Startup studio

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A startup studio, also known as a startup factory, or a startup foundry, or a venture studio, is a studio-like company that aims at building several companies in succession. This style of business building is referred to as "parallel entrepreneurship".[1] A startup studio is an organization that comes up with disruptive ideas and products and builds businesses alongside industry-relevant executives. The startup studio will oversee the startups from the onset of investment and will help guide the company well beyond product launch. A startup studio hires founders (either external or internal entrepreneurs who will direct the startup through “exit”). These founders come in and run each market-tested company, providing the startup with top-level mentorship, all underpinned by an enormous amount of support provided by the studio.[2]

History[edit]

Idealab, founded by Bill Gross in 1996, was one of the first to introduce the 'incubator industry' to the field of technology startups, and has started over 75 companies. Idealab was founded to test many ideas at once and turn the best of them into companies while also attracting the human and financial capital necessary to bring them to the market.[3][4]

The startup studio trend gained momentum beginning in 2008. As of 2015, there were over 65 startup studios across the world, of which 17 had been built since 2013.[5]

Types[edit]

There are several types of startup studio models.

"Builder" studios[edit]

A builder startup studio focuses on creating and developing a company, mostly from internal ideas.[6] Notable examples of this model are Atomic,[7] Pioneer Square Labs,[8] Rocket Internet, and eFounders.[9]

Unlike business incubators and accelerators, venture builders generally don't accept applications concerning their portfolio of companies, and the companies instead "pull business ideas from within their own network of resources and assign internal teams to develop them."[6]

According to VentureBeat, Nova Spivack was "part of the early technologists who pioneered the venture production studio model. He wrote about the model in 2011 at a time when most of its production elements were still in gestation. Nova actually invented the Venture Production Studio term, calling it a 'new approach to building startups.'"[6]

"Investor" studios[edit]

Investor venture studios bring in early-stage external startups and help them grow by providing them both funds and expertise. Studios Betaworks and Science, Inc. fall in this category.[citation needed]

At the very end of the spectrum, some VC firms are growing closer to the startup studio model by intervening very operationally in the startup they invest; for instance Andreessen Horowitz and Google Ventures. However, this participation is usually limited to some areas, such as recruitment, fund raising, or PR relations.[10]

List of Startup studios[11][edit]

Startup Studio Year Established Companies Launched Location Founders
Atomic 2012 Bungalow, Hims & Hers, Homebound, Paravision, Remrise San Francisco, California Jack Abraham
Betaworks 2008 Giphy, Anchor, Gimlet, Stream, Unsplash New York, New York John Borthwick
Builders 2015 Influentials, IPS, Obey Rotterdam, The Netherlands Michael van Lier
Colab 2013 Candid, NoCap, Charge, HighReach, Scriptera Los Angeles, California Jon Bradford
Coplex 2018 Steady Install, Pluto, Nurseio, Yellow Bird, Payper Phoenix, Arizona and Los Angeles, California Anthony Johnson, Ilya Pozin, Nikola Mickic, and Zach Ferres
Devland 2016 Retain Research, E-BX, ORetail, Content-X San Francisco, California Miles Dotson and Devon Fanfair
eFounders 2011 Canyon, Collective, Crew, Kairn Paris, France; San Francisco, California; New York, New York; and Berlin, Germany Quentin Nickmans and Thibaud Elziere
Expa 2013 Aero, CMD, Collective, Eco, Haus San Francisco, California; New York, New York; Los Angeles, California; and London, England Garret Camp
High Alpha 2015 Luma, Filo, Trava, Shaker, Bolster Indianapolis, Indiana Mike Fitzgerald, Scott Dorsey, Eric Tobias and Kristian Andersen
Human Ventures 2015 Paloma Health, Tiny Organics, Current, The Muse, Kindred New York, New York Heather Hartnett, Joe Marchese and Megan O’Connor
Pioneer Square Labs 2015 Boundless, Glow, Big Box, Attunely, Gradient Seattle, Washington Ben Gilbert, Mike Galgon, Greg Gottesman and Geoff Entress
Rocket Internet 2007 Bluenest, Everstox, Global Savings Group, Home 24, Nestpick Berlin, Germany Marc Samwer, Oliver Samwer, Alexander Samwer, and Fabio Tran
Science 2011 Athena, Dollar Shave Club, Kyoku, Dog Vacay, The Good Patch Santa Monica, California Greg Gilman, Michael Jones, Mike Macadaan, Peter Pham, and Tom Dare
Wilbur Labs 2016 VacationRenter, Vitabox, Joblist, Barkbus San Francisco, California Phil Santoro and David Kolodny
Zuma Ventures 2014 ProspectWise, Wizr, Flying Yak Santa Monica, California Allen Hurf and David Carter
Mamazen 2017 Homstate, MOSA, Morsy, Orangogo Turin, Italy Farhad Alessandro Mohammadi and Alessandro Mina

Overview[edit]

Business model[edit]

Startup studios are often mistaken with startup incubators and startup accelerator, or operational Venture Capital firms.

The startup studio model is defined by three important criteria:[12][self-published source][13]

  • Startup studios focus their business on creating startups

Unlike startup incubators or VCs, the main goal of a startup studio is to build a startup from the ground up. This implies an important involvement of time, dedication and resources to working operationally on the project for a period of time.

  • Startup studios build several startups following a repetitive process

One focus of a startup studio is the rapid development and prototyping of new products. They work on multiple startups and projects simultaneously instead of building one project at a time.

  • Startup studios build an infrastructure that enables an efficient venture building process

Startup studios own an infrastructure made of pooled resources: technical tools, management processes, and a multi-disciplinary team. By building several projects a year with the same team, startups studios can re-use this infrastructure, software and best practices across products.

Features in early stage ventures[edit]

Startup studios in the early-stage entrepreneurship environment

Startup studios occupy a specific place in the entrepreneurship environment, based on the amount of human and financial support they provide to the startups:[14][self-published source]

  • Incubators and accelerators focus on providing advice and some operational guidance to the startups they select. They are mostly providing ‘Human Capital’.
  • Startup studios provide a high level of ‘Human Capital’ along with some ‘Financial Capital’. They dedicate a team to the development of their startups and inject limited funds early stage in their startups.
  • Angel investors and early-stage VC focus more on ‘Financial Capital’: they provide funds to help their portfolio startups develop, sometimes along with some guidance and strategic help.

See also[edit]

References[edit]

  1. ^ Lapowsky, Issie (November 25, 2014). "The next big thing you missed: tech superstars build 'startup factories'". Wired.
  2. ^ Kronenberger, Craig (2021-02-23). "How the Startup Studio Business Model Is Changing the Startup Economy as We Know It". Medium. Retrieved 2021-03-10.
  3. ^ Farmer, Ryan (2004). Idealab: First Mover, Last Survivor. California Institute of Technology.
  4. ^ "Bill Gross: A Devotion to New Ideas | Stanford eCorner". ecorner.stanford.edu. Retrieved 2016-08-29.
  5. ^ Chernova, Yuliya (March 11, 2015). "Human Ventures Names CEO as Startup Studios Proliferate". Venture Capital Dispatch Via the Wall Street Journal.
  6. ^ a b c Diallo, Ali (January 18, 2015). "How 'venture builders' are changing the startup model". VentureBeat. Retrieved 2016-05-09.
  7. ^ Geron, Tomio (2017-01-23). "Atomic, With First Fund, Looks to Upend Venture-Capital Model". Wall Street Journal. ISSN 0099-9660. Retrieved 2017-07-27.
  8. ^ "Pioneer Square Labs Grabs $12.5M To Dream Up, Then Kill Off Or Spin Out Startups". TechCrunch. Retrieved 2019-01-05.
  9. ^ "eFounders unveils its next batch of enterprise SaaS startups". TechCrunch. Retrieved 2020-12-11.
  10. ^ O'Dell, Jolie (August 13, 2013). "In a valley of VC clones, Google Ventures does more than just write checks". Venture Beat.
  11. ^ Kronenberger, Craig (2021-02-27). "List Of Top Startup Studios in 2021". Medium. Retrieved 2021-04-26.
  12. ^ Elziere, Thibaud (September 16, 2014). "Startup Studio: the 3rd Co-founder Model". Medium.
  13. ^ Rao, Leena (February 16, 2013). "The Rise Of Company Builders". TechCrunch.com.
  14. ^ Elziere, Thibaud (April 22, 2015). "Startup Studios: The Rise of Human Capital". Medium.

External links[edit]