Microsoft Plans More Startup Accelerators in Seattle, Elsewhere

Microsoft feted the first batch of startups to go through its Seattle accelerator Wednesday with a demo day in the heart of Amazon’s neighborhood. And despite their competition for workers and customers, Amazon employees were invited inside, a gesture that the accelerator’s leader called a sign of Microsoft’s new openness, particularly in support of entrepreneurship.

The Microsoft accelerator, in partnership with American Family Insurance, focused on home automation. A big theme was devices and services employing wireless and cloud technologies to offer relatively affordable, do-it-yourself versions of security (Novi Security) and home lighting control systems (Plum) that have typically been costly, custom affairs. There were also multiple approaches to warning you when you’ve left the house with the stove on, including one (Wallflower) that turns it off if you don’t replay to an alert.

The four-month program held at Microsoft’s Redmond, WA, headquarters included the usual—marketing training and support, business development instruction, mentors—and some unusual perks befitting a global corporate giant, such as a field trip to Shenzhen, China.

Microsoft intends to continue its Seattle accelerator program on a regular basis and announced the focus of its spring 2015 session: digital work.

“The next cohort will focus on startups building scalable productivity applications, cloud-centric software platforms, and enterprise-grade solutions to help people get more done,” director Mukund Mohan, pictured above, wrote in a blog post. Applications are open now. The program is set to begin in March.

Microsoft also has accelerators in Paris, Berlin, Bangalore, Beijing, London, and Tel Aviv, and plans to expand to more locations, said Zack Weisfeld, head of Microsoft Ventures global accelerators.

They’re part of Microsoft’s broader effort to reach out to startups through things like the BizSpark program, which provides free software and services, and Microsoft Innovation Centers that offer help for aspiring entrepreneurs. For the most promising startups, Microsoft may make direct investments or provide “white-glove treatment,” introducing them to the company’s own corporate customers and partners, Weisfeld said.

(Microsoft Ventures, meanwhile, is between leaders after the departure last month of Rahul Sood, who was tapped to create the Bing Fund in early 2012 that last year became Microsoft Ventures. Sood left to start Seattle-based Unikrn, about which the VoodooPC creator said little other than, “My gaming past continues to drive unrest inside me.”)

As of Wednesday, 272 companies have gone through Microsoft accelerators worldwide. So far, 80 percent of those received follow-on funding, averaging $1.9 million per startup. Sixteen companies have been acquired thus far, including one by Microsoft itself.

At the end of the event, Mohan said that 371 people showed up and many were left out in the rain because of capacity limits at the South Lake Union venue Microsoft chose for the event, right in the middle of Amazon’s quickly growing urban campus.

Mohan went on to note that there were more Amazon people in the room than Microsoft people, signaling the company’s willingness to work with partners and competitors, as well as other accelerator programs, if it benefits the startup companies.

“That’s a change,” Mohan said, noting an attitude adjustment at Microsoft under new CEO Satya Nadella. “We’re open. We’re here to help entrepreneurs and we have our startups in mind first.”

But the warm feelings don’t extend to every corner of Microsoft. Sales boss Kevin Turner recently called Amazon “half” a competitor when it comes to the global cloud computing business.

Benjamin Romano is editor of Xconomy Seattle. Email him at bromano [at] xconomy.com. Follow @bromano

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