A mobile services provider based in the Middle East observed that the market was ripe for home-grown start-ups.
A Middle Eastern mobile operator wanted to incorporate start-up collaboration into its digital transformation.
A rapid increase in broadband availability and a jump in the number of smartphone users inspired a generation of highly educated and tech-savvy youth in the country. In the span of just a few years, local entrepreneurs launched an online food delivery service, an Uber-like car riding and sharing service, a project management platform, café management toolsets, an online marketplace for handcrafted goods, stock photo services, and various consumer applications and services. Moreover, many had their eyes on creating local versions of Amazon or Facebook, both of which had high adoption but no direct marketing presence in the country.
For a mobile operator with a high profile and a strong financial and technological base, the expanding digital ecosystem promised new and varied customer engagement opportunities and revenue streams. But it would require a significant change in the company’s culture, operating model, organizational, and financial structure. It also required a strategy for Innovation and Corporate Venturing, something the firm did not take seriously before.
The main issue facing the operator is a common one internationally: it was focused primarily on its core business, and managing its “cash cow” core business required a hierarchical, command-and-control structure that is not ripe for playing in a dynamic, fast-changing digital ecosystem. Keeping up with the soaring demand for SIM cards and building out the network to ensure coverage took priority over direct or indirect engagement with the emerging digital ecosystem.
Simply put, the operator had not put in place the organizational structure and tools needed to be more than just the “dumb pipe” medium through which others innovated and created the digital economy. Moreover, the operator lacked the financial vehicles necessary to drive internal and open innovation and collaboration with the local digital startups and global OTT players.
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