Technology giant Microsoft has today announced it will be moving into the new Sydney Startup Hub and using it to establish the eighth location of its worldwide ScaleUp accelerator program.
The Sydney Startup Hub, which co-working space Fishburners and a number of other companies have been operating out of for some time, was officially opened today by NSW Premier Gladys Berejiklian. The Hub is a $35 million project by the current state government, and the decision by Microsoft to move into it is a “huge vote of confidence”, said the Premier.
“The decision by Microsoft to move in is a huge vote of confidence in our city, our economy and the people that make up our startup community,” she said in a statement.
ScaleUp is Microsoft’s primary accelerator program and it’s run in Seattle, Beijing, Berlin, Tel Aviv, Bangalore, Shanghai and London. To date, nearly 730 companies have completed the program worldwide, with each raising an average of $US5.2 million ($6.6 million) in follow-on funding for a total of $US3 billion.
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It differs from other locally offered accelerator programs in that it typically focuses on more established startups that have already raised funding, and does exactly what it says on the tin: it helps them scale up.
Tiana Yuki is the founder and chief executive of social media indexing company Shareablee. Yuki was born in Sydney but moved to New York to found her startup. While abroad, she underwent the ScaleUp program in Seattle and told StartupSmart the program made her think realistically about the next 10 years of her already-established company.
“We were already in the market with over 200 customers and a solid product-market fit, but the ScaleUp program itself challenged us to think about what the next ten years of the company would look like,” she says.
“It challenged me to look at my founding vision and how I might adapt that to changes we’re seeing in the world. I was very focused on executing on my original mission, and this made me look up and take notice.”
Heading up ScaleUp, along with her additional role as global head of startups at Microsoft, will be industry figure Annie Parker, who recently stepped down as the chief executive of Fishburners.
The program runs for four months, and does not take equity from the startup. It hopes to run its first cohort before the end of the year.
In a statement, Microsoft Australia managing director Steven Worrall said he wants the program to be the ”‘glue’ that connects the startup ecosystem in Australia”.
“Being part of the Sydney Startup Hub enables us to realise that ambition. For any business to succeed it needs strong local and global connections and we believe Microsoft can help a startup be global from the outset,” he said.
Local startups need to think beyond Australia
Yuki says the ScaleUp accelerator could suit a startup of any size, but it’s aimed at those in a market “sweet spot”, having been there long enough to achieve some amount of traction with their product or service. For a startup not in the tech space, she says the company would probably need to be funded “to some extent”.
Scaling up also goes beyond becoming a larger local company, with Yuki saying the Microsoft program puts founders in the mindset of becoming a global enterprise, which is something she believes startup founders rarely think of.
“Companies, in general, are stuck on how to scale up, but definitely those in Australia. You’ve got a really thriving customer ecosystem and a great marketplace, so it’s easy to think of your business just serving inside of the country,” she says.
“When you’re dreaming up a company its exciting and wonderful, and you’re focused on the skills and tools and team you need to get ten customers. But when it’s ten thousand, not ten, most startups aren’t in that mindset.
“You’ve got some really exciting tech and big data companies emerging here, but why shouldn’t the system benefit from going global. It’s about demystifying what it means to do business beyond Australia.”
In advice to founders gearing up to scale up, Yuki warns it’s “always a little bit of a tightrope” when considering growth. Founders have to toe the line between redundancy and being over-prepared.
“Operating with scale in mind means that when the time comes, the company is prepared. The only thing worse than no growth is having massive amounts of growth and screwing it up,” she says.