies that have been running only for a couple of years but are tremendous in size already, or have created a huge impact.

43:15Raised 100 million in venture capital for just this one focused problem. So you can always make up some potentially defining elements of what a startup has or has not. But ultimately that's not the point, I would say. And going forward, there probably shouldn't be a clear line. In terms of organizational responsibilities and just making sure, okay, clarity, who's doing what, it might be helpful to define the line. But in reality, I would say this is very much fluid.

43:47Isn't the line within a certain budget constraint, within a certain time constraint and within a certain liability risk constraint? Like, you're clearly not going to try something in the cabin now on some flight like that. But ultimately it's that, right? You're sandboxing from all the dimensions to make sure that ultimately, applying lean startup, you're trying to make maximum learnings with minimum investment in order to then go through the next cycle. I would actually say this is probably the way, if not being implemented yet everywhere. And the same goes for us. But this is ultimately what it should be, because it's not the point whether it's a super young company or an older company.

44:29It's about the technology or the innovation that they bring to the table. And it's more about us being, I would say, experts and enablers of testing that technology in a very defined scope and budget, as you said, but having the expertise of navigating the governance of a bigger corporation in the most seamless way, to allow for us as a large company to test that solution in the quickest way with limited resources, and get the maximum learnings as quickly as possible to make a decision moving forward. This is just a cycle on repeat.

45:12Repeat, repeat, repeat. Because the world is moving and it's all just about, how can we make sure that we continuously use and adopt the good stuff that the good people of this world are creating? I have two points there. One: before you even heard about venture client, maybe, or maybe just got in touch with the Lufthansa Innovation Hub, did you have thoughts of, hey, here are things that could be improved? And would you have known ways to actually move these things forward?

45:43So that would obviously be more in an operational capacity, right? Because as a pilot back then, or in operational management roles, or on the flight deck, you definitely realize, if you are the pilot of a flight and you reach your destination and there are no stairs. Most people have experienced it: either no one is unloading or loading your bags, or there are no stairs, or for some reason things are not moving as they're supposed to, right? So that you can experience firsthand.

46:18And actually, it's super early, so I can't really speak in detail about it, but we're currently looking into one use case where we might look at how we can create more awareness of where the ground service equipment is, GSE in short, and actually have it maybe technology-steered in a better way, especially when things happen in operations. Because generally on the first flight of the day you could start on time, but as the day progresses, stuff happens.

46:57Weather delays, technical issues. So one flight gets delayed, one might be canceled. This obviously affects also the use of the equipment needed. Because if one plane is delayed and they still need to load or have access to the airplane, one piece of the equipment is still stuck at that plane, but it might have been needed already at another plane. So maybe leveraging technology, not only knowing where it is on the airport, but also steering it in a more efficient way.

47:27And especially when a disruption happens, to be able to leverage technology so that it can quickly derive a new plan. Like, you know what, move stairs A to flight C, and stairs D you move to flight A, and this is actually more optimal. But that is not an airline responsibility, that's typically the airport themselves. It depends. You're right to the most extent, at least in Europe. But there's also for us an exception to the rule. At one of our hubs we do have our own ground service provider.

47:58The group has its own ground service provider. And that's exactly where we might potentially look into this use case. And it's different in the US, for example, where there's still a bigger dependence on company employees working on the ground handling, whereas in Europe it has always been very much on having partner companies doing the ground handling for you. But so that wouldn't be the airport itself, like BER here or Fraport. It's not even them that are responsible for that, it's the airlines that then get a contractor to be on the ground.

48:40Most airports do have their own ground handling team, or So it's a service. their own company that they offer basically, and you can contract it. But there are other companies also in that domain. But then again, that's not even the point. Once again, it's an ecosystem game. With one company of the airport in Munich that provides ground handling services in Munich, and our company, we just started pooling equipment. And it just makes so much sense. It's so obvious.

49:09But it's about thinking beyond company boundaries and just pooling equipment. Does it hurt me if I have stairs available and you use it, even if we don't have a contract, if we find an arrangement that we pool the equipment? If I'm working for the airport ground handler, I can provide my customers with equipment at the right time and place, just as you can leverage my equipment if you are running short. It makes so much sense. But obviously you need to have a very trustful relationship. But ultimately that's why I'm saying it's an ecosystem game, and you need to have the right players and partners in the ecosystem, because it's so interconnected.

49:46I want to move, you spoke about, it's a bit back, about procurement, and how without your procurement colleagues you could have never set up this fast-track procurement process that allows you to test new technologies and validate suppliers. How did that go? Did you just go to them and explain the concept, or because you had a top-down mandate they had to move? How did that conversation go? So, no top-down mandate, which I think was honestly also helpful.

50:20Not to have it. Yeah. Obviously now it would make sense to have it, just, this is also about clarity, because you don't want redundancies. It should be clear who's doing what, just so you don't waste your resources. I think this is clear, whether it's Startup Gate or someone else, but there should be clarity on who's doing what. Simply because there needs to be some ownership in terms of making sure it's done in the right way, that you can actually account for it, that you can measure it, and that you don't waste your resources. So that I agree.

50:54But coming back to your procurement question, I believe back then it was actually exactly as you described it. I just went to one of my procurement colleagues, which I knew from my previous role. He's in a senior leadership position, and I just approached him like, that's where we are, and we have this issue, and we're trying to do this PoC, but there's no setup yet, and we're running into this issue, can we talk about it? And he invited us then to his team meeting, his leadership round.

51:27And we explained it. And obviously there was some hesitance. Well. Aren't you guys doing what we're doing? And so obviously we needed to get to know each other and then develop an understanding of how this is actually beneficial for the group, but also for them. how it's also complementary. And by no means is it taking over a role previously done by procurement. It's extending the role that procurement does and adding just this area of expertise without removing anything, basically.

52:09Right? It just took a while. We had really honest discussions and workshops on how this could work. And we trialed it, and we developed this, as you said, fast-track process. So a unique process under which, in a defined scope, we can just move freely, I would say, with dedicated touchpoints that we have, so we maintain this close relationship. And so far it works great. Amazing, it works great. And we're just trying to now find the right way to move this forward for the entire group. But I've got to say, we could have been way, way worse off, to be honest.

52:49They know how it's been done previously, how their standard sourcing usually works. And then just taking them and showing them a clear way, a clear path through it, that is very much agreed upon, it makes it really easy. And then at some point you realize, oh, there's some sort of relief. Are you actually compliant? Right? Yeah. Contrary to the belief. Oh, we are compliant. But actually we're not only compliant, we're actually fast and compliant. That's the entire value proposition.

53:22We are fast and compliant, right? And once we have done it with our colleagues, and we do it again with them, it's a no-brainer. It's only the first time. But having this process, it's about the scalability and about the number of projects and PoCs you do on the one hand. But it's also a really good, I would say, business card to show, to address the hesitation and somewhat also the anxiety on our colleagues' side, which is totally understandable, because if it's novel, if you've never worked with each other, you don't know each other, there's no trust relationship yet. So a process, a clear process and a structure, in my point of view, enables this trust relationship a little earlier.

54:13And also, coming back to the centralized versus decentralized, I think it's also extremely important initially to have faces to it, because before I trust a process, I trust a person, right? And right now, Daniel stands for that. Hopefully at one point you don't even need to be associated to it. You've just added some lines of code, ultimately, to the source code of how the Lufthansa Group operates. But I think that's exactly also why it typically starts with a small team that is setting up these initial processes and is also vouching for, guys, we're on a journey here, but this is compliant, in order to then hopefully eventually, which I don't think any organization has fully reached yet, have this standard process fully available. Because it's like online marketing didn't exist in the past, right? That function needed to be created, some iteration, some learning, and eventually you decided, okay, it sits within marketing, or we

55:18actually move it into our digital department, whatever. But now online marketing as a business function exists. Or QA, or product, on the software side, also as functions that previously didn't exist, where standards were created and now every organization just has them. And you're talking about trust. It comes back to why we believe also moving it into the organization makes sense. Because if you have never done this, but you know there's someone within your business unit also pushing this, supporting you on that road, there's no discussion about, what's your game in here?

55:57Why are you doing it? What is the motivation? There is no argument. You're in the same business unit. You're doing it for the same cause. Often the venture client thing gets framed as, hey, there's this new innovation tool that we're now going to use, similar to incubation, acceleration, the likes in the past. But the truth is actually that it's not a new invention. It's just a methodology that was developed around something that companies have been doing forever. Right? I don't know how much, but I would guess at least a thousand new suppliers are added to the supplier database every year.

56:39Now, a good share of those is going to fall into the category startup, or fall into the category of, we've done something with them that previously we haven't, or we've done differently. Yeah, I would agree. Because look, in such a big company, you mentioned we have over 100,000 employees. Obviously there is amazing talent in that company, right? And there are so many people that actually want to move ahead and make a change that is beneficial to the company. So obviously, also in the past, people have thought about how we can improve this. And then they started just looking, right?

57:19So this always happened. I agree, this always happened. This is more just being more structured and deliberate, kind of creating the Autobahn, so to speak, for it. Right? Maybe not take the small road with a couple of detours, but just move on to the Autobahn. Yeah, exactly. I think it's also that, if I now, like, I'm a pilot, or maybe I'm not a pilot because they don't have so many improvement potentials, but I'm managing the ground team in Munich, the one that you spoke about that you have, and I would want to make a change, I would have to find my own path.

58:03Now I found my path, cool, I've done it. Or maybe I was disheartened and not motivated anymore, because it was just so difficult. Now someone else also does that, also finds their own path. Again, someone else also does that, again finds their own path. Actually the potential for the Autobahn is already there, because a bunch of people have created roads, just they don't know of each other. And there are probably like 20 little trample paths next to each other in the forest, where if you would move them all together, we already would have a good part of the highway.

58:36If they knew they had the same destination, they probably said, oh, maybe we can move together. Yeah, exactly. Which is exactly why it is needed to initially have someone with a mandate to professionalize this, because no one in their operational work is going to take that on. You seem to be able to do a lot with your time, but nonetheless, you've taken some time to set up these agreements with procurement, to align a team, to understand. There's much we haven't spoken about but can do in a future conversation: compliance, IT, etc. There's still so many other departments as well to get into. That is a real job, to create that Autobahn.

59:24But the question is, is it actually a job forever, or once you've created that Autobahn I would say that's an open question. I don't know the answer exactly. But I would very much agree that if you have established, if you have found a good setup that works reliably, consistently creates the impact for the group, because it's all about the impact. Nobody cares about the number of PoCs. Oh yeah, I mean, I do care about the number of PoCs, because I want to As an activity KPI. As a manager you care to see, okay, we're doing things.

1:00:01We're busy, right? Yeah, exactly. But nobody cares. It's the impact that counts. How are we actually improving Lufthansa Group as a corporation? How are we actually supporting that cause? And only if that is working, then that makes a difference. That being said, we have now this task of creating this, or removing roadblocks, making it easier. Sometimes it's not only about roadblocks, it's just making it, instead of some pathway through the forest, making pavement, making it easier to move. Right? We have this. And I truly believe down the road, while we scale the concept across the group, we don't necessarily scale our team.

1:00:52And I don't think that's necessary. I think there will be a very healthy balance of where a small team can be very capable of maintaining the Autobahn, maintaining the concept, making sure that everyone else working with it has all the tools, all the frameworks, always up to date, consistently being available for challenges that might come up, but generally working on maintaining the process and the structures. And that, I believe, you can do with a very limited team.

1:01:27I want to close off with a few quick questions. All right. Starting out with: if you could ask one thing from the Lufthansa management board, what would you ask them for? If I had only one ask. I would ask to get the opportunity to prove that this type of innovation is actually creating the impact. And for that, it actually needs a little time, just to move across the organization. And if I ask for time, it's usually also asking for money, because that buys you a little bit of time and moves forward some use cases.

1:02:11Your Lufthansa colleagues: if you could ask one thing from them, or send one message to them, maybe some of them will view this. I would say, share whatever little or big pain point you have, whatever inefficiency you have, share it with us. The worst thing that can happen is we can't do anything about it. But the best case scenario is there's actually an opportunity to solve this. But only if we learn about it can we actually figure this out.

1:02:39Then one wish to the startup ecosystem, or the founders of companies that might have relevant solutions and technologies for Lufthansa. Again, this is repetitive: share them with us. It's very easy. For now, go to the Lufthansa Innovation Hub website, lh-innovation-hub. And there you can actually share your startup, your idea, your pitch with us. And we take a look at everyone. You always get an answer back, even if there is no opportunity immediately, if we don't see us coming together in the next couple of months. You always get feedback, you get an answer, and this is how it works.

1:03:23We share very openly with the ecosystem, both internally and externally. And if you feel the same way, just share it with us. If you could ask one thing from GlassDollar, what would you ask for? First I've got to say, I very much agree with, or like, the decision to focus on the technology, because I think the technology is actually where you will provide the most value to us. And if I can ask just one thing, it's exactly creating this transparency and openness to shape it, to listen to the customer and co-create this product with the customer. And I'm not sure you will, but this is something that I hope, even if the company becomes bigger, we will retain this.

1:04:19Let's put it this way. Well, I can also say it's a pleasure co-creating this product with partners like you. And then the last one, this is not an ask, but what would you recommend to those starting out on their journey of establishing venture client within their organization? Be pragmatic about it. Don't overthink it. There's ample opportunity and resources out there to get the basic knowledge, and then just do it. But what I would say is, as early as possible, for example, talk to procurement, to your sourcing colleagues, to some critical stakeholders.

1:05:04Not to define a process per se at the earliest stage, but to shape this with them together, because I believe if it's co-shaped and co-created, there's this co-ownership. It's not our thing, it's as a team, but it goes beyond the team, right? And having this shared ownership and commitment and moving into one direction, I think it's very beneficial to the cause itself. Cool. Daniel, this has been so insightful. Thank you very much. It was a pleasure for me. This was really so much fun for me.

1:05:36Likewise. Thank you.