10 learnings in 10 years #Wayra

This week we celebrate our 10th birthday at Wayra. It seems incredible, actually, it practically is, because these kind of global corporate initiatives do not usually achieve this longevity in sound health.

So, first of all, we have to heartily thank the entire Wayra team, past and present, those who decided to bet on entrepreneurship in a corporation when it was not at all trendy, and the president of Telefónica, Jose María álvarez-Pallete , for his unconditional support, as well as from the top managers, who demonstrate the importance of top management support so that open innovation can be a success.

Not forgetting the internal and external Wayra Shapers, all those agents of change who work with startups from and within the business units, the public and private partners with whom we work, our co-investors and above all the more than 800 entrepreneurs who have bet on us during this time.

When Wayra started 10 years ago, in informal meetings every Friday in Jose María's office, the fundamental goal was to support the emerging entrepreneurial ecosystems of Latin America and also Spain. 

With the conviction that there was plenty of local talent and that with financial support and access to Telefónica's commercial network, it would be possible to create relevant digital projects that would grow and develop in their places of origin. As Gonzalo Martín-Villa said, we were looking to “identify the Steve Jobs of Europe and Latin America”.

In that initial phase, I became involved as a mentor from the first cohort of startups, enjoying the privilege of seeing the eighth floor of Telefónica's august headquarters in Gran Vía converted in a meeting place for entrepreneurs in investors of all kinds.

From the original claim, “Bring your business idea” to the current “We scale startups” in our spaces around the world, not only ten years have passed but also many illusions, projects and above all, great people. We are still faithful to our vision of becoming the most global, tech-driven and connected Open Innovation Hub in the world.

The marked anniversaries are a good time to reflect on the past, the memorable moments, the great successes, the failures and above all the learnings. We love sharing with the community, so I thought it would be nice to share some of those lessons learned, accumulated over the years as part of Telefónica's open innovation arm.

1. Patience

In a project like this, it is easy to be dragged down by the tyranny of the short term, and if you do not show conclusive results in 2-3 years, the budget might be canceled. But here, a maturation was needed and not only to leave a lasting effect in the internal cultural transformation, but also due to the growth dynamics of the invested companies (in the seed phase) that will take more than seven years to produce tangible results.

In addition, in portfolios like ours, bad news are usually given at the beginning, with the mortality of the first investments, hence we required strong perseverance and long term view to achieve more than 70 exits or the 1 ,7x TVPI that we have right now.

And always betting on entrepreneurs who are not only good, but also good people, with projects that have a real and lasting impact on people's lives.

2. Luck and humility

Working with startups is not easy and hitting the double combo of finding which company is going to have accelerated growth while achieving significant business development with Telefónica is less likely than winning the lottery. You have to kiss many toads to find princes and princesses in the most unexpected way.

Luck plays a fundamental role and requires great faith in the team's intuition. You have to be humble to know that nobody knows anything, and that the brand of Telefónica is not a guarantee of being right, or even of having a place at the table of good deals. In these years, we had to refine our value proposition to entrepreneurs, beyond investment, focused on helping them generate joint business.

And humbly, we can say that in these 10 years, we have been wrong many times. Not only investing (more than 300 startups of the 800 initially invested have died along the way) but also launching initiatives that have not worked or pushing commercial agreements and pilots that have not reached scale. Taking significant risks means exposing ourselves to failure more times than we will succeed, and we needed teams who dare to risk for disruptive innovation to occur.

In our monthly town halls, in addition to making the successes memorable, we dedicate almost 15 minutes to applauding and recognizing members of the teams who take risks in every corner of our network, to make the elephant dance with the gazelles without stepping on them.

3. Culture

The culture of an organization is not based on inspiring phrases, Mr. Wonderful style that you can paint on the walls, but on the sum of the actions of the team members, especially when things are not going quite well and being true to your culture hurts.

In Wayra, in these ten years, a sense of belonging and very special values have been created. From the need to "hack" the system when needed to achieve results in collaboration with startups, to the agility to decide with little data and time, or the ability to adapt to reorganizations and changes in corporate strategy avoiding creation of silos.

Culture should be embedded in every fiber of the organization, from the moment of hiring a new team member to daily decisions, reaction to a failure, management by service, avoiding micro-management or betting on diversity as a source of wealth.

And culture acts as a protective balm against toxic situations, in which team members can affect the productivity or happiness of the rest. I think tackling those issues can lead teams to their full potential, which leads me to the next lesson.

4. Talent and organizational health

We have gone through all kinds of stages in these 10 years of emotional roller coaster. And there is something that permeates, and that is that beyond the individual talent of one or more people in a Wayra Hub or in a startup, what really achieves outstanding results are the best teams.

And the best teams emerge in situations with healthy organizational health, as Patrick Lencioni says, where challenges and objectives are clearly communicated and there is cohesion of the management team. 

To achieve this, starting from sufficient vulnerability so that trust is generated and positions can be shared is critical, even if they are contrarian. From that trust, it will be possible to manage conflicts around opposing ideas and decisions can be made. And since an open discussion is possible in which everyone expresses their point of view, then everyone's commitment can be forged with the direction to take, even if they did not agree at first.

In addition, there is an additional advantage with this process, which is that once you have managed to create a solid and cohesive team, it is much easier to add new members and maintain the existing culture and dynamics. This works equally for large organizations or small startups.

5. Trust

In teams as distributed and autonomous as ours, spread over 10 countries, it is essential to replace control with trust. Returning to the topic that haunts me about organizational health, trusting others does not imply that you cannot make a constructive criticism of their work. Feedback is a very powerful tool to improve the quality of what you do and to test innovative ideas and projects.

These times of pandemic, with the impossibility of traveling to the different hubs, have put to the test our ability to delegate and empower remote teams to make their own decisions in an agile and independent way. And the same has happened to us with our parent company, which has had to rely a lot on this leg of the company that does somewhat different things and acts as a permeable interface with the entrepreneurial ecosystem.

6. The NOs

We have learned that passion is a very important factor in working with entrepreneurs and that putting decisions in” first person” helps to clarify doubts. And although we try to have a bias towards action, if we are not convinced, we have learned that it is better to let it go, whether it is an investment, a hire or a sale. Therefore, we first wonder if we would actually invest our own money, if we would go to work for that startup leaving the security of the corporation, if we would work for that person we want to be part of the team, etc.

Taking into account that we analyze in detail more than 1000 projects each year, and then invest in around 30-40, that means that in 10 years we have said NO more than 9,000 times to great entrepreneurs. And we have an anti-portfolio of incredible projects, which we know will continue to grow in the future.

7. The data

When you do things at scale, you have an impressive information pool that allows you to understand the consequences of your decisions. We have tried to make the invisible visible, looking for correlations between initially unrelated variables, from investments or sectors, to team composition, etc. It is exciting to do a cohort analysis of our portfolio in terms of both portfolio performance and business development with Telefónica and understand the implications of strategic changes, even if they take time to consolidate.

The data point that I like to talk more about is that in these years more than 250 startups in the open innovation area have worked with Telefónica, improving our processes and generating more than € 285M in income for startups.

The obsession with data does not imply that we should burden ourselves too much with reporting, although it is a natural temptation in corporations. Trust allows you to send fewer management reports, which prevents people working on PPTs and other people reading those same documents, taking time we need to help startups and the core business, which is our real job.

The task of simplifying and automating the reporting processes never ends, because communication and collaboration in the network is key and, of course, it is important that the corporation understands the results of the efforts made and that the audit and legal requirements are met. But balance is very important.

8. Smart frugality.

In innovation areas, we are privileged to be paid our salaries today so that we can help pay the salaries of our colleagues in the future. And having an assigned annual budget implies a great responsibility to use resources efficiently, as if it were your own money.

Over the years, we are clear that Wayra must act as a startup itself, with sustainability and growth objectives, and also with agile processes. We must avoid loading ourselves with processes, resist the temptation to create new rules every time you discover unexplored territory or make a mistake.

 Our Wayraman, Gonzalo, used to say back in 2011, “The rules are not written yet” and that principle still stands ten years later.

9. Cadence

A team member told me during my first weeks at Wayra “that task is not in my KPIs”, and I remember being shocked. It is not something that is heard much in the “startup” environment from which I came, but the solution is not to fill the teams with KPIs that no one can remember in two weeks.

Less is more, with some objectives that can be shared by the entire organization and, above all, with a cadence that allows us to see their evolution and the key tasks that have been set for the quarter. 

Have a point of comparison, to see what has been delayed, why and if it is necessary to correct the course. Working with startups, getting off course is natural and expected, but the key is to be able to find the north again, iteratively. Off course & correct - Off course & correct and forward.

10. Flexibility

Over time, entrepreneurial ecosystems have changed and matured and so have we. In 2018, we launched the new Wayra, which, more than a change in logo and positioning, implied a change in our strategy and investment model, focused in more mature startups, with higher investment tickets, seeking to optimize business relationships in companies with product- market fit. At the beginning of Wayra, all investment and acceleration processes were standardized, the same for all Hubs, but we learned that flexibility is essential to work with uncertain environments.

It is not only about changing the strategy, we also had to digest a cascade of modifications in the organizational model, the relationship with the ecosystem, the investment thesis or the tools we used, which allow there to be coherence between what you say , what you want and what you do. 

And this adaptation process will never end, which is why we have recently launched Wayra Builder to create startups from scratch, or Wayra X to invest in 100% digital projects with a B2C focus.

Bonus: The purpose

At Wayra, we have one of the best jobs you can imagine, with the tremendous privilege of helping entrepreneurs fulfill their dreams, and in the process helping Telefónica reinvent itself for the next 10 years. Having a defined purpose allows you to face the future with optimism and enthusiasm.

Telefónica also turns 97 this month, and in three years, when it will face its first 100 years of life, I am convinced that Wayra will continue to be a pillar of inspiration and learning, of connection with entrepreneurs and a driver of change for the Group.

I'll take the famous words from Jeff Bezos: "bet on things that won't change in the next ten years." I am sure that the need for perpetual reinvention, to work more closely with startups and to push iterative and disruptive innovation, are things that will not change in the market and in Telefónica in 10 years.

So, the journey has just begun.