In the past few days, both Google and Nokia have announced corporate venture funds to support new technologies supporting their platforms.  This subject is near & dear to my heart.  For one, I’m the beneficiary of news such as this — two major companies believe in new Web technologies enough to invest real money in early stage companies.  And I’ve been told that at least two other major companies are working on similar plans as we speak.  This is great news.  It means that the work we do as early stage entrepreneurs has real value again. 

On the other hand, it’s frustrating as hell.  The one project that was most meaningful to me in my 15 months running Microsoft’s Web Strategy team was creating such a beast at Microsoft.  I wanted a small venture fund that would identify investment opportunities that relied upon the Microsoft web stack.  I figured that the investment would probably pay for itself, but it would be a really interesting thing for the company to do… betting on the Web and the Web stack (and being the first major tech giant to do so) would have been very beneficial to our message & fledgling technologies such as Silverlight and Windows Live amongst others.  Not to mention the added benefit of getting entrepreneurs excited about Microsoft again.

Maybe I was ahead of the times.  Maybe I was working at the wrong company.  I don’t know.  But I got a lot of objection to the idea… I heard a ton of excuses that really missed the point, for example:

• we aren’t a venture capital company…
• it would take us 2 years to get this going…
• you can’t pull it off operationally…
• where are you going to find $100m…
• etc.

It was unusual because it was probably the only bold thing I couldn’t get moved forward in my 3+ years there.  A critic could say that I failed… and maybe that is true.  But I found that doing such a thing really didn’t fit the pedigree of what the company wanted, what it valued, or what it was willing to do to stand behind the value proposition.

I’d be lying if I said that the situation didn’t play a small part in my departure.  If I was working in a tech giant, I wanted to work in one where a no-brainer move like this would be seen as bold and critical to future success.  This is the sort of thing IMO that Microsoft should be doing… a place where Microsoft should be leading.  Instead, it was a place more geared to enterprise predictability than consumer serendipity.  So I had to go.

But enough on that.  I wonder if the recent news will create a stir or a sense of urgency in the hallowed walls of Redmond.  Some things are woefully out of whack right now.  I can count on one hand the number of early stage entrepreneurs I know without a previous tie to the Borg who are betting on the Microsoft web platform.  But it isn’t like Microsoft doesn’t care.  Microsoft absolutely does care.  Microsoft wants and needs broad adoption of its web technologies, tools, and platforms.  I don’t know many people there who really think that saving Windows is the way to grow that company consistently by 15% a year.

Folks in Redmond are pretty well aware that Microsoft’s future growth depends on success with the Web, mobile devices, interactivity, internet advertising, etc.

So the situation we’re in is as follows:

• Microsoft is way behind in most areas that folks acknowledge are critical to the company’s future growth,
• Microsoft’s competitors are betting on early stage entrepreneurs by creating venture funds, and the more companies will follow suit over coming months.  This makes entrepreneurs focus effort & energy towards those competitors even more,
• Microsoft has very little share amongst early stage companies and an infinitesimal share in social media applications,
• As a strategy, Microsoft is investing more time, energy, and capital on consumer applications while pulling resources away from enterprise investments,
• Microsoft needs to succeed with the Web stack if it is going to be relevant in consumer markets.

It seems to me that Microsoft needs to be an extremely fast follower to respond… I’m talking about being a lot faster & more agile than ever before.  If one thing has been clear about the evolution of the Web, it is that being a fast follower is different in the Web world than the traditional client software world.  Exhibit 1 - Search Market Share.  Microsoft can’t just wait a few years to let this play out.  The time for urgency is now (I’ll refer you to some of my earlier ideas on helping entrepreneurs as a starting point.)  Whether or not it is in Microsoft’s DNA or even its constitution to be bold & urgent at this point remains to be seen.