How Wayra can change the food chain for the better

Entrepreneurs don't tend to want to work for big companies: they want to build one of their own. That's why big business is better known for buying innovation and talent than breeding its own. While the need to acquire on one side and the desire to exit on the other has long sustained the food chain, it's rarely been a satisfactory trade for both.

Consider what value AOL got from its $850m acquisition of Bebo or, on the flipside, the amount of equity most founders have to give away to get to exit - that's if they can get investment in the first place.

Add in that a start-up can now disrupt an entire industry within months and accumulate a nine-figure value in weeks (OMGpop, anyone?), it really shouldn't be a surprise that some big businesses - those with the most to lose as well as gain - are looking to mess with the ecosystem.

It goes a bit like this: if you can't breed your own and talent is increasingly risky, pricey and hard to identify or even a threat to your own business, then how can you create an equilibrium where you help nurture talent and bring it into your organisation while maintaining its independence?

Telefónica's brought its solution, Wayra, a global tech start-up accelerator project, to the UK this month. UK CEO Ronan Dunne has no qualms in admitting the motivation is to get the best tech start-ups first. At one extreme that means discovering the next innovative technology and bringing it to Telefónica customers and, at the other, getting first option on the start-up that could one day kill its current business model.

Wayra is a serious investment. Already up and running in nine countries across Latin America and Europe, each Wayra base will provide £50,000 seed investment (in exchange for approximately a 5% stake) in up to 12 start-ups, house them in totally kick-ass workspaces and intensively mentor them for six months. It's also investing heavily in a global coder apprenticeship programme to ensure Wayra recruits have access to the skills needed to catalyse ideas.

It's not CSR - this is coming off the bottom line. Yet, Telefónica isn't asking for anything other than a 'first option' in start-ups passing through Wayra and is adamant there's no ROI target other than fostering the next big tech start-up or, to put more succinctly, the next O2 or Telefónica...

The more sceptical among you won't believe the hype and will, fairly, point to the fact all activities of a PLC have to be driven by its overall responsibility to return profit to its shareholders. Who knows if Telefónica has internal targets or, should another Google fail to emerge, it'll continue to pour millions of investment globally.

It's arguably no more of a costly punt than the scattergun acquisition strategy of its rivals, though. And even if the next Telefónica doesn't grow up in Wayra, having symbiotic relationships with waves of savvy start-ups will change the company for the good and keep it on its toes. You've only got to witness the buzz emanating from the proportionally lean Wayra team laying out its foundations. They'll tell you it's been a landmark culture shift.

They're thinking like entrepreneurs not employees: they want to disrupt and they want to do it yesterday.

Beyond the benefits for Telefónica, does it make sense for the start-ups though? Well according to the ones I chatted to at Wayra Madrid it does. Cash, support, a place to work, access to skills, technology, other tech start-ups and, who knows, maybe 100million Telefonica customers - what's not to like?

Giving away 5% perhaps? It seemed more than a fair trade for the Wayra recruits we met: most walked in with little more than an idea, immediately saw their companies valued at £1,000,000 and described the mentoring and development as intensive but invaluable.

Don't get me wrong, a certain breed of tech entrepreneur doesn't need Wayra: they'll have the volition to find a way no matter what obstacles they encounter. But others really do need it.

To repeat myself: Wayra is bringing brilliant ideas to life. Any investor will tell you execution is everything. They'd rather throw their money at someone who can execute an average idea amazingly than the other way around. If Wayra can help nurture the ideas that get abandoned by a lack of experience, resource or contacts, it's going to be pretty exciting for us and, you can bet, Telefónica.

Telefónica London opens in May. You can find out more and apply to be among the first of its recruits here before 22 April: http://www.wayra.org/en/wayra-uk-call-2012.

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