Tim O'Brien, General Manager Apps & Platforms Microsoft: the biggest challenges for startups

Yesterday we had the pleasure of talking to Tim O'Brien, General Manager Apps & Platforms Microsoft, about growing startups through the exploration of new technologies. But the fireside chat we had with him revealed more than that.

From entrepreneur to enterprise

Tim started out as an entrepreneur himself, before joining Microsoft over 10 years ago. He told us that even if one changes work environments, the entrepreneurial drive never dies down. He has been working with Microsoft for 10 years now, focusing on Developer Relations, Application Development and partnerships for the Windows Mobile platform and more.

On changes in the tech industry

As we can start to feel ourselves, as end users, there is a wind of change blowing through Microsoft's plans. The new CEO only reinforces this, and, as we found out from Tim, things are moving about at quite a speedy pace for a company its size. There�s an attitude shift, a cultural shift happening in the company and it'll be completed with details as we go along what Tim shared with us.

Tim sees changes in the tech industry, too. Advances in hardware and software are constantly changing the way we see technology. In 10 year's time we went from scarcity to abundances and cheapness. Ten years ago most people used one device, today they use a lot more (at least 2 or 3). The big number of people that write code is another great indicator of the evolution of the tech world. Now writing code is more accessible, so anyone can do it. Imagine that the most downloaded game on AppStore at some point was written by a 14 year old kid.

To all these changes, Microsoft is responding through improving the capabilities and technical KPIs of their plaforms, but also by getting involved in major projects that shape the world wide web as we know it, like W3C or HTML5. Tim says that "the criticisms for a company like us is that it�s not real engagement if you�re not giving back", which is only fair. So that is why they're working on this area even more. Plus, there is a business interest at steak.

"It will take some time to get the word out and get people realizing we think differently about open source.", Tim O'Brien says, but he is sure that it will eventually happen.

Also, Microsoft is working on services targeted at the broad market and not just companies.
"People forget that we acquired Hotmail in 1997- it was a beginning of a portfolio of consumer focused products and services.", Tim recalled. "It�s a business we have been in for a long time, but the implementation looks a bit different today."

Another change to take into account is the direction to a new business model: "We�re taking off to a subscription business model, we are getting more into hardware design, integration of hardware and software." Tim says that "we want them [i.e. the end users] to think of us as a set of experiences much broader, that are more than just a phone or tablet."

Windows phone came late into the mobile phone market, and they fully realize that, but Tim said that they are trying to catch up. "We launched in the most competitive market in the world. But we've seen Samsung take the leadership position from Apple in just 3 years' time, so it�s not too late. Samsung is the best example to show things can change."

On managing multiple devices

Most people are using multiple devices, so this challenges designers to differentiate the experience. Microsoft is working on broadening the support they offer for communities, developers, and enterprises. As an advice for startups, Tim stated that the decision to build an app should be a business decision that takes into account what the return on investment will be. And then there is also the multiplatform challenge, which Microsoft is addressing by engaging in partnerships with companies to design an application for their different platforms.

The most frequent developer requests they get are around the possibility to re-use the code written for other mobile apps. So that is why Microsoft is moving towards offering greater support for third party platforms and entities. As expected, people are reticent to learning something new because there is no time to learn. They want to implement what they already know and that's absolutely natural for optimizing resources.

In the world of multiple devices there is also a lot of room for innovation, especially in the security sector, since the evolution of gadgets and the internet of things will trigger even more vulnerability factors. The management for all these devices itself is a challenge and Tim is sure that somebody is going to figure out a simple, elegant way to do this.

Some figures for Windows mobile:
* there are a quarter million apps for Windows phone in the store * there is a base of developers amounting to 7-9 million and Microsoft is working on bringing them forward in the new platforms, being aware that Microsoft needs to have a value proposition for the new developers

On reaching out to startups

Tim: "For startups we have a program called BizSpark, available to privately held companies, who need help procuring software. Through this platform, startups can get free access to development tools, services in the cloud, etc. More than 85.000 companies are already involved.

Microsoft also had an accelerator program that was implemented in 6 locations (London, Tel Aviv). One hundred and thirty seven companies graduated. There is also a chance for startups to engage through the global partner program that they have. Tim realized that there�s need for flexibility: startups need to feel closer to big companies.

On trends in tech startups

Tim O'Brien: "Before the cloud and app economy, the business model for software was understood. It took so much capital to get companies going. When the .com bust, in 2000, we were looking for used servers, we used cheap fans to cool them and that�s how you did things back then. Today it's quite different: the choice of the optimization on how the money comes defines the way you build your product. You can charge money for software, use the freemium model, deliver a subscription based service or any of the other options. Getting the formula right, that�s what you need to do. Angry Birds Go is a great example! Also, the Saas is still a difficult model. We did it with Xbox Live, one of the few services that worked."

Moreover, startups who build apps are having an increasingly difficult time to differentiate among the millions of apps. They will need to spend more on marketing and customer acquisitions that a few years ago. A lot more. Because consumers are getting harder and harder to get money out of too. The consumer products and services are going to have a more difficult path towards success.

As for SaaS startups focused on the B2B market, they should know that businesses are still paying money for innovation.

Thank you for joining us at TechHub Bucharest for this special fireside chat. If you didn't make it yet, we have our weekly meetup coming up on Thursday, when we'll tackle the many subjects surrounding community management in its many applications.