Robi Axiata Limited, the second largest telecom operator in the country, has quietly launched an internal employee only incubator program, according to three people aware of the matter. Under the new program, the company has already called for ideas from interested employees.
Selected ideas will be given an initial seed investment while the designated employee (s) will remain on the payroll of the company. The ideas that will show significant growth prospect and progress during the seed stage will be given further opportunities including funding, market access and more.
We could not find about the equity distribution, goals and other details of the program, we would update this story as soon as we find out more.
Why this matters: Corporate incubator program is not a new thing. However, this is a noteworthy move coming from Robi, the company has experience of getting involved with BDtickets.com, more so because Telecom Operators in the country are already in a war mood in order to position and prepare themselves for the upcoming digital service goldrush. All three leading operators are investing in a myriad of digital services starting from music and video streaming to ticketing, payment, ecommerce and more. Although Grameenphone, the leader in the sector, has some solid services in place, other two players are not far behind. All three operators aim to become the digital service partner of their users.
Strategically, an incubator is the best way to launch as many services as you want to because as big businesses, GP or Robi or Banglalink, can only do so much and launch and manage so many services given that they all have existing businesses to manage. An incubator or accelerator is a better strategy because you don’t need to allocate any resource to manage the new business except for the initial investment. If the new entity does well, you are a gainer, if it does not make it, your only loss is the seed money. From an overall strategy and execution point of view, it also makes sense to pursue it separately, more on that later.
Grameenphone first launched an independent accelerator program in the country. The company’s accelerator program, GP accelerator, has invested in and supported 16 startups so far. Although, it looks entirely separate an initiative from GP's core business but if you look closely it is the central and most effective piece, if succeed, in the entire digital strategy of Grameenphone. That said, to enjoy the benefits of the program, it has to produce some really successful companies.
Banglalink has its own incubator program in partnership with the ICT Ministry. Although the program looks more like a competition program than an incubation, it does offer mentorship and office space to selected startups. The operator is now rethinking the program, according to several sources.
The significance of the Robi’s said employee incubator program is that it is entirely designed within Robi, like most other in-house corporate incubators, and it is only for Robi employees which set it on a completely different trajectory than the GP accelerator. The advantage of such a program is that Robi would have better control over the ideas and companies from the program and can better align incubatees with its overall strategy.
On the other hand, its strengths become its Achille's heel. Since it is an employee only program, it will see far less diversity in ideas and people resulting in an insider bubble. The most significant challenge, however, will be the one Clayton Christensen describes in his seminal book Innovator’s Dilemma that Robi may soon lose the interest in the program and shut it down because it will not bring any result in the short run whereas Robi has a winning business as a telecom operator, logically it should invest in areas where it is making money and stop investing in places where it is losing. Since it controls the program and thus expects results early, incubator may soon become a victim of a good strategy.
Historically, corporate incubators often face this fate. This also applies to GP accelerator. However, since GP accelerator startups are independent companies, their fate is much more secure and are of independent of the GP accelerator's fate which might not be the case for Robi’s said incubator participants.
That said, if Robi has the patience for trial and errors, can truly think long term, and if it can design the program in a proper manner then this can be a game changer for the company in the long run.