Dr. Richard Benjamins, director of business intelligence at Telefónica Digital, has little tolerance of hype, but he has a high threshold for failure.

It's this attitude, in large part, that has made Telefónica successful in its decidedly unorthodox digital services endeavors.

But this wasn't always the case. Telefónica's Digital division was created in mid-2012 to push the boundaries of digital service innovation, something that wasn't possible within the broader confines of the traditional telco.

So the standalone operation, which has its own management team and modus operandi, was formed to innovate, let ideas grow, kill experiments or services when necessary (something it's currently doing with its Tu Me application) and form new partnerships away from its parent company. (See Telefónica: Tu Me Has Got To Go.)

And if any of those activities cannibalize revenues at Telefónica, then so be it.

"We use a lean startup methodology," Benjamins explained to Light Reading recently. "It's not about big products and rolling them out in two years. We put customers' needs at the heart, capture data, talk to them and understand what's working or not."

And, when it's not working, Benjamins pulls the plug on the project -- something that was near impossible to do within the operator. In its first 18 months of existence, Telefónica Digital has launched around 10 services, some machine-to-machine (M2M), some financial and, most visibly, its Tu Me and Tu Go communications apps. Each launched in beta to manage customers' expectations. (See Et Tu, Telefónica? and Tu Go Users Get Chatty.)

And the fact that the plug has already been pulled on Tu Me shows that the Digital business isn't just talking the talk.

Telefónica Digital isn't given a mandate of how many services to launch by its parent company, and it's empowered to work with partners as needed. Benjamins said it's been a challenge to work with startups as a big company, but "we're changing the company."

Part of that means keeping anything related to a new market separate from the parent company, even if that's a company Telefónica has acquired to target that new market.

"We've seen that you shouldn't try to integrate small companies -- you tend to kill them," the intelligence boss explained. "You buy them because you need them for some specific reason. If you try to impose telco processes, it doesn't work."

By being given the freedom to operate as a separate entity, Telefónica Digital is helping its parent company shed its telco image and also gain a greater understanding of how best to deliver what its customers want.

For example, it used to have its own music service, but now it partners (much more successfully) with Spotify.

And when its Big Data (or "big hype," as Benjamins called it) initiative to sell aggregated, anonymized data to retailers in Germany backfired, Telefónica Digital pulled the plug. Now it focuses on its Digital Confidence initiative to give consumers transparency and control over their data. (See Telefónica Creates 'Big Data' Unit.)

"We need to understand the customer and have a relationship with them," Benjamins said. That, too, isn't a traditional operator role, but Telefónica Digital is intent on proving there isn't much traditional about it.

— Sarah Reedy, Senior Editor, Light Reading