startupi

This week I attended Microsoft’s national conference for managers of Brazilian MIC’s (Microsoft Innovation Centers) that was held at the Centro Universitario Senac Santo Amaro in São Paulo. The focus of the gathering was a two-day symposium led by Malcom Fraser, CEO of the International Institute for Software Economics, Innovation and Entrepreneurship.

While at the symposium I caught up with Silvia Valadares, national director for Microsoft SOL (Startups On Line) program (and the majority of Brazilian MICs) and with the director for emerging markets and world-wide director of Microsoft’s Local Software Economy, Juliano Tubino (photo).

“In the past, there were differences between Silicon Valley and Brazil that go well beyond access to funding and venture capital,” declared Juliano Tubino. “A key difference is the culture of entrepreneurship. North Americans found it natural to think big, build their own businesses and pursue management studies.”

Now, however, Brazilians are rapidly fostering a culture of entrepreneurship, as can be seen by the plethora of activities and participants in the Global Entrepreneurship Week. “Brazilians have been making great strides and now have access to technology, such as through the BizSpark program, to infrastructure and to international capital,” says Juliano. In his opinion, the major remaining obstacles have to do with intellectual property rights and the bureaucracy involved in starting a company. “There’s nothing wrong with making money through software you spent a year developing,” he added.

Personally, the leader from Microsoft believes that it is not necessary for other countries to replicate the exact model of Silicon Valley. “Other countries can and should develop their own unique strengths. In Korea, for instance, three large companies dominate the market but at the same time  stimulate and foster startups through competition for acquisitions. Brazil has the potential to be a hub of innovation in technology, but it still isn’t there.”

Innovation and entrepreneurship are not about lack of choices

One of the questions Juliano would like to see people asking more often is: why innovate? “The process of innovation is necessarily replete with errors and dead ends. The question is, how do we accelerate the process of trial and error? To a degree, this process can be systematized and taught, however true instincts can only be encouraged. Entrepreneurs are fostered not created.”

Regarding opportunity for Brazilian startups, Juliano is optimistic. “ Brazil has made an impressive improvement in recent years in multiple areas that make it more attractive for investors, both domestic and international. Startups should target emerging sectors and figure out how they add value to larger ecosystems. The process is not easy and it takes time. There is no easy ‘Eureka!’.”

Innovating and investing during a crisis is fundamental for most businesses

One fact that the Kaufmann Foundation (a big player in global research on entrepreneurship) shared with Juliano caught my attention: “Most companies listed in the Fortune 500 grew in times of profound crisis. They launched new products, services and technologies that challenged the status quo, challenged the very causes of the crisis. A crisis is excellent for entrepreneurs, assuming you can use it to figure out your errors.”

Another fact pointed out by Tubino is the security of working with a startup. “The number of employees in a startup is not very volatile. That is, in times of crisis you can be more secure in a startup than in a large corporation, which eventually needs to lay off large numbers.”

Tubino on Microsoft:

• “we are the largest investor in research and development;”
• “our greatest innovation is the business model based on partnerships. Success is directly related to the success of the partners, whether in software sales or software creation;”
• “on a global level, each US$1.00 that Microsoft sells generates US$7.80 for partners;”
• “becoming part of our platform is an accelerating factor.”