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Startups

Telecom Italia Taps Startups for 8,000 Ideas

Telecom Italia may be wading through a recovery, but its startup program is alive and thriving, having garnered 8,000 new ideas and supported some 300 projects since it was launched six years ago.

Telecom Italia (TIM) opened the doors to its startup incubator, TIM #Wcap, in 2009 with the goal of selecting, financing and accelerating digital startups that could also prove helpful to the parent company. It has programs set up throughout Italy in Milan, Rome, Bologna and Catania.

According to Gabriella Styf, chief of Telecom Italia Lab , who oversees the program, Telecom Italia has collected over 8,000 business ideas since it started, as well as supported 300 projects in some way, large or small. This year alone it received more than 1,000 business pitches and recently selected 40 startups to take part in the 2015 TIM #Wcap program.

"We take our role seriously in supporting the ecosystem in the country and for the industry," Styf says. "We have a process to funnel and identify talent and ideas and business opportunities."

For Telecom Italia, many of these relationships turn into business opportunities for the carrier as well -- and that certainly is the goal. Styf says that the carrier has turned 21 startups it has supported into business suppliers for Telecom Italia.

That support can come in the form of helping work out a business plan, providing network competence testing and, most importantly to the startup, cash. In conjunction with the incubator, Telecom Italia's own venture capital firm, TIM Ventures, provides capital for those startups selected in the lab. Styf says the firm has invested around €5.5 million (about US$6 million) in different initiatives since it was launched and has offered its 40 startups grants of €25,000 this year.


For more on the wireless operators' approach to startups and innovation, peruse the business transformation content section here on Light Reading.


With so many startups coming through TIM #Wcap, Telecom Italia sees innovations that run the gamut of connected products and services. Styf says that the carrier is now challenging itself to support ideas that might not necessarily fit with its current business models or that maybe even threaten to disrupt them. She admits it's been a difficult process as ideas that don't fit in a particular business unit can often fall between the cracks.

"We're trying to be open and have interest for things that aren't necessarily our business model but could be, even things that are disrupting our current business model," she says. "We have to be open to that to explore and generate disruption inside our company."

That is, of course, a challenge that many wireless operators have run into in their quest for innovation and freeing themselves of the shackles of traditional, slow-moving operator operations. Some, like Sprint Corp. (NYSE: S), have chosen to run their startup programs outside of the four walls of their company, pulling in the parent company whenever possible. (See Sprint Accelerates Entrepreneurial Efforts.)

Others, like Telefónica SA (NYSE: TEF)'s Digital division, started independent and then were brought back in house when they were mature enough to spread the culture to the rest of the organization. (See Disrupting Telefónica in a Small Way.)

Others still, like AT&T Inc. (NYSE: T), have pockets of "startup-style" divisions within the carrier with the hope of spreading what they have learned and, most importantly, that culture and mindset to the rest of the company. (See AT&T Takes 'Startup Mentality' to Wholesale.)

Telecom Italia falls somewhere in between. It runs TIM #Wcap within the parent company, but Styf says it has been given a lot of freedom to select the companies it deems worthy. Sure, they have to have a product or service that is relevant to Telecom Italia's either current or future business models, but anything that is a hot topic is fair game. The entire company, she says, is looking to become more open and innovative in large part as a by-product of its focus on startups.

"To run it independently, you can go more wild and crazy on whatever you'd like to invest in," she says. "On the other hand, what we really want to make sure is we have a good hit rate to make these companies successful. It's not just for the sake of ticking a box that we have an Accelerator program or to look good; we want to create and support a good ecosystem."

Telecom Italia's startup program doesn't seem to have been slowed by struggles at the parent company. The carrier has seen its financials wane in the past year amidst competitive pressures in the Italian market, although is starting a slow climb of recovery through investments in fiber broadband services and more competitive mobile offerings, as well as cost cutting at the parent company. It recently confirmed plans for 1,700 layoffs, which a spokeswoman says won't affect the company's startup program. Telecom Italia reports its third-quarter earnings on Tuesday. (See Eurobites: Telecom Italia Plans Layoffs, Says Union and Telecom Italia Sees Domestic Recovery.)

— Sarah Thomas, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editorial Operations Director, Light Reading

Sarah Thomas 7/30/2015 | 2:44:26 PM
so many ideas! I've never heard of a startup program that has been this prolific. That's a lot of ideas for Telecom Italia to take in, although it's interesting that out of the 300 projects its supported, only 21 have become suppliers for the carrier. There's a big difference between a good idea and one that makes sense for a wireless operator to endorse, incorporate, sell and market on their own.
ErynLeavens 7/30/2015 | 5:51:11 PM
Re: so many ideas! Sarah,

So are you saying it's not a good idea unless it's self-serving? I read it as contributing to startups, whether relevant or not to Telecom Italia's mission, was the bigger feat. It is a ton of ideas though. I'd actually like to see some of the crazier/worst ones. You know there have to be some pretty outlandish ideas in there!
Sarah Thomas 7/31/2015 | 12:15:27 PM
Re: so many ideas! No, not saying that. There are lots of good ideas, which might not make sense for Telecom Italia, but could find success elsewhere. TI was, however, up front about the fact that it's looking for business suppliers out of this. Out of 300 projects, it only chose 20 so far, which seems a bit low to me, but there has to be a limit to how many different directions it can go in.

It's okay for startup programs to be self-serving to a degree -- there has to be a business case for operators to invest so much. They should also help the startup with funding, exposure, a network to test on, and often a first-reference customer. I think TI accomplishes all of that.

 
MordyK 12/24/2015 | 5:31:11 AM
Re: so many ideas! Looking at the list of "selections" I could see why there's a super low hit-rate, as most of these application - while interesting - are also outside of the carrier core business, and I don't see them spinning up new businesses to support a startup, unless it's a massive new line they'd like to get into.

I would suggest to any carrier incubator that theytake a two prong approach:

1. work with their vendor ecosystem to create a lab, mentorship, accesability, and commercializion lab to encourage things that go into and work with their network to enhance their cpabilities beyond stanrd 3GPP standards.

2. work with a program like Techstars to encourage peripheral development of apps that are of interest to carriers larger plans like IoT, AR, Etc., that carriers have interest in enhancing as it increases the value of its network.

This approach would allow a larger hit rate and improved result, as these companies are not dependent on a carrier decision, while those that are gain the benefit of working with the forward thinking and risk taking carrier. 
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