Lars Hinrichs and the attack on the telecommunications industry with AI

Telekom boss Tim Höttges only responds with an emoji. The entrepreneur Lars Hinrichs had written to him that his new company was starting soon. And the Telekom boss sent back a monkey covering its eyes. Hinrichs is happy to send the screenshot because he knows exactly how to read it. Until 18 months ago, Hinrichs sat on Telekom's supervisory board, but now he is competing with her. But what does competition mean? With Hinrichs it sounds different: “It is a complete attack on Telekom, Vodafone and many, many others.” He doesn't make it any smaller, the old serial entrepreneur.

Lars Hinrichs has already managed it once, at least he managed a company worth millions and made it a name that most Germans know. Then he also had the odd misfire. And now he's trying again.

From the customer's perspective, what Hinrichs offers is simply a cell phone tariff. It will be called Simsalasim and will cost ten euros a month. There are cheaper tariffs on the market - but Hinrichs advertises a different promise: flat rates and roaming. For the money, the customer gets unlimited telephone minutes and SMS in 50 countries, unlimited data volume without throttling in 100 countries (although without the cell phone being allowed to become a router for the laptop). During the conversation, customers should be able to call up an AI assistant: For example, it can bring even more people into the conversation, record the phone call or translate it. Parents should also be able to control what their children do with their cell phones. It should start next week.

Hinrichs will not operate its own cell phone network in the future either. Like so many providers of cell phone tariffs, he buys service from the network operators who supply the country with antennas - in Germany from Telefonica. This means that his costs also depend on what these network operators demand from him.

This is only possible in this way, says Hinrichs, because he and his team developed the entire software core themselves - right down to the programs that are not normally handled by the tariff providers themselves. This way it can offer more functions. It wasn't planned that way when he founded his company more than a year ago. “Two and a half years ago we had the idea that we would reprogram a few core elements and then simply license the rest,” says Hinrichs. Over time, the team noticed that artificial intelligence also made software development much easier.

Hinrichs now runs the company with just two dozen employees, but he wants artificial intelligence to do everything he can - not just software development, but also billing, marketing and customer service. Hinrichs says he pays almost 80,000 euros a month to use AI services. “But a hundred developers come out of it.”

In Simsalasim, Hinrichs dares to undertake one of the larger experiments in German business: Is it possible to run a company largely with artificial intelligence? “One-person unicorn”, loosely translated: “unicorn with only one employee” is the name given to the new trend among start-ups to create the most successful companies possible with very little staff thanks to the new technology. Or will Hinrichs realize over time that he needs more staff than planned and then the calculation no longer works out as planned?

If the company ultimately became just a normal cell phone tariff provider among more than 100 in Germany, then Hinrichs would not have achieved his goal. He wants to revolutionize the entire telecommunications industry.

If Hinrichs can do this in the mobile phone market, then it could possibly work in other industries too: Artificial intelligence could then make it easier for new start-ups to get started and put pressure on long-established competitors with better service or lower prices. The number of start-ups in Germany is already growing, and the startup association attributes this not least to artificial intelligence. “If you can rethink every process based on AI, then now is your chance to realize new business models,” says Julian Riedlbauer, who supports start-ups in negotiations with investors. “It’s great that he’s now starting the next company.”

Hardly anyone among start-up founders is given better chances for this experiment than Hinrichs. In his career as an entrepreneur, the 49-year-old has not made every venture as successful as Xing, but he has often been at the forefront of his attempts. And not just because Xing was one of the first social networks in the world at the time.

Xing, or more precisely its predecessor, was born out of disappointment. It's been 23 years. Hinrichs, who comes from a family of Hamburg bakers, had already completed military service during which he helped to build the Bundeswehr's first homepage. He dropped out of his studies on the first day and set up a PR agency for internet companies, but it wasn't successful; there was a dispute with his business partner, and after the new economy bubble burst, the company had to file for bankruptcy when the KfW demanded their development loan back. Hinrichs often calls this phase his actual MBA, his actual entrepreneurial training.

“So I went to Mexico and Cuba, read a lot and decided that I would only do things that excited me,” he said in an interview with F.A.S. in 2008. While on vacation he read Malcolm Gladwell's famous book, he later said, called Tipping Point. That gave him the idea: You could build a website where people who have professional contacts can connect. “I always like to get to know the contacts of my contacts, so founding a network platform on the Internet was somehow logical,” says Hinrichs.

Bringing people together – that’s what runs through Hinrichs’ entrepreneurial story. And because all sorts of people were losing their jobs, they were in danger of losing sight of each other and were grateful for such a site. OpenBC was born, one of the world's first social networks.

Hinrichs renamed his creation Xing, put it on the stock exchange in December 2006, and when it was valued at 190 million euros, he sold a large part of his shares in 2009 to Burda-Verlag, where Xing grew even further. Today the network is a shadow of its former self, overtaken by the American competition called LinkedIn, which is losing momentum again because there is too much artificial intelligence on the move - but no one blames Hinrichs for all of these developments.

After his exit, Hinrichs founded a company called “HackFwd”, in which he did not simply finance new start-ups, as investors in the scene often did. Instead, he let the start-ups learn from each other - a concept that has become established in more and more places over time. The best-known center of this kind is currently the “Y Combinator” in San Francisco, once headed by Sam Altman, who now heads the ChatGPT forge Open AI.

And yet no company emerged from this period that every German would know today. Hinrichs himself says that he got his investments back six or seven times. However, the project is over. The main reason he didn't continue was because there were more and more similar concepts - and: In order to expand, he would have had to get money from investors, his own money would no longer have been enough, but at the same time he would have had less time for his previous companies. He then built a platform that connects companies and their intermediaries with customers in company pension schemes and health insurance.

And he tried his hand at the real estate market. In Hamburg he built an apartment building in which he equipped the apartments with particularly lavish technical equipment. And he runs a holiday home in Ibiza, for which he sometimes charges more than 100,000 euros per week. The model Rosie Huntington-Whiteley and her husband, the action actor Jason Statham, have already documented in Instagram photos that they were visiting the house, and the media also spoke about soccer star Lionel Messi and singer Alicia Keys.

Shortly before the opening, there will be a digital museum that Hinrichs has been building in Hafencity for several years.

He was also repeatedly present on supervisory boards. The most prominent was that of Deutsche Telekom, where he was a member for more than ten years. In January 2025, when he wanted to found Simsalasim, he wrote a letter to the chairman of the supervisory board and then did not attend any meetings. From his conversation with CEO Tim Höttges, Hinrichs says: “Tim said it’s a small market.” He himself answered: "Well, Tim, I believe in it. I will resign from office now."

And will he now manage to change the world with a new cell phone tariff? At least Hinrichs is someone who can try out the principle of the one-person unicorn better than many others. “He’s good at bringing small teams together and motivating them,” says someone who has known him for a long time – emphasizing that they should be small teams. Large corporations with thousands of employees, Hinrichs doesn't feel comfortable in this world, he says so himself - but if you can suddenly achieve a lot with a small team and a lot of technology, then that exactly suits Hinrichs' strengths.

On the other hand, the pace of innovation in telecommunications has not been huge in recent years. In 2018, during his time on the supervisory board, Hinrichs praised Telekom's innovative strength. Now he puts it very confidently: "There has been no real innovation in the telecommunications sector in the last twenty or thirty years. It is always time equals price or data equals price." Anyone who has been working in the industry for a long time doesn't necessarily agree - and yet: even people from traditional telecommunications companies see it that way that old software is often still at work in the industry and prevents some innovations. “I warned the supervisory board several times about black swans that occur in every industry,” says Hinrichs today. “Back then I didn’t think I was the black swan.”

At the same time, industry experts are wondering how Hinrichs plans to bring his product to customers. There are so many different brands of cell phone tariffs that you first have to make your voice heard. Hinrichs will not have the cheapest offer. This is where telecommunications expert Peter Winzer from the Rhein-Main University of Applied Sciences comes into play, who advises the Federal Network Agency in its scientific working group. Winzer doubts that performance is really crucial for large numbers of customers. Many didn't even travel to a hundred countries. “Very few people will actually need it, if you’re honest.” For most people, a handful of countries outside the EU are completely sufficient. In addition, most mobile phone customers do not use up their data allowance anyway. Seen in this way, the telephone functions made possible by artificial intelligence remain the main incentive for customers. At the same time, Winzer says: If Hinrichs sets up a good sales channel for sales, then he can achieve something.

Marketing cell phone plans is not easy. It's easy to see which cell phone someone has in their hand. Which tariff it runs on doesn't matter. Nevertheless, many successful providers have managed to ensure that customers associate something with their brand. Be it simplicity, quality or marketing to a specific group of people.

Hinrichs himself once again relies on his address book - the contacts are what he needs again. Of course he wants to advertise on social media, but above all he wants customers to recommend his product to others. He wrote to 1,000 people for the company that later became Xing, and 492 registered. Now he knows more people. This time there should be 16,000. Let's see if that's enough to change the world.