Learnings from the GSMA Ecosystem Accelerator Programme.
Being only over a year and a half old, the Ecosystem Accelerator Programme has established a lot. They successfully educate the market about the benefits of partnerships between operators and innovators and just announced the first nine startups, that have been selected for their innovation fund.
During our interview and the time, we spent with Maxime and his team working on our joint report “Opening Doors”, we could feel their passion for fostering startup-corporate collaboration and their excitement for innovative ideas in the mobile services space. We enjoyed working together and look forward to fruitful collaboration between Match-Maker Ventures and the GSMA in the months and years to come.
Can you provide us with a brief overview of what Ecosystem Accelerator Programme is and what is the mission of the programme?
GSMA is an organisation representing the interests of mobile operators worldwide, uniting nearly 800 operators with almost 300 companies in the broader mobile ecosystem. The Ecosystem Accelerator programme was launched in early 2016 by the GSMA with the objective to scale innovative and sustainable mobile services in emerging markets through partnerships between mobile operators and start-ups. Today in emerging markets, mobile operators have reached the scale that start-ups lack, while start-ups have the local innovation mobile operators need.
The Ecosystem Accelerator Programme is aiming to scale innovative and sustainable mobile services in emerging market through partnerships between operators and innovators. What is your role and what has been achieved to date?
The GSMA Ecosystem Accelerator works to bridge the gap between operators and innovators, enabling strong partnerships that support the growth of commercially sustainable mobile products and services. We are doing this mainly through two initiatives. Firstly, knowledge sharing and advocacy to educate both parties on the benefits of these partnerships and the best approach to make them successful (see our latest insight here). Secondly, an Innovation fund that provides selected start-ups in Africa and Asia with grant funding, technical assistance, and the opportunity to partner with mobile operators in their markets, to help scale their products and services into sustainable businesses with positive socio-economic impact. We have actually just announced the first nine start-ups selected by our Innovation Fund.
Why does it need external help to foster startup-corporate collaboration?
In the specific case of collaboration between mobile operators and start-ups in emerging markets, while some collaborations have already taken place successfully and without external help (recent examples include Eneza and Safaricom in Kenya or WowBox and Telenor in Bangladesh), engaging and setting up these partnerships remains a complicated journey for both sides. The differences in terms of culture, organisation, execution speed and expectations are tremendous between mobile operators and start-ups. Although we are convinced that this journey will become easier on both sides as a number of mobile operators are gearing up to set up clear processes and allocate staff and budget to it, in the meantime we are trying – at our scale – to enable and facilitate this journey.
If you look at mobile operators in emerging markets, what are the key challenges for start-ups to successfully collaborate with MNOs and how does this differ to more advanced markets?
This is what we dive into in our latest insight co-authored with Match Maker Ventures (Opening Doors: A Start-Up’s Guide to Working With Mobile Operators in Emerging Markets). There are four main challenges alongside the four steps of this engagement and collaboration journey:
(1) Start-ups might not be familiar with the trends, challenges and needs of the mobile industry and the mobile operators,
(2) It is difficult for start-ups to find out within their country, and their market, which mobile operator to engage with and which person(s) at this operator to reach out to.
(3) Pitching to a mobile operator remains a very different exercise than pitching to an investor (which start-ups are usually more familiar with).
(4) Setting up a collaboration with a mobile operator and steering it requires a lot of effort and dedication from the start-up’s side. Once again, this is even more the case in emerging markets as those collaborations are still quite rare and hence start-ups might find themselves in a situation where they are the first start-up working on setting up a partnership with a given mobile operator.
Likewise what are the key challenges for MNOs?
The situations vary quite significantly from one mobile operator to another depending on whether or not the collaboration with local start-ups is a key topic on the top management agenda. Today most mobile operators in emerging markets we are talking to are keen to work with local start-ups. However, they are all at different stages when it comes to turning this willingness into a reality. One critical challenge to overcome is accepting that working with local start-ups is risky and might only pay off in the long term, while mobile operators are under quarterly commercial pressure. Beyond this initial top management buy-in, challenges like human resources and know-how, but also difficulties in sourcing the right start-ups, are making this journey harder.
Looking at start-ups that were selected in the first round of the GSMA Ecosystem Accelerator Innovation Fund, what are the three factors that make you believe it would be a good match with a mobile operator?
As was highlighted recently by a mobile operator in a panel that we hosted at Africa Tech Summit London, it is difficult for a mobile operator to work with a start-up at pre-revenue stage. This is why one of the criteria for start-ups to be eligible in the Innovation Fund is revenue: they need to be already generating revenue. A second and critical point we look at is how the start-ups are using mobile technology in their core activity (mobile application but also USSD, SMS, IoT etc.). Lastly, one key question we ask start-ups to answer when they apply to the fund online is about the kind of collaboration they foresee having with local mobile operators, what would they need from them and why it would make sense for mobile operators to collaborate.
If you think back, what are you most proud of and what would you have done differently to help start-ups and mobile operators to work together?
With the programme being just over a year and a half old, when we look back only a little bit, there was initially nothing at all. So we are quite excited that in such a short time we have been able to put this programme and its team together. One of the things we want to improve on is the traction the Innovation Fund got in Asia. Close to 70% of the 400+ applications we received during the first round of the innovation came from African start-ups and 30% from Asian entrepreneurs. While this is great as this shows the dynamism of the African tech ecosystem, we are working hard now to encourage more start-ups from emerging markets in Asia to apply.
For the second round of the GSMA Ecosystem Accelerator Innovation Fund, what do you expect?
For the second edition, it was decided to keep the criteria as they were for the first one, specifically when it comes to the two innovation focus areas. As it was the case for the first round we will be supporting start-ups in two innovation focus areas: the Sharing economy and Services for SMEs.