Microsoft at Madrona 2024

Each year, S. Somasegar and I host a session to raise money to support the Microsoft GIVE campaign by conducting a session at Madrona on venture capital and entrepreneurship. Soma is a Managing Director at Madrona Ventures, where he invests in #AI, #datastack and #developertools.  Soma spent 27 years at Microsoft , ending as Senior Vice President of the Developer Division at Microsoft. Under his leadership, the Developer Division expanded its mission to deliver developer tools and services for mobile and cloud development across various platforms that served thousands of developers worldwide. Soma was also on the board of my previous company Suplari, Inc. which was Madrona -backed.

This year, we hosted six Microsoft employees Koshy John , Apoorav Trehan , George Chen , Christian Dirajlal, Jitu Padhye, Anirudh Garg and Akshay Bhatnagar for a master class in careers at Microsoft, trends in AI, and entrepreneurship hosted by CEO of Read.AI David Shim and Soma.

Career Advice: Apporva asked Soma for his advice in managing his career at Microsoft. Soma advised:

1) Do the things you are excited about as you have a limited amount of time. Soma was passionate about his time and every role he had during his 27 years at Microsoft. He knew it was time to make a change when he questioned spending the next 10-20 years at Microsoft. This caused him to do some soul-searching, leading him to his role in venture capital.

2) Spend 80% of your time trying to hit a home run in your role.

3) Spend 20% of your time doing things  not expected of you but that help your team or Microsoft overall. Soma gave the example of leading the development engineering outside of Redmond back in the '90s. Soma went to India, China and Israel to learn how to build great engineering teams and collaborate with Redmond. Soma led the effort to stand-up the India Development Center (IDC) in Hyderabad in 1999  Developing the IDC was Soma’s night job.

AI Investment Trends: Madrona feels that the app layer will capture the majority of the value as new AI businesses develop. Soma used the mobile stack as an example of how the stack and business models evolved. When the iPhone first came out, there were very few truly valuable apps released. The most popular apps were simple apps like Flashlight and Weather. Over time though, entreprenuers started businesses like Uber and AirBNB, introducing business models that took advantage of the inherent nature of the iPhone (location, camera, payments). The same will happen with AI. Soma highlighted Glean , Perplexity , Harvey , Typeface , Runway , Coda , and Nixler as exciting start-ups.

Investing in Start-ups: Venture captial investing is about identifying people and then giving them access to the resources to be successful. Soma explained “Founder Market Fit” which is 1) Problem: Identifying an interesting problem, 2) Have a differentiated and revolutionary solution, 3) Having the right founders who can charge the hill to build a great business. “Why Now” is a critical and important question. Soma talked through the investment he led in Snowflake , which should have failed 10 times over due to competition from Amazon Web Services (AWS) , Microsoft and Google . Yet, the right, focused founding team, a differentiated product, and the right CEO scaled Snowflake into one of the top VC investments of all time.

Lessons in Entrepreneurship: The great David Shim finished the session talking through the highs and lows of entrepreneurship. David is a 4x Madrona entrepreneur, selling Placed to Snap Inc. and then to Foursquare and starting Read.AI in June 2021. read.ai’s founding team is built from the high performing executives and engineers from his past he worked with at Placed. He encouraged the team to openly share ideas as execution is the hard part. Ultimately, an entrepreneur may meet someone new or learn new and critical information by sharing ideas. David finished our discussion with the concept of “connected intelligence” and “content as an entity.”

 Thank you S. Somasegar and David Shim for an awesome discussion. Thank you everyone for your support of Microsoft's GIVE campaign!