Prompt Cast
Microsoft's Head of Strategic Investments on the Importance of Empathy and Diverse Experiences in M&A
TLDR Brian Schultz, Microsoft's Head of Strategic Investments, emphasizes the importance of empathy and diverse experiences in M&A. He explains that the corporate development team at Microsoft is responsible for managing acquisitions, investments, and joint ventures, and that the process is driven by the business groups within Microsoft based on their knowledge of their markets and product roadmaps.
Timestamped Summary
00:00
Microsoft's Head of Strategic Investments, Brian Schultz, discusses his experience in both the startup world and corporate development, highlighting the importance of empathy and diverse experiences in M&A.
05:44
Microsoft's Head of Strategic Investments, Brian Schultz, explains that the corporate development team at Microsoft is responsible for managing the company's balance sheet activities, including acquisitions, investments, and joint ventures, and that the process of finding and acquiring companies is typically driven by the business groups within Microsoft based on their knowledge of their respective markets and product roadmaps.
11:06
Microsoft Ventures, the early stage investing arm of Microsoft, has undergone significant evolution over the years, with the company previously investing heavily in startups during the dot com era but later realizing that strategic investments did not have the same impact on stock price as increasing revenue and profit, leading to a shift in focus towards more deeply strategic investments like the successful investment in Facebook.
16:34
Microsoft Ventures focuses on creating strategic partnerships through early stage venture investments, while the Head of Strategic Investments at Microsoft focuses on investing in companies that are already Microsoft partners.
21:42
Microsoft's Head of Strategic Investments focuses on investing in companies that are already Microsoft partners, looking for interesting technology product integration, go-to-market sales and marketing motion, and a good investment with a reasonable financial return.
27:11
Microsoft is not interested in acquiring random software companies, but rather focuses on acquiring teams, products, and technologies that fit into their technology roadmap and complement their existing businesses.
32:28
Microsoft focuses on acquiring mature software companies with legacy businesses that have a strong revenue stream and growth potential, and they have co-invested with private equity firms in some cases, such as the Informatica acquisition, where they can make the necessary cuts and investments to modernize the company in a private equity format.
38:04
Microsoft's strategic investments in companies like Foursquare and DocuSign have resulted in successful partnerships and product integrations, such as leveraging Foursquare's data for Cortana and utilizing DocuSign's electronic signatures in Office 365.
43:49
Microsoft's Head of Strategic Investments, Brian Schultz, emphasizes the importance of building relationships with potential acquirers and developing partnerships with their product teams in order to increase the likelihood of a successful acquisition.
49:56
Microsoft judges the success of their acquisitions based on agreed-upon milestones, metrics, and criteria, such as retention, product integration, and revenue targets, and they track these over time, although they acknowledge that judging the success of an acquisition in the tech industry is challenging due to the constantly changing landscape.
56:09
Corporate VC has become popular in recent years, with many companies, including Tyson Foods, setting up their own venture capital arms, but Microsoft's Head of Strategic Investments Brian Schultz believes that it's important for startups to maintain optionality and be cautious about tying themselves to corporate entities.
01:01:56
Microsoft's Head of Strategic Investments Brian Schultz discusses the complexities of selling stock in companies that have gone public and the strategic discussions that VC firms have around when and how to sell their shares.
01:07:58
Microsoft's Head of Strategic Investments Brian Schultz recommends reading an article titled "Silicon Valley has an empathy vacuum" that explores the broader impact of technology on society and raises questions about the responsibility of the tech industry.
Categories:
Technology
Business
