Investing €20,000 into two start-ups, unconditionally

Start-ups are hindered in their development by a lack of access to capital and expertise, while large companies face the challenges of established processes and little space for error owing to the expectations of the customer base. In partnership, start-ups and large companies can benefit from each other’s strengths. We are seeking to invest in at least two start-ups.


Eesti Telekom is willing to contribute to start-ups. Are start-ups ready to contribute to Eesti Telekom?

A reliable brand is both a strength and a weakness. On the one hand, a strong brand is essential to profitable business on a competitive market. On the other hand, strong brands such as EMT and Elion cannot afford failures of new trials, as customer expectations are high and disappointment would lead them to use the services of competitors.  

Furthermore, innovation in large companies on small markets is limited by the market size, as product development costs might not be recovered. This is why Eesti Telekom cannot focus on the development of niche products, as our domestic market is limited to Estonia, which does not allow niche values to be converted into money. 

Start-ups, on the other hand, should specifically focus on the development of globally expandable products. Start-ups can afford to fail, as the best value for the customer is achieved through trial and error.  

To create mutual benefit, Eesti Telekom launched the VUNK accelerator, through which we will invest in start-ups. We regard this as a way to strengthen others, while also benefitting ourselves. As we focus on serving customers in Estonia, we are seeking a partnership to boost global businesses whose value would be returned to our customers in Estonia. 


We will grant €10,000 to two start-ups, unconditionally 

When planning the partnership model, we debated whether we want a holding in return for the seed capital. The simple consideration of “perhaps they will succeed?” spoke in favour of having a holding, while the concern that start-ups might thus wither in our corporation without creating any value for either party spoke against it.  

A decision was ultimately reached to grant the seed capital and a mentoring programme without asking anything tangible in return. We will not require a holding in the start-ups that receive our grant of €10,000 (per start-up) and a one-month mentoring programme. 

What is our benefit, then? Through our contribution, we intend to learn from the bright and innovative leaders of start-ups and to introduce the start-up mentality at Eesti Telekom. Mentoring will provide guidance to the start-up leaders and, with the speed and ambition of the start-ups, we also want to bring added value to our common customers.  

A monetary grant with a mentoring programme will be granted to two teams, while partnership with others is not precluded. After the accelerator programme, which will identify the actual business model and ambitions of the start-up, we can jointly discuss whether we will enter the market and what partnership model we will use. The choice can only be based on the common interests and valued contributions of both parties.  

If the start-up is independent and Eesti Telekom will not play a considerable role in the success of the new business, it can go on and conquer the world completely independently. Eesti Telekom will not require the repayment of the seed capital. As we cooperate with the Estonian business angels network and other incubators and accelerators, we can refer start-ups to our partners for further development and the involvement of investors.

 

Through the thorns to the stars 

The main programme of our VUNK accelerator for start-ups will be launched at the end of August, while teams contact us also outside the incubator. A good example is the Autlo automatic parking solution, for which the leader of the start-up Kristjan Konks paid a number of visits to Telekom to pitch his idea, only to be rejected due to a lack of a feasible technical solution and business model. His faith in the success of his idea and persistence in bringing it to the market led him to repeatedly test, develop and reshape his idea. This is how he reached a solution that is now being offered to customers on a limited scale and improved based on their feedback.  

Such a mentality is essential to the success of a start-up, especially in the early stages, when the scale and potential of the concept is still unknown. Learning from mistakes, constant changes and boundless faith in one’s idea are the greatest values when launching a business. This is also noted by investors and potential partners, and is, in fact, often the basis for decisions. Competence can be involved and developed, but the passion has to be there.


The Vunk Garage48 Telecom development weekend will be held on 28-30 August, followed by the accelerator programme. We are expecting 120 participants. Find out more and register at vunk.eu.


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