The Telco is My Shepherd: Funding Innovation

Ensuring that the management team knows about the start-up and the progress they are making is critical to success.

The shepherd to success

What these start-ups so obviously need is internal support to help steer them to success—a shepherd of sorts to guide and protect them through the labyrinth. In my experience across many start-ups, it has only been when a shepherd leads that success follows. When the role is institutionalized (and not someone just volunteering to help because they believe in you and your products), the telco creates an internal pipeline for start-up success.

Sometimes this role is championed by the VC or corporate development groups; after all, they want to see their investment succeed. Other times it is the CTO or product teams that lead. Either way, when clearly defined, the role achieves a number of objectives:

Stakeholder buy-in

Many different groups will need to be convinced that the new product or technology not just works, but will reach telco scale, can be operationalized, can generate revenue, will be supported if the start-up fails, and so on. When the easiest and safest thing to do is nothing, the value to each of these stakeholders must be spelled out while paying attention to stakeholders’ own needs and wants. The role of the shepherd is to guide the start-up company through these groups, address issues early and help find answers to issues before the momentum of the project is lost.

Vendor onboarding

This process alone can take six months or more, and there are often ways of accelerating deals if you know the right process and people to talk to. One telco I know has a “snap-out” agreement that allows them to transact deals under $2 million without a master services agreement.

System deployment

Just because the deal is done doesn’t make deployment happen, and delays in the process caused by integration or service issues can kill a promising project. Getting ahead of these groups and what they need, how other vendors will react and be managed, and keeping a reporting cadence to hold groups accountable for progress might seem a typical role for an internal program manager, but it often needs higher-level support.

Executive visibility

Ensuring that the management team knows about the start-up and the progress they are making is critical to success. Having an advocate who puts your company in front of executives with a regular cadence provides the coverage you will need when problems occur and when you really need that order to close.

It may sound like this shepherd role isn’t really working for the telco at all, but that would be wrong. Innovation is the lifeblood of our industry and shepherds help level the playing field, protecting the flock of start-ups from the wolves of incumbent vendors. Best practices and best outcomes suggest that the role of shepherd should not be left to chance, but should be a dedicated role, with someone who has the institutional knowledge and internal political good will to guide.

This is by no means the only best practice to emerge. There are others, from a committed fund from each telco to drive telecom infrastructure investments through their VC groups; to separating out new technologies from the omnibus-edition-style mega-RFPs that constitute the annual bidding cycle for capital equipment expenditure; to removing the “pay-to-play” model, where startups are obliged to run negative margins on their first deals to prove their fealty to the telco.

Ultimately, telcos don’t operating in a vacuum, and while regulation and quasi-monopoly status provide a level of protection, the threats to business erosion from the hyperscale cloud companies, from private 5G, and from LEO satellites (to name just a few challenges) should push focus on innovation as the only way to grow. Returning this ecosystem to a healthy state is the responsibility for all of us who make our living connecting the world together.


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