Whether you are an entrepreneur like Jasminder Singh Gulati, Boaz Hecht or Itay Braun, a corporate venturing unit looking for exciting young companies to invest in, or a business looking towards the future, we are all part of the start up ecosystem and have the ability to make a difference.

From our sister publication, Global Corporate Venturing

 

There are problems all over the world waiting to be solved. Fortunately, entrepreneurs everywhere are setting out to tackle real world problems, most often problems they experience locally. In India, for instance, there are more than 50 million businesses that have no digital presence.

Meet Jasminder Singh Gulati, co-founder of NowFloats. He recognised the gap and set out to create a simple solution to help bring India’s business community online. NowFloats, a graduate from our Microsoft Ventures Accelerator in Bangalore, helps companies create an online presence via an SMS texting platform. Businesses can quickly create websites that are optimised for location-based searches, which helps customer discoverability. This is not just a problem for businesses in India, it is a global problem. Even in the US, 46% of businesses have no digital presence.

For a myriad reasons, entrepreneurship has become a global phenomenon that is not going to change anytime soon. That is why Microsoft Ventures uses its global footprint to help entrepreneurs in every corner of the world succeed at every level in the start up ecosystem.

Supporting start ups at every stage

One thing that I feel is really important to discuss with the investor community is how we can work together to support start ups at every stage of maturity.
 
Take a moment to ask how your organisation is thinking about building and supporting a robust pipeline of new businesses, from education initiatives for young entrepreneurs and technical support, to creating access to seed funding and mentoring. It is not just your returns that make you successful, it is your ability to support and grow the start up community that will create a lasting impact.

I want to share a few thoughts on how my team thinks about supporting start ups at every stage of maturity in an effort to create lasting value for the community. This is something we care a lot about and are always interested in working with organisations that have similar goals.

At its core, Microsoft is a platform and productivity company. To help entrepreneurs apply technical solutions to problems, our developer tools, software and services are made available to any start up around the world free through the Microsoft BizSpark programme. Like painters need a canvas, brushes and paints, entrepreneurs need the tools to help them build companies.

Our partners and customers are also critical not only to our success, but also in the creation and development of local ecosystems to help start ups thrive. We partner leading accelerators and incubation hubs all over the world and have created more than 100 Microsoft innovation centres in partnership with academic, technical and government institutions to enable ideation and development. We also help high-potential start ups make business connections with partners and customers.

As a serial entrepreneur, I understand the importance of having a support network for a start up to succeed. Access to funding, mentoring and business resources are all components critical to building a future-proof company.

A while back, Microsoft decided to create a series of accelerators where we can work closely with a select group of start ups, provide a hands-on lean start up programme, technical advice and help build a community of mentors that support business development for start ups around the world. We now have seven Microsoft Ventures accelerators in key markets, including Bangalore, Beijing, Berlin, London, Paris, Seattle and Tel Aviv.

More than 205 start ups have graduated from our accelerators, with 78% receiving follow-on funding a year from graduation at a $1.5m average. Our focus has been helping start ups with the resources and connections they need most while in our three to six-month programmes. We see this as an important role to play as a global corporation and a tech company. We want to see start ups thrive and help the entrepreneurial ecosystem and investor community grow.

There are plenty of other industry organisations doing great work to provide support for start ups at various stages and our goal is to help connect these opportunities for entrepreneurs.

For example, Boaz Hecht and Itay Braun were two entrepreneurs who started working with us through our BizSpark programme looking for technology resources for their company. They are co-founders of SkyGiraffe, a software-as-a-service platform that helps businesses deploy enterprise-grade mobile applications on any device immediately and without the need for writing code.

Later on they were accepted into our Microsoft Ventures accelerator in Tel Aviv, and after graduation we decided to assist with seed funding to help them further their business. As their company has matured, we have been able to provide support at every stage. Now they are growing their customer base and we are helping them gain connections with Fortune 500 companies.

This is just one example, but a good way to demonstrate how start ups can benefit from a multitiered approach that supports businesses as they scale.

Partnering to drive vertical innovation

What is great about the tech community is that there is a continual circle of capital being reinvested in new companies. If your first company as an entrepreneur fails, there is always an opportunity to start fresh with a different perspective and key lessons from your last venture. The corporate venturing community needs to learn from start ups and understand how we can support the growth of these important ecosystems.

MoneyTree reported that venture capitalists invested $29.4bn in 2013. Annual investments in the software industry in 2013 also reached the highest level since 2000. This is a great time for the investor community, but we should also look at how we can diversify and support companies on the verge of disrupting traditional industries.

Through our accelerators, we focus on learning about how Microsoft as a company can better serve the start up community, whether that is key insights to grow our programme offerings, creating better mentoring opportunities or developing services tailored for start ups. One of the key takeaways is the value that our partners and customers can bring to the table. This is something that we are also seeing across the industry. For example, TechStars, a leading start up accelerator, has been identifying unique ways to support start ups in specific industries by partnering corporations like Disney, Barclays and Sprint. There is a lot of value in creating focused efforts to accelerate start up innovationin key markets.

We have also been focusing on opportunities for our partners to develop thematic accelerators, focused on a specific industry, technology or market opportunity ripe for innovation. In our Seattle accelerator, hosted on our Microsoft campus, we have partnered American Family Insurance to create a unique opportunity for start ups creating businesses in home automation. The goal of the partnership is to identify and support companies creating safer and smarter homes that are using the internet of things to create innovative solutions. We recently announced the 10 start ups accepted into the programme which are gaining critical industry insight to build companies with the potential to have an enormous impact on our lives.

Dan Reed, managing director at American Family Ventures, recently noted that “working closely with start ups and making early-stage investments in emerging technology companies is a great way to support the ecosystem and also benefit our customers”. This proactive approach to supporting start-ups that are disrupting traditional businesses is a great way to work with the community instead of against it, actively investing through a venture arm and offering a minimum optional $25,000 equity investment in each start up accepted into the programme. The company also has a $50m venture capital fund.
At our Tel Aviv accelerator, we have partnered Becton, Dickinson and Company (BD), a leading global healthcare company, on a thematic accelerator to create healthcare start ups. BD’s purpose is “helping all people live healthy lives”, and what better way to look towards the future than by working closely with start ups that can help generate advances in the industry and create better services for communities.

We are also working with Akamai Technologies, a provider of cloud services for delivering, optimising and securing online content and business applications, together with venture capital firm Jerusalem Venture Partners to focus on advancing cyber-security. This is a great example of how we are working to provide not only a unique opportunity for start ups, but also for our partners and customers. Combining industry insight, capital and technical expertise is a great formula for success and we are excited to see the outcomes from this programme run out of our Tel Aviv accelerator.

Throughout our programmes and investments we are looking across the spectrum, from discovery to enablement. We want every start up and entrepreneur to have an entry point to engage with Microsoft Ventures, but we also want to provide unparallelled routes to customers for high-potential start ups to scale their business.

Intersection of innovation

What I find interesting is this intersection of innovation, and how this might help address innovators dilemma, which many Fortune 500’s currently face. Helping start up ecosystems around the world grow by enabling start ups to do their best work, assisting the investor community to find great companies that are poised for growth, and facilitating unique opportunities for our partners and customers to benefit from the start up community.

Whether you are an entrepreneur like Jasminder Singh Gulati, Boaz Hecht or Itay Braun, a corporate venturing unit looking for exciting young companies to invest in, or a business looking towards the future, we are all part of the start up ecosystem and have the ability to make a difference.