A Clear Path To Market In Telecom?

Author: Derek Kerton, Principal Analyst of The Kerton Group & Chairman of The Telecom Council of Silicon Valley

If only the dream of “build it and they will come” were true, startups and venture capital investing would be an easy job. But, it’s obviously not. As many Silicon Valley VCs advise time and time again, “first, you have to satisfy a need the market actually has.” That’s why hackathons often have developers building apps around food delivery and college kids build websites to connect with other college kids – they are solving their own problems. That’s not bad, of course, and even better if many others share the same problem. But it can’t be technology for technology’s sake. New tech isn’t even essential. Remember that Apple wins markets by using mature tech, but actually putting it together and explaining it in a way that meets people’s needs and desires.


When a company knows exactly which problem they are setting out to solve, writing specifications, preventing feature creep, and target marketing becomes faster and easier. If their technology works well, they may have a winner. My group, The Telecom Council filters about 500 startups each year who want to pitch to the 35 telcos who are represented in the Valley, but many haven’t clearly identified the problem they are trying to solve. My obligation to the carriers is to filter those out, at least until they can articulate a value proposition that touches a customer pain point. Often those companies arrive at this roadblock honestly, because they employ many engineers but no marketing people, but often enough they actually have marketing staff. If this staff is good, the problem usually is that they don’t have the authority to push the founders to reshape the product. These are the companies in which the VCs are clashing with founders, trying to get them to “finish”, “deliver”, or “listen to your marketing”. This usually goes nowhere until the last round is burned out. Then, you’d better believe that subsequent rounds will come with conditions.


How efficient would it be if every industry had a way for the innovators and startups to know what their customers needed and wanted before those RFPs went out? Imagine having the inside knowledge of what the innovation needs of your potential customers were – before leveraging technology and building finished products and services. This is one of the reasons that market analysis and strategy consulting firms exist, to help companies predict the hot areas of future demand. The cost of setting out in the wrong direction – or no particular direction – is measured in months or millions.


Luckily for the telecom and wireless industry, the major carriers and vendors gather on an annual basis in Silicon Valley to broadcast their innovation priorities to the innovation ecosystem that supports them. Any company building services that ride on telecom infrastructure can get this information directly from the strategy and innovation teams at the world’s most forward -thinking carriers by participating in this public forum.


For this industry at least, the telcos, vendors, startups, and VCs know that partnerships with startups are fruitful and symbiotic relationships. Carriers challenge the community, ask for innovation, and have programs and teams in place to partner and adopt innovation into their networks. That process has a reputation of being long and frustrating, which is why it’s so important to take the shortcuts that are available. Carriers, major vendors, and young companies alike have already laid the path, overcome the challenges, built solutions, and those solutions are already in billions of homes, businesses, pockets, and purses worldwide.

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