Oystercatchers Event | October 2013 | Charmaine Eggberry Q&A Session | Director | Wayra UK

Oystercatchers Event | October 2013 | Charmaine Eggberry Q&A Session | Director | Wayra UK

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Charmaine Eggberry: Wayra, for those of you who don’t know, means change in Spanish and Wayra was started with the very simple, but very powerful question, which is why do all the innovative companies have to go to Silicon Valley in order to be successful? A very powerful question! It was asked to the gentleman who was the chief operating officer of Telefonica, and it was asked because over 20% of all the applications that find themselves in the app or store, actually come from Latin America and the companies feel that in order to feel recognised, in order to see value, in order to get good valuations, they have to up sticks and go across to Silicon Valley.  And he paused for a moments as he does, and he said “well that’s a really good question, why do they have to do that?” And fast forward 100 days and the very first Wayra academy opened.

Charmaine Eggberry: So Wayra is Telefonica’s digital accelerator, and the difference here is that our focus is on finding the very best digital talent on planet earth and accelerating them.  Our focus is purely on digital companies and we look both at the people i.e. the serial entrepreneurs in many cases or someone who has a world changing idea and then we’re also looking at the business ideas.  So we look, and I’ll differentiate this, we look at people in addition to the idea.  Why? Because we have learnt first-hand that an idea as only as good as the people that are going to execute it and I can take a bad idea and throw some great people at it and make it world class, but I cannot take some people and throw them a world class idea and have a company that you all want to buy, or invest in.  So very simply, that is our focus.

Charmaine Eggberry: We have, we believe, some very clear values which I’ll run through in a second, which also to my mind are relevant to this point about innovation and about energy.  We are currently the world’s largest accelerator network, so we have 14 of these around the world.  We’ve pretty much opened one every few months, and one of these typically accommodates anything from 10 to 20 companies.  London right now is the largest accelerator of its kind in this network on planet earth.  So we have 20 companies that we accelerate every 4 to 9 months depending on their performance.  What does that mean? Well we invest in them so we actually buy a share in them.  We give them board members, advisors, mentors, industry experts, innovation sessions, everything that you can think of to take them from the idea that they’ve come up with or the business that they have, and to show a demonstrable increase in the valuation of that company when they leave.  We don’t just focus on them when they’re in with us, but we also focus on them when they’re out.  So we find them investors, we find them second and third round valuation.

Charmaine Eggberry: The thing that we do that comes under this umbrella of innovation, is we believe we bring a couple of things that are slightly different, because you’ll hear a lot about accelerators particularly in London, you’ll hear a lot about them in Silicon Valley, you’ll hear a lot about incubators.  And the different here is about pace.  We do something which is slightly different, which is yes we focus on the people, very much on the people.  To get selected into Wayra is an incredibly difficult process.  If you think Dragon’s Den looks tough, take it again.  For this they go through weeks of HR interviews, IP interviews, legal, you name it, they really do.  And then they still have to re-pitch at a three day event where they pitch against 40 other companies that they have to compete against.  It’s very very tough to get in, and it’s deliberately tough because one of the things, some of the things we bring to them is this fabulous list here which is funding, mentorship, a network not just here in London but the ability to take that company and very quickly scale it to all of the properties that Telefonica has around the globe.  So, today Telefonica has 300 million customers…300 million! Telefonica owns O2, and then if you add their relationship with China Unicom and various other properties around the world, if you come into Wayra you have potentially access to a billion customers around the globe – which is good, but you only get access to them if you hit your milestones, you are innovating and you are that company which we believe is going to be successful.

Charmaine Eggberry: This is Wayra, so this is where all the magic happens as they like to say! So what looks like a cool agency space, as someone described to me, or as one vented capitalist said to me, “It just looks like a high end frat room”.  Yeah I’m not so sure because every element of what we do is about the psychology of innovation, so every piece of furniture has multiple uses.  Where the start-ups even sit, they get the best light, the best pods, even the kitchen is engineered so that it is quite simple, it is very start-up like.  They are not treated like they are sitting in Google campus (quite deliberately) because what we want them to do is focus on work, and focus on actually making their company successful.  So every single thing at Wayra is architected around collaboration, innovation, work, even down to the furniture.  We have meeting rooms that look great, it’s all good, this is where their milestone meetings happen, so I get to sit in the couch and I get to question them about what they’ve done in their two week sprints.  They sprint for two weeks – they’re set milestones and they have to achieve things every two weeks.  We review what are you doing, how are you doing it? Many of them will sprint far faster, far far faster than that and that’s ok, but we will review every two weeks and set them new goals to get at.  It’s this idea of constant innovation cycles, get up, get your product up, have you got new clients? Where are you in revenue etc.? Even here – that’s not actually a ping pong table it’s a board room table, and that’s not actually just a normal telephone booth, it’s a skype booth so you can phone your investors within peace and quiet.  Every single thing within Wayra, as I said, is about the psychology of making sure that you’re there to work, be successful, and also hopefully have some fun.  And yes there are many of these tables, and we have table football and all kinds of fun things that everyone seems to enjoy.

Charmaine Eggberry: In terms of numbers, again because we are a commercial enterprise, it is focused on innovation and as I said it’s the very best digital talent we can find on earth, but very quickly, 90% of the start-ups have launched.  You can come in with a single idea.  We did actually invest in a lady who I’ll talk about in a second, who literally had a great idea, zero funding, she had credibility – she’d been in start-up before, she came from agency land.  And the first thing we said is we’ll give you some money and the amount of money we give them is also psychological because we only give them enough money to survive for a few months.  We don’t give them enough money to sit there for a year and think.  They have to do.  We just give them enough, and we give them the space so they’re there for 9 months, they have no rent, they have no overhead, they have nothing else, we give them just enough money so they can survive and grow and then they have to go out and find new funding.  So 90% of them have launched, which is again quite unheard of, and 40% of them are already doing work with Telefonica, so this value that Telefonica brings is massive.  It’s not just about brand, it’s not just about money, but it’s about having instant access to clients.  And then 70% of them are already selling, so generating revenue at the start.  We have currently invested in 295 companies – not people but companies.  And we’ve got a call open right now.  A call means that we’re actually asking for applications to Wayra a worldwide.  So we should have that number probably up to 500 by the middle of next year.  That’s 500 companies under active management that we’re working with every single day.  So when someone asks me why I love my job, I can tell you considering we invest in every possible vertical you can think of, every type of business, there is absolutely no theme other than they’re digital companies.  I have to say, you know work with challenging people who are hugely passionate about what they do, what’s not to like about that? And every single say I’m probably learning as much from them, as they are from the people that we’re surrounding them with.  Only 1.4% of all the applications get in…1.4%! And in the UK alone we’ve had about 3,500 applications, not again from people, but from companies.  Companies that have to be registered here in order to get into Wayra.  They can come from oversees, we do have people from Eastern Europe in particular, people from Ireland, we’ve had people from the US, we’ve had people from Spain.  It doesn’t matter as long as they incorporate here, and that they’re willing to grow their business here in the United Kingdom, and then what we often find they do is go back to their home countries, where Wayra will have a network as well.  So we invest at the moment in two companies every week.  That’s quite huge! Ask the average VC or the average Angel person what they invest in and they’ll probably tell you two a year! We’re doing two a week at the moment and these are some pretty heavy-weight investors that we’re talking about.  And that’s great, and as I said we get an application an hour and they are every single possible kind of company that you can think of.  It does make judging them very difficult!

Charmaine Eggberry: We also just launched a new academy, so we have one entire floor just off Goodge Street, which is great.  It’s a huge physical space that has all the start-ups sitting next to each other so they can learn from each other.  We’ve also just opened the very first social, digital accelerator in collaboration with the government.  The government gave us 50% of the money, Telefonica has put the other 50%, and we’re now accelerating another 10 so we’ll have 30 start-ups at any one time at Wayra.  Another 10 companies who at their heart it’s all about social impact done via digital execution.  All about doing good, and you have to be able to measure how they’re doing good, because that’s one of the pre-requisites of the government giving money.  So they’re doing good, but they have to have digital and innovation at their core, and they’ve now been with us for all of 3 weeks, and again I have to say the energy that the energy that they create, and the passion that they have for what they’re doing, and the impact that they’re making, and these are some very world changing ideas that they have.  Small example: a lady is figuring out how to get all the cancer research databases in the world to talk to each other.  Because currently if you have an issue with cancer or you have a tumour and you send it off to one database, you have to apply for permission to all the other databases around the world.  That can take 3 to 6 months.  You typically don’t have 3 to 6 months! And she’s figuring out an algorithm and has figured out how to mobilise through crowd sourcing.  I’ve had a tonne of data engineers who are giving freely their time to make these databases talk to each other so all you have to do is pay one licence fee at a university or research body, and you can have access to that information immediately.  So you can have turn around on tumour research immediately.  These are very big ideas, there’s nothing in there which isn’t very game changing.

Charmaine Eggberry: We built them a new space because we couldn’t fit them into our own.  They have their entire own floor, designed by lovely architects.  All white, and while you’ll notice Wayra is black, they’re all white.  They’re connected by staircases and we populate these teams, so the 20 teams that start upstairs go downstairs, and the teams downstairs go upstairs.  Because at the heart of this, it’s about innovation, and also about commerciality.  So we’re making sure that we cross-pollinate all the time.  Whether you’re a dating app, or the cancer app that I talked about just now, we’re making sure that you learn from each other.  Because the heart of innovation is learning, and it’s about constant invocation and about pace, and they learn genuinely more from each other than anything else that you can possibly teach them and we can possibly teach them, so we make sure that we really do cross-pollinate a lot.

Charmaine Eggberry: This is a quick slide – there’s lots of wording on here about what we offer, and I’ve run through most of this already, which is generally, well I think the biggest thing we offer is the focus on people as well as product, the scale that Telefonica can bring them, and this relentless focus on making sure they are sustainable businesses, because one of the other things I hear about innovation, and about start-ups, is that 95% of them fail! 95% of them fail within the first three years of them being in business.  So far, we’ve had 3 – we have a 5% failure rate, in fact slightly less.  That’s amazing! But the point about that is because we are focused on trying to create, everything that we do is focused on trying to create sustainable businesses rather than grow big very very fast, get bought out and move onto the next thing! We’re trying to grow businesses that will continue to add value.

Charmaine Eggberry: They’re a very good looking bunch, as you can tell.  So this is our class of 2013, these are all our co-founders and start-up CEOs.  Have a look at that picture and you’ll start to say, hmmm, and you’ll start to look at demographics and the first thing you’ll say is all male! No it isn’t, at this point actually downstairs in our social innovator, half of the CEOs are now female, which in a tech industry is an amazing thing, I can tell you that, an absolutely amazing thing to see.  So half those companies have female CEOs, not just co-founders.  And we’re starting to see a huge rise in the number of women coming through who are either co-founders or running digital start-ups.  Something I think can only be a positive thing.

Charmaine Eggberry: These are the companies that we currently have within Wayra, and I’ll run through a few of them and just talk about the innovation that they have.  You are welcome at any one time to come down, meet these companies, and talk to them in person.  I’ll try and do them justice in the time that I have, and briefly run through why I think they’re all very special, but the cohort (this is an important one) they are very very different to what people think start-ups and entrepreneurs look like.  For one thing, they’re older.  Here’s the interesting thing: everybody thinks that it has to be about wearing jeans and a bad t-shirt, and a lot of beards and other things, and you all have to be under 22.  Well the interesting thing is that most of ours are above 32 and over, actually the bulk of them.  And they have not just run one company, but several companies.  Some very successfully yes, but a lot of them not so much.  And in fact the thing that we look for is have you learnt from failure? And what have you done about how you failed? And one of the first questions we ask in our HR interviews of them is have you failed? How did you fail? What did you do with that business? Why did you fail? All of those things in addition to celebrating the fact that you’re an amazing entrepreneur that’s going to make lots of money, you have to have balance.  Because when the going gets tough, and it does almost on a daily basis, you have to have the skill set to be able to survive when it’s got tough, and to get through that.  And it’s as much about attitude as it is about aptitude.  So as you can see a very different picture to what people typically think, and the good news for me is that over half the teams that have been there for over 5 months have already got second round funding.  In the middle of a recession, that’s unheard of.  When people are incredibly risk adverse, and they’re all looking for the next Facebook, and the next Twitter, to have very early stage start-ups get second round funding, which really takes them into the next league, is very difficult and very rare.  These folks have only been there for 5 months and over half of them have already got it, and we have a whole other deal pipeline already under way.

Charmaine Eggberry: Let’s talk about a few of them.  This is buzzmove.  Why do you want to know about buzzmove? Well any of you who are moving home in the next 6 months do need to know about buzzmove because they are the very first price comparison website for moving.  They’ve figured out a proprietary algorithm which basically will populate everything that you have in your house, it will do it all for you, it will give you a guaranteed quote and they have managed to sign up all of the leading removal companies in the country, and they are launching soon.  They are the very first one to be able to do this.  They get very irritated when I call them the moneysupermarket of the removals industry, a very bright one to watch.  So if you’re moving – wait! And then wait for this site.  It’s coming in weeks, and I literally mean it is coming in weeks.  Eitechnolgies – motion sensing on your mobile phone.  If you’re advertiser, you want to know about this because it’s an algorithm that runs in the background.  It tells when you’re talking to people whether you’re happy, you’re sad, you’re depressed, or anything else.  Right now being used for mental health issues, soon being pivoted to work with advertisers so that you can push certain kinds of adverts based on someone’s mood on their mobile phone, and the tonality of how they’re talking.  Welcome to Eitechnolgies.  You’ll see that app and that technology launching at the end of the year and their Ted talk is coming up this month.  So for those of you interested in this kind of thing, their Ted talk’s coming up in a couple of weeks.

Charmaine Eggberry: IHelp.  This is an interesting one! The founder at the bottom, Andreas, had two heart attacks before he was 24, and the thing that he found was that the amount of response time was a leading indicator whether he would survive or not.  So what has he figured out? An app that can tell you where the nearest defibrillator is, where the nearest trained person is, in addition to contacting the hospital and asking them to send an ambulance.  So what it is, if you think about crowd funding or social networks, this is a social network for heart attacks.  What it does (he’ll hate me for saying this, but it’s true) is he either has an armband or on the phone, he literally presses one button.  It’s prepopulated, it will tell you and have a network based on GPS where all of the defibrillators are around you and anyone who has ever been trained in CPR can come and help.  Plus you’ll contact people, plus it makes out the calls to all the hospitals there.  It’s very interesting, talking to the NHS right now.  Hopefully what you can see is that there’s no commonality in any of these businesses other than they’re all trying to break the model of what they’re doing.

Charmaine Eggberry: JollyDeck – an interesting one! Two guys – hands up any of you who have O2 accounts.  Anyone? Anyone on 4G? Anyone moved yet? Anyone aware of the 4G technology? Very good! These are the guys who have done all the training for O2’s staff on 4G.  They’ve trained 9,000 people and they’re a 2-man start-up who wrote a gamification program to educate people and to make it into fun.  So they’ve actually created a game and a character, and questions and answers a bit like a quiz show, that has trained every single person in O2 on how to understand 4G in a way that sticks.  We trialled this in Wayra – it was the most incredible thing.  They trialled it on questions around Wayra and you have a choice as to when you play the game, you don’t have to play it in set periods.  Most of the people in Wayra played the game between 1am and 3am.  Very scary! They also played it for at least an hour a day! Sticky, really really sticky! A 2-man start-up, hopefully soon to grow.  An example of a team from oversees, they’re actually from Slovenia.

Charmaine Eggberry: Ensygnia.  This is the largest fundraising round in the UK currently.  Not in Wayra, not in any other, the largest period in the industry.  This is an example of a tech where you use your mobile phone, you use the camera on it, all you have to do is scan a QR code on any website and it automatically does the entire transaction for you, from 10 minutes down to 10 seconds.  It’s your whole wallet in your phone.  So if you think today you have one of those tap and go credit cards, think of this as tap and go on your phone! Currently valued very north of £5 million if not £10m, and in large discussions with all of the major vendors around.  Completely protected with IP, they’re a very different example of a start-up.  They have 32 people working for them, currently underway in Wayra.

Charmaine Eggberry: And then last but not least, how many of you use Nike Plus, Fitbit, Moves or all those good things? Anyone? Great! Well you need to know about his company, (Narrato).  This company has figured out and created a platform that makes Outlook, your journal that you keep, Twitter, your Fitbit, Moves, Nike Plus and all of these things work together to answer some very important questions like, it can tell you that actually you should sleep for 6 hours and not 8, and actually you should do Outlook in the afternoon and not the morning because that’s when you’re most productive.  It’s a platform that has figured out how to make all of these different applications work together.  Serial entrepreneur, sold his first company to Lycos for many millions, then decided to go off and be a DJ and the ministry of sound because that’s what you do when you’re an entrepreneur, and then decided to become a professional photographer, and then got bored of all that and is now programming this and is on his way to North America to go and retail that.  Quick experiment on them to tell you how sticky this is – on a Friday afternoon we had 1,500 downloads.  We decided to try and experiment to see how powerful social networks really were so we all tweeted out to everyone and said ‘Narrato free for the weekend! Download here!’ Because they’ve started off with the journal app as the first example of what they do.  1,500 applications on the Friday afternoon, 30,000 on Monday morning! 10,000 of them paying customers! The power of innovation, but also the power of social networks.  So again, for all of you who have them, I have my Fitbit too, a company to watch!

Charmaine Eggberry: And so that’s it with regard to innovation.  Lots of other examples I said I’ve got 30 other companies in the stable which we love, and when they all leave in about 4 months’ time I will probably be utterly bereft as you can tell because I do genuinely think I have one of the best jobs in the world, which is to help them grow, watch how they innovate on a daily basis.  This is about innovation in real time.  This isn’t about hot housing; this is about watching them pivot all the time.  It’s about watching all the assumptions about what you have about what makes success happen, completely change.  We have music apps that are focused in North America and get picked up in Japan on a weekend, and suddenly they have to fly to Japan and incorporate themselves there.  Because people pay $28 for music downloads in Japan, and we pay nothing for them here via Spotify But their entire business and where they thought was success was all on one side of the world, and they’ve had to pivot completely.  This happens almost every single day in Wayra, which is why we live by that slogan which is “the rules are not yet written”.  Thank you!

Victoria Sinclair