I Can Haz Telco: The Ins and Outs of Partnering with a Goliath

A guest blog for Geeklist post by Alex Salkever

So you have the latest whiz-bang smartphone app. You got mad coding skills. You have a monetization strategy that would slay Larry and Sergey. Naturally, you want to partner with a large telco to maximize your distribution and get some do-ray-mi flowing to your coding teams and get that VC monkey off your back. Right? Or at least do a throw-down press release to solidify your B-round. Ummmmm.

Playing the telco game is tricky for a small company. As someone who works inside one of the world’s largest telcos, I have watched a number of startups travel down the partnership path with various degrees of success. Here’s a quick guide to playing that game without getting crushed, drowned, or fried. Telcos are not inherently evil. To the contrary, they actually want to build things their customers use and love. But they view the world very differently than you do. To that end….

1) Map That Org - If you have decided you want to get into the game, you need to understand the decision makers. This is common for many large companies but is a bit more complex with telcos. First line of defense is usually biz dev or partnership team. Next will come a product team. Then will come a technical due diligence team. Then comes the executive sign-off. And last, oddly, will come the guys that actually could make you money - the sales and marketing teams. You will have to train them up to sell your product, or at least to give you decent distribution and marketing push. All boxes must be checked to get to a final deal. If you don’t know which box is which, or who owns what box, you could talk in circles for years without getting anything done. Equally important is to get an inkling of potential competitors that have talked to these folks and where alliances may lie. You can have the hottest product in the world but if the unit you are talking to feels most comfortable with an inferior product from a large company, then you have to sell around that obstacle. And if you don’t know it exists, you are selling blind. So map that org and learn who the players are as well as their relationships and preferences.

2) Speak Their Language - Mobile startups (and let’s be honest, in telco land we are mostly talking mobile startups) love to come and talk to me about MAU. Now, I know what MAU means. But most of the folks inside my org do not speak MAU. They understand ARPU. Anything that can jack ARPU is inherently GOOD. This hints at what is a major problem in speaking to telcos. If you talk like to a telco the same way you talk to a venture capitalist, you will have serious problems communicating both your value proposition and core aspects of your monetization strategy. My advice? At first, speak plainly. Do not try to use industry jargon or metrics terms. Learn the telco language and then apply it to your business in a coherent way to explain what you do. When in Rome…

3) Be Patient - For a large business unit inside a major telco, two new product launches a year is a normal amount. Sure, app stores are different. But, in general, the process moves far more slowly than may be comfortable for most startups. This Is Normal. Telcos move slowly because they are designed to be careful and not break things. If your game app goes down, nobody dies. If something a telco has added to its ecosystem causes problems and brings down infrastructure, probably no one dies but they may - and other really bad things can happen, like bank ATM networks going dark (witness the recent madness in South Korea). So to get to a firm agreement, you should expect to spend more than a year, in most cases. Three is actually not unusual. Be patient, grasshopper. It’s not you. It’s them and it’s the way they are built to operate. - safety first.

4) Always Maintain a Plan B - Large telcos are political organizations, like any other large org. While getting a new project or product approved can run years, killing that project or product can happen much more quickly. For a startup, absorbing such a catastrophe can be difficult, particularly when you have built your monetization, distribution, or funding strategy around that Big Shiny Telco deal. For the telco, too, deciding not to pursue a deal with a smaller company is just part of doing business. They mean you no harm but that’s the way the game is played in the Big Leagues.

5) Plan for the Firehose - I don’t mean the huge rush of customers. Rather, I am talking about the implementation and negotiation phase. Every process you touch will likely require a lot more time and effort than doing a deal with a small, nimble partner company. Lawyers get seriously busy with big docs. Technology teams rip your product down to the studs. Business Development and sales teams will hit you up hard for potential revenue numbers so they can update their business cases and revenue forecasts. You’re not in startup Kansas anymore. In the big city, process is critical. If you can’t handle the process, think twice about entering the deal.

If you are thinking of snuggling up to a major telco and follow these guidelines, you will increase your chances of success significantly and minimize brain damage and frustrations. So think big, code fast and stay thirsty.