It all started with a tweet.
Investor Kirby Winfield felt like Microsoft was far more important to the startup scene of the Pacific Northwest than most people realized. So he dashed off a few names — from Rover CEO Aaron Easterly to Zulily co-founder Darrell Cavens — who once worked for the software giant.
“I have always been surprised that the trope ‘Microsoft people don’t make good startup founders’ is received wisdom in many Seattle tech circles. It conflicts with what I’ve seen personally as a startup operator and an investor,” Winfield told GeekWire in a follow-up email.
ex-MSFT founders of Seattle startup behemoths:
Darrell Cavens (Zulily)
Dan Lewis (Convoy)
Aaron Easterly (Rover)
Nick Huzar (OfferUp)
Eric Ranft (Docusign)
Brent Frei (Smartsheet)
Manny Medina (Outreach)
Eugenio Pace (Auth0)
But yeah, MSFT doesn’t birth startup talent. smdh
— Kirby Winfield (@kirbywinfield) June 10, 2019
Winfield named the first CEOs and founders that came to mind. Recognizing that there were probably more examples that he missed, he called on GeekWire to do some more digging. So we analyzed the GeekWire 200, our index of top privately held tech startups in the Pacific Northwest, to see how many companies on the list are run by CEOs with experience at Microsoft.
The answer: 46 of the current GeekWire 200 companies, nearly a quarter of the index, are led by CEOs who worked at Microsoft at some point in their careers, representing a combined 349 years worth of experience at the company. No other organization or company comes close to having that kind of influence on startup leadership in the Seattle region. Amazon was the second-most common former employer, with 11 former Amazonians among the CEOs on the list.
It’s a partial window into this phenomenon, not taking into account publicly traded companies or other leading institutions. But the analysis of the GeekWire 200 makes it clear that Microsoft is a major source of startup leaders. But what has made it such a fruitful source? And were those entrepreneurs successful because of or in spite of their time at Microsoft?
Big projects and independence
One key factor: many CEOs on the list were able to gain critical startup-style experience even when they were inside the tech giant.
“As an entrepreneur, I had the opportunity to run four different businesses in Microsoft,” said Bryan Mistele, a former Microsoft general manager who is CEO of INRIX, the transportation analytics and traffic technology company based in Kirkland, Wash. “The teams were very autonomous back in the mid-90s. That experience was critical to learning how to run businesses.”
Robbie Cape, founder of Seattle-based virtual primary care startup 98point6, also ran several large units as a general manager at Microsoft. Another high-profile example is Zillow Group CEO and co-founder Rich Barton, who started Expedia inside Microsoft and led the travel company after its spinoff. Barton later went on to start and fund a series of startups. (As a publicly-traded company, Zillow is not on the GeekWire 200, but Barton’s career helps to illustrate the trend.)
“Microsoft made my technology career,” said Kieran Snyder, CEO and co-founder of Seattle-based augmented writing platform Textio, who joined the company after finishing her doctorate and quickly learned that creating software for a billion people was nothing like the academic work she had done previously.
Snyder was part of a team that integrated the Bing search engine into Windows, a project that was larger than she had ever anticipated.
“There’s no question working in an environment like that taught me the rigors of making production software,” Snyder said. The company also introduced Snyder to her co-founder (and husband), Jensen Harris, who was instrumental in shaping the user experience of Windows and Office as a director at Microsoft.
Startup leaders with Microsoft roots
Here's the full list of CEOs on the GeekWire 200 who once worked at Microsoft. If we missed any, send an email to firstname.lastname@example.org. Story continues below.
|GeekWire 200 Rank||Company||CEO||Years at Microsoft|
|66||Unify Square||John Case||16|
|69||Spaceflight Industries||Curt Blake||4|
|88||Moxi Works||York Baur||2|
|95||Educative||Fahim ul Haq||6|
|163||Click2Cloud Inc||Prashant Mishra||7|
|167||Clean Power Research||Jeff Ressler||10|
|188||Plugable Technologies||Bernie Thompson||5|
|190||Actively Learn||Jay Goyal||5|
Auth0 CEO Eugenio Pace left Microsoft with two of the most important assets that he needed to launch his own business. While at the company, he met Auth0 co-founder Matias Woloski and came up with the idea for the identity management startup that recently raised a $103 million round.
“I spent almost 13 years there trying to ease the journey for developers and made the realization that identity management was one of the biggest obstacles (and headaches) for them,” Pace told GeekWire in an email. “That experience is what led me to start Auth0.”
Highspot CEO Robert Wahbe, who spent 16 years at Microsoft, pointed out that several of the fastest-growing startups in the region — including Rover, Convoy, Outreach, Auth0 and, yes, Highspot — all have CEOs who came from Microsoft.
Despite the many advantages that Microsoft offered, leaving the software giant for a startup often made for a rough landing.
Snyder, who also spent time at Amazon, thinks that it’s impossible for a big company to prepare someone for a high-growth startup. “The pace requires you to learn something that is hard to learn at heavily-resourced companies,” she said. “I don’t know how much any big company can recreate what it is to be a startup.”
One thing Snyder wished she had learned at Microsoft, but didn’t, was a sense for how all the different parts of the business worked together. Silos between teams made that difficult.
Wahbe echoed that sentiment: “In a big company, it’s easy for a senior person to never talk to a customer in their entire tenure,” he said.
Moreover, there is a sense of safety within a large organization that doesn’t exist in startups. “There was nothing I could have done to affect [Microsoft’s] stock price,” Snyder said. But as a startup CEO, every decision has consequences.
Mistele thinks there might be a cultural aspect to why there aren’t even more ex-Microsoft people starting companies. As he sees it, both entrepreneurs and investors in the Bay Area have a mindset of trying lots of new ideas and moving on if they don’t gain traction quickly.
In the Seattle region, on the other hand, Mistele views founders as more interested in building huge companies from scratch — just like Bill Gates did. While that may be a worthy goal, it’s far from the “fail fast” mentality that is needed for a roiling startup scene.
This phenomenon of Microsoft veterans leading startups may not last. Mistele said the culture of independence at Microsoft has given way to a more collaborative way of working under CEO Satya Nadella. While that may be a good thing for Microsoft’s culture, it also may not produce as many entrepreneurs going forward.
“I wouldn’t be surprised if, over the next decade, there weren’t a lot of startups coming out of former Microsoft employees,” Mistele said.
The list of former Microsoft employees who now run top startups also reveals a gender gap: Three of the 46 CEOs are women, or 7 percent of the group. Microsoft, which has slowly made progress on its diversity efforts, reported last year that women comprised 28 percent of its workforce and 20 percent of technical roles. Out of the entire GeekWire 200 list, 16 companies are led by women, or 8 percent, as we reported earlier this year.
What about Amazon?
Eleven CEOs on the GeekWire 200 spent time at Amazon, but it remains to be seen whether the company’s executives and employees will one day be as influential in the region’s startup scene as former Microsofties are today.
Many of the most successful startups from former Amazon employees are based outside of the Pacific Northwest, from Jet.com in New Jersey to Flipkart in India, as well as Bay Area startups Twilio and Hulu.
But the company can also lay claim to CEOs from two of Seattle’s fastest-growing and largest tech startups: Manny Medina, CEO of sales automation company Outreach; and Dan Lewis, CEO of on-demand trucking company Convoy. The companies have both reached coveted “unicorn” status, valued at more than $1 billion each. Both Medina and Lewis also spent several years at Microsoft.
Amazon may have a reputation for being agile — at least for a company of its size — but Snyder said that as an employee at both Amazon and Microsoft, the two companies “felt much closer together to me than either has felt to a startup.”
Mistele thinks that executives from Amazon, like many from Microsoft, are more likely to leave for other large businesses rather than starting a company from scratch. There’s also an incentive to stay at large tech companies, both for the sense of security and the company stock that employees accumulate over time.
Pace is optimistic that Amazon will leave a similar legacy of entrepreneurship. “It’s hard to deny the impact that any company of Microsoft’s or Amazon’s stature can have on future innovation and leadership,” the Auth0 CEO said.
But at the end of the day, the most important role either company plays in the region may have little to do with training tomorrow’s entrepreneurs.
“The biggest thing [Microsoft and Amazon] have done for the region is they have been magnets for strong tech talent,” Snyder said.
The GeekWire 200 — sponsored by CenterCard — is derived from our broader list of more than 1,200 Pacific Northwest tech startups. The list is designed to provide a better understanding of the startup landscape in the Northwest. The rankings are generated from publicly available data, including social media followings, approximate employee counts (via LinkedIn) and inbound web links. As we mentioned, the most important factor is employee growth, since our goal is to track those companies who may be emerging as the next Microsoft, Amazon or Expedia.
To make sure your startup is eligible for inclusion in the GeekWire 200, first make sure it’s included in the broader Startup List. If so, there’s no need to submit it separately for the GeekWire 200. If your Pacific Northwest startup isn’t among the companies on that larger list, you can submit it for inclusion here, and our algorithm will crunch the numbers to see if your company makes next month’s GeekWire 200. (Please, no service providers, marketing agencies, etc.)
Thanks to everyone for checking out this month’s ranking. And, just a reminder, if you value resources like these, be sure to check out our list and map of out-of-town tech companies with Seattle engineering outposts as well as our list of startup incubators, co-working spaces and accelerators in the region, startup fundings, and our GeekWork job board.