26 meetings with over 60 people – getting apps funded by carrier VCs

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App developers hoping to get their offerings snapped up or funded by the carrier giants often have to endure a lengthy odyssey of between 23-26 meetings with upwards of 60 people, it emerged at the TC3 Telecom Council Carrier Connections conference in Silicon Valley Thursday.
In a panel entitled “Carrier’s Corporate Venture Capital Agendas,” moderator Thorsten Claus, a managing consultant from Detecon outlined the process from personal, painful experience, while asking pointed questions of his panel which included the head of Venture Capital at Vodafone, the VP of Investments at Rogers, a general partner at Innovacom and a venture representative from TeliaSonera.
Getting a big company to understand why a small startup or a product from a small company might be a good investment and be big in the future is a key problem, said Claus, who added that those selling their wares needed the right team, the right product and a lot of patience.
Indeed, for many, the process is not just an uphill battle but a labor of love, which makes it extremely difficult if and when the answer from the would-be investor is “no.”
According to Peter Barry , head of VC and start-ups at Vodafone, the biggest mistake a start-up can make is not understanding when a no is a no, and not ceasing to flog a dead horse, so to speak.
On the other hand, however, Barry admitted carriers did absolutely need outside innovation, noting “You’re being very narrow if you think all innovation is going to come internally and through working only with big vendors.” The problem, he said however, was how do carriers stimulate such innovation without throwing wads of cash at every potential offering that comes their way.
“If you want to break away from the competition, you need the ‘differentiation’ that only small companies can bring,” concurred Greg Franklin of TeliaSonera, adding that if a carrier was only offering the same services as all its competitors, there would be precious few incentives for customers to choose one over the other.
And when a carrier comes across that special service, it can actually move pretty fast to incorporate it. “If a carrier needs a service, it will find one and deploy it really quickly,” explained Barry, saying that he himself had seen cases where Vodafone required a certain service and had moved in and done a deal with a company and deployed the product within three months from start to finish.
Mike Lee of Rogers agreed that he too had seen this happen, while Frederic Veyssiere from Innovacom maintained that despite the long haul for many startups, “once you get there it’s worth it.”
There was some discussion about whether the VC industry, especially in terms of carrier investment arms, was in crisis, garnering mixed responses both from the audience and the panel itself.
“The top tier VCs are doing fine thank you very much,” declared Barry, although Franklin argued that the carriers no longer had the R&D budgets they used to.
Several in the audience also asked why carriers seemed so sluggish when it came to jumping on good opportunities, and why they always seemed to come into the investment cycle so late in the game.
The panel vociferously disagreed with this view, but many felt their indignation at the question to be unjustified.
At the end of the day, sluggish or not, it’s clear developers have to go through an awful lot of trials and tribulations before the giants of the mobile world even give them a fair sniff, and as Rob Hull, VP of consumer networks scouting for British Telecom had said earlier in the day, often, “a fast no is a valuable thing.”