Shameen Prashantham - Gorillas Can Dance

Thus I observed positive vibes among Microsoft managers and entrepreneurs across multiple locations. The period and nature of engagement was not unlike other accelerators, but what appeared to make it work was the caliber of the startups, involvement of Microsoft executives, and the willingness of Microsoft partners from its wider network to engage with the startups as well. I was left with the impression that Microsoft was taking startup partnering seriously; it wasn't just paying lip service.

Before wrapping up the second phase of the story, it seems worth noting that the action was heating up in emerging markets, notably China and India – and Microsoft's strong presence in those markets was a great advantage.

As a company, Microsoft has historically taken emerging markets seriously, as seen from the scale and scope of its operations in China and India, and regular visits from global top managers. Not surprisingly, this is the case when it comes to startup partnering as well. The Skelta example from India demonstrates that although it required strenuous efforts from both managers at Microsoft India and the leaders of the startup, it was not impossible for an Indian startup to “dance” with Microsoft, even before BizSpark. And with the launch of BizSpark (and of BizSpark One), more such opportunities presented themselves, as illustrated by the case of Gridsum.

Beijing-based Gridsum was founded by Qi Guosheng, a young computer science graduate from Tsinghua University. 28 While at college, Qi had spent a summer interning at Microsoft's research facility in Beijing. When he founded Gridsum after graduating, he used Microsoft technology to build software products, the quality of which impressed Johnny Xu, a Microsoft China manager working with startups. Gridsum became the first (and, for a while, only) Chinese entrant into BizSpark One. For Microsoft China's sales force, Gridsum became an attractive example of how a Chinese company could leverage Microsoft technology to build software products. And thanks to BizSpark One, Gridsum was also able to attract global attention from Microsoft.

In 2011, when Steve Ballmer visited Beijing, he gave a talk at an event that had two speakers – Ballmer and Qi. Thus Gridsum was showcased as an example of how a startup in an emerging market like China could have a mutually beneficial relationship with Microsoft. 29 However, despite the examples of Skelta in India or Gridsum in China, most of the action during BizSpark One was in the West. For example, Microsoft produced a video showcasing some of the most promising BizSpark One startups; they were all from North America or Western Europe. 30

In 2012, by contrast, the launch of accelerators in Bangalore and Beijing, on the heels of the original one in Israel, gave tremendous impetus to Microsoft's startup partnering efforts in the world's two largest emerging markets. When first launched, the Indian accelerator readily adopted the Israeli model of a four-month curriculum, but in China, with its linguistic differences and unique ecosystems, it was felt that a six-month program was required. Eventually Chinese cohorts also adopted the same four-month program.

The timing of the launch of the Bangalore and Beijing accelerators proved to be fortunate, as both China and India were witnessing the beginnings of the rise of the mobile Internet. (In China, for example, 2011 was the year that WeChat was launched, and it began to take off the following year. 31 ) Microsoft was able to engage with some interesting startups and “catch 'em young.” For instance, Testin was a startup created in Beijing in 2011 to provide software testing services for mobile apps. Testin was part of the first cohort of Microsoft's accelerator in Beijing in 2012. It has since gone on to extend the Microsoft partnership with China to the United States, where it has an office in San Francisco, apart from also building partnerships with several other multinationals. 32

In 2013, Microsoft reiterated its interest in a wide range of emerging markets when it launched the Microsoft4Afrika program, 33 which included small and medium-sized enterprises (SMEs) as one of its target audiences, with a view to helping them develop digital skills (and thereby become potential customers of Microsoft software). In South Africa, with input from advisors like Catherine Young, managers such as Warren Larkan actively promoted Microsoft's partnering with smaller firms. The BizSpark program was creatively augmented in conjunction with a government program that led to a more elaborate offering of support to startups. Also, to comply with South African government policy, Microsoft launched a depth partnering program for a small number of software startups that qualified in terms of black-ownership criteria and high innovation potential. 34

Also in 2013, Microsoft's efforts around community building (notably, the breadth program, BizSpark), accelerators (depth), and seed funding (e.g. a small fund associated with Microsoft's search engine, Bing) were brought under a single umbrella called “Microsoft Ventures.” 35

In 2014, Steve Ballmer, under whose watch the BizSpark and Accelerator programs had thrived, stepped down as Microsoft CEO. Satya Nadella succeeded Ballmer. Big changes followed. Microsoft Office software was made available on Apple's iPads for the first time 36 and a significant write-off was made on the Nokia smartphone acquisition. 37 Given that even prior to becoming CEO Nadella had championed cloud computing – which was of great relevance to startups – Microsoft's startup managers I spoke to at the time expressed hope that startups would continue to be taken seriously.

By 2015, there was an upsurge in interest in startups among corporations as valuations rose and several so-called unicorns – startups with a valuation of $1 billion – emerged, not only in advanced markets but also in emerging markets like China and India. 38 Thus Microsoft's move into accelerators looked like a prudent move. The rise of cloud computing was also having a profound impact on startups, which were no longer constrained by the need to incur upfront expenditure on software infrastructure. The emergence of startup accelerators and other enablers around the world was accompanying the growth of startups in the ecosystems where Microsoft Accelerators already had a presence. That same year, Microsoft launched BizSpark Plus alongside its in-house programs, through which it engaged with over 200 startup accelerators around the world. 39

The 2016 Global Accelerator Report identified Microsoft accelerators in China, India, and Israel as the leading ones in their respective countries. Weisfeld found that Nadella's vision for Microsoft resonated with his efforts in startup engagement; he once remarked to me, “Microsoft accelerators were ‘growth mindset’ in action,” referring to Nadella's fondness for Professor Carol Dweck's concept regarding the human capacity to believe that change and improvement in one's capabilities is possible and hence strive for it. 40 He observed, “Ten years ago, Microsoft was not seen as relevant or in the loop with the entrepreneurial community,” and added that he and his team found it immensely satisfying that Microsoft had come a long way in being supportive of startups: “There's just something about working with startups and entrepreneurs. It's a very emotional journey, but both experiencing and helping them through those ups and downs make it a very giving experience.” 41

In 2016, talking to Ravi Narayan, who was part of Weisfeld's global team, I sensed a shift in thinking regarding the type of startups that Microsoft should be welcoming to its accelerators. Although there was no doubt in Narayan's mind that Microsoft's accelerators had added immense value to startups, including in terms of helping them raise funds 42 – in fact, Microsoft was viewed as one of the best accelerators in both China and India and some global rankings 43 – it seemed that it was time for a change. The focus was switching from early-stage to more mature startups.