Faraz Hoodbhoy, director of outreach, ecosystem and innovation at US-listed phone operator AT&T, is a welcoming face for entrepreneurs tapping into one of the exceptions to the rule that large companies eventually whither away.
One hundred years ago and AT&T was the second-largest company in the US. Fifty years ago and AT&T was still the second-largest company and, even despite a government-induced breakup, and AT&T by the end of last year had still seen a 20% increase in its market capital to $240bn even if the overall growth of the economy means the company has finally fallen out of the top 10.
And connecting the internal organisation with the entrepreneurs is part of its success. Hoodbhoy said: “I work for AT&T and run their Innovation Outreach and equity program. My team acts as the official front door for new technology at AT&T. We meet and evaluate about 500 startups per year and facilitate about 100 commercial deals per year with startups representing over $250m in new deals. That’s the highest engagement rate in industry and we are very proud of it. We occasionally take an equity position in companies where the fit makes sense.”
These equity stakes include Fast forward, video group Cheddar and SnapRoute last year.
Hoodbhoy’s next challenge is to develop a corporate venture capital (CVC) fund. He said: “My ambition is formalising a venture fund that continues to operate with both a sizeable engineering team and strategic corporate business decision capabilities in a single unit.”
This would make AT&T cutting edge as he said that the industry would improve by groups having a “sizeable in-house technical team that performs real-world engagement with startups to vet technology and make better decisions around applicability of technology to the parent company”.
It is a difficult challenge, as Hoodbhoy said, “figuring out how to navigate a gigantic company of 270,000-plus employees to find the exact right principals to work with and getting management to get comfortable with a decision structure where both business and technology decisions are owned by the same person/team”.
Such a challenge is keeping even a successful entrepreneur occupied. Hoodbhoy’s own company, PixSense, was broken into two parts, with the consumer portion sold to a private equity fund in Singapore and the intellectual property (IP) licensing part of the business re-branded Modern Video, which was later was re-branded to Cinova.
He said: “I am an entrepreneur who exited his last company [Modern Video] and my wife applied for my current role to keep me from playing too many video games. I did not ever expect to be in a big company much less last the five years I have been at AT&T.
“I have a unique opportunity to not only see every major deal in industry, and to get hands-on experience through an engineering team of 100 of the most talented engineers at AT&T. It is a unique opportunity and vantage point that’s really hard to replicate.”
And Hoodbhoy’s love for startups remains fresh as he also teaches entrepreneurship at University of California, Berkeley, as a course mentor.