REDMOND, Wash., Oct. 3, 2007 — For the thousands of technology startup companies that emerge each year, achieving and sustaining business success is a tough proposition. Many don’t make it, succumbing to the myriad challenges along the way — from funding to marketing, to changing market conditions.
But startups don’t have to go it alone, and many successful startups achieve their business goals with the help of a strong set of partners. The Microsoft Emerging Business Team was established in 1999 to partner with startups and work with venture capitalists worldwide to support innovation and accelerate the software ecosystem. Today the group is launching a new program, the Microsoft Startup Accelerator Program, to further the company’s support of this important community.
For more insight into the work of the Emerging Business Team and goals of the Microsoft Startup Accelerator Program, PressPass spoke with Dan’l Lewin, corporate vice president of Microsoft’s Strategic and Emerging Business Development.
PressPass: What is the Microsoft Accelerator Program and how does it fit within the emerging business efforts of Microsoft?
Lewin: The Microsoft Startup Accelerator Program is designed to foster the success of high-potential software startups on the Microsoft platform. The companies we identify as high-potential startups will receive customized engagement plans to support their software development, provide accessibility within Microsoft and increase market visibility. Twenty companies were initially selected to join the program, based on their innovation, high growth potential, funding, platform decision and strategic importance to Microsoft. It is a global program with local implementation in the United States, France, the United Kingdom, Germany and 12 additional countries. Our goal is to help emerging businesses be successful primarily on two fronts — accelerating software development and accelerating their market visibility.
Microsoft has a long history of partnering effectively with some of the top hardware, software and service vendors in the world, and our partner ecosystem is a huge part of who we are at Microsoft. The mission of the Emerging Business Team is to identify and focus on new technologies and business models that emerge from early stage startups that we identify as innovative, compelling, disruptive and potentially strategic to Microsoft. We then facilitate opportunities for those startups and the venture capitalists that fund them. Of course, we want to partner with all startups using our platform technology, not just the high-potential ones, and we have many other programs that encourage them to engage in the Microsoft ecosystem. Many of these programs are self-help, typically Web-based tools for the tens of thousands of ISVs that we work with. And we have the Microsoft Startup Zone, which is a great resource for startups that are interested in getting the most out of Microsoft’s programs and resources, and increasing their success with Microsoft.
PressPass: So your focus is not only on the startups, but also on the venture capitalist community for funding, is that right?
Lewin: That’s correct. On the investor side, we also develop relationships with venture capitalists and with relevant members of the angel investor community. We hold an annual forum in Silicon Valley called the VC Summit where we share with them our current key initiatives and related technology roadmaps. Our goal is to be really transparent to help them understand where we can be helpful to their portfolio companies and they can decide where they want to engage with Microsoft. They might find that we have a competitive product and they might choose to compete with us, and that’s OK, too. We also connect interesting companies in need of funding. And, as venture capitalists are looking at companies that are on the Microsoft platform, they often will come to us, and we will help them evaluate companies. It’s a mutually beneficial relationship that we have with the investor community.
The Startup Accelerator Program focuses on a subset of the startup community — those with the highest potential for strategic partnership with Microsoft — and helps move them through the partner program and gain customer adoption. We typically do not fund these companies from a direct investment standpoint. Rather, we put enormous amounts of human and technology investment into our offerings.
PressPass: How does Microsoft identify those startups that would make good candidates for the program?
Lewin: The Emerging Business Team evaluates hundreds of technology startups each year to identify those with the strongest potential to succeed in the market, shape the industry’s future and enhance the overall value of Microsoft products and services for customers. We look at a number of criteria, such as marketability, growth potential, funding, management and management history, platform decisions, and strategic importance to Microsoft. We identify those companies that are aligned with technology areas that Microsoft is focused on, and where we can best develop the relationship.
PressPass: Are there particular technologies that Microsoft is looking for in candidates it chooses for the program?
Lewin: The closer startups are aligned with our business and technology goals, the better opportunity we have to help them be successful. Microsoft has a very broad technology footprint and we look for startups that align with our company priorities. This could range anywhere from next generation Web innovations, media broadcasting, news advertising models, service-based software, to the technologies that enable Office Business Applications (OBAs), scenarios around entertainment and mobility, and CRM (customer relationship management) extensions. And that’s just a glimpse at our breadth. We’re also focusing on innovative uses of Microsoft technologies and what people are doing that’s new and different. If we find something that’s interesting or disruptive, we always like to take a look at that, even if it doesn’t fit into our focus areas.
PressPass: What are the benefits of the program to those startups that are chosen?
Lewin: There are a number of benefits. First, we develop a one-on-one relationship with them. We have portfolio managers who are part of the Emerging Business Team that are dedicated to that account to help them succeed. We will put together a customized engagement plan for them, depending on what their needs are, with the focus of accelerating software development and market visibility. On the software development side, that might include access to our premier support staff, access to software licenses and subscriptions, access to new technologies and/or access to Microsoft Technology Centers for software testing and architecture guidance. For instance, if they are at the point where they want to make sure that their products scale, we can give them some time in our Microsoft Technology Centers to help with that.
On the market visibility side, that could include a published success study, presence on the Microsoft Startup Zone Web site, introductions to appropriate product and marketing teams inside Microsoft, blogging opportunities with Microsoft portfolio managers, introductions to investors as needed and/or event opportunities. For example, if they are involved in one of our upcoming technologies, such as Microsoft Silverlight, and if we have an event coming up, there may be an opportunity for us to showcase their products in one of those forums. Those are the kinds of things we can do to help them advance their success.
PressPass: Can you give an example of the work you’ve done with a startup that has been mutually beneficial?
Lewin: A recent example of a company that we’ve been working with is Tutor.com — an on-demand tutoring and homework help service that students can use when they’re stuck with a homework problem, need to study for a test or want to improve their confidence and grades. The company started off with a narrow focus of libraries and educational organizations, then decided to expand their market by selling services directly to students and families. In order to make their services broadly available, they worked with the Microsoft Technology Center to develop a technology solution that would enable them to scale. We helped them to test scalability and provided consulting and guidance on performance issues. Like most startups, they had limited resources, so being able to use our technology and resources was a great help to them. This summer we took it to another level when we announced a strategic alliance with tutor.com – when a student buys Microsoft Student with Encarta Premium 2008, they will get 75 minutes of tutorial services from Tutor.com at no charge.
We’re also very excited that Tutor.com is one of our first participating companies in the Startup Accelerator Program.
PressPass: What is the track record of companies that Microsoft has supported in the past?
Lewin: We have had a lot of success with a broad range of startups, including a few brand-name companies. We worked with MySpace when they were very small and provided them with technology and support so that they could scale to the hundreds of millions of users they have today. PolyServe is another company we’ve worked with. We started working with them when they were a very young company and helped them to grow, and they were recently acquired by HP. NewsGator is another company that we worked very closely with, helping connect them with the products groups within Microsoft to support their product development. Today, NewsGator has an industry-leading RSS platform.
PressPass: What should startups do if they’re interested in participating in the Startup Accelerator Program?
Lewin: They can go to the Microsoft Startup Zone to learn more and submit a company profile if they wish to be considered for the program. Startups that aren’t selected to join the program can still receive support and access to other Microsoft partner programs by visiting the same Web site.
As in the examples I just gave, we work with many companies at various stages of development. It’s our mission to go out and try to identify the companies that we think have the highest potential of being the next success story, like MySpace or PolyServe or NewsGator. We don’t have a crystal ball, of course, but we know there are certain formulas that work, and we track the entrepreneurial and investment patterns to identify those we can help succeed. And when they succeed, we think the whole industry succeeds.