Riding U.S. Rails

Touchnote,a 15-person London-based start-up has developed a service that makes it as easy to send any photo from a mobile phone or the Web as a real, printed postcard.  To date it has delivered postcards to over 200 countries and territories and its apps have been downloaded by more than 400,000 people.

Like other enterprising European start-ups, it is riding U.S. rails, leveraging technology platforms built by U.S. companies to gain traction. New cloud-oriented distribution platforms — Facebook, Apple’s App Store, Android Marketplace, Google Apps, etc. — allow start-ups to target and address global markets, notes London-based angel investor Hussein Kanji. The costs of setting up and scaling has dropped, shifting from expensive up-front capital expenditure to ongoing operating costs, allowing companies to scale with growth.

To push its service to the public, Touchnote built apps for Apple’s iPhone and iPad, for Google’s Android operating system and for Microsoft’s Windows Phone 7.

The young company uses Microsoft’s tools to develop its platform, Google’s tools for knowledge sharing and website analytics, Facebook’s platform to generate user data, Dropbox for document sharing, and Amazon’s service as its server infrastructure.

It also gets help from Microsoft’s BizSpark program, enabling it to access the computing giant’s technologies and development tools for free or at significantly reduced prices as well as regularly use resources like product training, business tools and technical gurus to help stay ahead of the competition.

Touchnote is one of some 14,000 start-ups in Microsoft’s BizSpark program in Europe. The program helps start-ups to connect not just with venture capitalists and government funding but also with banks loans, free legal advice and a whole host of other services to get their companies get off the ground. It’s an aggressive move by Microsoft to give away free software and support in order to ensure that start-ups consider using its tools when they build their infrastructure rather than  alternatives.

Despite best efforts, carefully cultivated relationships with start-ups arenot necessarily monogamous. For instance, BizSpark company Mobiles Republic, a developer of personal news applications scheduled to attend Le Web 2011, is building on Mango, Windows Phone 7.5. “We strongly believe in Mango and are amazed by the quality of the operating system,” says Mobiles Republic CEO Gilles Raymond.

But Mobiles Republic is already available on all other smartphone and tablet platforms and next-generation Google TV. News Republic and its sister applications Biz Report, APPY Geek and Glam Life have racked up more than three million downloads to date, with over 70 million articles read in one month alone.  The apps can be found on all major application stores, including iTunes and Android Market.

Platform providers such as Microsoft know they can’t prevent start-ups from building on competitors’ platforms but the race is on between U.S. technology giants to court as many developers as possible. At Le Web 2011, an annual industry gathering that attracts some 3,000 actors from the global Internet sector, Microsoft BizSpark, Google, IBM and Facebook will all be touting the benefits of their platforms.

Ruud de Jonge, Microsoft’s Director of Technical Audience Evangelism & Startups, Western Europe, acknowledges the tough competition from Apple’s iPhone and Android phones, but noted that “we are gaining momentum from Nokia’s announcements and the noise Nokia will start making a few weeks from now when phones are launched en masse.”

Last month Nokia announced its first phones using Windows Phone 7, the Lumia 800 and Lumia 700. The devices will begin shipping in Europe this month, and in Asia by early 2012. Newer Nokia Windows phones will be sold in the United States early next year. Windows Phone 7 is a complete overhaul of Microsoft’s older Windows Mobile software, which never achieved the momentum enjoyed by Apple’s iPhone and Google’s Android.

The battle is over the future of computing, given that mobile phones are increasingly the most popular computing platform. Succeeding in all aspects of the mobile market will be critical to Microsoft’s future if it wants to compete effectively with Apple and Google and diversify from a software license business to one specializing in hardware and services.

Microsoft will be promoting its Azure cloud technology at Le Web. It is expected to make an announcement with Kobojo, a French social gaming company, at the conference.

Microsoft is also optimistic that the launch of Windows 8 and new tablets will give it a lift.  “So how are we going to get the cool factor with developers?” asks de Jonge. “The phones will help us, Windows 8 will help us, how we approach the market will help us.”

If it works, Microsoft may itself get the kind of traction that the BizSpark start-ups it works with are hoping to get from them.




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