Day 5: KAREN MIRKIN from WAYRA ARGENTINA: Inter-business relationships in South America

Description: In discussing the role of Wayra in the global operations of their Spain-based parent company, Telefonica (one of the largest phone, internet and TV providers in the world). The talk helped to illustrate both the way businesses interact with each other differently in other parts of the globe, but how power and value chains in business is leveraged. 

Checking the Trip Itinerary No Doubt

Background: Wayra is legally separate from Telefonica, but acts as a business and idea procurement division of the company. Wayra operates in 10 primarily Spanish-speaking countries where Telefonica also operates. Their primary function of the company is to invest in "tech industry disruptors" and to facilitate strategic partnership with Telefonica.

Wayra Countries of Operation

Business Operations: As is commonplace in the U.S., giant Telefonica attempts to keep agile in a changing market by relying on young, limber and disruptive startups. In the States, however, a tech giant like Google or Amazon tend keep flexible and responsive and flexible by buying out tech startups poised to disrupt the industry. In the case of Telefonica and Wayra, the stress seems to be on investment and forming sustainable and strategic partnerships for both companies. Telefonica is able to develop partnerships with suppliers and gain exclusive rights with them while the startups are able to ride the coattails of Telefonica's huge demand into becoming large companies themselves.

Key Criticisms: In the case of Telefonica we also see a huge power and value imbalance like we see with US companies like Google. Wayra gains revenue from its capital investment in startups, which fail approximately 50% of the time. Telefonica is protected from risk but stands to gain substantially from the successful startups Wayra funds. Similarly the startups have limited autonomy. The loans they receive from Wayra are not for specific purposes, but Wayra reserves the right to pull funding from startups that want to change direction. Bottom line is that Telefonica holds most of the power in the transactions with Wayra somewhat caught in the middle. That being said, it is a good strategy on Telefonica's part to use Wayra as a buffer and filter, and to partner with tech companies instead of purchasing them. This reflects unique properties of the business environment of Argentina.