Bridging innovation between Silicon Valley and Switzerland
13.10.2014
ScanTrust, eSMART, Geosatis, Hoosh and CashSentinel are the winners of the second Swisscom StartUp Challenge. The five startups travel this week to California's Silicon Valley, where they will attend a Swisscom-tailored mentoring programme. Silicon Valley is the undisputed centre of the digital economy. What goals is Swisscom pursuing here? Ursula Oesterle, Head of Swisscom Outpost, and Stefan Kuentz, Investment Director of Swisscom Ventures, explain.
 Ursula Oesterle, Head of Swisscom Outpost
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 Stefan Kuentz, Investment Director of Swisscom Ventures
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Ursula, what is Swisscom Outpost actually doing in the Valley?
Ursula Oesterle: Swisscom has been in the Valley since 1998– back then with the goal of understanding the Internet wave in terms of the telephony business, as well as detecting trends and technologies. And then the Internet bubble burst and the question arose: Should we stay in the Valley or leave? And Swisscom was one of the few carriers that stayed. The times changed again, and around 2003 the targeted exchange between Swisscom’s business units and the Valley became even closer. It became important to understand such topics as marketing and business models “made in the USA”. We’re now a mixed team, consisting of employees from departments of Swisscom Switzerland who rotate every three or four years. In the meantime, Swisscom Outpost is well known in Switzerland, too, because we also support other Swiss companies locally. We receive business delegations on a regular basis and organise road shows for Swiss companies in the Valley.
Stefan, what is the role of Swisscom Ventures in the Valley?
Stefan Kuentz: Fifty percent of the investment activity of Swisscom Ventures takes place in Switzerland and the remaining fifty percent internationally, primarily in Silicon Valley. After all, that’s where the greatest disruptions occur that have an impact on our core business. For example, new infrastructure software, the optimisation of bandwidth services – or, most recently, cloud technologies. So we also try to make our investments directly in line with cooperation. Swisscom Ventures has been active in Silicon Valley for seven years, and during this time we’ve been able to develop a sound network with California financial investors, such as Sequoia and Greylock. Of course, we draw on our experiences and network in order to support our Swiss portfolio companies as well.
Ursula, how does Swisscom cooperate with start-ups?
Ursula: We have four ways in which we cooperate with start-ups: connect, co-create, incubate and invest. Connect means that the start-up is already mature and can be linked to Swisscom without any significant time and effort. Co-create means that the start-up has brought its product to up to 90% completion, and we develop the end phase together so that the product solution can be applicable to Swisscom as well. For us, incubate means a collaborative development with start-ups on a larger scale. Invest is a strategic partnership or a participation by Swisscom Ventures, or, depending on the situation, both of these.
The Valley is still clearly the hotspot for start-ups – why is that?
Stefan: The Valley is simply a functioning marketplace that brings together the best talents, capital, large corporations and universities. And at the centre of that is the entire topic surrounding the Internet, which moves from one wave to the next. Innovation occurs in the Valley at enormous speed because everything required to grow start-ups is finely tuned. This speed also applies to how financing rounds are handled. And that makes it even more attractive for us to invest there.
Ursula: The Valley is the place where disruptive innovation is developed. Because we have here a large mass of innovation-addicted entrepreneurs and investors prepared to take risks, who are prepared to invest in a multitude of game-changing ideas that in many cases are premature. Silicon Valley develops new markets and products, whereas London and Berlin are more likely to introduce new products in existing markets. The Valley lives off its own success – every IPO and major exit generates wealth, and more new investors and entrepreneurs who, in turn, generate new ideas and go in search of new success. This evolution dates back to the 1970s, when the chip industry created a large number of new companies and the first venture capitalists.
What opportunities do Swiss entrepreneurs have in the Valley?
Stefan: A Swiss start-up should carefully consider an expansion in the Valley. The Valley is a very competitive environment. But generally speaking, I think it makes sense for every entrepreneur who wants to enter a global market to check things out here locally and find out what the drivers of the ecosystem are for his or her business. But that doesn’t mean that one has to open an office here right away. With the Swisscom Startup Challenge we’re trying to do exactly that: to offer specific insight into the ecosystem in Silicon Valley. And otherwise, I truly believe that only Swiss entrepreneurs who are really mature, i.e. who have developed a product that permits something unique with major global growth potential, controlled via the U.S. market, should go to the Valley.
What are the opportunities that the Valley offers to Swiss start-ups looking to gain a foothold in the Valley?
Ursula: Silicon Valley offers various “soft-landing zones”. Different incubators offer a workplace and a network. The KTI provides support with the Swiss “Landing zone SwissNex“. With our office in Menlo Park, we are naturally happy to help out with temporary workplaces, to a limited extent, of course – at the moment we’re working here for one week with the five winners of the 2014 Swisscom StartUp Challenge.
About the Swisscom StartUp Challenge
As part of the Early Stage Fund, Swisscom and venturelab are looking every year for five high-flyers from the ICT, media and cleantech sectors to attend a mentoring programme in Silicon Valley, where an investment by and partnership with Swisscom will be evaluated. The young entrepreneurs will have a unique opportunity to have their project thoroughly scrutinised by qualified industry experts and venture capitalists. They will also gain access to know-how and benefit from the network of the Swisscom’s outpost in Silicon Valley.
Ursula Oesterle: Swisscom has been in the Valley since 1998– back then with the goal of understanding the Internet wave in terms of the telephony business, as well as detecting trends and technologies. And then the Internet bubble burst and the question arose: Should we stay in the Valley or leave? And Swisscom was one of the few carriers that stayed. The times changed again, and around 2003 the targeted exchange between Swisscom’s business units and the Valley became even closer. It became important to understand such topics as marketing and business models “made in the USA”. We’re now a mixed team, consisting of employees from departments of Swisscom Switzerland who rotate every three or four years. In the meantime, Swisscom Outpost is well known in Switzerland, too, because we also support other Swiss companies locally. We receive business delegations on a regular basis and organise road shows for Swiss companies in the Valley.
Stefan, what is the role of Swisscom Ventures in the Valley?
Stefan Kuentz: Fifty percent of the investment activity of Swisscom Ventures takes place in Switzerland and the remaining fifty percent internationally, primarily in Silicon Valley. After all, that’s where the greatest disruptions occur that have an impact on our core business. For example, new infrastructure software, the optimisation of bandwidth services – or, most recently, cloud technologies. So we also try to make our investments directly in line with cooperation. Swisscom Ventures has been active in Silicon Valley for seven years, and during this time we’ve been able to develop a sound network with California financial investors, such as Sequoia and Greylock. Of course, we draw on our experiences and network in order to support our Swiss portfolio companies as well.
Ursula, how does Swisscom cooperate with start-ups?
Ursula: We have four ways in which we cooperate with start-ups: connect, co-create, incubate and invest. Connect means that the start-up is already mature and can be linked to Swisscom without any significant time and effort. Co-create means that the start-up has brought its product to up to 90% completion, and we develop the end phase together so that the product solution can be applicable to Swisscom as well. For us, incubate means a collaborative development with start-ups on a larger scale. Invest is a strategic partnership or a participation by Swisscom Ventures, or, depending on the situation, both of these.
The Valley is still clearly the hotspot for start-ups – why is that?
Stefan: The Valley is simply a functioning marketplace that brings together the best talents, capital, large corporations and universities. And at the centre of that is the entire topic surrounding the Internet, which moves from one wave to the next. Innovation occurs in the Valley at enormous speed because everything required to grow start-ups is finely tuned. This speed also applies to how financing rounds are handled. And that makes it even more attractive for us to invest there.
Ursula: The Valley is the place where disruptive innovation is developed. Because we have here a large mass of innovation-addicted entrepreneurs and investors prepared to take risks, who are prepared to invest in a multitude of game-changing ideas that in many cases are premature. Silicon Valley develops new markets and products, whereas London and Berlin are more likely to introduce new products in existing markets. The Valley lives off its own success – every IPO and major exit generates wealth, and more new investors and entrepreneurs who, in turn, generate new ideas and go in search of new success. This evolution dates back to the 1970s, when the chip industry created a large number of new companies and the first venture capitalists.
What opportunities do Swiss entrepreneurs have in the Valley?
Stefan: A Swiss start-up should carefully consider an expansion in the Valley. The Valley is a very competitive environment. But generally speaking, I think it makes sense for every entrepreneur who wants to enter a global market to check things out here locally and find out what the drivers of the ecosystem are for his or her business. But that doesn’t mean that one has to open an office here right away. With the Swisscom Startup Challenge we’re trying to do exactly that: to offer specific insight into the ecosystem in Silicon Valley. And otherwise, I truly believe that only Swiss entrepreneurs who are really mature, i.e. who have developed a product that permits something unique with major global growth potential, controlled via the U.S. market, should go to the Valley.
What are the opportunities that the Valley offers to Swiss start-ups looking to gain a foothold in the Valley?
Ursula: Silicon Valley offers various “soft-landing zones”. Different incubators offer a workplace and a network. The KTI provides support with the Swiss “Landing zone SwissNex“. With our office in Menlo Park, we are naturally happy to help out with temporary workplaces, to a limited extent, of course – at the moment we’re working here for one week with the five winners of the 2014 Swisscom StartUp Challenge.
About the Swisscom StartUp Challenge
As part of the Early Stage Fund, Swisscom and venturelab are looking every year for five high-flyers from the ICT, media and cleantech sectors to attend a mentoring programme in Silicon Valley, where an investment by and partnership with Swisscom will be evaluated. The young entrepreneurs will have a unique opportunity to have their project thoroughly scrutinised by qualified industry experts and venture capitalists. They will also gain access to know-how and benefit from the network of the Swisscom’s outpost in Silicon Valley.