Startups Call The Shots At The Telecom Council’s TC3 Summit
Author: Roslyn Layton
Co-author: Liz Kerton
In the world of mergers & acquisitions, it used to be that small companies approached big companies, through conferences, road shows, elevator pitches, and so on. But no longer. At the Telecom Council’s annual TC3 Summit the giants of the industry compete for mindshare for entrepreneurs and startups. At this year’s event on Sept 30-Oct 1 the world’s leading companies try to win the attention of startups in the Valley. An increasingly global marketplace means that the opportunities for entrepreneurs and startups are increasingly dynamic and competitive, though new federal Internet regulation has injected uncertainty into the M&A equation.
In last century, telecom companies mostly had a lock on their customers. The term “Not Invented Here” was indicative of telecom companies’ challenges with emergent technologies. A lot has changed since then including the emergence of the mobile Internet, wireless, cable companies offering voice services, VoIP, portable phones and devices that use only Wi-Fi. Today, Internet providers have had to learn to compete and that they can’t do it alone. As such they eagerly participate in partnerships in Silicon Valley, adding valuable capital to fuel the ecosystem for entrepreneurs and innovation.
Similarly the world’s biggest Internet providers with massive facilities in the Valley now find themselves competing long term with the best ideas from the best entrepreneurs from around the world. No matter how big the R&D budget, it is sometimes outmatched by the army of creative people lurking and coding in garages and basements or building the next big idea. And today, if providers do not offer that idea, the innovator can just go so-called Over The Top – essentially competing with the provider using the provider’s own network—or even operating system–as the delivery pipe. Providers have only one option: if they can’t beat innovators, they must join them.
Telecom and Internet providers started arriving in California in droves in 2000 from around the world. Today the Council has 35 telecom providers as members. But the Council is not just for telecom and Internet providers. Over two thirds of the members are other companies that are part of the Silicon Valley ecosystem, and the community reaches even further with involvement and presentations from non-member companies. The role of the Telecom Council is to speed deals and speed the path of innovations to market. TempoAi, Metaio, Aruba, Connectem, Mavenir, Periscope, Eden Rock, FourSquare, and Altera are just a handful of companies that have tapped the Telecom Council network to close their M&A deals.
There is no government or region funding the Council; in fact, the Council is the very opposite of government. It can’t force regulations, push standards, or require cooperation. Participation is entirely voluntary, but it works effectively nonetheless. The Council amplifies and nourishes the Valley with a number of activities. Most of year startups come to the Council’s monthly meetings to pitch themselves, but once a year the tables turn.
While the Telecom Council can assist startups with finding capital from providers, there are larger macroeconomic trends beyond its control, including new Internet regulations that may negatively affect startups. While capital from providers has generally flowed to the Valley unabated, following these new rules, telecom investment dipped 12 percent in the second quarter, something that has only happened after the dotcom crash and after the financial crisis. Hundreds of startups will come to TC3 seeking a capital investment, and the hope is that regulatory uncertainty will be resolved so that startups can continue to enjoy the capital influx that keeps the ecosystem so fertile.
Entrepreneurs have mistakenly seen “telcos” as a homogeneous group, a misperception that ignores the dynamism of today’s marketplace. The TC3 conference gives opportunity for providers to differentiate themselves, to advertise that they’re open for partnerships, and to explore technologies. Armed with this knowledge, startups have more options and can ultimately make better M&A negotiations. The ecosystem is already in the Valley. The Council just smooths out the awkward phase of the dating relationship.
Liz Kerton is the President of the Telecom Council of Silicon Valley.