At Mercedes, Racing Is ‘Business on Steroids’
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Wolff decided to return to Austria, where he successfully invested in some early Austrian internet and technology companies.
He later started several venture capital companies and then returned to part-time racing while in his 30s.
He quit in 2009 after a serious accident cost him his senses of taste and smell.
In the same year he began investing in Formula One, by buying a 16 percent share in the Williams team and becoming a director of the team.
He was approached by Daimler in 2012 and was asked if he wanted to take over the Mercedes team, as well as invest in it — along with Niki Lauda, the Austrian three-time world champion. Wolff agreed and began running the team in 2013.
Success came immediately as the team won the drivers’ and constructors’ title every year since, from 2014 to 2016. He is married to a former Formula One test driver, Susie Wolff.
Mr. Wolff spoke with me about Mercedes, Formula One and his life.
Passion is a good place to start. You are married to a racing driver, and you have a son involved in a Formula One school project making miniature racing cars. Is racing an all-consuming passion for you?
It’s actually not. What I’m passionate about is that you have the business side of Formula One as one of the few true global sports, representing a brand like Mercedes as a partner, and then the brutal reality of the stopwatch always telling the truth.
And the combination of the business side, and then racing 20 times a year, and the challenge and the competition against others — somehow I am passionate about the mix.
So Formula One is kind of “business on steroids,” then?
That’s actually a kind of nice, fun analogy. It is true, yes, it is business on steroids: It is a multibillion-dollar sport and entertainment competition with some of the largest brands in the world involved, like Mercedes, and with the challenges of coming together 20 times a year on racetracks where within a couple of hundred square meters you have your own people, your fiercest competitors, the regulator, the sporting authority, your sponsors, your suppliers; there is no other business where that happens. And then you can benchmark it, every single weekend. And you are only as good as your last race results.
You have shares in this team. Is that something that drives you on as well? Does that add an extra layer to have a personal investment in the team?
That is one of my main drivers. When Daimler, Dieter Zetsche, decided to restructure the team it was because they believed that there are benefits from a large multinational organization for a Formula One team, like resources. But there are also downsides; that multinationals are often not quick enough in this specific environment and that it should also be managed like a midsize company, and managed in a very entrepreneurial way. And when they approached me, it was very much them saying: “This is a condition we think is necessary to be successful. We want you to be a 40 percent shareholder of this team. What do you think about it?” And I said: “Actually it is the only way it works for me.” I have been involved in venture capital and private equity for almost all of my life and developing the team, and developing the company and increasing value — shareholder value — is a main driver for me.
That is interesting because it was the problem in the past with teams like Toyota, Jaguar, and Honda, that the manufacturers did not have that driving factor and direct responsibility for the team leaders — they were all just employees.
That is the uniqueness of Mercedes today. That Daimler decided to accept external shareholders with Niki Lauda and myself — he has 10 percent and I have 30 percent — and understand the weaknesses of the global structure in terms of organization and efficiency. And I think that they very much looked at Toyota, BMW, Honda.
How much is it necessary for success in this business to have a passion for racing itself? Even many of the most successful, top people running the business — like Bernie Ecclestone, the promoter, or the previous president of the governing body, Max Mosley, were always passionate about racing.
It is such a specialized business, and if you are passionate about it that means you have stayed a long time. You need a lot of years of experience in different categories in the sport itself and the passion around the sport to understand the difficulties of this particular business.
You had your own race driving career. What happened to it? Was the talent there, but you lacked opportunity?
I lacked the talent. I was lacking the resources of a family that makes the possibilities and the opportunities.
Why is it that some of the best team directors in Formula One were not very good racecar drivers?
Maybe the humiliation of not having been a very good racecar driver and the self-awareness that you aren’t, made people then transition into a different side of the sport — not in the car but outside of the car.
Your team, Mercedes, has won everything for three seasons in a row. After this winning streak, will you have the same passion? Because these things go in phases, teams rise and fall.
First of all you are right: Success comes in cycles in Formula One. You can see that various teams have been very successful over a couple of years and then a regulation change kicked in and they lost their competitive edge. And that is something that drives us very much. There is a regulation change for next year, and we want to be the first team that can stay competitive through a regulation change. But it is not an easy task, and it is not an easy exercise. We remind ourselves that what is happening to us at the moment is unusual. And we need to keep on our toes, to stay motivated and to continue to develop the organization in order to stay competitive the following years. As long as I am passionate about doing it, I am going to stay. How long that will be, I don’t know. But at the moment I still am.
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