We analyze today the Swire Properties’ open innovation project in Hong Kong: Blueprint, a tech-focused co-working space combined with a B2B startups accelerator and a multipurpose events venue.
A project which makes a lot of sense for one of the largest property empire in Asia, owning several business office hubs such as the famous Taikoo Place in Hong Kong.
One year after Blueprint was launched, let’s see how it has helped Swire Properties to grow.
The objectives for Swire Properties are multiple:
- Attract customers: by supporting startups with their accelerator, these can grow faster and rent more office space.
- Benefit from the technologies developed by the startups: some Swire companies, either in their conglomerate or the ones renting offices, could adopt the technologies built by Blueprint startups, bringing innovative concepts back into the company.
- Expand into future market: Swire Properties is adapting to the emerging trend of co-working spaces, especially needed in “Fast cities” like Hong Kong which attracts entrepreneurs looking for affordable and flexible space. In Hong Kong itself, the number of co-working spaces went from a handful in 2012 to a dozen today. Blueprint serves as a testbed for more co-working space in the future.
It obviously makes sense for a property company to expand into the surging market of co-working spaces which is reshaping the traditional concept of work and workplace.
The new generations, Millenials born between 1980s and 1990s for instance, are now entering the workforce, but what they want is significantly different from their parents. A recent study shows that only 7% of this generation is willing to work for a Fortune 500 company.
The co-working space is also used as an experiment ground to see what interactions the “companies of the future” have with office spaces.
It’s also source of potential innovation for the different divisions of the Swire Group.
Creating an accelerator for B2B startups is a costly, but efficient way to attract the newly-formed companies who might grow big enough to rent their spaces in the future. It allows Swire to stay at the heart of the innovation. The startups are chosen from over 150 applications. Swore Properties wants it to be “an accelerator with no strings attached”, so it is not taking equity in the startups it accelerates for the moment and would likely not do so on the medium term as they would need to open a dedicated investment arm.
Overall, the project is a long term commitment for Swire Properties which is bringing a lot of resources (two floors on one of its skyscrapers, employee time, cash for events, etc.) while the startup doesn’t have any obligation to give Swire Properties anything. But Swire Properties stands to gain in a more indirect way in the long run.
Swire Blueprint has three great assets which makes it valuable as a new hotspot in the Hong Kong startup ecosystem:
- It’s part of the Hong Kong business landscape with operations in many industries for almost two centuries. Their long-term mindset prevents any blunt move or precipitation.
- It positions itself clearly as the B2B innovation space, which makes them more visible in an ecosystem where coworking spaces and accelerators are numerous, but the quality of the “supply” is not yet there – Hong Kong makes great businessmen rather than great startupers.
- No financial ROI is expected on the short and medium term from the startups.
HOW IT WORKS?
Blueprint is a three-in-one concept opened in January 2015 in Hong Kong, powered by Swire Properties with:
- A six-month accelerator for 10 B2B tech startups in a 10,000 sqm floor. The first batch earlier this year accepted startups in Big Data (Blue Sky Energy: dashboard for energy data), Collaborative tools (Snagr: photo sharing app for construction industry) or HR (Jobdoh: job marketplace for temporary workers). The longer timeframe of acceleration is explained by their team by the longer B2B sales cycle.
- Another 10,000sqm floor for coworking space, where 60 startups are hosted. If there is no hard filter, they still have to be technology-based startups (and not just freelancers), and ideally to fit into Swire Properties’ group possible interests, which are very broad.
- A multipurpose events venue, in the same place than the coworking, to attract entrepreneurs through curated events.
They occupy two floors in Taikoo Place, a newly developped business district slightly outside the downtown area of Hong Kong, which is also home to the local HQ of Facebook, IBM or Rackspace.
In December 2016, the team operating Blueprint will feedback the group with an internal white paper with learnings and foresight.
RESULTS & LIMITATION
It’s hard to make conclusions after only one year, as this project is meant to give a return on investment on the long term.
The KPIs Swire Properties gave to the Blueprint team are not cost-centric at the moment, and don’t involve any financial ROI on the short run.
Still, some short terms results are already visible.
Among the first batch of startups selected by Blueprint, and in spite of their very early stage, some of them ran pilots with different divisions of Swire Properties. One example is Snagr, an inspection and defect inspection system for engineers. Its solution was used by the construction arm of Swire Properties in Hong Kong, for the Tamar building in Admiralty, and the Peninsula Hotel refurbishment.