Telcos crave innovation, but start-ups find the maze impossible to navigate

If anything sums up the telco industry, it is the pursuit of innovation coupled with the failure to be a leader in emerging segments. The solution might well be working with more start-ups, but are they accessible enough?

To be fair to the telcos, this gripe is not solely one for the telecommunications industry. Navigating through the red-tape maze to engage any large, traditional business with a new idea or technology is a tricky task. But it is an issue none-the-less; it is incredibly difficult for start-ups to engage the right person and pitch the value of their technology to the business.

A couple of sessions in AfricaCom caught our attention. With the AHUB section of the conference specifically designed for start-ups and entrepreneurs, this rarely listened to segment of the digital ecosystem has a voice, and it raised one worrying issue; pitching telcos is an incredibly difficult task.

One start-up suggested there is a ‘take it or leave it’ attitude with some telcos, perhaps not rewarding the full value presented. Another said there is a risk of technology being copied or ripped off. But one gripe which was brought up several times was the difficulty in engaging telcos and presenting new ideas.

The main reason for this is the complexity of telco operations. This are usually massive businesses, with decision makers scattered all over the place, siloed departments without a cohesive objective, internal politics which can threaten any conversation, an insistence by some to maintain the status quo or a procurement process with levels of red-tape jam sandwich-enthusiasts in Brussels would find impressive. Irrelevant of the reason, the telcos are ultimately the ones which will be punished.

This is an industry which is crying out for innovation, because more innovative players are swooping in and stealing potential fortunes. It’s the story we’ve been hearing for years; telcos are building the connectivity foundations for the digital economy, but the OTTs are the ones who are reaping the greatest rewards. Something has to change for the telco industry, and the pursuit of innovation is feeding this desire.

While some of the larger vendors are very effective at producing new ideas and products, a lot of innovation comes from the start-up community. These are guys who play around with new concepts and explore dark corners not of interest to the major vendors until the value has been validated. This could be an advantage for the telcos, if only they were any good at engaging the little guys.

In terms of countering this trend, the general feedback went down two avenues. Firstly, have an innovation-enthusiastic management team. Many companies would suggest they do, though in reality most are focused on oiling the cogs as opposed to searching for new engines. Some certainly do, MTN Zambia was highlighted as a company with a particularly enthusiastic CEO who has embedded himself into the start-up community, though the majority do not.

Secondly, there are telcos who have created their own venture capitalist or technology research business units. Orange is one example, and in these cases the team explicitly and proactively searches for new technologies to incorporate into the machine. These are the telcos who will be making waves for years to come.

Whichever route is taken, the outcome is similar. There is a platform to engage start-ups and less established businesses who can help the telco remain relevant in the digital ecosystem. The big question is whether the telcos are open to change and disrupting their own business.

Silicon Valley was founded with family, this generation is killing the idea

With some of the tech industry’s biggest names acting incredibly irresponsibly, the friendly and welcoming reputation of Silicon Valley is fast becoming a thing of the past.

With each passing week, there seems to be a new scandal emerging from the dark corners of Silicon Valley. This week’s installment sees Google getting sued for trampling all over user privacy rights, as well as potentially misleading millions through underhanded practises and overly-complicated terms of use. Unfortunately, the Googlers are not alone in their mission to abuse the heritage of Silicon Valley.

Facebook’s Cambridge Analytica scandal was shocking enough to lure slumbering politicians away from a free lunch and start a #DeleteFacebook campaign on Twitter. Twitter somehow managed to find validity in the offensive and ridiculous ramblings of the lunatic who runs the Infowars website. And aside from violating privacy rights, Google has tried to apply its artificial intelligence smarts to bombs and also bowed to China’s censorship demands. LinkedIn sacrificed its principles of free-speech to penetrate the Great Firewall of China years ago. Tesla founder Elon Musk recently called a man instrumental in saying the lives of Thai children stuck in a flooding cave a paedophile because he didn’t like one of his designs. Qualcomm is constantly being investigated and sued for market abuses. And Apple seems to think loyalty translates to making its customers as poor as absolutely possible.

When you actually ignore the play-style offices, the expensive advertising campaigns and the gestures of goodwill, the activities of these businesses are occasionally far from desirable.

The idea of Silicon Valley is a simple one, and it attracts the interests of millions. Warm climates, sunny skies, liberal attitudes, friendly people and companies where the purpose is to serve the greater good. Ask someone who has never been to California what they imagine Silicon Valley is like. They will probably describe something similar to a university campus on a warm, spring day, with some people causally tapping away on laptops, drinking iced coffee, while a game of hacky-sack takes place in the background. This is an image which has been incredibly well crafted.

Even when you look at the companies themselves, the perception is reinforced. Google branding looks approachable, and the ‘Do No Evil’ mantra still floats around despite it being dropped years ago. The Apple logo, with a bite taken out, is cheeky, as are the adverts. The Facebook and Twitter stories are all about giving normal people a voice which everyone can hear. Tesla is all about being environmentally friendly and fulfilling childhood ambitions of being spacemen.

There are of course reasons for creating and maintaining this image. Products are much easier to sell to the mass market when there is a friendly vibe attached. The data sharing economy, with information as a currency, arguably wouldn’t exist without it. And recruiting exciting, young talent is made much easier when it looks like the companies are socially-conscious.

When a bright engineer leaves MIT or Stanford University, about to embark on a career, there are a huge amount of choices. Those who have advanced degrees in software engineering or data sciences are scarce commodities, and often command significant pay packets. But these graduates are often idealists. They have no idea of the working world and want to work for exhilarating organizations. There are plenty of exciting companies out there, but few offer the perks, casual work lifestyle and feel-good factor of some of the internet giants. This image of Silicon Valley helps attract the best and brightest, a critical component for future success.

But what should be worth noting is the image of Silicon Valley is not just an artificial one.

The technology heritage of Silicon Valley can be traced back to San Diego in the 1890s. As a major harbour, San Diego also became a hub for the early telegraph and radio industries. Charles Herrold began using the radio to broadcast a regular program to listeners in San Jose as early as 1909, arguably becoming the first radio station. Some might suggest this is one of the first steps towards democratising free speech for the masses.

From humble beginnings in radio, the Valley moved towards what we would call technology today. In 1956, Shockley Semiconductor Labs was founded in Mountain View, an unusual location but chosen so its founder, William Shockley, could live closer to his sick mother. Admittedly, there was a lot more to happen in the middle, but Shockley was the first to propose using silicon not geranium in processors, a massive step forward.

Elsewhere, professors and students in Stanford University were tinkering around with some new technologies. The government funded programme eventually led to the creation of ARPANET, the forefather of what we would call the internet today. These examples are excellent foundations for Silicon Valley to build the friendly and liberal image of the region today.

The perception of Silicon Valley is a carefully curated one, and employees do seem to believe it, at least in the first instance before that youthful vigour is eroded after years sitting at a desk. Google employees revolting over the decision to work with the Defense Department on its missile guidance system, or the creation of a censorship-friendly version of its news app are two example of employees still believing in the ‘Do No Evil’ mantra.

Unfortunately, as the scandals listed at the top of this article indicate, the core principles of the business do not match those of the employees or the prescribed perception of Silicon Valley. This is not to say scandals are a new thing to the Valley, but the frequency has sky-rocketed recently. Perhaps the management teams of these firms are simply artificially creating this image and the values died years ago, before money-hungry kids, with no concept of tradition and only ambition for disruption, started dominating the board rooms.

But does it matter if Silicon Valley companies are no better than the bankers who caused the financial crash of 2008?

From a recruitment perspective it will become more difficult to attract the best talent. With the edge gone, the hippy persona, other companies will be on a level playing field. To get talent to relocate, the battle will be with paycheques. In terms of getting cash from the consumer, they’ll become far less frivolous when the sunny perception of these companies is made gloomier.

The US is the dominant force in the technology world because of Silicon Valley, and Silicon Valley is in its current position partly because of its heritage, plus its ability to attract the best talent. With the teenagers flailing around the streets (Facebook is 14 years old after all) violating consumers trust, over commercialising platforms, not sorting out the fake news problem and facilitating hate speech, Silicon Valley’s influence on the world will only decline as people look elsewhere.