When the world’s largest mobile phone maker decided to open an office in the heart of Silicon Valley, Samsung did not set out to hire mechanical engineers or product designers. The company’s Open Innovation Center will focus on software, and is actively recruiting developers with ideas.
“You bring the product vision; we’ll bring the rest,” says the website for Samsung’s Accelerator.
“The rest,” includes a salary and access to Samsung employees and technologies that could help startups get their ideas off the ground. In addition to its startup accelerator, Samsung’s Open Innovation Center will include a venture capital arm, a mergers and acquisitions group, and a partnership group that will work with promising startups and companies that want to partner with Samsung.
By deciding to invest in promising software startups, Samsung is following the lead of other mobile device and chip makers who recognize that even the fastest, most powerful hardware is only as valuable as the software on board. Chipmaker Qualcomm (QCOM) has been a leader in software incubation; its Qualcomm Labs subsidiary already has two success stories under its belt. Qualcomm Life connects and manages wireless medical devices, and Skifta is an app for streaming photos from smartphones to TVs and PCs over Wi-Fi.
“The businesses should all ultimately be stand-alone businesses or product lines,” said Liz Gasser, vice president of business operations for Qualcomm Labs. Gasser said that in order to receive continued funding and support, each startup needs to meet one of two criteria: “Is it a scale opportunity or is it highly strategic to the company?” Qualcomm Labs is currently incubating Gimbal, a context aware platform for iOS and Android.
Nokia is also working to help software startups, although the struggling smartphone maker is not sharing intellectual property or taking an equity stake in the startups it funds. The Nokia Bridge program offers low-interest loans to Nokia employees who have lost their jobs as the company restructures. Mobile Brain Bank, a service that lets businesses post mobile app proposals for developers to bid on, was initially funded through Nokia Bridge.
Unlike Nokia, Samsung clearly plans to maintain a strong connection to the companies it incubates. Software that is not a fit with Samsung’s mobile devices may still produce a financial return for the company. Samsung’s chief strategy officer Young Sohn, who first announced the innovation center last year, has a background in venture capital. He noted that Samsung is locating its first innovation center on Silicon Valley’s Sand Hill Road, home to many prominent vc firms. Sohn said that Samsung will open several innovation centers, but probably not more than five, noting that there are only a handful of cities in the world with the right combination of innovative technical and business thinkers.
Follow me on Twitter.
