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Silicon Valley is rife with innovation. Historically, that innovation started in hardware, then added in software, then the web, and lately it has become the global capital for innovation in the mobile telecoms industry. By being the home base of such power players as Google, Apple, Facebook and many more is just the tip of the iceberg. The region has attracted field offices for the world's biggest telecom operators, all keen to capture and profit the latest innovations and technologies.
Overall, there are more than 25 global telcos in Silicon Valley, in fact nine of the ten largest in the world have offices here. The mandate of these offices varies a little, but they actually have more in common: if there is a hot startup with a great new idea, they want to know about it today, not next year when their competitor launches it in their home market.
Lots has been written in the past decade about how difficult it is to work with the telcos…and most of it true. As very large companies, they are not very nimble, and have been slow and clumsy in their dealings with small companies. More than one startup has gone broke while waiting on a deal with a telco to bear fruit. However, this clash of cultures is largely in the past. Today, the telcos have become far more responsive to startups' needs, have accelerated the deal making process, offer faster "nos", and provide assistance to prepare technology for launch on their networks. Incubators have been established to foster ideas that need just a little boost, and structured processes have been put in place that allow the startup much better feedback on which mile marker they are at on the partnership road.
At the same time, VCs and startups have gotten far more savvy about how to deal with telcos. They know to plan for a longer cycle than Silicon Valley norms, they know to not put their eggs in one basket, and they know to go straight to market in parallel to prove traction, and also to nudge the carriers along. It turns out that in this era, a credible threat is "Adopt this quickly as a partner, or someone will go straight to market with it, and it will go Over The Top (OTT) of your network instead.
In fact, that threat is no small part of the reason why carriers have improved their partnership processes. Competition is indeed a powerful driver. After trying to build in-house solutions…and losing, and after playing a waiting game in some areas…and losing, the carriers are fully aware that they must partner with best-in-class innovative partners, or fall woefully behind. The upshot is that there has never been a better time to try to partner with a carrier as your go-to-market strategy. It isn't the best strategy for every startup, but it is the best for some: The telcos global reach, ability to bill, and ability to drive mass distribution make them an important option.
What are the areas of innovation that the carriers are most interested in partnering? I can run through a brief list here, but the best way to learn is straight from them, which is why the Telecom Council of Silicon Valley holds our TC3 meeting every year. At this event, the biggest telcos from around the world (and some regional players, too) get on stage specifically to tell Silicon Valley where the gaps are in their roadmaps, and what kind of partners they are seeking to engage. VCs can use this information to shape their investments, startups can use it to adjust or double down on their technologies, and dealmakers can use it to determine which telcos are the best targets for their partnership efforts.
Some of the ideas we expect to be in demand:
- Software Defined Networking and Network Function Virtualization
- Heterogeneous networks, small cells
- Wi-Fi offload
- Rich Communication Services, service layers
- LTE, all-IP technologies and services
- Vertical Industry solutions
One thing remains certain: it always pays to listen. If you want to use telcos as a distribution path for your company, the best place to find out what they are looking for is to ask them.
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