“Corporate innovation is not a big thing in Asia,” says Mike Chen, founder and CEO of SWELL.
SWELL is a startup that helps other startups partner with with big private and public enterprises that need the agility and innovation of startups to help solve corporate problems. First set in motion about half a year ago, SWELL has analyzed over 70,000 startups and is now heading full-force into Asia.
“There’s a fear of startups to engage with large companies,” says Chen, describing the difficulties of such a business in Asia. Startups in the region fear they will be copied or get caught in a bad deal. Furthermore, investors tend to be risk averse, don’t throw money at core technologies, and avoid early acquisitions. Chinaccelerator‘s managing director Todd Embley, who partnered with SWELL at this week’s Global Mobile Internet Conference in Beijing to host a pitch competition, says, “We believe corporations can be a great way for us to accelerate and internationalize our portfolio growth. Currently startups are afraid to work with big companies and have a very difficult time integrating with them; large companies need to improve their in-house innovative processes which can present a tremendous opportunity if we can get it right.”
He says other players have the same goal as SWELL – advertising-focused agencies, out-of-touch consultants, matchmakers who charge both parties a premium, and corporate-backed accelerators – but they’re all doing it wrong.
The 80/20 rule
SWELL vets and curates every partnership opportunity on its fast-growing list. Corporations pay SWELL a subscription or can sponsor a pitch contest, but startups that join never pay a penny. The company aims to protect them from shady deals.
“When we talk to a startup, we already have a deal waiting for them,” Chen says. “This is how future businesses are going to conduct business.”
Partnering with a corporation doesn’t necessarily mean a startup gets acquired, explains Chen. For example, it connected Chinese startup Thoughtful Media with health and well-being giant Unilever to create a custom digital marketing pilot campaign, for which it received US$100,000.
Chen says SWELL is a “bottom-up” company that finds startups anywhere from online job boards to in-person meetups. The company has an 80-to-20 rule when vetting startups, eliminating four out of every five to make sure it only recommends the best to its corporate clients. It also emphasizes startups with a strong future outlook, says Chen. “A startup that’s relevant today is probably not going to be relevant in a few months.”
SWELL currently focuses on five verticals: human-to-human, human-to-machine, machine-to-machine, artificial intelligence, and commerce. It analyzes about 100 startups per day. Corporate partners are mostly big global brands, everything from Absolut to Mercedes-Benz to Sony.
The San Francisco-based startup is traveling to different regions around the globe, spending three months in each to build its network. Chen and his team plan to make appearances at major events in Asia in the coming weeks, and their schedule can be found on SWELL’s website.Editing by Steven Millward