21st & 22nd of May
Maribor, Slovenia
Friday, April 28, 2017

Matthias Hilpert, MH2 Capital: Transparent communication is the key to consumers' trust in the age of IOT and Big Data

In the near future, the most successful telecommunication companies will have a relentless focus on the quality of their network, providing access to products and great customer service to their clients. With even more bandwidth hungry applications such as AR and VR on the horizon, this will be the battleground for telecoms in the future, says Matthias Hilpert, the CEO of the private fund MH2 Capital, an investor and advisor with extensive experience in the field of telecommunications. What does he see as key to gaining and keeping consumers' trust in the era of IoT and Big Data? A proactive and transparent communication strategy.

Mr. Hilpert, you are an investor, advisor and have more than 16 years of experience in telecommunications, having held executive positions in various large and successful telecommunications companies globally. In your opinion, what technology trend will bring the largest innovation in telecommunications in the following years and what should telecom companies do to stay on top of their game?

Past experience, including my own rather painful ones, have shown that telecoms have tried very hard and spent lots of money on the application layer, both in the network as well as on smartphones. However, they have largely been unsuccessful. The most successful telcos will have a relentless focus on the quality of their network, providing access products and great customer service to their clients. With even more bandwidth hungry applications such as AR and VR on the horizon, this will be the battleground for telcos in the future.

Do you believe companies are taking enough advantage of the opportunities that are arising from the innovations in the field of communications in order to improve their performance?

Most larger companies still have significant opportunities to utilize new ways of communicating at work. Too many Emails in Outlook, cumbersome shared drives and user-unfriendly Oracle ERP systems are predominant. I am amazed every day at how my portfolio companies work together remotely on Google files in the cloud, communicate openly with Slack, execute with Trello or drive their sales processes on a very granular level with Salesforce or Base. The result of these new ways of communicating and working together is building a much more agile and involved culture within the company.

Telecom companies have been among the earliest to jump on the corporate venture capital bandwagon and seize the opportunities that arise from investing and joining forces with startups. Is this enough for them to successfully respond to the challenges brought by new technologies?

Successful Corporate VC is hard, it needs great people attracting great businesses as well as long-term budgets and management dedication. This is rare. Most efforts unfortunately result only in PR, but with limited value-add to the operational business or strategic evolution of the corporate. The real opportunity is in acquiring a start-up business that adds real value to the corporate, and intelligently positioning that business alongside the existing operation, creating synergies while at the same time preserving the conditions for the start-up to flourish further. Europe still has much to learn here from the US, but the first European companies are already benefiting from their acquisitions.

How are Big Data and IoT changing the telecommunications industry? Do you have any security concerns regarding this and how to overcome them?

While both domains provide a great opportunity, it is only a few telco players that have been able to build a business around them. As with all new domains, understanding the risks is of importance, but in my view the primary issue the industry is concerned with right now is finding the right propositions and business models first.

Your career has required that you have a very deep understanding of the customers. What will it take for the companies to gain and keep their customers’ trust in the era of Big Data? 

Customers, in particular the B2B segment, understand that there is no such thing as 100% security. Companies need to demonstrate that they do the utmost possible to prevent any breach, specifically when they are handling sensitive client data. In case that there is a breach, key is to react fast and be very transparent along the process, both with regards to the impact as well as the company´s own shortcomings and how they will be fixed. A proactive and transparent communication strategy will be capable of building trust instead of losing it.

One of your fields of interest as an investor is also real estate. How will IoT and being able to access everything with our phones change the way we live and make decisions about our homes in the following years? 

There has indeed been a lot of discussion around the automated home and what is possible. My sense is that most of the scenarios are, however reasonable, niche only. I think the first area that will be of mainstream interest is to give transparency, for example which appliance is consuming the most energy or water. This will then drive manual or automated optimization of consumption. A third area will be the increase in households running on their own solar energy and minimizing their reliance on the network. It is still some years and a few technological breakthroughs away, but I’m sure this will be good fun.

As an investor and advisor yourself, what advantages (for corporations and startups) do you see in startups joining forces with corporate investors? 

Corporates have a big role to play in the start-up eco system. My experience shows that acquisitions are the best way to provide immediate value to corporations. This should also be the long-term goal of any corporate investment strategy.
Corporations have many advantages, such as access to growth, innovation, new customers and talents of start-ups. Start-ups benefit from access to capital, distribution or operational capabilities. However, there are also potential downsides that need to be considered, such as lost opportunities with competitors of the corporate, potential process and disclosure requirements etc.

You have an extensive portfolio of private investments; one of your investments is also the Slovene startup Eurosender. How does a startup convince you to make an investment?

I invest in seed stage start-ups across Europe out of Berlin. Mainly marketplaces and subscription business models with early revenue potential and a strong technology element. At such an early stage, it’s mostly about the team, the traction they have been able to build and the market. Product and Strategies can and will evolve over time. I was rather impressed with Jan and Tim as founders of Eurosender as they have built a strong business in little time with small amounts of investment and a good nose for commercial opportunity. This combined with the trillion USD global market for logistics made the decision. There is a great road ahead of us and I’m looking forward to participating in the journey.

Matthias Hilpert is currently the CEO of a private fund MH2 Capital and has 16 years experience in telecommunications, consumer electronics and media industries, both in developed and emerging countries and 11 years experience investing in public markets, real estate and private direct investments.
He is a high profile expert for sales management including online and telesales operation, customer and product marketing and is recognised in management and leadership excellence. He has worked in excecutive positions in various large and successful telecommunications and consumer electronics companies across Europe and tried his startup chops as the co-founder of Avalas.com, the first independent German WAP portal. 

The interview about the future and the opportunities brought by the Internet Of Things was made possible by Telekom Slovenije, this year's PODIM Challenge BlueChip partner.

Matthias Hilpert will be a keynote speaker at this year's PODIM conference