Question: You were Telefonica’s chairman between 1982 and 1990. Which is the main difference between what you had to do then, and what the current chairman has to do now?
Answer: I had to undertake a lot of important changes. The company started many new projects, some of which were finished and some other were not: the foundation’s birth, the New York’s IPO, the purchase of the Argentinian and Chilean operators. Telefonica was the only European private telephone firm, the only one listing, not even British BT was. I found it was a huge advantage because privatizations were beginning in LatAm and the company could introduce itself free of the burdening label of state-owned company… I am sure Telefonica would not be the brand is today without doing all of these. Furthermore, that expansion allowed it to become a much more efficient company
Q: Now you have returned to Telefonica as the chairman of Wayra (the company’s startup acceleration initiative). What do you think about this massive movement of promoting entrepreunership in Spain? Are the results satisfactory?
A: The crisis and the unemployment rate have forced many people to self-employment, especially the youngest, in the most technological sectors, but the creation of this breeding ground is very positive. This is new in Spain, at least so extensively. Spanish aspired to be public officials in the past, so we should take advantage of this shift and help entrepreuners to organize their ideas.
Q. Must be telecoms in Europe obliged to push technologies up?
A. They must be one of the main actors in the scene. I totally respect the financial and energy sectors, but telecoms mostly need to promote technological solutions. It is important to remind that sending an sms was not for free just a short time ago, while now people send messages via Whatsapp and operators are not paid fot it yet. This is a significant warning and companies are very concerned about it.
Q. Sms, mobile contents, roaming, part of international calls, even pay TV are said to be potentially threatened. What can telecoms do to stop this?
A. Everybody sees clearly that unless new ideas appear, telecoms will become some similar to toll road operators which are paid the same no matter if it is a Fiat or a Rolls which pays. This is a big risk and Telefonica is so perfectly aware of it that many of their employees are exclusively devoted to solve these. What has really happened? That the culture of “free of charge” has deeply impacted, that prices are decreasing in almost all business, that which has a price goes down at once or even stops to have a price. Any business can hardly be considered stable and durable. This is new, which requires big companies to be much more dynamic than they were until now.
Q. Are we living in a permanent instability?
A. This is the culture to be dominant in the XXI century. Anything is going to last for long. Why monsters like Google applies itself to buy everything in its scope? Because they have doubts about their current and future ‘core business’ and about the search engine lasting forever.
Q. Google is a monopoly, but operators are not. If they become plain ‘carriers’ trasferring voice and data. Which will happen then?
A. They will turn into a ‘utility’, just like a toll road operator. However, Telefonica is willing to avoid this. The searching for inteligence, for new ideas proves it. That is the reason why the company created an structure to select entrepreneurial initiatives with several steps that we can promote, buy, integrate or whatever is needed.
Q. However, it is very difficult for Europe to reach a reduced telecom market of just three operators like the US. We are the EU of 28, and each market is different.
A. Yes, we can. We are inventing a new nation, something that the US did a long time ago, by the way after a civil war, and means their comparative advantage. I am convinced, however, that as the European union moves forward, we will be able to resolve many of these problems. Who could think two or three years ago that Europe would have a common banking regulation and supervision? Yet here it is.
Q. Let’s talk about your current position at Wayra. Which are your goals?
A. First of all, since the moment Telefonica’s chairman César Alierta entrusted me with the coordination of all the company’s different and dispersed efforts of entrepreneurial promotion, Wayra has become a very relevant piece of a further proccess of startups creation called Telefonica Open Future, which develops like an elevator: it begins with the so-called crowdworking, opening spaces for all the people having new ideas in all Telefonica’s territory, here in Spain, in UK, Germany, LatAm and so on, always accompanied by mentors. These projects are to be connected in a common platform of ideas storage, at the disposal of all the world’s companies. It may be projects in which Telefonica is not interested but useful for another. This is a pioneer inititive.
Q. The next floor would be Wayra, wouldn’t be?
A. The ideas that are of Telefonica’s interest are integrated into Wayra and then invested on about €40,000 euros. Once these companies get a considerable size, the next step is Telefonica Ventures, a risk capital fund whose investments amount at around €500,000. The following stage comes with Amérigo, also a fund but created by Telefonica along with other ‘private equity’ funds, that contributes with more relevant sums of money.
Q. Why do you say it is a pioneer business model?
A. Because Telefonica accompanies entrepreuners from the first step until they achieve listing in Madrid or New York stock exchanges. That only one organization go with them in the whole process has nver been done. What makes me feel more proud is that we did not need to invent anything, a new management chart or a new entity, just to integrate activities and projects that existed before but went separated.
Q. How many new startups do you mentor a year?
A. About 250, ten per academy. It takes a lot of time. Wayra has been working just for one year and a half, so that it will take patience to see those 250 projects massively climbing to top positions.