Startups and their innovations keeps the world turning
The telecom industry is an exciting and fast moving industry. Even if the lead times for new technological development can sometimes feel excruciatingly long, it is important to keep in mind that for consumers, technology that was released one or two years ago is in many cases already considered old and stale. In order to stay on everyone’s lips, companies are both expected and required to invent and reinvent all aspects of our daily life. You may be the biggest player today, but with our current attention span, you might be old news by tomorrow.
With this sort of pressure, and with such a plethora of areas to innovate within, it is impossible for any company to stay on the front line of innovation all the time. In fact, several organizations within the telecom market are simply trying to stay afloat, and while revolutionary innovation may bring exceptional rewards, it comes with high risks that must be managed. It is not news to any entrepreneur that characteristics such as dynamism, flexibility, and risk taking are required to create something new, a luxury that the larger companies do not always have.
How, then, can we as consumers reasonably expect to satiate our continuous need for new technology, especially after establishing that many of our favorite larger corporations do not have the appropriate tools to do so? This task we entrust to the startups.
I am not the first (and will certainly not be the last) to point out the fantastic startup ecosystem that has been growing in Stockholm over the last few years. It has arguably become one of the best European startup ecosystem for tech companies, something that needs to be encouraged and nurtured by the rest of the industry as it benefits everyone. Organizations like STING, SUP46, and various tech meet up events are doing a fantastic job, and more forums like these are needed. The sheer amount of startups, their combined value, and profitable exits are all metrics that keeps climbing without stopping for air. The media attention and business benefit that startups bring to all actors within the industry shows just how alive and strong the telecom industry is.
Even the most basic applications are being reinvented. The phone app is reinvented by companies like TrueCaller, the SMS app by WhatsApp, our Wi-Fi function by Instabridge, and so on. All the native versions of these apps are perfectly functional, developed by some of the best programmers in the world, and cost the manufacturer a fortune in developing costs. Knowing this, it would certainly take the tenacity of a startup to say: “We can do better”. This sort of reinvention happens not only in your phone, but in all seven layers of the OSI model.
These creative solutions also force the larger companies to stay as innovative as they possibly can. It helps them see what end-users really want (be it B2C or B2B), and either explore the area themselves, or acquire the startups in order to gain access to the technology and the people behind it. Even innovations by technological frontrunners like Google or Facebook are often the results of strategic acquisitions, rather than in-house development.
Over the last few years, both the amount of acquisitions, as well as the acquisition values is stunning, and it encourages talented people with brilliant ideas to make the leap of faith and start their own businesses. In fact, the telecom industry is moving at such a high pace in various areas that it is nigh shocking that it is not more fragmented than it is, and I would argue that startups serve as the much-needed glue that holds an otherwise fragmented industry together.
These startups have so much to offer the larger organizations, not to mention the industry as a whole, that it would be ultimately beneficial for everyone if they received the right tools to continue to grow. The way I see it, if we want the telecom industry to be moving forward at the impressive pace that it has, it is the responsibility of the whole industry to provide the support and assistance that these startups need.
In line with this spirit, Northstream has decided to launch a program through which we will support selected startups in their mission to develop creative ideas and contribute to the industry. We see many reasons to be more involved in the startup ecosystem than we already are, and we are very excited to launch this program. There will be more information in the upcoming days, so stay tuned.
Kristofer is a Consultant at Northstream