Microsoft Accelerator Bengaluru turned 5 years old this year. We talked with programme CEO Bala Girisaballa about ecosystems, success and why a B2B company can’t fail in India.
The Bangalore Mindset
Offering different programmes in cities as diverse as Seattle, Beijing, Tel Aviv and Berlin, the Microsoft Accelerator has also made its home in Bengaluru for the last 5 years. Bengaluru is its own unique ecosystem and Bala Girisaballa knows it. In fact, the CEO of the Bengaluru branch of the Microsoft Accelerator is overseeing the track today at the Bengaluru Tech Summit where keynote speeches, panel discussions and investor/corporation speed dating all converge on the topic of startup ecosystems.
One of the most astonishing facts about the Bengaluru ecosystem, according to Girisaballa, has been its explosive growth. ‘What Silicon Valley did in 25 years has been achieved by India- a process they’re still going through- in about 7-8 years.’ he said, noting that there were three reasons such a fertile landscape had been sown is such short time.
Firstly, ‘worldwide, the movement of the cloud has impacted large companies’ growth (and their IT) and that has put pressure on the services industry. All of that energy got channelled and [the ecosystem] evolved much quickly as a result.’
Furthermore, Girisaballa went on to add that the government has been has been ‘very supportive in creating a conducive environment for startups to play in. The idea was also to foster entrepreneurial energy so they could employ workforce at every level.’
And finally, as a result of having a population of 1.3 billion people, many of whom wield smartphones in hand, this implies that ‘now the data is much more affordable and this frees up the canvas on which you can innovate. You don’t have to build an infrastructure like you had to do in 2008.’ All of these macro trends walked hand in hand at just the right time to shape the current landscape that exists in Bengaluru today.
Photo courtesy of Microsoft Accelerator
The ecosystem is now so large that other cities have come to depend on it when they come to terms with scale. Speaking of startups that succeed in Mumbai or Delhi, Girisaballa said that ‘after they grow to a certain level they’ll open an office in Bangalore because they can deal with the scale of a global company.’ As a result, ‘it will take a long time for some of these other cities to flourish.’
‘If you ask Microsoft to set up in Sambalpur, Microsoft will probably pull it off.’ Girisaballa quipped, but he notes that a similar action wouldn’t be pulled off too easily by locals. This doesn’t mean that a company couldn’t be successful in cities outside of Bangalore. On the contrary, Girisaballa believes if you get out of the ‘Bangalore mindset’ of ‘success equals growth’ then the other cities have their own chance to shine. Say for example a community of like-minded individuals that try to solve the problem of local employment in rural areas within India, an ecosystem can succeed even if they fail to register the mega-profits that their Bengaluru cousins make. ‘If you start to see things with that lens you start to see things differently,’ Girisaballa said. “In that canvas, a thousand cities can bloom.’
Success in the Accelerator
But what counts as success within the Microsoft Accelerator program in Bengaluru? Girisaballa believes that the common thread among the succesful is difficult to pin down in all cases but he does impart a little wisdom on markers of a successful enterprise.
For one, in a place like India ‘it’s hard to fail as a B2B company.’ Girisaballa said, noting that the death rate of B2C companies is much higher. However, though B2B companies can always meet their payroll and your expectations the challenge, Girisaballa believes, is to scale. ‘It’s at the later stages that they struggle. After [a company exceeds $2 million] they need to sharpen their focus to go on a global scale.’
Another determinant of success for a startup is the ability to ‘meet and grow with partners.’ ‘You can’t just do it alone.’ Girisaballa believes, ‘Closing deals is hard without partners. A majority of the companies that I work with there is stress and friction in the system. One company had built a direct sales channel and they needed to build a partner channel as well. Nothing worked and it turned out the two channels were in conflict. They were competing in the market!
AI Redundancy
The Microsoft Accelerator will accept its 12th batch in late January. As the process is now referral-based rather than seeking applications, a startup may be wondering what their chances are of being approached and invited by the Microsoft Accelerator program to their selection day in Bengaluru (whereby 12 are chosen).
We can make two not so bold predictions about the intake. One, all of them will be B2B. This reflects not only the dominance of this sector in India but also the program’s own policy since 2016 of accepting only late-stage startups that had already formed a product and tested it on India’s tolerant customer base. Given that they take in only tried and tested candidates, Girisaballa conceded that ‘whether we can be considered a real accelerator is a fair point, but most of the companies that go through our program see tremendous value. Microsoft is a platform company and a B2B company. If someone is B2B and on a cloud, we can perforce help them on the technology side and introduce them to our customers.’
We can also be certain that all of the startups chosen next year will have some focus on AI. So much so that Girisaballa might just stop using the word ‘AI’ when making press notes about the incoming batch. ‘It is not something that differentiates them anymore,’ he said, adding that he remembered in 1999 that ‘companies used to differentiate themselves by calling themselves a ‘dotcom company’. In 7 years no one said that anymore. I imagine in another few years people will stop calling [AI] out.’ Instead, Girisaballa expects the conversation to be more nuanced, where startups look into diverse fields like learning intelligence (VideoKen – batch 2017), customer interactions (like Cloudcherry – batch 2015) and predictive intelligence (like DataRPM – Seattle batch 2016). When that nuance may arrive, is anything but predictable.
