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How Startups Can Work With Big Companies

This article is written by Jeremiah Uke, a Contributor Author at Startup Istanbul.

Christopher Rogers is currently a partner at Lumia Capital, an Expansion-stage venture capitalist partnering with leading tech companies in under-invested emerging markets and forward-thinking US companies to accelerate growth. Christopher has 30 years of mobile industry experience and has established himself as a successful entrepreneur, he was one of the guest speakers at Startup Istanbul 2016, where he shared a few details about his journey into entrepreneurship.

Big companies have proven that it is difficult for them to be innovative due to their structures, they have 5-year budget cycles and they also have 2-year strategic planning cycles, this restricts them from making quick pivots even when needed, the big companies also have the most powerful data in the world but somehow, they don’t know what to do with it, they do not know how to how to translate their data to profitable value such as funds and customers. This is where the startups can come in and partner with these big companies, using their innovative culture to bring solutions or products that will be backed by these big companies.

Using telecommunications (telco) as the case study for big companies, statistics are showing that these companies are starting to partner with innovative startups, companies such as Verizon Ventures, T- Mobile, Orange, Telus, Softbank, Innovacom amongst others have established private investments, many companies have backed away from this process as well. Some of the benefits for startups working with big companies are:

  1. Access to expertise and resources.
  2. Telecom enablement partnership
  3. Shareholder value and returns

There are a few examples of startups which have been invested in by big companies, they include Comcast which invested in Icontrol, Orange which invested Deezer and Verizon which invested in ITSON. To lay more emphasis, Deezer was founded by 2006 in Paris, it is an online platform and app that provides songs from a variety of genres, delivering a multi-local music experience to more than 26 million people worldwide, in 2011, Deezer announced a distribution partnership with Orange to make Deezer Mobile available exclusively to Orange pay monthly customers, in  2016 , Orange invested in $110M Series E after Deezer cancelled a planned IPO, the investment strengthened partnership with Orange, including an extension of a longstanding distribution deal with Orange France for an additional 2 years.

Therefore, startups should be thinking about their own telecom/carrier strategy, asking two major questions which are:

1. How can a telco be helpful to you?

This is where your startup should consider how a telco can improve your service or help you grow and expand, offering value in terms of distribution, reach, data and connectivity.

2. What value can you offer a telco?

This is where your startup should consider how they can add value to a telco, by improving their technology, boosting their audience, improving and generating content or bringing in innovative processes.

Answering these questions is definitely the starting point to startups building partnerships to benefit themselves and big companies.

26 August 2019

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