Silicon Valley drove the first era of the internet. In its modest confines it was the innovation hub which delivered some of the most iconic web brands and tech companies of the 1990’s and 2000’s. Yet this area has become so competitive that in some cases large corporations are purchasing start-ups in order to acquire their lead developer rather than their cutting edge technology. Samsung think they have the answer though, as last Thursday they launched the Samsung Accelerator in Silicon Valley, with the aim of literally hoovering up the best talent in the valley.
Based on Palo Alto’s famous university avenue, the accelerator will focus on software companies as opposed to the hardware companies that it might be assumed would interest Samsung more. As a sign of how serious Samsung are taking this programme, they choose to launch it with senior executive David Eun. Eun is the company’s executive Vice-President, and he will be driving the programme from the senior executive level within Samsung. Having launched the Silicon Valley class of 2013, Eun has indicated that a New York based version is next in line.
All of this start-up innovation will feed into the samsung ‘open innovation centre’, which routes into the company’s main business arms, including mobile and television. This open innovation initiative feeds any acquired organisations into the wider Samsung family, whilst also housing the south-korean company’s venture backed schemes. Whilst the open innovation centre has no specific geograhical locale – its remit is global – the main head quarters is a mere ten minute drive from Stamford University, as well as big research centres for leading tech company’s like Nokia.
It increasingly appears that such schemes could be the future of clue chip company’s innovation. The bloated organisational structures of the larger tech companies can stifle in bound innovation, as the organisations lose the nimble, lean structures that their founders instigated. Such structures do little to entice the top talent, many of whom are attracted by the ‘start up culture’ that has defined the Silicon Valley area for generations
Therefore, the increasingly attractive accelerator market makes sense for company’s like Samsung. The premise is simple: Young start up companies apply to join the accelerator. If accepted, the accelerator provides mentor ship, office space, access to resources and general guidance. In return, the accelerator takes equity in the new companies, usually circa ten percent. The company is then given the launch pad it needs to push on, but is given a time limited timeframe to start succeeding – which is usually as short as 90 days.
With a stake in the companies, Samsung will be able to influence their future and tap into the best elements. As exciting new software emerges, Samsung will get first (or at least early) access. They therefore get access not only to the best talent, but also that talents best early creations.
No doubt this model will be looked at by other big tech companies moving forward, as done right, it can work well for all involved.