Tuesday, November 19, 2013

Startups Gaining Luster in the Golden City of Prague under the Guidance of Wayra: A Telefonica Venture

By Paul Chen



In December 1890 a group of outcast artists from Paris decided to revive the SociétéNationale des Beaux-Arts because their art were considered not up to the standard of the them prestigious Salon de Paris.  Rather than having their paintings and sculptures exhibited among the many at the Louvre, they opened a smaller exhibition where its members can show off more of their craft.  These days, paintings and sculptures of Manet, Delacroix, and Rodin are worth millions each.   

The moral of the story is that it is sometimes better to have the big fish in a small pond approach in startups.  In recent years, telecoms like Deutsche Telekom and Spain’s Telefonica while being giants are giving some very talented individuals and teams chances to do just that.  In Krakow and Berlin, Deutsche Telekom formed branches of the accelerator hub:Raum.  In many Latin America capitals as well as some selected European cities, Telefonica opened branches of the accelerator Wayra. 

While some telecoms and corporations are resistant to the idea of outsourcing research and development to startups.  The reasons are understandable.  The low level of control over product development and the high up-front pre-seeding fee can be concerning to some middle level managers and accountants.  However, in the end both the sponsoring company and the startup can benefit from this model.  Because they are startups, they can concentrate on developing a good solid product and service while being nimble enough to make necessary pivots without having to answer to some mid-level managers.  Additionally, the startups, if successful, will be providing the community with jobs and improving the local economy.  And they will keep the market competitive providing better products and services to the customer.  The startups will also have access to the sponsors’ large portfolio of pre-existing clients. 

The sponsoring company wins by being the first in line to acquire the rights to use the products and services.  The sponsors are also able to add more variety of services to their menu.  If the startup does badly, they can distance themselves from the product and service as the startup is considered a separate entity.  As a result the company brand doesn’t get damaged.  There is probably a tax incentive in having these ventures. 


In the center of the golden city of Prague on the magnificent Wencelas Square sits the Czech office of Wayra.  I caught up with Ms. Linda Kajzarova the branch manager.  This is what she has to tell us:

This is certainly a really great location, why here, rather than outside the city center like other coworking spaces in Prague?

There are two reasons:
  • It is better for the startups to have many varieties of food options within walking distance so they can eat and get back to work without having to travel long distances. 
  • It looks wonderful for investors to visit a more upscale office in the middle of the city.  That way they can feel the energy as well as the hustle and bustle.   


How does the Wayra Academy work?

In our first round of recruitment, we received over three and half thousand (3,500) applications for ten (10) spots.  A startup can reapply as many times as they wish.  We will always provide them with good honest feedback without any sugar coating.  During their time with us they will have access to the following:
  • Fully equipped (internet, furnished workspace, kitchen use, a shower) coworking space in the heart of the city.
  • Infrastructure for growth
  • Access to our global team of experienced mentors
  • Six (6) months of training focused on the topics of: pitching, negotiating, product and customer dev.
  • Insider information on all the markets that Telefonica serves
  • 40,000 Euro of pre-seed funding given in installments provided certain KPI’s are met.
  • Access to our global network of offices, personnel, and community



What does Wayra want in return?

We would ask for 10% equity, first right privileges.

What are you looking for in a startup?

We are looking for startups with a focus on telecom products and services.  We are looking for hard-working, passionate people who believe in their idea.  We are looking for startups that will be able to make contributions to our global community and believe in the system. 

Some cities will try to compare their startup community to those in Silicon Valley.  How do you think Prague compares to the Valley?

There are a huge number of success stories to come out of Silicon Valley, which is wonderful for them.  However, as you have heard from other places in Prague earlier, here in Prague, we would like to create our own pond and success stories.  We don’t really need validation from the Valley.  We know we are good and we believe in ourselves. 

Any early successes?

One of our startups,Datamolino,  was invited to make a pitch at the Wayra Global Demo Day.  They were able to make their pitch to over 300 global investors.

How do you think the Prague Startup Community could improve?

I would like to see more girls involved.  I would like to see more people be courageous enough to take a chance and put themselves out there.  It’s OK to make mistakes, as long as you can learn from it and it improves your idea or product in some way.    I would like to see more people apply to our accelerator program.

Wayra just closed the next round of global recruitment.

The current cohort of startups:

Mapilary – Tracks people in real time as they meet up.
Lion Expo – One-stop shop for commercial exhibitions and exhibitors.
Data Molino – Enterprise quality software and ’back office’ support for small accountancy practices.
Linxy – Offline app that uses your phone camera to look up words for explanation and definition.
Big Launcher (the only Czech startup) – An alternative interface for Android smartphones that simplifies functionality.
TrashOut – Allows users to report illegal waste dumping sites to relevant authorities.
Excalibur – Allows secure login without passwords using your phone as a universal ID.
Remote Assistant – Uses a mobile phone’s camera to deliver real time assistance to the visually impaired.
Networker – A "mobile LinkedIn" for business functions.
WOPPA – Resource for connecting students with opportunites  and grants offered by government and agencies.



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