Telefónica, the Spanish telecoms large, is well-known for its Wayra accelerator programme, launched in 2011 and one thing of a European counterbalance to the dominance of Silicon Valley. In these 10 years it has helped alongside some 800 startups who’ve generated greater than €285m in revenues and 10,000 high-skilled jobs.
However over the past two years it has signalled a shift away from its origins. It launched Wayra Builder, a enterprise constructing unit, designed to capitalise on patents, applied sciences and concepts from inside Telefónica. The unit has created 4 startups to date, though Irene Gomez, open innovation director at Telefónica, is reluctant to quote successes or monetary outcomes simply but, saying it’s “a bit too quickly”.
Final September, it additionally arrange a brand new €250m development fund referred to as Leadwind, in partnership with personal enterprise capital agency Okay. The fund, which can lead funding rounds of as much as €15m, focuses on deeptech scaleups in southern Europe and Latin America in sectors reminiscent of cybersecurity, business 4.0, future of labor, power, ehealth, fintech, way forward for the house and mobility.
Telefónica’s shift comes amid rising questions within the innovation neighborhood over the effectiveness of accelerator programmes and labs. So Sifted felt compelled to ask Gomez: does the corporate now not trust within the accelerator mannequin?
“It’s not that we’re leaving one mannequin and beginning a brand new one,” Gomez says. “It’s a matter of evolution.”
Whereas to a sceptic which will sound a bit like a non-answer, Telefónica continues to be investing of their seven Wayra Hubs and has launched Wayra X, a 100% digital hub designed to maneuver it extra into B2C areas, which it defines as “mass markets”, centered on areas together with 5G, ehealth, digital training and residential automation.
However, says Gomez, the innovation ecosystem has modified, and Telefónica’s method has needed to change with it.
“It’s not that we’re leaving one mannequin and beginning a brand new one. It’s a matter of evolution”
A decade in the past when it began Wayra, Gomez argues, the ecosystem was nonetheless in a really early stage and Telefónica discovered itself among the many first traders in some very immature corporations. However over the past decade, the ecosystem has advanced — and startups with it.
“We’ve discovered that the maturity of startups has advanced,” she says. “We’ve additionally recognized that we’re able to working with extra mature startups, and are actively investing on this space as properly.”
This isn’t, then, a case of Telefónica abandoning the accelerator programmes however diversifying the way it works with startups and entrepreneurs.
A way, not an finish
Gomez, who took on the position of innovation director simply over two years in the past, simply as Telefónica was starting to vary the way it labored, is eager to maneuver away from the hype that has grown round innovation — the branding, the funding bulletins, the funding photo-calls, the dizzying guarantees of latest applied sciences and the hopes of getting in early on a future unicorn.
Gomez strikes a extra sanguine, pragmatic tone.
“The open innovation crew is a method, not an finish in itself,” she says. “We’re a approach of making range within the company, as a result of range is an effective way to make issues occur in another way.
“We’re a bridge for cultural change by connecting two worlds, the company world and the entrepreneurial one.”
Help (not simply) on the very prime
One of many methods Gomez needs to create that bridge is ensuring there are connections between startups and the company all the best way down. Typically in innovation groups, there’s an emphasis on getting buy-in from the highest as a result of with out the highest govt, their innovation and cultural transformation are more likely to fall brief.
There’s simply as a lot threat, although, in an over-reliance on the CEO.
“You want the CEO, however not simply the CEO,” says Gomez. “You want different sponsors throughout the enterprise the place innovation could make a distinction.
“Sponsors and promoters generate change inside the corporate and so they’re key to permitting innovation from the surface world to be accepted.”
Gomez offers an instance of when giant expertise corporations and lesser-known startups are competing for work.
Massive tech corporations usually have established and multifaceted relationships with a company like Telefónica — they are often each present companions and prospects of the organisation. When an RFP is issued in search of experience to assist remedy an issue, there’s usually a threat that present relationships championed by inner stakeholders reminiscent of account groups can squeeze out the startup.
“Our funding is a approach of signalling our confidence within the startup”
The added problem for Telefónica, is that after they spend money on a startup, it comes with a dedication to assist that startup to do enterprise and develop with Telefónica.
“This highlights the significance of getting assist from sponsors inside business groups, not simply product groups,” says Gomez. “We don’t advocate each startup we come throughout, however these we spend money on shouldn’t be seen as a better threat than bigger companies.
“Our funding is a approach of signalling our confidence within the startup — it’s working with different prospects, its roadmap is being delivered, we’ve got a seat on its advisory board. We attempt to give peace of thoughts and assist an enormous company to take a threat.”
And we’re not speaking small numbers right here. Gomez cites a big 270+ startups which have energetic business relationships throughout the Telefónica group.
OKRs all spherical
Measuring the effectiveness of innovation groups is at all times arduous, however Gomez has made establishing OKRs (aims and key outcomes) throughout her groups a key focus. It isn’t simply to be sure that the crew delivers worth, it’s to present them permission to discover areas exterior of Telefónica’s core enterprise as properly.
“We’re on the lookout for good investments with a VC mindset”
“You must make sure that everybody has OKRs, and that they’re joined up,” she says. “Some are OKRs only for the open innovation groups, and a few are shared with enterprise items to assist create alignment and customary possession.”
Telefónica’s open innovation groups have 4 OKRs which function each a yardstick, and a mandate.
- Income technology for Telefónica by way of working with startups — “We measure the worth generated for the corporate yearly by making these connections occur, and we agree on the KPIs with the enterprise items so we’re aligning with the operation”
- A monetary return on our investments — “We wish to see a return — we’re on the lookout for good investments with a VC mindset.”
- Cultural change, indicated by the variety of startups working with Telefónica — “Our intention is to have an increasing number of startups working with Telefonica yearly — we measure cultural change by way of the variety of efficient connections [between the corporate and startups].”
- Future alternatives and expertise bets past these specified by the corporate at this time — “There could also be no enterprise unit that may work with the sort of expertise or product at this time, however we make investments as a result of we imagine we have to ship these sort of conversations to the corporate.”
Gomez factors to areas such because the metaverse and decentralised networks, the place her groups are exploring alternatives and investments which can be each exterior of the core enterprise, and and not using a outlined want or drawback inside Telefónica’s companies at this time.
“They might not have a match at this time,” she says, “however why not in two or three years’ time?”
Embracing threat, wanting additional out
One other new concept is the “anti-portfolio”.
“The anti-portfolio are the businesses the place we had the chance to speculate, however declined for match causes,” Gomez explains. “However these had been nonetheless tremendous alternatives for funding.”
These not solely function reminders of how simply short-term considering can affect even essentially the most established innovation features, however are additionally ripe to be revisited with out the stress for an apparent match within the right here and now.
“Company agitation for outcomes can typically kill concepts which might have a constructive influence within the longer-term,” says Gomez.
Her largest fear is that enterprise could be too centered on the wants of at this time, whereas as an open innovation unit, “we have to take dangers and spend money on the tomorrow, even when the enterprise just isn’t ready at this time”.
“Company agitation for outcomes can typically kill concepts which might have a constructive influence in the long run”.
Her private problem for 2022 will chime with many: “Getting the steadiness proper between listening to the identified wants of the enterprise, versus stimulating them with issues not on their thoughts at this time.”
Thomas Brown is Sifted’s company innovation reporter, and a contract journalist, award-winning writer and marketing consultant, specialising in digital transformation, innovation, organisational tradition and client behaviour. You’ll discover him tweeting from @ThinkStuff.