AGILEVC My idle thoughts on tech startups

June 9, 2008

I had the opportunity to attend Microsoft’s “VC Day” this past Friday. Microsoft has been doing this type of event for some years out in Redmond, but this was the first year they hosted here at their new facility in Cambridge. There were 35-40 of us there in attendance, mostly from here in the New England venture community, though a few from farther afield. Hats off to Don Dodge and the rest of the crew there at MSFT for getting the event together.

There was the usual chit chat and networking. I always get a little amusement hanging around in a crowd of other VCs… it’s a little like Garrison Keillor’s mythical village of Lake Wobegon, where all the portfolio companies are “above average” :) But most of the morning was setup as informal presentations and Q&A sessions by various execs from MSFT.

It’s always good to hear from Dan’l Lewin, CVP Strategic/Emerging Business whose team basically looks for startups Microsoft might acquire (among other things). Only at Microsoft are $250M transactions considered “small” and unneeding board approaval. But I think the two most interesting sessions were with Reed Sturtevant and Jennifer Chayes. Reed is a long-time entrepreneur who was recently hired by MSFT CTO Ray Ozzie to build a “concept development center” here in Cambridge. They’re still in the process of getting it off the ground, but having previously spent time w/ Reed and his team this quasi-incubator should be a positive force for us here in the internet and software space in Boston and I’m curious to check out the first products they launch. Chayes gave an overview of the Microsoft Research center being built here, the reach is truly expansive covering not just computer science but fields like behavioral economics (has implications in SNS advertising), biology, and even physics.

I also had the chance to spend time at Google’s new facility here in Cambridge last week. They now have a couple hundred people based here, split roughly evenly between engineering and sales / sales ops , and the office continues to grow. The commitment by GOOG and MSFT to grow their presence here, especially among product and engineering types, is of huge benefit to the startup ecosystem here.

We’ve always had both great technical talent, university research, and entrepreneurial DNA here in the Boston area, but particularly with the growth of the internet we’ve been somewhat lacking in large companies in this sector beyond Monster, Akamai, Lycos, et al. While it’s obviously not the official party line, execs at Google and Microsoft freely admit that they anticipate their organizations will become “finishing schools” for a next generation of startup founders and employees. Plus with an increased footprint in this area, presumably more partnering or even acquisition opportunities with these behemoths may arise for the startups already here.

The most successful startup ecosystems require a broad range of participants, each unique but with overlapping and at times complementary interests. I’m thrilled our internet ecosystem here in New England continues to grow in both breadth and depth.