Tuesday night’s Start-up Accelerator, run by Henry Chuks, was another informative evening, and for anyone who doubts the efficacy of such events I can tell you that when I arrived 20 minutes late after being unavoidably delayed the hall was packed, and I had to make do with a watching brief from outside the double doors. This means I won’t be talking about James Wise at Balderton Capital, but by all accounts he spoke well, and gave some valuable advice regarding common mistakes made by start-up enterprises.
For me, Diane Perlman, who was next up after James, really captured the imagination, firstly because she spoke eloquently, really engaged with the audience, and provided a lot of information and insight in a short space of time, and secondly because she was here to talk about Microsoft Ventures, which I believe could be a vital launch pad for anyone lucky enough to find themselves selected to take part in the scheme. Judging by the small crowd of founders, directors, and techies who surrounded during a brief networking session, competition is likely to be fierce.
I’ll try to summarise the main points Diane made. If any of the below strikes a chord with you and your team, I would suggest you check out the website. I’ve read a lot this week about the disappointment felt by founders who have failed to get on to an accelerator schemes. Be quick, or be disappointed!
Diane explained, that there are 4 business essentials Microsoft are looking for, without which you are unlikely to succeed
1/ Your team; if you think you can go it alone, you are either Mark Zuckerberg, Shawn Fanning, or wrong. You absolutely must have a team in place that is on-message and prepared for a hard slog. The accelerator is a 3 month program where you will be expected to work hard on building your Company. If the commitment is not there to really make it happen, then the chances are you will be quickly found out, and that goes for all your team members, not just you. Once you’ve found the right co-founder, CTO, or developer, make sure they are as committed to your Company’s success as you are.
2/ Your team must be coachable: let’s be honest, here; Microsoft was founded by Bill Gates; if you have one millionth of the success that he has had then you will be a great success! So you really have to listen to what Microsoft has to say to you. Don’t look at acceptance onto the scheme as a publicity stunt that you then go around telling everybody about, whilst failing to listen to the business mentors the scheme will provide you with. That’s not what it’s about. Microsoft will provide you with a state of the art workspace in Whitechapel, free software and development tools, access to the Azure platform via BizSpark (worth $60,000 over 1 year), and most importantly, ongoing mentorship from top execs and technologists. Make sure you use them, because if you don’t, they won’t stick around for long.
3/ Idea: bit of an obvious one, but it can be surprising how quickly your core business idea gets away from you once you have begun your marketing campaign, funding round, or accelerator application. Stay true to the core principles and ideas that made you launch your start-up in the first place; don’t make promises and you can’t keep, or try to adapt your business to fit an angel investor’s idea of what will work simply to please them. Microsoft are, predictably, looking for technology oriented companies, in fields such as software, Cloud, Internet, and Mobile and Games development. If you don’t believe 100% in your business proposition, why should anybody else?
4/ Fundability: At the end of the 12 week program, you will be pitching to a room full of investors who will be looking to spend. Microsoft actually hold an event around two thirds of the way through the program where they vet potential investors, known as VC early look days. The Demo Day will be the culmination of all your efforts to date. Diane estimates that 85% of companies on the program will eventually get funding. Some will walk away on the day with a cheque from an investor in their pocket. She tells a story from Beijing, where less than 1 minute into a pitch an investor wrote a cheque for 1 million dollars. Less likely to happen in London, admittedly, but you need to make sure you are clear about how you are going to use funding. Don’t simply stand there in open-mouthed astonishment that someone is prepared to give you the cash you have always dreamt of. Expect it, and know what you are going to do with it. If you want to play in the big league you can’t afford to come across as a small-time player.
If you are not funded straight away there is an opportunity to remain with Microsoft as a business in residence for a further 3 months. Microsoft expects that you and your business will be successful. If you can get on the scheme they won’t let you down, so make sure you don’t let them down.
A question that was asked a number of times on Tuesday evening. What’s in it for Microsoft? They don’t take equity positions, they rarely invest in or acquire companies on the scheme (though it’s not unknown, check out www.skygiraffe.com), and yet they are going out of their way to help bring through small companies. Suspicious? I’ll let Microsoft answer that one:
We are reinventing the way Microsoft works with top entrepreneurs and start-ups, we believe in “cultivating seeds of greatness” and helping broadcast the success globally. We believe that Microsoft Ventures Accelerator is a way of helping us engage deeply with developers, help expose them to our cloud and developer tools, and get meaningful feedback on their needs and opinions.
Microsoft Ventures Accelerator is part of Microsoft’s continuing support of the UK’s high-tech community, which we believe to be one of the strongest and most innovative in the world.