Franz Joseph I of Austria
If Greater Germany was to prevail, the crown would necessarily have to go to Franz Joseph, who had no desire to cede it in the first place to anyone else. On the other hand, if the idea of a smaller Germany won out, the German crown could of course not possibly go the Emperor of Austria, but would naturally be offered to the head of the largest and most powerful German state outside of Austria—the King of Prussia. The contest between the two ideas, quickly developed into a contest between Austria and Prussia. After Prussia decisively won the Seven Weeks War, this question was solved; Austria lost no territories as long as they remained out of German affairs.
Wilhelm von Tegetthoff
Tegetthoff was appointed commander of the Austrian battle fleet on 9 May 1866, shortly before the Seven Weeks' War against Italy. Although the Italian fleet was larger and more powerful, Tegetthoff decided to engage it after a successful reconnaissance of the Italian base of Ancona on 27 June 1866. With their army suffering defeats against the Austrians during the first week of the war from 20 to 27 June 1866, the Italians sought a victory over the Austrian navy by sending their fleet against the Austrian naval base at Lissa, off the coast of Dalmatia near Spàlato (Split) on 16 July 1866. Encountering the Italian fleet early on the morning of 20 July 1866, Tegetthoff sailed straight for the center of the Italian fleet, hoping to ram the ships to make up for his own fleet's lack of firepower ("Rammstosstaktik"). The smoke from the Italian ships made visibility very poor, however, and the Austrians missed the Italian fleet completely. Swinging around, Tegetthoff again charged, this time setting two Italian armored ships on fire and damaging several more.