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David Crow

Connector of dots. Maker of lines. Rider of slopes.

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Microsoft

A Microsoft venture fund

by davidcrow

Kevin Merritt has a great suggestion for creating a Microsoft venture fund. This is not new, I wrote about my displeasure with the proposed Yahoo! deal back. Kevin has thought about a YCombinator-esque microfunding model.
  • A three person team comprised of Ray Ozzie, Don Dodge and Dare Obasanjo would be the investment committee.
  • Anyone can submit a 10-slide business plan. No NDA protection, which is the norm in the VC industry.
  • Plans are reviewed once a quarter. Those that make it through the screening are invited to a 90-minute in person demo and pitch.
  • At the end of the 90-minute demo & pitch, the three-person Ozzie/Dodge/Obasanjo investment committee makes an immediate decision. It’s pass/fail. You’re in or you’re out. American Idol style. You’re going to Hollywood or you aren’t.
  • If you pass, here’s what you get: an investment of $100,000 cash plus $25,000 per founder, but never more than $175,000;  all the Microsoft software you need; unlimited, free use of Microsoft’s cloud computing infrastructure for 3 years; mandatory office space for up to 5 people for the first year in either the Redmond or Silicon Valley Campus; all the non-sense administrative support services that typically saps a startup, a collegial environment working with other Microsoft funded startups.
  • In exchange, Microsoft gets: 10% of the company in common stock with no special preferences or rights; your commitment to exclusively use Microsoft development software and operating systems for 3 years, other than with written exception by Microsoft; your commitment to deploy your software to Microsoft platforms first (i.e. if you build a mobile app, it has to run on Windows Mobile before iPhone).

That’s it. Quid pro quo. Startups need cash, tools, infrastructure and elimination of noise and distraction. Microsoft needs access to innovation and a future generation of folks building software with Microsoft development tools and to be run on Microsoft platforms. My bet is that Microsoft will flat out buy some of the companies during their year of incubation. And if you assume each startup will have 3 to 5 people, even the ones that fail will produce a good stream of folks who could easily become employees. Microsoft probably already spends $50,000 per hire anyway, so it’s not really costing them much if anything at all.

Oh, there’s one more important twist to help stem the tide of people leaving Microsoft to found companies or join startups. Microsoft employees in good standing having spent at least 2 years at Microsoft can quit their job and can be admitted into the incubator program with only a single approval from the investment committee. No business plan, pitch or demo are required. You’re in. Your prior contributions are your ticket. How many young entrepreneurs-to-be are willing to put in two good years at Microsoft just to get into the incubator program? I think more than a few. It’s a VC spin to the army college fund. It’s the Microsoft future entrepreneurs fund.

This is a great, well thought out plan for putting $25M to work. The biggest questions for me are: how does the model scale around the world? What are the implications with respect to existing anti-trust agreements and funding companies?  What are the areas, much like the Y Combinator 30 ideas, that are part of the initial investment thesis? It feels like without a clearly defined investment thesis that this is really a public relations campaign with entrepreneurial leaning technologists.

Posted on July 31, 2008 Filed Under: Articles, Entrepreneurship, Evangelism, Innovation, Microsoft Tagged With: capitalization, Entrepreneurship, Innovation, Microsoft

What would you do with $44 Billion?

by davidcrow

Forty four billion dollars! It’s a huge sum of money. It’s a lot of money to pay to create Pepsi (apparently I prefer Coke). Others have provided their analysis of the deal. There is a mad rush to create a true competitor to Google in the rapidly growing online advertising market and now that a combined Microhoo/Yahsoft which would have created a set of highly trafficked sites and a huge amount of ad revenue, it is now off the table.

Cash. Stock. Debt. It doesn’t really matter because $44 billion is a lot of money. It’s more than the combined venture funding in the US in software since 2002! The actual amount according to PricewaterhouseCoopers MoneyTree is closer to $31B. Interestingly, angel investors in 2007 put $26 billion into 57,120 ventures according to a study by Center for Venture Research at the University of New Hampshire!

To hell with a $10 million dollar Facebook Application Fund. Never mind a $100 million dollar iPhone Fund. What about a new huge software fund aimed at funding new solutions on the Microsoft platform?

Going on an acquisition spree seems to make a lot of sense, Kara Swisher calls it Project Granola, but imagine the power of creating MicroBook, FaceSoft AND all of the other properities already out there. Digg. TechCrunch. GigaOM. LinkedIn. Meebo. The list is almost endless. Building a open media ecosystem to compete with Google, Yahoo and others. What about investments in non-North American properties? It’s a great time to be building media properties. It’s not the first time that it has been suggested that Microsoft could benefit by encouraging entrepreneurs to build successful media businesses.

With the $30 billion left over, it could be like Christmas in July for the geeks and venture firms of Silicon Valley. But Microsoft could scoop up a lot of good stuff, even if prices are high.

Here’s a list: LinkedIn. Digg. Flixster. Slide or RockYou. Veoh. WordPress. Sphere. Sugar. Some international stuff. And more.

Then, some noted, Microsoft would have to give massive financial incentives to those entrepreneurs to stay and thrive. Most importantly, it would have to keep its Redmond hands from interfering.

Time to take the lessons from building a successful software business, and see if the proceeds can be used to build an online media business(es).

Posted on May 7, 2008 Filed Under: Articles, Entrepreneurship, Microsoft Tagged With: Entrepreneurship, Microsoft, venture

The Platform is the Core

by davidcrow

livemeshdesktop

Live Mesh was launched yesterday at Web2Expo in San Francisco.

Our design goals for Live Mesh are to have…

  • …your devices work together
  • …your data and applications available from anywhere
  • …the people you need to connect with just a few clicks away for sharing and collaborating
  • … the information you need to stay up-to-date and always be available

I’m really excited about Live Mesh as a platform. It really is one of the first services above the level of a single device. The integration of experiences across devices is really interesting and important. I started to realize the power of creating a device mesh when I switched from my Blackberry to a Windows Mobile device and Microsoft Exchange. I am able to access my email service using my Palm 750, my Mac Book Pro running Entourage, my new Dell m1330 or my old Thinkpad x60 running Outlook, or when I’m connected over the web running Outlook Web Access. The devices are really irrelevant to me, what is most important is my data. My contacts. My calendar. My email.

Live Mesh is an early platform that allows the abstraction of data and data synchronization with applications, the web, and the cloud. It is a platform for developers to begin building the next generation of applications for the web, devices, rich clients, gaming platforms, media devices, etc.

  • Services Are the Core of the Platform – the Live Mesh platform exposes a number of core services including some Live Services that can all be accessed using the Live Mesh API; these include Storage (online and offline), Membership, Sync, Peer-to-Peer Communication and Newsfeed.
  • Same API on Clients and in the Cloud – the programming model is the same for the cloud and all connected devices, which means a Live Mesh application works exactly the same regardless of whether it’s running in the cloud, in a browser, on a desktop, or on a mobile device.
  • Open, Extendable Data Model – a basic data model is provided for the most common tasks needed for a Live Mesh application; developers can also customize and extend the data model in any fashion that is needed for a specific application.
  • Flexible Application Model – developers can choose what application developer model best fits their needs. .

Mike Zintel, from the Live Mesh team, describes the locus of control is with end users. People are given a platform where they have the control over the devices, the communication, the storage and the membership to the network.

The mesh is the foundation for a model where customers will ultimately license applications to their mesh, as opposed to an instantiation of Windows, Mac or a mobile account or a web site.  Such applications will be seamlessly installed and run from their mesh and application settings persisted across their mesh. The device ring inside of the Live Desktop is a simple visualization of the mesh, and provides a view of all devices and current device availability. The Live Mesh platform provides the ability for applications to connect to any other device, regardless of network topology (network transparency), within the mesh. This infrastructure enables the Live Mesh Remote Desktop experience today.

It is a great way to start to build above the level of a single device. Being able to abstract devices, membership lists, connections between devices, and then an underlying pub/sub infrastructure for awareness and sync is a very empowering framework. I can’t wait to start enabling more of my personal data between my devices (namely music, videos and photos shared between my laptops and music players, and if I’m lucky my TiVO because I can already share from my Mac to my XBox360 via Rivet or Connect360). Ewan Spence covers the hackable power of the underlying “RSS and XML derived data exchange”. This looks like a really good first direction for a Software+Services platform that enables developers beyond the context of a single device.

As Live Mesh is a limited Technology Preview, but it is a great start to building cloud connected applications.

For more information, go to LiveMesh.com. For more Live Mesh coverage:

  • Read the Live Mesh team blog
  • Watch the interview with Ray Ozzie introducing Live Mesh on Channel 9
  • Watch an interview with Abolade Gbadegesin on Live Mesh Architecture on Channel 9
  • Watch the demo of the Live Mesh application on Channel 10

Posted on April 23, 2008 Filed Under: Articles, Development, Innovation, Microsoft, User Experience Tagged With: livemesh, Microsoft

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