He never got on with the banks. Capitalism is abhorrent to him. He sees their exploitative wrongdoings personally in regular trips to Africa. For example, cobalt mining and the accompanying degradation of rivers and lakes in Congo, in his opinion one of the most beautiful regions of the world.
We’re visiting Heini Staudinger, 62. In the small nest of Schrems, Lower Austria, near the Czech border, a man with a huge grin approaches us. “Hi, I’m Heini, a warm welcome to Schrems.” We’re standing in the courtyard of the Waldviertler shoe factory, which doubles up as Heini’s garden. He has lived in a former storage room in the factory since 1991. It is around noon. The atmosphere at the table as we eat lunch is delightfully familiar. The boss’ smile seems to affect his whole staff, who always say hello and are ready to talk with you for hours.
Heini grew up as the son of a greengrocer in Schwanenstadt in Upper Austria. After finishing school he went on his first trip to Africa; a 12,000km journey on a 50cc Puch moped with his best friend. From Austria, through the Sahara to Tanzania. The impressions he got on this journey would deeply influence his life. He was fascinated by the humility and generosity of the people there. Nobody has anything and yet everybody has so much.
He spreads these values until today in his company. Firstly they made him study medicine and then later, completely on a whim, become a shoe salesman. He packed his sleeping bag and hitchhiked up to Denmark to buy his first batch of shoes. He borrowed the money from friends and never once entertained the idea of going to a bank. Some years later he founded the Waldviertler shoe factory and independently manages every area of the business, from the production right through to distribution to the customer.
Over the years Heini has invented a new way of advertising, concentrated on content marketing, a term that hadn’t even been invented at the time and has financed new warehouses at the factory by borrowing money from friends, long before crowd funding was even a thing. By doing this he has also dumfounded the Austrian financial authorities, who prosecuted him for illegal banking procedures. Heini battled it until the highest court in the land. He lost the case but played a huge role in the formation of the Austrian crowdfunding law.
The story of a rebel who lives his life with humility and sustainability and who started the process of change while others were merely crying out for it.
Please tell me a bit about your background.
I grew up in the small town of Schwanenstadt. My parents were greengrocers and I’m the oldest of five siblings. My family’s living environment was pretty much the grocers itself, it was totally mixed up with the shop. There was a door from the living room to the kitchen and another door that led to the shop. Everyone in the family had to work, that’s still the backbone of my entrepreneurship today. I learned to greet people when I was two and at only three years old I learned how to serve and attend. At the age of six, we were all able to do some mental arithmetic. But what I think is the most important thing is that I learned humility. The greengrocer business suffered from the time I was born. And as it got worse and worse, my parents said, “As long as we can make a living, there’s nothing to complain about.” I heard the same thing later on in school, expressed a little bit more elegantly, in a quote from Seneca; “Never is too little which is sufficient.” This attitude still helps me today in running the Waldviertler Schuhfabrik.
During your schooldays, you broke out of Schwanenstadt for the first time.
Exactly. I went to a Catholic college in Linz. When I got there in 1963, it was essentially a penitentiary. Interestingly, in the seven years I went there, it underwent a complete process of change. The reason was that the spirit of ’68 was infused into the college. We had a prefect who was employed as an educator by the bishop, though he hadn’t been an educator. And he thought about how the perfect educator would act. He was a Catholic preacher who thought, “The perfect educator must be God”. And then he thought about which tools God would use as an educator, the most important of which was trust. So from then on, trust was his most important tool. In practice, this meant that we enjoyed total freedom in the 7th and 8th grade. That was a significant event in my life. At the same time, this experiment led to the biggest educational success in the history of the school, 14 out of 24 boys started to study theology, one of them was me.
Your enthusiasm did not last long.
One semester, to be exact. For me, no one was excited and believed enough. I studied science of communications and politics for another semester in Salzburg, when a friend wrote me a letter where he informed me that he would stop his studies, planned to travel to Africa and asked whether I wanted to join him. I wrote back a card that had only one word: Yes.
How did you manage to finance this trip being just 19 years old?
1972 was the year of the Olympic Games in Munich. We earned 3,000 German Marks (around 1,500 Euros) for dumb work – night watchmen. With that money, we bought two mopeds and traveled to Africa. 12,000 kilometers in six months. We started off on December 12, 1972, in the middle of the winter.
That sounds like a huge adventure.
It was indeed! We first went to Palermo, then moved on to Tunis by ferry and from there crossed the Sahara desert, first to Western and then to Central and Eastern Africa. It was an unbelievable time in my life. In Nigeria, for example, we went to the area where Boko Haram is now so active, which makes me really sad. Another example is East Congo. During my life I had been asked several times what I found was the most beautiful landscape in the world and I always answered, East Congo. The 5,000-meter-high Ruwenzori mountains in the East and the steaming jungle in the West. Rivers, lakes, woods – blossom in unbelievable glory, fruits in all colours. The soil is so fertile it’s jaw-dropping! Five potato harvests a year. And exactly in that paradise, people had bad luck, as the soil contains the coltan that we need for the production of smartphones. Through that coveted mineral, an economical war started that killed six million people. And the rivers and lakes are now so polluted that no animal would ever drink out of it. I find that enormously tragic, as we enjoyed unbelievable hospitality there, such that we Europeans should feel embarrassed, as we will never reach such a level of magnanimity. After six months we reached our goal in Tanzania. These times will always be in my memory.
What did your parents say when you told them your plans?
When we told our parents that we wanted to go to Africa, they said, “You’re crazy, finish your studies first and then you can still go afterwards”. Then they realised somehow, that logical arguments weren’t going to work here so my mum played the emotional card and said, “If you go, I’ll die!” On the day we left I said to her, “See you, I’m going so I guess you’re going to die!” We both cried. She didn’t die but we did leave. Even that was an important thing to go through, to not buckle under that emotional pressure. Willy Reich would say that I followed my own sense of longing – that is the key moment where life opens up in front of you.
What’s the story behind you starting a shoe company?
Upon getting back from Africa we realised that we had never actually talked about what we were going to do once we got home. We both started studying medicine because of the awful illnesses and desperation we had seen in Africa and I increasingly became aware that the problems in the third world were clearly linked to the craziness we have at home. I was studying for an important pathology exam with my friend Peter, who passed while I failed. He had a rich father who gave him 10,000 Austrian Schilling with which he went shopping in Munich.
We met later in Café Merkur on Florianigasse and he showed me what he had bought. He was completely made up with the shoes he had bought, which you couldn’t get anywhere in Austria. I looked under the table at these shoes and he’s still going on about them and so I lifted my head and said, “You know what Peter? I’m going to stop studying medicine and become a shoes salesman”.
You changed your life plans from one minute to the next?
Indeed! I hadn’t been interested in shoes for a day in my life but in that moment everything fell into place and I’m still astounded, 35 years on, that it all happened like this.
What were the first steps into your new life then?
I hitchhiked up to Denmark and hid my sleeping bag in a park so that they wouldn’t realise that I was poor and travelling like a homeless person. I went into the company’s office and said, “I’d like to sell your shoes in Austria”. They said, “Super!” I told them that I didn’t have any experience in selling shoes and that they should help me put in a first order. They wrote out an order for 300,000 Austrian Schilling. I had no money, so to hide it from them I signed with a smile and hitchhiked back home!
I rung my friends up and asked if they could lend me money as I had bought 300,000 Schilling’s worth of shoes and within two days I had the money I needed to start. I didn’t consider for a moment that I could have gone to a bank to ask for the money; doing it among friends was much more personal for me.
When I came back to Vienna, I cycled through the streets for an hour and found an empty shop that I liked because the sun was shining into the shop window. I rang the landlord, we went to a tobacco shop to buy a lease contract and five minutes later everything was fixed. The contract is still effective today! Sometimes I think that in many areas it would be good to go back to the simplicity of those times.
How did your first years as an entrepreneur work out?
Shortly after the first shop opened, friends of mine opened shops across Austria. After the rebranding, the company was renamed to GEA in 1984, the Waldviertler shoe factory was established. I was totally unsatisfied with the reliability of my Danish suppliers and by happy coincidence, a friend who was shoemaking teacher made a suggestion to found a shoe factory in Schrems (a 3,000 person village in lower Austria). There, the textile industry had just fallen apart and many people were unemployed, so our initiative was supported from different sides.
You became CEO of the shoe factory a few years later. Why did you move to Schrems from Vienna?
The company has never really been completely been economically sound. So as the debts continued to grow, the shoemakers got scared that they would have to pay back the 8,000 Schilling’s worth of loans that they had taken out and started searching around in panic for someone to give the company to. Then Gerhard Benkö, who was a business manager at the time, and I took over the firm in 1991. And because the company didn’t have any money and we couldn’t afford a business manager who would have had an idea about how to get out of debt, I couldn’t think of anyone who could have done the work for free apart from myself. I had been able to live off the shoe business so it was a piece of cake to roll my sleeves up and get going. I didn’t think for a second that I should have looked for an apartment in Schrems, I just put a bed in a sort of garage and slept there. I worked in the staff room and about ten years ago I got a wooden floor and heating so I’m pretty much living like a king!
From then on, you had a double burden…
I was in the Waldviertel region of Austria trying to get the company there healthy and up and running again and while that was happening, my own company GEA was slipping into crisis. I wasn’t able to see it for a long time and when I did finally catch on, it was nearly too late. When we had no money left in 1997, I had the thought that helping each other, saving and working hard was the way out of this mess.
What were some practical steps out of the crisis?
As I thought about saving, I thought that it’s most effective where we’ve got the most expensive people on the books, which in our case was the advertising specialists. I had a friend who was an unemployed architect and I said to him, “Didi, let’s try and put an advert together”. Advertising is actually shit; they bother us on TV, on the radio, as we’re driving along looking at scenery and now on the internet. So since we’re having to advertise, I wanted to gift a little bit of fuel for the heart and mind as a thank you for looking in the first place. That’s how we got onto the idea of these advertising brochures where every second is a full-page photo with a poem or philosophical or literary text.
I think that we’re doing these brochures right when they answer one fundamental question: What are doing here in the world? This here is a favourite passage of mine, which I found in a book from Dorothee Sölle, ‘Mystik and Widerstand’. It says, ‘Boundlessly happy, completely fearless, always in difficulty. This is all part of the potential of our life’.
Content marketing of the first hour.
Indeed. Funnily enough with these brochures that Didi and I had created, we had our first advertisements where we could measure their impact in turnover afterwards. And we had some unbelievable success with them. The company grew 40% in 1999 and we were lifted out of the debt and losses of 1997 in quick fashion. In 1999 I was invited to a meeting with the bank where I was told that our credit limit was being reduced from 12 million Schilling to 7 million Schilling, something that made me livid when I first heard it but something that I am thankful for now as I was then able to say, “Being independent of any kind of group is the most important thing for my company”.
This led to your crowdfunding activities later on. Do you feel a higher sort of obligation to your private investors than you would to a bank?
You can definitely say that. All in all, it’s now 350 people who lent us almost five million Euros. If the money had come from a bank, I obviously wouldn’t wish for us to go bankrupt but when I imagine that we could cause any sort of damage to people who were kind enough to lend us money because we made a mistake, I would really hate it. These people have not only lent us their money, they have also wished us the best for the development of our company. They wish that we act sustainably with their money. On the one side, I feel that we have a strong moral obligation, on the other hand it’s a warm and positive connection following the principle of not letting each other down. Now we invite our investors once a year to our factory. We show them what we do with their money and our tax accountant answers all of their questions. This gives me a very special feeling – economics can be that beautiful. If only a small part of our economy worked like this, it would have an enormous educational potential where people could gain a huge range of competences.
Your economical approach was not exactly well received by everyone. When did you start putting your moral sense over the common laws?
Through our approach we came into conflict with the Austrian Financial Market Authority, who accused us of running illegal bank businesses. And what they demanded from me was essentially impossible. They wanted us to pay back the money we had borrowed from private people within a few weeks. You could ruin almost any company in Austria if loans are terminated in a very short time frame but the problem was that I had no choice. I couldn’t just go to the bank and say, “I need a loan because I need to pay back the money I received from private investors”. The banker would have felt it’s absurd.
Where did you find the confidence to take the case to the supreme court?
My disobedience towards the FMA was ultimately obedience towards my colleagues and the work we are doing here. When I realised afterwards that the whole community was behind me, being brave was a piece of cake. Now I think that just like there are contagious illnesses there is contagious health, and just like fear can be contagious, so can courage. D und I have seen some crazy things – like walking through Vienna, having cars stop in front of us and people shouting at us, “Don’t let them bring you down!” Somehow with this wind at my back, being courageous isn’t very hard. I think that we should share this courageous wind with as many people as possible as there are so many things that are screaming out for change and that won’t happen unless we tackle the issues at hand. It’s all there in what we want for the world. We want to put the things that we see and hope for back into motion.
How do you approach things that you want to tackle? Do you have any advice?
I think I have a strange talent for perseverance. I often find myself playing around with thoughts in my head and I can’t leave it, though I sometimes wish I could – wish I could not permanently think about something! But if things that are important to me capture me, I permanently need to think about them. Perseverance. Somebody once said it was stubbornness, to which I say, “No, in ‘I Ging’, the Chinese book, there are many encouraging phrases concerning our lives. And the last sentence always reads, ‘And if you want to succeed, be persistent’.”
What do you still want to achieve in your life?
My goal is to find a model of how to run a business that is communal and as compatible with people and nature as possible. If I could do that and it were copied a hundred times by other people, I would be very happy. The way economics is set up now is destroying the planet and leaving at least a billion people behind. Gregor Gyzi said it nicely when he said, “If we don’t take responsibility for the third world, they’ll come to us”. It’s also noticeable how we are already at the maximum point of this way of living and that we’re barely able to hold the lid on it all. And so I believe that something big is coming. If we are able to see it as a challenge to our humanity, one which we are ready to take on, it could be a major success. The egomania that has been dominant in the last few decades cannot be the way forward. It’s tragic that in this way of life, even the ‘winners’ aren’t winning. I don’t know anyone who has been able to live in these consumeristic times where I would say, “He’s got it all together. I want to be like him”. Not even a little.