Startup Spotlight: Swrve's Marketing Automation
Swrve, a provider of marketing automation software, is the third successful startup for its two founders.
Gamers, not enterprises, built the first big mobile apps. They gave many of these apps away because they wanted to attract players. They also wanted to attract profits but struggled with how to do so, said Swrve co-founder and Chief Strategy Officer Hugh Reynolds.
"Game developers are not necessarily the best marketers," said Reynolds, who co-founded the marketing automation startup with Steve Collins. "That was our breakthrough, building this tool for marketers so they could communicate with that consumer who had come to that free-to-play game."
That may have been the breakthrough for Swrve, but it certainly wasn't the first breakthrough for Reynolds and Collins, now Swrve's CTO. For more than 20 years, the two have partnered in three startups, each based on introducing cutting-edge technology to non-technical industries.
From Academia to Entertainment
Their successful working relationship started with a serendipitous encounter. Reynolds met Collins as a third-year computer science student at Trinity College Dublin after he secured a scholarship to study at a Hitachi research lab.
"I had access to this -- at the time -- super computer, which was probably as powerful as your phone, and they said, 'The last guy, some of his files are still there. He was doing this super high-end graphics research and he was a guy called Steve Collins,'" Reynolds said. "So that was the first time I heard the name of Steve Collins. He was the guy who got the research internship the previous year from me."
Both men went on to become professors in computer science, where their study of simulating the physics of how objects behave overlapped. In real life, objects collide rather than overlay one another, but programming that was a major challenge in the early 1990s. Their work in this field led to the creation of a physics simulator and their first company, Havok.
If you've seen the movie "The Matrix," you've seen Havok at work. Havok helped create the famous Burley Brawl scene, in which Agent Smith duplicates himself and fights Neo. It was also used to create special effects in "Troy," "Lord of the Rings" and "Charlie and the Chocolate Factory," along with more than 150 games. The company even earned a technical Emmy in 2008 for Physics Engines.
They sold the Irish company to Intel in 2007 for €76 million (more than $84 million in today's dollars). After Havok, Reynolds and Collins formed Kore Virtual Machines, which took scripting language and made it industrial grade for the entertainment and education industry. When that was acquired by Havok in 2010, Reynolds and Collins founded Swrve.
An unusual aspect of their business partnership is that they haven't worked on the same continent for a decade.
"Steve has been in Europe and I've been here, so we've actually been on the same continent for maybe less than six months or maybe even less than three months over that 10 years," Reynolds said. "Maybe this is one of the keys to our success; we very much are able to keep this working relationship going at a distance."
The two also share computer science backgrounds, an interest in graphics and an entrepreneurial bent that led them to leave their careers in academics.
"One of the frustrations that both of us felt in an academic environment is that it's a lot of time you spend producing dusty papers that never get used," he said. "That was very frustrating because there's a revolution happening."
With Swrve, they wanted to design a marketing automation tool that would allow marketers to better target gamers from within the app, without special coding by game developers.
"We saw that people were building these great games but there was a marketing gap, which is 'how do I take people who are beginning to play for free and how do I encourage them to become invested and want to spend some money,'" he said.
In their decades of collaboration, simplifying technology has been a reoccurring theme.
"In each of these models, we were going, 'Here's something that belongs to the elite that's kind of locked away behind an engineering wall, and what we want to do is we want to pop it out,'" Reynolds said.
Not Just for Gaming Anymore
Swrve creates transparency into mobile apps, so that marketers can woo customers while they're using the app, and in a targeted way. It incorporates A/B testing to determine what worked, as well as data analytics and the ability to insert calls-to-action and other marketing functions into the app -- all without burdening the developers, he said.
The technology is a lightweight software development kit that's dropped into the app. Swrve works with the development team to "plumb" it into a company's mobile apps, a process that can take a week or two. After that, marketing can access Swrve via the software-as-a-service (SaaS) platform, where they can take a broad view of the data or drill in and create messages targeted to specific user groups.
EA, Activision, Microsoft and Sony were among Swrve's early clients. In the past few years, other industries have embraced the business potential of mobile apps because they want the same visibility and functionalities that Swrve offers to gaming companies.
"We started seeing this idea of building a non-trivial view of a consumer that you track over time, over days, weeks or months - or even years - and be able to reach out and interact with those consumers," he said. "That starts to become not just something that game developers wanted to do; it started to become something that every app developer with a brand wanted to do, and that really transformed our business."
The technology cuts across every consumer-facing vertical and can be applied to any app, Reynolds said. For instance, H&R Block wanted its app to act like a pocket financial advisor so, for example, it could prompt users to take a photo of receipts when making a donation to Goodwill.
Reynolds is particularly excited about the potential use for the product in the medical space, where it could help prompt patients about health care needs.
"It's incredibly exciting for me as a founder to be able to see how many different aspects this is touching in people's lives," he said.
Scale and Security
Swrve isn't the only mobile marketing automation solution available, but Reynolds contends it differentiates on scale and the rigor of its analytics. Scale is particularly important for mobile apps, he said, pointing to mobile app outages that happened on Black Friday in 2014 and 2015.
The company also has invested in security, data privacy and two-factor authentication to ensure compliance with both U.S. and EU laws, he added. Finally, Swrve provides strategic consulting and best practices guidance to users to ensure useful results.
"A bunch of folks deliver certain aspects of what we do, but I think we've continued to be the leader in scale and in rigor," Reynolds said.
In November Swrve acquired adaptiv.io, a data automation platform for mobile devices. The adaptiv.io deal will allow Swrve to support data for multi-channel campaigns, Venture Beat reported. The company also announced another $30 million in funding.
Fast Facts about Swrve
Founded: 2010, in Dublin
Founders: Hugh Reynolds and Steven Collins
HQ: San Francisco
Product: Swrve's mobile marketing automation solution provides easy-to-understand app analytics, A/B testing and content delivery
Employees: 51- 100
Customers: Microsoft, Sony, Samsung, Virgin, Hasbro, Activision
Funding: Evolution Media Partners led a series C funding round in November, that brought in $30 million, bringing Swrve's total funding to $51.1 million