Gaule: Give a brief description of the purpose of your venture, when it was formed and how the process occurs in your organisation.
Mégret: Swisscom Ventures was formed in 2006 to strengthen Swisscom’s innovation ecosystem. We already had an outpost in Silicon Valley [California, US] back then, but we felt we needed to develop our relationships with innovative companies further. We also wanted to learn from the process and skills of venture capitalists and start-ups in order to build an in-house centre of competence for early-stage
management. Our objectives are both strategic and financial, whereby we have a hard definition of strategic – it is about making money by levering Swisscom’s assets, both helping to reduce costs with new technologies and increase revenues with new products. In our investment portfolio Vilant is a good example of a company which has broughtprocess and cost savings to Swisscom. Quantenna, which
is in next generation WiFi, is an example that has brought revenue benefits for Swisscom business and also opportunities for Quantenna to be deployed in other telecom markets.
Gaule: Can you give us a brief overview of the people in the team and the partners you work with.
Mégret: We are a small team of five, with three partners in Switzerland, one in the Silicon Valley part-time and one chief financial officer. We work very closely with Swisscom’s technical and commercial colleagues, who are our main providers of qualified deal-flow. Ideally, we invest just before than Swisscom enters into a commercial relationship with a start-up. We have also been actively developing an external
network of co-investors and in particular with other telecom corporate venturing organisations, who can be both investors and customers of our start-ups.
Gaule: How are you seeing the technology and business models changing in your industry and how does venturing support the business?
Mégret: Telecommunications is essentially a national business, with little international cross-border synergies. At the same time, we are being challenged by start-ups with global scale that can amortise large development costs over a much larger number of customers. Consequently, it is very hard for telcos to keep up in the innovation race with their subscale internal innovation resources alone. The Swisscom
Ventures organisation is there to bridge between these two worlds. Traditionally, telcos have sourced their innovation from the big equipment suppliers and integrators, but they now need to go directly to the start-ups to get differentiation and go-to-market timing advantage. Otherwise there is a big risk that start-ups will simply disintermediate the telcos, as they already did in our core businesses, voice and
short-message service (SMS). So, if you cannot beat them, join them.
Gaule: In Corven Networks we are currently researching terms in corporate venturing investment agreements. When you invest in a start-up do you apply conditions?
Mégret: We use standard conditions, especially when we enter as simple co-investors. We occasionally take lead investor roles, but we prefer to focus on what we can do
best, that is helping the start-ups with business development inside Swisscom and towards other telcos.
Gaule: What do you do to relax?
Mégret: I like endurance sports and try to practise them together with my wife and teenagers when possible. We are fortunate to be able to go skiing, cycling, trekking and even
sailing within 30 minutes from home.
You can hear the full interview as an audio download from Global Corporate Venturing or from www.corven.com/corven-networks. Previous interviews are also available on iTunes – search for Corven Networks.
To contact Andrew Gaule and for future interview ideas, email andrew.gaule@corven.com and jmawson@globalcorporateventuring.com