From Selling Sausages to Making Millions
This is the story of a 34 year old German entrepreneur with no background in real estate, finance or even college degree.
Gunther Schmidt is the founder and CEO of Quarters, a co-living business which has 1,850 units in 12 cities across 3 countries and 2 continents.
His path to running what he calls the WeWork of shared living spaces, however, started with a clever idea when he was just 14 days old.
While living in Burgberheim, he saved money from an after-school job and had his parents drive him to go buy salami sausages from a nearby plant to resell for a marked-up price on eBay.
His scheme worked well for a while, with Schmidt receiving consistent five-star reviews from happy customers, until the owner of the factory caught on and forced him to stop. “So back then I learned, OK, you have to look in all the directions [of a business] and see the potential risks and how to navigate them, and how to build it up in a sustainable way, and how to build long term value,” recalled Schmidt
“Honestly back then I did not see myself as an entrepreneur because I didn’t know what that is,” he added. “I was just a kid playing around.”
Schmidt befriended Ambrose while performing in an Oktoberfest beer tent. And at 18, instead of heading to college with his classmates, Schmidt together with Ambrose launched a search engine to aggregate websites that offered free text messages.
The site eventually attracted 100,000 visitors per month, spurring the duo to capitalize on the traffic through advertising. Before long, they earned their first $1 million.
On ordering a TV online which never got delivered, Schmidt decided to help others avoid shopping from deceptive e-commerce sources. In 2008, Schmidt and Ambrose launched eKomi, which has since become one of Europe’s largest transaction-based review and rating sites and is now backed by Goldman Sachs.
In a bid to solve the accommodation challenge for talents they needed hired from around the world, Schmidt and Ambrose offered their first form of shared living spaces to candidates willing to relocate. “We called it social living,” based on "social network," Schmidt said.
Their flats offered furnished rooms, free WiFi and Netflix, along with like-minded peers to spend time with. “We figured we could create real value in putting people who were in the same exact situation together,” Schmidt said. The housing concept was so popular among their employees that by 2012 it had turned into their next business.
When asked where they learned how to secure such large-scale investments from big-name backers, Schmidt replied that he and Ambros, “just talked to a lot of people.” Quarters, for example, has 10,000 members resulting in an occupancy rate of 96%, proving a reliable track record, he said.
Little wonder, from December 2018 to January of this year, Schmidt and his business partner, Michael Ambros, raised another $1.1 billion from Corestate Capital Holding SA in Europe, along with $300 million from W5 Group in the United States.