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 over 50 million businesses that don’t have a digital presence. Meet Jasminder Singh Gulari, co-founder of NowFloats. He recognized 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 America, 46% of businesses do not have a digital presence.
For a myriad of reasons, entrepreneurship has become a global phenomenon that isn’t 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 startup ecosystem.
Supporting Startups 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 startups at every stage of maturity.
Take a moment to ask how your organization 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 mentorship. It is not just about your returns that makes you successful, it is your ability to support and grow the startup community that will create a lasting impact.
I want to share a few thoughts on how my team thinks about supporting startups 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 our 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 startup around the world for free through the Microsoft BizSpark program. Like painters need a canvas, brushes and paints, entrepreneurs need the tools to help them build companies.
Our partners and customers are also critical to not only our success, but also in the creation and development of local ecosystems to help startups thrive. We partner with leading accelerators and incubation hubs all over the world and have created more than a hundred of Microsoft Innovation Centers in partnership with academic, technical and government institutions to enable ideation and development. We also help high-potential startups make business connections with partners and customers.
As a serial entrepreneur, I understand the importance of having a support network for a startup to succeed. Access to funding, mentorship and business resources are all critical components to building a future-proof company.
A while back, Microsoft made the decision to create a series of accelerators where we can work closely with a select group of startups, provide a hands-on lean startup program, technical advice and help build a community of mentors that support business development for startups 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 startups 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 startups with the resources and connections they need most while in our three to six month programs. We see this as an important role to play as a global corporation and a tech company. We want to see startups thrive and help the entrepreneurial ecosystem and investor community grow.
There are plenty of other industry organizations doing great work to provide support for startups at various stages and our goal is to help connect these opportunities for entrepreneurs.
For example, Boaz Hecht and Itay Braun were two entrepreneurs that started working with us through our BizSpark program looking for technology resources for their company. They are co-founders of SkyGiraffe, a SaaS 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 startups can benefit from a multi-tiered 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 doesn’t succeed, there is always an opportunity to start fresh with a different perspective and key learnings from your last venture. For the Corporate Venture Capital community, we need to learn from startups and understand how we can support the growth of these important ecosystems.
MoneyTree reported that venture capitalists invested $29.4 billion 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 startup community. Whether that is key insights to grow our program offerings, creating better mentorship opportunities or developing services tailored for startups. 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 startup accelerator has been identifying unique ways to support startups in specific industries by partnering with corporations like Disney, Barclays and Sprint. There is a lot of value in creating focused efforts to accelerate startup innovation in 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 with American Family Insurance to create a unique opportunity for startups creating businesses in home automation. The goal of Microsoft and American Family Insurance to identify and support companies creating safer and smarter homes that are using the Internet of Things (IoT) to create innovative solutions. We recently announced the 10 startups accepted into the program who 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 startups and making early-stage investments in emerging technology companies is a great way to support the ecosystem and also benefit our customers.” Their proactive approach to support startups that are disrupting traditional businesses is a great way for them to work with the community instead of against it. And they are not just standing by and watching, they are actively investing through their venture arm and offering a minimum optional $25,000 equity investment in each startup accepted into the program. They also have a $50m venture capital fund.
At our Tel Aviv Accelerator, we have partnered with Becton, Dickinson and Company (BD), a leading global healthcare company, on a thematic accelerator to create healthcare startups. BD’s purpose is “helping all people live healthy lives,” and what better way to look towards the future by working closely with startups that can help generate advancements in the industry and create better services for communities.
We are also working with Akamai Technologies, a leading provider of cloud services for delivering, optimizing and securing online content and business applications, together with leading venture capital (VC) firm Jerusalem Venture Partners to focus on advancing cybersecurity. This is a great example of how we are working to provide not only a unique opportunity for startups, 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 program run out of our Tel Aviv Accelerator.
Throughout our programs and investments we are looking across the spectrum, from discovery to enablement. We want every startup and entrepreneur to have an entry point to engage with Microsoft Ventures, but we also want to provide unparalleled routes to customers for high-potential startups 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 startup ecosystems around the world grow by enabling startups 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 startup community.
Whether you are an entrepreneur like Jasminder Singh Gulari, Boaz Hecht or Itay Braun, a corporate venture firm looking for exciting young companies to invest in, or a business looking towards the future, we are all part of the startup ecosystem and have the ability to make a difference.