 "'We don't want too many idea-stage companies'")
For its next batch, Microsoft Ventures Accelerator has received far more applications than the 850 it had for the previous one. So far, the accelerator has graduated 51 start-ups, of which two have been acquired and 87 per cent have been funded within a year of graduation. Overall, these start-ups received $10.73 million in funding. Director Ravi Narayan, in an interview with Itika Sharma Punit, talks about the past two batches mentored under him, the difference between Microsoft Ventures and other start-up incubators in India, his plans for the coming batches and the Indian start-up system. Edited excerpts:
The accelerator has graduated four batches in India. How does India's start-up system compare with those of other countries?
Every year, the US produces 60,000 start-ups. Next is China, with at least 6,000 start-ups every year. India has only 1,000 start-ups coming out every year. But that is much better than a couple of years ago, when we had only 300-400 a year. Israel, which gets a lot of attention, produces only about 400 start-ups every year. But for Israel, the good thing is start-ups there move very quickly and get to raise money in the US. India is catching up very well, and there is a possibility it will be able to see commensurate successes in the coming years, as is the case with other countries, especially Israel. But it will take some time for that to happen.
What big change have you seen through the past four batches?
The number of companies applying for the accelerator programme has increased a lot, probably because the number of start-ups coming up now is much higher, with people taking risks and venturing to build companies. Also, the quality of companies coming through has improved substantially.
What is your focus while mentoring at the accelerator?
There are three major areas where we help start-ups - technology enablement, customer development and how to tell a story.
What is unique about Microsoft Accelerator?
We work with several other incubators. The reason we want to do that is because we don't want to do what they are doing. Let them do what they do well; in fact, we will help them. Also, most start-ups that come to other incubators are at a slightly early stage than where we want to see them. We do take some idea-stage companies. For instance, in the recent batch, we had three. In the next batch, we will have slightly less than that. We don't want too many idea-stage companies because it will take these nine-10 months to actually get their products and reach customers. But the accelerator programme will be over in four months. If they are still trying to figure what to do, working with them is probably not the best use of our resources.
We have decided, we will gradually move to taking companies only by referrals from people within the system, rather than start-ups coming to me directly. We are seriously contemplating not to have the same application system from the sixth batch or so. This is because there should be some logical progression for companies, rather than these serendipitously going from place to place. Entrepreneurs have to feel there's a path for them to take.
How big will your next batch be? What are the kinds of applications you have received so far?
It will be a regular-sized batch, with 14-15 companies. For the earlier batch, we had received 850 applications; this time, we have already far exceeded that number. The process is still underway. I haven't started screening the applications. The process of receiving applications will be closed on June 10. Within a few weeks of that, my team and other mentors will screen the applications and shortlist about 40. I will further shortlist from these and present the applications to a panel of selectors, which includes some venture capitalists, angel investors and some within Microsoft.
The accelerator has graduated four batches in India. How does India's start-up system compare with those of other countries?
Every year, the US produces 60,000 start-ups. Next is China, with at least 6,000 start-ups every year. India has only 1,000 start-ups coming out every year. But that is much better than a couple of years ago, when we had only 300-400 a year. Israel, which gets a lot of attention, produces only about 400 start-ups every year. But for Israel, the good thing is start-ups there move very quickly and get to raise money in the US. India is catching up very well, and there is a possibility it will be able to see commensurate successes in the coming years, as is the case with other countries, especially Israel. But it will take some time for that to happen.
What big change have you seen through the past four batches?
The number of companies applying for the accelerator programme has increased a lot, probably because the number of start-ups coming up now is much higher, with people taking risks and venturing to build companies. Also, the quality of companies coming through has improved substantially.
What is your focus while mentoring at the accelerator?
There are three major areas where we help start-ups - technology enablement, customer development and how to tell a story.
What is unique about Microsoft Accelerator?
We work with several other incubators. The reason we want to do that is because we don't want to do what they are doing. Let them do what they do well; in fact, we will help them. Also, most start-ups that come to other incubators are at a slightly early stage than where we want to see them. We do take some idea-stage companies. For instance, in the recent batch, we had three. In the next batch, we will have slightly less than that. We don't want too many idea-stage companies because it will take these nine-10 months to actually get their products and reach customers. But the accelerator programme will be over in four months. If they are still trying to figure what to do, working with them is probably not the best use of our resources.
We have decided, we will gradually move to taking companies only by referrals from people within the system, rather than start-ups coming to me directly. We are seriously contemplating not to have the same application system from the sixth batch or so. This is because there should be some logical progression for companies, rather than these serendipitously going from place to place. Entrepreneurs have to feel there's a path for them to take.
How big will your next batch be? What are the kinds of applications you have received so far?
It will be a regular-sized batch, with 14-15 companies. For the earlier batch, we had received 850 applications; this time, we have already far exceeded that number. The process is still underway. I haven't started screening the applications. The process of receiving applications will be closed on June 10. Within a few weeks of that, my team and other mentors will screen the applications and shortlist about 40. I will further shortlist from these and present the applications to a panel of selectors, which includes some venture capitalists, angel investors and some within Microsoft.