How Telecommunications Companies Can Support Startups With Corporate Venture Capital

Dayana Jones

CEO of Telekom Srbija Group, a provider of fixed-line, mobile, television and internet communication services to over 11 million subscribers

As I have mentioned before, the former revolution in the telecommunications industry is at an end, and companies must now search for new sources of innovation and ways to boost revenue while retaining and attracting subscribers. New ideas and innovation are the lifeblood of digital transformation.

With this in mind, I would like to share my views on the role of corporate venture capital among startups. After all, what better way to drive innovation than by supporting new trail-blazing ventures? I firmly believe telco operators should look to uncover new ways of boosting their business operations. By doing this, they can play an active role in helping small businesses thrive.

Startups: Hotbeds Of Innovation

Telco operators must continue to seek problem-solving solutions that could improve people’s everyday lives. Increasingly, these solutions will need to address the challenges of our digital age and be globally oriented and scalable. Such solutions will also need to be disruptive. Because of this, telecom companies cannot only rely on looking inwardly. I believe these solutions are to be found externally among the vibrant, young startup communities. Indeed, I see startup communities as a new branch of our industry—a hotbed of innovation waiting to be unleashed.

A Duty To Invest In Innovation

Startups are the seeds of revolution, but, like any business, they need investment to make it through their early years. In those early stages, true innovation must not be stifled due to a lack of investment. More established businesses have broader shoulders and stronger financial foundations required to invest in new ventures. I, therefore, believe it is the industry’s duty to invest in, encourage, nurture and motivate young people to create their own businesses to solve the new challenges of digital transformation. This will enable them to generate income and new jobs in their home regions. I am not alone in this belief. Many businesses are already investing in their own CVC funds.

The Broader Benefits Of CVC Funds

There are also many other broader benefits to establishing a CVC fund. First, the association with the latest startup ventures can provide a new channel for keeping pace with global change and can help companies stay competitive locally and regionally. Investing in startups at an early stage, as well as monitoring their further development, also creates a positive climate for quality growth and development of the startup community.

In Serbia, where my business is located, we are fortunate to have a strong community of highly talented, creative and innovative young people. By providing them with funding, local companies can demonstrate their support and appreciation for homegrown talent. In addition, such funding has a retentive and mutually beneficial effect. By investing in their ideas, I believe these talented young people are more likely to stay in our region to run their own businesses while also making a growing impact on our country’s economy.

Starting A CVC Fund Successfully

My company recently established its own CVC fund. We have also made our first investment in a new business, and we are looking forward to helping it grow and succeed. On our CVC journey, some key learnings stand out that I want to share.

1. Keep an open mind. Establish an interview process during which you ask startups to present their idea and solution backed with a compelling argument explaining why they need investment. This process is key; however, I have also found that keeping an open mind to new ideas is just as important. My company’s focus, for example, gravitates naturally to technological innovations, but we are not bound by this. We are always open to other ideas and sectors. If there is market potential, there is also an opportunity for investment.

2. Form expert partnerships to enhance collaboration. You can benefit from the expertise of talented people in your own region who have global experience in building startups and corporate venture capital funds. I would encourage collaboration at all levels to gather the necessary world-class expertise to drive your CVC fund forward.

3. Learn from one another. When you invest in startups, ensure it’s a reciprocal process. As your relationship with the startup develops, expect to thrive, learn and grow alongside the startup you invest in. Have a hunger to learn more and for continuous improvement. This is why I consider it a privilege to participate in creating and boosting new industries that have huge future potential.

4. Be responsible. Corporate social responsibility should be part of your DNA. I believe my company, for example, has a responsibility toward society and future generations. Without a steady stream of new ideas, the 4.0 revolution will stutter to a halt. There are visionaries in our society who can contribute but might find it challenging to secure financing for their projects. Your company might be in a position to offer support. Investment accelerates startups to a higher level and sets new standards of excellence, prompting other companies to engage in similar innovative endeavors that benefit all.

I hope that these thoughts will inspire you to consider setting up a CVC fund for your own organization. The benefits to young people, industry and society as a whole are clear. What is more, by nurturing startups, your own business will play a vital role in driving innovation and growth in your region for years to come.

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