Dan’l Lewin, Corporate Vice President, Strategic and Emerging Business, Microsoft Corporation

How One Thing Leads to Another

One thing leads to another. Those are actually lyrics from a popular song in the '80s: “you told me something wrong, I know I listen too long, but then one thing leads to another.” For me, it sums up the magic of startups — one thing does lead to another, or as Joe Kraus (Excite! Founder and now CEO of Jotspot) said at a recent Churchill Club event: “Opportunity creates opportunity in ways you cannot predict at all, and the biggest key to success is straight up, old-fashioned persistence. The beginning of the discussion is when someone says ‘no’ — that’s where the fun begins.”

Joe went on to relate a story about an almost unbelievable series of serendipitous events — all stemming from his persistence — that led to Excite!’s financing and fast-track growth. Let me see if I can recall it correctly. After Joe graduated from Stanford, he received a book (Accidental Empire) from his then girlfriend. He called the author, even offered him a job (which the author declined). That led to an InfoWorld connection, which led to a paying project, which, in turn, led to an introduction to InfoWorld’s parent company IDG, then to an IDG board member at Charles River Ventures, then to Geoff Yang at IVP (now at Redpoint), and then, finally to Vinod Khosla at Kleiner Perkins. Vinod asked a basic question about Excite!’s business model: how does it scale? Great question, thought Joe. Vinod ordered Joe’s team a $10,000, 10 Gigabit disc drive (hard to believe today) to help them figure it out and ended up investing $3 million in Excite! without ever seeing a business plan. The rest is history. As I said, one thing does lead to another. Of course, Joe’s persistence as “phone guy” in those early years (his words)--when he was literally calling people from WSJ articles and making connections that led to others--didn’t hurt either. It’s a hallmark of successful entrepreneurs. (And something Joe clearly repeated with this week’s purchase of Jotspot by Google.)

See where I’m going with this? While all successful startups involve great entrepreneurs with technical skills, vision, passion and persistence, that persistence often leads to serendipitous opportunities that can play an important role in success. We’ve been working with some very exciting companies that through a series of events — some serendipitous, some due to just plain old perseverance — are on their way to real market success. While we at Microsoft can provide the technology platform and help make some connections through our vast software ecosystem (sprinkle some fairy dust), we can’t replace having the passion and the right vision to start with. Again, we think the magic is in the startups. So let me tell you about a few of them. Incidentally, many of these are from our latest, fifth edition of the Microsoft’s Innovation Starts Here book.

A Magic Mix of Founders

Speaking of magic, let’s start with Tableau Software. A more unlikely mix of founders and serendipitous connections is hard to imagine. In 1997, the U.S. Department of Defense and Energy placed a phone call to the co-founder of Pixar Studios, Dr. Pat Hanrahan, who by then was a professor at Stanford University’s Computer Science Lab. Concerned that everyday knowledge workers in security positions found databases too hard to query and understand, the DOE/DOD asked Hanrahan to invent a visual analysis framework for analyzing information in databases. They challenged the person who won two academy awards for graphics technology to overturn the database industry.

More than five years later, what began as an extensive R&D project inside Stanford — supported by the DOE/DOD as well by Microsoft’s well known database researcher Jim Gray, technology such as SQL Server, and a team of talented founders — became Tableau Software. The team had invented an innovative visual query language that enables people to explore and analyze databases and spreadsheets with simple drag-and-drop operations. Some call this innovation “Visio for databases” or a “visual spreadsheet”. Tableau CEO and co-founder Christian Chabot says that from day one they have been introduced to the right engineers and managers in different Microsoft product groups to make sure their products tightly integrate. Not only have we been a vocal advocate for Tableau, but we’re now a customer, too.

Activating A Network of Connections

Ravenflow is another company whose story involves a serendipitous connection that helped the company raise funding. Ravenflow has created a very cool way to take software requirement in plain English and automatically generate Unified Modeling Language (UML) diagrams — enabling business and IT to ensure software development success. We’ve helped them both inside Microsoft and outside with investors and even customers.

In spring 2005, Sam Ramji, then part of my group on the Emerging Business Team, got very excited about what Ravenflow was doing and became a strong advocate for the company. He arranged a meeting with Rick LaPlante, General Manager of our Team Foundation Server (TFS), and a couple weeks later, a two-day session was set up for all of the key product managers within TFS. Out of that meeting came a four-step plan for integrating the Ravenflow product with Visual Studio. Pretty exiting opportunity for a young company. At the same time, the company was pursuing its first round of venture financing, since it had been angel-funded to start. One meeting clearly led to another.

According to Phil Trapp, Ravenflow’s VP, Business Development, “When we talked to investors and said we had a strategy with Microsoft, they wanted to hear more and talk directly to the Emerging Business Team. The message the VCs got from Microsoft was that Ravenflow had a talented team, an important technology, and support from inside Microsoft. That was a very important message to give.” Phil says that commitment from us was crucial to securing a sizable $10 million round of funding from Alloy and Palomar Ventures in November of 2005.

Later, in February 2006, we set up another meeting with Ravenflow’s key investors and management team to plan how we could help shortcut access to the right people within Microsoft. In April 2006, Ravenflow announced integration with the Visual Studio Team System, and in May, had their first customer in production with Raven Visual Studio Team System. Once again, we played a role. When Sam Ramji learned that Ravenflow was talking with Bowne & Co. (NYSE: BNE), he connected them with the Microsoft sales team in New York City. Says Phil, “We did one call on the customer, and they immediately upgraded from Visual Studio 2003 to a full suite, the Visual Studio Team System 2005.” Ravenflow’s customers today include ADP, Charles Schwab, Citco, Kaiser Permanente, and the World Savings Bank. Again, Microsoft is not responsible for Ravenflow’s well deserved success, I want to make that really clear, but activating our network with the right people at the right time did help the company clear some important hurdles. Being able to help a great team is truly its own kind of magic.

Robots Serving You, Literally.

Imagine taking a personal tour of a museum remotely, using robotic technology. In Europe, a major global network operator, Orange, is using Robosoft technology to give its subscribers this very novel experience. Robosoft is a pioneer in advanced service robotic solutions and one of the first spin-offs from INRIA, the French National Institute for Research in Computer Science and Control. It is providing the core technology for reliable, cost-effective, industrial grade robots. Robosoft’s goal, according to President Vincent Dupourque, is “to democratize and popularize service robots for widespread usage, so choosing Microsoft technologies is helping to attract the widest possible audience.” One key technology they used is the Microsoft Robotics Studio, which provides a common development platform for robotics innovators. They are also getting support from the Microsoft France IDEES program — an initiative aimed at helping startup companies in France develop and grow. It is one of hundreds of programs we run on a local basis around the globe to help foster the local software economy and is a good example of how all over the world we can activate our network to help startups succeed.

Leaving Pie Charts in the Dust

Fractal:Edge Limited, in London, harnesses fractal technology — the power of mathematically defining geometric curiosities — to solve the complex problem of how to visually present large amounts of data. The company’s Fractal Maps dynamic displays leave pie charts in the dust and offer a better way to interact with and interpret large or rapidly changing data sets. As a participant in the Microsoft Office 2007 Ascend Program, Fractal:Edge will make Fractal Maps available as an add-in for Microsoft Office Excel 2007, extending the benefits of the technology to a much broader audience. The company and its investors (Wesley Clover) tell us that being a Microsoft Certified Partner and using Microsoft .NET technology has been a huge plus in its efforts to sell into a broad audience in the investment banking community. So far, it’s paid off. Seven of the world’s top 10 investment banks are already using Fractal Maps as a way to manage their market risk and compliance.

Building to Scale, in Fraction of Time

IdeaBlade has been called “.NET on rails.” Its products are becoming a must-have for successful Internet enablement, development, and deployment of enterprise .NET applications. Albert Wang, IdeaBlade’s CEO, says the Microsoft association has given them broad visibility with potential customers. They have been featured on no less than seven MSDN developer sites, showcased in the MSDN Canada tour, featured by MSDN editors worldwide, and promoted by a number of Microsoft developer and architecture evangelists. They were recently accepted as a delivery partner into our NXT program, an ISV initiative for migrating to the Microsoft platform.

Innovating the Mobile IM Experience

Miyowa in France provides private-labeled IM and entertainment services for mobile carriers and media companies. It credits Microsoft with helping it develop its product in less than a year and deploy its mobile IM solution at seven carriers in Europe and Asia. Bouygues Telecom, the company that has democratized the mobile telephony market in France, was impressed with Miyowa’s ties to Microsoft and Windows Live Messaging because it offered access to France’s largest IM community. Within five weeks of introduction, Miyowa’s “Mobile MSN” had become one of Bouygues’ most-used portals. We’ve also supported Miyowa through our IDEES program in France. And our team made introductions to Chinese, Japanese and other global carriers.

Recently, Steve Ballmer was in Paris along with the CEO of France Telecom, announcing a multi-million dollar deal for Miyowa. They’ll be providing Orange’s 135 million users with an MSN Messenger client working on Java phones. (We do our own client on Windows Microsoft phones.) Miyowa also just received $3 million euro in its first funding round, led by Techfund and Sophia Eurolab. Microsoft made one of the VC introductions.

You’re In the Movies Now

Mydeo, based on London, is fast-becoming a premiere Internet broadcasting service — it is fully integrated with Windows Movie Maker. The company enables customers to create and send streaming video emails and add videos to personal web sites or to blogs. Cary Marsh, Mydeo’s CEO, says that the Microsoft association has given them global reach — they now have customers in more than 160 countries, something they say they could never have done alone as a UK-based startup without such a global partner. The partnership is driving qualified targeted leads directly to its service — the conversion rate from visit to registration from the Windows Movie Maker channel is more than 60 percent. And the current sign-up rate is increasing 25 percent each month. Marsh credits the Microsoft partnership with helping other potential partners have confidence in its solution. Mydeo is now integrated with Tiscali (one of the largest broadband providers in Europe) and with Orange consumer portals, giving Mydeo exposure to millions of broadband users.

There are many more stories where these come from. We have had hundreds of extremely successful engagements helping startups drive their shareholder and end customer value. As I’ve noted in past columns, we help startups in a number of ways:

  • Provide the technology platform assets that help them model and scale their solutions in advance of customer demands.
  • Reduce development time and get to market quickly.
  • Lower investment risk and help them secure funding via our network of venture capital relationships.
  • Help them kick-start and drive sales momentum.
  • Extend their partnership model and broaden their reach by leveraging our extensive partnership ecosystem.

From enterprise engagements, to product group distribution agreements, to deep levels of technology engagement, to being a customer, to providing an exit strategy — one thing very often does lead to another.