India is becoming world's start-up capital: Microsoft India's Sangeeta Bavi

Start-ups going through ups and downs is a reflection of the economy and the market, says Bavi

This is an fascinating time to be an entrepreneur in India. Sangeeta Bavi, Executive Director, Digital Natives, Microsoft India, says India is going through a generational change culturally as the country is witnessing a push towards entrepreneurship. In an interview with Aryaman Gupta, Bavi talks about how Microsoft is helping Indians to build their own start-ups. Edited excerpts:

What success has Microsoft seen in the Indian start-up ecosystem in the past three to four years?

Microsoft runs like a well-oiled engine. It is a large MNC operating in 192 countries. We have always been a very enterprise-focused company. In the past few years, there has been a lot of focus on fostering innovation in the country locally. Schools and educational institutes are pushing students to become entrepreneurs. In India, quite a handful of student entrepreneurs have their own registered start-ups. India is genuinely becoming the start-up capital of the world.

We started the Microsoft Start-up Founders Hub initiative about five years ago. Unlike other players in the ecosystem who target early-stage start-ups, we attempted to bridge lighthouse digital natives in India, and started partnerships with category leaders, like iCert, Fractals, Udaan. Based on this, we created the entire programme catering to start-ups from the day of inception till they become unicorns.

What entrepreneurial and technological guidance does Microsoft Start-up Hub provide start-ups?

We are currently working with start-ups numbering four digits. Microsoft guides these fledgling businesses about how to be an enterprise, offering technical support and financial guidance. It does not provide start-ups with direct financial benefits but offers $350,000 of credit, which can be used to avail our technology stack free of cost, as we understand that as the start-up grows, they need to optimize their costs.

In this regard, start-ups can also work with our technical engineers and architects to create scalable architecture.

Microsoft provides mentoring and guidance on the business and technical side of things. Once start-ups see what we have to offer in terms of the business aspect, we offer them our tech stack. If they are interested, we can go deeper.

For early-stage start-ups, our assistance in terms of engineering is almost consultative. This includes how to attract consumers to their platforms, how to create a scalable architecture, and even how to eventually reach the unicorn stage.

What we have witnessed is that start-ups generally start small. They continue to grow with us as they unlock these values with Microsoft. Some classic examples are Udaan and our seven-year partnership with iCert.

When it comes to innovation, as long as a start-up is relevant in the Microsoft portfolio, we integrate both our products to unlock more value for customers through partnerships. This is irrespective of whether the start-up is in its early stage or about to go IPO.

What is the technology roadmap being adopted by early-stage start-ups in light of Microsoft’s open-source services?

Keeping Microsoft out of the equation, typically, the journey of a start-up is always driven by funding. Only some start-ups are completely bootstrapped. But, the percentage of that population in India is very small. The initiative at Microsoft is to support these start-ups and guide them.

It doesn’t matter if they are using Microsoft or not, we will guide them in creating a scalable architecture which has robust security. However, not every start-up intentionally incorporates security into its tech stack. That is the awareness we are trying to create.

Microsoft’s technological support comes from our engineering team, who work with engineers from these start-ups. This helps build a mutually beneficial relationship, where start-ups receive the right technical advice and market insights while Microsoft engineers learn how these start-ups are using our tools and platforms. At the end of the day, we want start-ups to use our tech stack.

Microsoft has also set up an entire developer tool chain. If our platform lacks any specific features, we work with start-ups and come up with solutions to bridge those gaps by opening private APIs which help these start-ups connect with the Microsoft platform. Since Microsoft is the OS fabric for all developers, this enables start-ups to get more discovery.

Finally, Microsoft provides a complete, unified layer of security so that start-ups don’t have to buy numerous security solutions.

Microsoft partnered with Open AI earlier this year. What kind of services do you provide start-ups in terms of artificial intelligence?

Microsoft offers Open AI benefits to start-ups partnered with Founders Hub. Almost every start-up today involves usage of AI. We have seen a lot of such start-ups like nucleus.ai. While they continue to run their own customer horizon, the biggest challenge is getting access to the right data. Open AI provides this access to data to start-ups.

We also launched a programme called Microsoft AI Innovate which helps start-ups to have AI as one of their core IT. With cohort one, we worked with ten start-ups in a ten-week skilling certification programme for their developers, data candidates, product managers and non-tech people on how to drive business elements for their companies.

Due to its extensive technological support, does Microsoft tend to focus more on deep tech start-ups?

Sectors such as spacetech, healthtech and BFSI are focus areas for Microsoft as we can provide a lot more tech value to such start-ups. For instance, in the spacetech realm, our engineering team runs the Azure Space Program where we have partnered with a similar start-up from the seed stage.

When we create such programmes, we are very intentional about the verticals we choose to provide ample tech value. Having said that, we also work with other start-ups in various sectors as well.

Despite seeing immense growth in recent years, be it in terms of access to funds or the number of unicorns produced, start-ups are now going through a funding winter. What is Microsoft’s take on these developments?

Start-ups going through ups and downs is a reflection of the economy and the market. In the last two years in India, a lot of the established start-ups got enormous funding to grow fast. If you look at funding in totality, it has been less than last year. However, looking at early-stage start-ups in the first six months, there has been around 30 per cent year on year growth compared to last year.

Among growth phase start-ups, growth has been less than last year as their focus now is in terms of improving their expansion models.

Our guidance to large start-ups in this regard is towards continual investment in tech and bringing product innovation in the market.

Is the discussion on optimising costs among both early stage and late-stage start-ups getting stronger?

For established start-ups, optimising costs was always the focus. These start-ups usually work on cost optimisation on a quarterly basis. But right now, because of the current market situation, some of the early-stage start-ups have also started incorporating this practice.

How is Microsoft reaching entrepreneurs from smaller towns and cities? Have tier III or tier IV cities come more into focus this year?

For emerging hubs, Microsoft has a partnership approach. We partner with communities that regularly engage with start-ups, bringing them Microsoft’s mentors, experts and programmes.

The next phase of innovation is likely to come from non-metro cities. The pandemic has caused most start-ups to operate remotely. So, we will likely witness a lot more innovation from smaller cities.