Can Microsoft Think Like a Startup? Windows Phone Wants to Go Big By Embracing Small

April 23, 2013

Microsoft Windows Phone Strategy: Adopting a Startup Mentality

Microsoft Embraces the Startup Mentality for its Windows Phone Strategy

Last week, an article in TechCrunch highlighted comments from Microsoft’s Windows Phone Chief Terry Myerson about how they approach the mobile space. He referred to his team as a “scrappy albeit well funded startup” operating within Microsoft. Before you laugh, it’s worth noting that while they can’t really identify directly with all of the hardships that startups face, it is true that Myerson himself was at the helm of a startup that was acquired by Microsoft in 1997.
But with Windows Phone is Microsoft really embracing a startup mentality? And, more importantly, is it working?
As I’ve discussed in a prior review of Windows Phone, there are some definite holes in the product right now. Overall, they’ve struggled to gain share in the market, and are positioning themselves as a solid Number 3 option behind iOS and Android. That said, it’s far too early to count Microsoft out just yet.
Here are three ways the Microsoft Windows Phone strategy is taking pages from the startup playbook in its hunt for a competitive advantage.

1) Targeting Smaller Markets Its Competitors Are Vulnerable In

While Microsoft has publicly said they are focused US market, they are committed to picking the segments where they can get traction in other countries. According to IDC Windows Phone is outpacing iPhone sales in Argentina, India, Poland, Russia, South Africa, and Ukraine.
Specifically, they have identified markets where smartphone purchases are not subsidized by the Cell providers. Since the full price of Windows Phone handsets are significantly lower than competitors, they have an inherent price advantage in those markets. Even though Microsoft has near unlimited resources, they’ve chosen to go the path of least resistance in terms of gaining market share.

2) Focusing on Core Competency and Leveraging Partners

They are relying on their hardware partners HTC and Nokia to build attractive phones. While Apple and even Google have built their own phones, Microsoft is unwilling to commit to building their own phone yet. They leveraged the strong brand presence of both Nokia and HTC in Asia to leverage the customer bases these partners already have.
While there have been rumors of a Surface Phone, Microsoft has been quick to shoot these rumors down. They are concerned about damaging their partner relationships and prefer to focus on their core competency: the Windows Phone operating system.

3) Adopting the Role of the Consumer-Focused Underdog

Terry Myerson has generally avoided confronting Apple and Android directly in his public comments. He attended the Dive Into Mobile Conference recently to talk about Windows Phone, and was asked to comment on the competition.
When asked about where Microsoft sees opportunities to go after their competitors, he simply said that Windows Phone was focused on the consumer.
However, while he had the audience’s attention, he did “hesitantly” jab Apple as lacking a sense of urgency and called Android “a mess”. Not exactly subtle and his comments created a buzz in the tech circle.
With that statement, he positioned Windows Phone’s core mission as serving the customer and separately implied Apple and Android were losing focus.
While Microsoft and “startup” sounds so contradictory, they are utilizing some of the tactics startups do to get traction in the hotly contested smartphone industry. While it is too soon to tell whether the Microsoft Windows Phone strategy will pay off, it’s interesting to see the behemoth compete in an industry where it is the clear underdog.

What do you think? Does Windows Phone stand a chance in the market? Is Microsoft’s attempt to adopt a startup mentality a winning strategy?


Corporate Strategy, Sales Operations

Sudip is in charge of Corporate Strategy, Sales Operations at <a href="">Alegeus Technologies</a>. Previously, he worked at OpenView from 2012 until 2014 with portfolio companies to provide insights on the markets they operate in, their customers, and drive development of business strategies.