His name is Carl Johann Freudenberg. The success of today’s technology company can be traced to him. It was 175 years ago – on Feb. 9, 1849 – that he and a partner founded a leather factory in Weinheim. It then began a unique, entrepreneurial journey to become a global company. The story has been superbly documented in Freudenberg’s own archive and other sources. But what does the historic record tell us about his personality, about Carl Johann as a man? How do his thinking and actions continue to shape Freudenberg’s corporate values even today?
Freudenberg Archivist Julia Schneider paints a picture: “Imagine the founder of a startup who has just become a father for the third time and, in the middle of a civil war, has borrowed a lot of money from his father-in-law to buy a small, insolvent industrial firm.” This is an admittedly oversimplified image of Carl Johann, but it shows he had no shortage of confidence. He was also lucky to be able to assemble the right ingredients for a step-by-step rise from apprentice to co-owner and eventually sole proprietor of a company of his own. What were these ingredients? What led him, as a 30-year-old family man, to look ahead to success during a period of such uncertainty? “The right character traits are part of the answer. So are the right associates in his business and personal life,” Schneider says.
The Child
Carl Johann was just nine years old when he lost his father Georg Wilhelm. For a time, George Wilhelm ran “Zum Löwen,” an inn in Hachenburg, a town between Cologne and Frankfurt. But times were tough in the dawning industrial era, and business suffered. In early 1829, the inn was closed, and the onetime innkeeper had to make a radical career change. He accepted a position at the customs house in Weilburg an der Lahn, but died there a short time later, on March 9, 1829. His son, Carl Johann, had accompanied him from Hachenburg and was the only one with him when he died. His family mourned and struggled for financial survival. His mother took him and his five siblings to Neuwied, where relatives made sure they would not starve. At 14, Carl Johann had to fend for himself. He began an apprenticeship in his uncle’s leather shop 200 kilometers (about 124 miles) from Mannheim, a long way to travel at the time. “The family’s poverty no doubt triggered something in Carl Johann and gave him the urge to make something of himself,” Schneider says. “We see this in his later years when he rose to become a kind of self-made man thanks to ambition, industriousness and thrift.”
The Up-And-Comer
Carl Johann was on his own. But he soon found himself and identified his strengths. He supported himself as an apprentice to his uncle, Johan Baptist Sammet, and partner Heinrich Christian Heintze in Mannheim, a vibrant, large city and quite a contrast to his hometown. “At this time, he sees the positive impact of his achievements and his personal capabilities on his life. He gains self-confidence to pursue the goal of making something of himself,” Schneider says. His industriousness and ambition drove him on. The young man not only served customers from behind the trading house’s counter and made deliveries – with the help of earnings from the leather business, he was able to run a cigar store on the side, improving his finances. Freudenberg, who never attended secondary school, learned French and English, attended the Mannheim National Theater, and moved with growing confidence in respected and international circles. He also continued to excel in his uncle’s company. In 1844, he acquired 20 % of its shares as a silent partner.
The Husband
That year, Carl Johann married Sophie Martenstein, whom he had met at a choral event, a so-called singing circle, during the spring of the previous year. Martenstein came from a wealthy Worms family. Her father, a spice merchant and respected businessman, approved the match, but he no doubt looked beyond young Freudenberg’s heart, character and grooming in making the decision. There were economic realities to consider, including the suitor’s net worth and his business success. In her memoirs, Sophie wrote: “The conviction that he was gaining a good, capable son-in-law who had already saved up 5,000 guilders [the equivalent of about 100,000 euros today], led my father to entrust his only daughter to him.” Children came along over the next few years: The first arrivals were two daughters, Elise and Luise, although the latter died young. When son Friedrich Carl was born in 1848 in Mannheim, Baden was in the throes of a revolution.
His Contemporaries
What was happening on Carl Johann’s doorstep in Mannheim? At stake was nothing less than press freedom, trial by jury and a German national state with a freely elected parliament. Until that point, the country was a patchwork of independent territories, including the Grand Duchy of Baden, where Mannheim was located. The revolutionaries were divided into two camps, one liberal-constitutional and the other radical-democratic. Unrest reigned in Mannheim. There were calls for an insurrection. Thousands attended revolutionary people’s assemblies. Countless more of them sprang up across the country. There were pitched battles. “Businesspeople who generally want stable political conditions viewed the events anxiously. That was certainly true of our founder,” Schneider says.
The Entrepreneur
Political storms were buffeting the country. In their midst, the bank whose bills of exchange had financed the company collapsed. The firm fell into economic difficulties and had to be dissolved in 1848. “Freudenberg has the good fortune to be able to turn the crisis into an opportunity,” Schneider says. “He now has a strong family behind him who can give him seed money.” The father-in-law, who had high regard for Carl Johann, made the capital available to his daughter Sophie so she could help her husband with his plan to acquire part of the company. At the time, it was a progressive idea to involve a daughter in a business.
Friedrich Carl, the son born during the year of revolution, wrote in his memoirs nine decades later: “Since the liquidation required the departure of the two owners, my father was able to choose between them. He chose Mr. Heintze. The firm of Heintze & Freudenberg ended up in Weinheim, taking over a small, calf leather tannery in 1849.”
Why did he buy into a leather factory with Heintze and not into a leather shop with his uncle? For an entrepreneur, the leather factory offered far broader opportunities for designs and growth than “just” a leather shop. “This shows Carl Johann’s entrepreneurial vision,” says Schneider. And there was something else: “The conviction that he could pull this off in turbulent times is based on the fact that he had extricated himself from a financial crisis as a young man. His personal qualities had made him a success. In a sense, it was something that he had already done. This time, he was determined to use his experience and strengths to his advantage.” Thus, in the middle of a revolution, he charted a course that would lead to a global company. On Friday, Feb. 9, 1849, the partners officially founded the firm of Heintze & Freudenberg with an entry in the commercial registry. The revolution was put down just a few months later.
The Company Executive
Over the next three years, revenues quadrupled, and the staff grew from 50 to 170. “Three aspects play an important role here,” Schneider says. The first is quality. “In Germany alone, there were about 10,000 companies making leather products. Freudenberg knows that he and Heintze can only set themselves apart with quality products.” Secondly, it was clear to him that he had to internationalize the business quickly to buy hides and sell leather. It was either “go big or go down,” as the saying goes. The two businessmen built up relationships in the United States, Switzerland, the United Kingdom, France and Turkey (still the Ottoman Empire at the time.) And last but not least, Freudenberg recognized the importance of innovation early on, picking up on the patent leather trend from France and gearing his production to it. He had to win his partner Heintze over. “If you make patent leather, you get to ride in the carriage. If you make regular leather, you walk,” he once said, demonstrating his vision once again. The product from Weinheim was a prize winner at the Great Exhibition in London in 1851 and ensured the company’s success for many years.
The Mentor
After he bought out the Heintze family and he took over the company as a sole proprietorship in 1874 – once again with financial help from his wife’s family – he was able to show his caring side as an entrepreneur. Heintze had emphasized cost-efficiency and had presumably stood in the way of Carl Johann’s other interests. That same year, Freudenberg founded a health insurance association for his employees, the forerunner to the health insurance fund that the company later established. A general aid fund followed for the families of Freudenberg employees in need. “You can see a connection to his experience as a child,” Schneider said.
Freudenberg eventually brought his sons Friedrich Carl and Hermann Ernst into the company to help him, making it a family operation. In 1887, he made them partners, giving each one-third of the company. It had more than 500 employees by then. With the transition to the next generation and with the size of the company in mind, Carl Johann wrote down his business principles by hand. He considered humility, honesty, a solid financial foundation, and the ability to adapt to change to be the most important principles for successful entrepreneurialism. The theme of trust – not just in oneself but in one’s family, partners and employees – played a major
role. “It is better to trust a hundred times at risk of being taken in than to mistrust unjustly even once.”
A summary: After misfortune, Carl Johann Freudenberg always endeavored “to make the best of any situation,” (as he put it in his Business Principles) with diligence, thrift, ambition, self-confidence and adherence to principles. He became a successful entrepreneur thanks to his business vision, an openness to change and the innovations associated with it, and a culture of trust that he modeled personally. His legacy has shaped the company culture down to the present.
Even today, the principles that he formulated at that time are the basis of the Freudenberg Group’s Business Principles, which are applied worldwide.
