Emerging Trends | SMEs/Entrepreneurship
April 29, 2016

New leadership at Telefónica: a boost to startup-corporate collaboration?

By Isidro Laso

Big corporations need to work closely with startups if they want to stay innovative and competitive. At the same time, startups need to engage with corporations as customers or investors. However, in most parts of the world – from the United States (excluding Silicon Valley) to Europe to Asia to Africa – this critical collaboration is almost non-existent.

Will new leadership at the top of the big corporations launch a new wave of collaboration between startups and corporates? Will the new CEO at the Spanish telco giant Telefónica be an example of this new wave of collaboration?

What will Jose Maria Pallete do?

Having Jose Maria Pallete as the new CEO at Telefónica may have a profound impact on keeping Telefónica competitive and capable to adapt to fast moving future markets.

Mr Pallete has a good track record of launching pro-startup initiatives within Telefónica: from corporate startup accelerator Wayra to Campus Party Europe to Think Big. He also tweets himself (@jmalvpal), and re-tweets insights from well-known sources of startup-related news, such as Techcrunch and Entrepreneur.com.

How much impact will Mr Pallete have on rejuvenating Telefónica and allowing the company to expand into future markets is something that nobody can answer at this moment. But it is certain that this new appointment is a step in the right direction to build bridges between Telefónica and the startup community.

Will this change in leadership trigger changes in the same direction in other corporations?

Successful businesses collaborate with startups

Some of the most successful big businesses that we know nowadays have been able to master collaboration with the startup ecosystem, whether it’s soft collaboration activities – such as one-off events or sharing resources including Coworking spaces and accelerators – to the most ambitious and beneficial of collaboration activities: acquisitions.

Companies like Google, Facebook, Microsoft, Apple and Twitter are using acquisition of startups to rejuvenate their workforce and launch new products. Every one of them has made around 50 acquisitions since 2010 (Google – 57 acquisitions, Facebook – 52, Microsoft – 50, Apple – 48 and Twitter 48).

The importance of pro-startup leadership

Google is a good example of the crucial role that pro-startup leadership plays in encouraging corporations to acquire startups to remain competitive. Founders Larry Page and Sergey Brin are still engaged in the operations of the company, keeping 56 per cent of stockholder voting power, and sharing responsibility with Eric Schmidt for day-to-day operations.

Also, Google is constantly mingling with startups. So when an acquisition opportunity is identified by the experts and brought to the attention of the board of Google, the board is capable of understanding what it means to be a startup.

This is not the case in the majority of corporations worldwide. Most executives and corporate decision-makers have never created a company themselves. This experience is nowadays very valuable for companies if they want to keep innovating.

Isidro Laso
Isidro (@isidrolaso) is Head of Startup Europe Sector, European Commission Directorate General for Communications Networks, Content and Technology (EC DG-Connect) and Continuing Policy Fellow, Centre for Science and Policy at Cambridge University.
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