How Can Startups Partner With Samsung on IoT?

TL;DR

Startups can work with Samsung without surrendering their independence because its investment terms permit partnerships and acquisitions involving other companies. Samsung’s Global Innovation Center combines early-stage capital with corporate navigation, distribution, research and development, and manufacturing support, while acting as a bridge between startups and internal Samsung teams in areas such as IoT, security, big data, and digital health.

Transcript

Richard, thank you very much for the honor. It's great to meet you all. Um, given that we are a more intimate group here, um, I am still going to use the slides because I want everybody's eyes away from their laptop. I used to sit in these seats not too long ago, so I know exactly how it goes. So my slides are literally just a way to get people to ... Read More

Key Insights

• Samsung Electronics is a two-hundred-billion-dollar technology company within a broader conglomerate that also has operated in industries such as shipbuilding, construction, and military equipment. The seminar states that Samsung has about eighty thousand engineers and leading global positions in phones, televisions, and refrigerators.
• The Global Innovation Center is Samsung’s startup-facing organization headquartered in Mountain View. Its main functions include early-stage investments, partnership support, acquisitions, and accelerators, providing several routes through which young companies can engage with Samsung’s technology organization.
• Samsung’s early-stage investment team focuses on seed, Series A, and Series B financing. Larger investments are handled by a sister organization, Samsung Ventures, while the Global Innovation Center’s investors concentrate on younger companies and potential strategic cooperation.
• Corporate navigation is a central service offered to startups working with Samsung. The partnership team helps founders identify relevant people, manage numerous internal relationships, and structure mutually beneficial collaboration inside a large organization that could otherwise be difficult for a small company to navigate.
• SmartThings is described as an open smart-home platform that connects devices from Samsung and other manufacturers through a hub. The underlying proposition is that greater communication among household devices can create more intelligence and deliver richer value within a connected home.
• Samsung’s investment approach is intended to preserve startup options. Portfolio companies may partner with anyone and may sell themselves to any buyer, while term sheets avoid poison pills. Samsung asks companies to work with it in addition to, rather than instead of, other partners.
• UniKey is an example of an option-enhancing investment relationship. The company was working primarily with Apple and lacked an Android partnership when Samsung invested, and the investment was intended to enable additional cooperation with Android and Samsung without invalidating UniKey’s existing relationship.
• The corporate investor’s role is to mediate between startup needs and Samsung’s internal objectives. Amit Garg describes acting as a filter, steward, product manager, and business-development resource, identifying the overlap between both sides and addressing demands that might harm either participant.

Questions & Answers

Q: How can startups partner with Samsung without losing independence?

Startups can preserve independence through structural protections and active mediation. Samsung’s described approach allows portfolio companies to partner with anyone and be acquired by any buyer, while avoiding poison pills in investment terms. The Global Innovation Center asks startups to work with Samsung as an additional partner, then helps both parties focus on the overlap between their respective goals.

Q: What does Samsung’s Global Innovation Center do?

Samsung’s Global Innovation Center acts as an interface between Samsung and startups. Its principal functions include early-stage investing, partnership assistance, acquisitions, and accelerator programs. Based in Mountain View, the organization brings together people with experience at technology companies, venture capital firms, and startups to help young businesses connect with relevant Samsung teams and develop mutually beneficial commercial relationships.

Q: What stages of startup funding does Samsung target?

The Global Innovation Center’s investment team targets early-stage companies at the seed, Series A, and Series B stages. When an opportunity requires a larger investment, another Samsung team takes responsibility. Amit Garg identifies Samsung Ventures as a sister organization that handles those larger transactions, distinguishing its role from the early-stage focus of his own investment group.

Q: Why does Samsung offer startups more than investment capital?

Capital is only one part of Samsung’s proposed value to a startup because funding can be obtained from many investors. Samsung can also provide access to distribution, research and development, manufacturing, and other corporate resources. Amit Garg argues that these capabilities can change a company’s growth trajectory more substantially than funding alone, especially when internal partnerships are carefully coordinated.

Q: How does Samsung help startups navigate a large corporation?

Samsung’s startup-facing team helps founders determine whom to contact, interpret the objectives of internal groups, and manage the many relationships created by working with a large company. The investor can serve as a filter between both sides, explain each participant’s position, identify shared interests, and intervene when corporate or startup demands could become detrimental to the partnership.

Q: How does SmartThings support Samsung’s smart-home strategy?

SmartThings is presented as an open hub that can integrate devices made by Samsung as well as devices from many other companies. This interoperability supports a connected-home model in which more devices communicate with one another. According to the seminar, increasing those connections can make more intelligence available and produce richer value for people using the smart-home environment.

Q: What does the UniKey investment reveal about Samsung’s strategy?

The UniKey example demonstrates Samsung’s stated preference for expanding a startup’s options instead of restricting them. UniKey was working primarily with Apple and did not have an Android partnership when Samsung invested. Samsung accepted that existing position and used its investment to enable UniKey to work additionally with Android and Samsung, rather than demanding an exclusive relationship.

Q: Which technology areas interest Samsung’s investment team?

Samsung’s investment group focuses on areas that include big data, the Internet of Things, security, and digital health. Amit Garg specifically identifies IoT and digital health as two areas within his own responsibilities. These priorities align with Samsung’s broader effort to place more intelligence and services on top of its devices, appliances, software, and connected-home platforms.

Summary & Key Takeaways

• Samsung’s Global Innovation Center serves as the company’s interface with startups. Its teams cover early-stage investments, partnerships, acquisitions, and accelerators. Staff recruited from technology companies and venture capital backgrounds help young businesses navigate Samsung, identify useful internal contacts, and pursue areas of mutual benefit without becoming overwhelmed by the corporation’s scale.

• Samsung wants to add intelligence and services to its large portfolio of electronics and appliances. Its software and services work includes distribution, content, applications, advertising, smart homes, IoT, security, big data, and digital health. SmartThings illustrates the strategy by providing an open hub through which Samsung and third-party devices can connect.

• Samsung presents corporate investment as more than a source of capital. Startups may gain access to distribution, research and development, manufacturing, and partnership opportunities while retaining freedom to work with or be acquired by others. Investment personnel mediate between startup and corporate expectations, concentrating cooperation on areas where both sides’ interests overlap.