From Bangalore to Beijing, through Tel-Aviv and London, Zack Weisfeld has been a serial entrepreneur and is now nurturing “the perfect global startup” as Head of Microsoft Ventures Europe & Global Accelerator Program.

The program is what we call a corporate accelerator. It gives a big corporation – Microsoft here – an opportunity to support startups, with various objectives in mind, from technology adoption to having a stake in a possible unicorn.

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Zack Weisfeld, Head of Microsoft Ventures Europe & Global Accelerator Program, on the stage of Bangalore NPC 2014

And, because we’ve discussed with Zack following his speech at Bangalore’s tech event Nasscom Product Conclave Seed Summit, it’s great to see the program is spread across seven cities, Bangalore included.

Three pillars for Microsoft Ventures corporate innovation program

Microsoft is quite advanced in the ways they manage this corporate innovation. They have about 100 Microsoft Innovation Centers, more than 200 partnerships with local accelerators or incubators, as well as these seven Microsoft Ventures Accelerators in Seattle, Tel-Aviv, London, Beijing, Bangalore, Berlin and Paris.

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Three pillars give the structure of Microsoft corporate innovation program:

  1. The community, through the BizSpark program (free software for about 100k startups), the 107 Microsoft Innovation Centers who help entrepreneurs at a very early stage, and the 200+ partnerships with accelerators, but also with support organisations such as the Founders Institute.
  2. The 7 Microsoft Accelerators, lasting 4 to 6 months, running since 2012, with a 2% admission rate, no equity, and no obligation to use Microsoft technology. Each location is staffed by a full time experienced team. The curriculum is comprehensive, from Lean startup to product, scale-up and storytelling/marketing.
  3. The growth pillar, where Microsoft Ventures Growth help more mature startups, possibly future unicorns, through access to funding, connection to big companies

The results so far:

  • About 250 graduates within the Microsoft Ventures Accelerators
  • 80% follow-on funding within one year of graduation with an average of $1.9m
  • 15 exits including Microsoft, Google, Yahoo or Yandex
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A tiny part of the startups “in store” at Microsoft Ventures

How does it compare to the competition? Quite well, as Zack Weisfeld adds: “For Microsoft Ventures accelerator results – 6500 applications a year (we only accept 2% of applicants vs. industry 4% +) , 80% follow on funding (Top US accelerators at 57%), $1.9M avg funding (1-1.7M top US) and 15 acquisitions (3 times than top industry marks)”.

Corporate innovation must be designed as an ecosystem

The objective of the program is both to go beyond the Silicon Valley and to find the top 5% of global entrepreneurs. Zack and his team learn a lot too, and share two key takeaways:

  • First, the necessity of being inclusive with the other players of the ecosystem. As they don’t take equity, “we’re not competing with investors, so they see us as an opportunity and a potential deal flow”. Mentorship is a key asset for accelerators, and these are to be found within the ecosystem, especially among serial entrepreneurs. Partnerships are key, with other corporates who can benefit from innovation while being a first important customer for alumni.
  • Then, the management of cultural difference (a topic we had approached in Kenya already). Zack shares a real-life anecdote as in the accelerator, it’s common to purge the ideas of first time entrepreneurs to make them face reality. A painful moment where cultural features can be visible. “If you say to an entrepreneur what they do is not on the right track, they react differently. In the US, entrepreneurs accept the feedback and change rapidly. In Tel-Aviv, entrepreneurs would say “you have no clue, we know better than you” even though they would change too. In Bangalore, some got offended when we said their baby was ugly, feeling really bad but same thing, they learn and move forward. In Berlin there’s nothing coming back as the entrepreneur is doing his own analytics in his mind apparently”.

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From corporate accelerators to vertical accelerators

The next stage for the Microsoft Ventures Accelerator is to try out vertical corporate acceleration.

As Zack told us, three batches of these speciality-based accelerators are planned: In Seattle – Connected HomeIOT together with American Family Insurance. Cybersecurity in Tel-Aviv together with Akamai and JVP, and MedicalHealth with Becton Dickinson and Helthbox. The great value the vertical accelerators provide – domain expertise , unparalleled route to markets, specialized mentors and investors. Its too early to judge the results as these batches are still running.”