I can’t believe it’s already been seven years since I joined Wayra, Telefónica’s startup accelerator. Back then, few understood why Telefónica, one of the world’s largest telecommunications companies with presence in 21 countries and annual revenue of €52bn would be crazy enough to acknowledge that its ability to survive the digital revolution would partly depend on its ability to work and grow with startups.
There are now almost 400 incubators and accelerators in the UK alone, with more than half being backed by corporates. The top five companies in the world – Apple, Amazon, Google, Microsoft and Facebook – are or soon will be trillion-dollar former startups. And their billionaire founders are still seen as the motors of their creations, while corporates without access to such sterling entrepreneurial DNA struggle to avoid being disrupted.
Today, Wayra operates in ten countries and in the UK alone has invested in 178 startups that have raised $224m and done $15m worth of deals with Telefónica. Along the way, we’ve learned a few things.
Leadership must come from the top
Many middle managers will kill innovation because it isn’t among their KPIs. Telefónica’s CEO is also Wayra’s founder. It’s easier to get employees to internalise an innovation agenda when a company’s CEO lives and breathes innovation. Corporates who limit innovation to an innovation department and can’t figure out how to change their culture from both the top down and the bottom up, will not survive.
Corporates don’t work well with early-stage startups
Most managers will only engage with startups if they see a clear fit between their KPIs and the company in question. This means startups must be able to articulate tailored pitches that help middle managers clearly see the win-win. They also must have commercial products that can be quickly deployed to potentially millions of customers. We recently relaunched Wayra to acknowledge that our strategy has evolved to focus on startups of this sort.
Open innovation means you can’t fly solo
Open innovation shouldn’t be lonely. Our partners include the Cabinet Office, GCHQ, the Oldham Council, University of Edinburgh, Big Society Capital, Merck, Cisco and Hyundai. They even include Deutsche Telekom, Singtel and Orange. Change happens whether we like it or not and doesn’t limit itself to a particular sector or type of organisation. Just ask Blockbuster, Kodak, Myspace and the entire taxi industry. To survive, organisations must open up, be humble enough to acknowledge vulnerability, have a sense of urgency and be willing to work with others.