Startup studio
Lua error in package.lua at line 80: module 'strict' not found. Lua error in package.lua at line 80: module 'strict' not found. A startup studio, also called startup factory, startup foundry or venture builder, is a studio-like company that aims at repeatedly building several companies in parallel. This process is based on a reusable infrastructure of resources, and a cross-disciplinary team.[1]
Contents
History
The first attempt to creating a company building startups lies in Idealab, founded by Bill Gross in 1996. As stated in their website, 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 market.[citation needed]
The startup studio trend has really started around 2008. Betaworks is one of the pioneers of this model. Today, there are more than 65 startup studios across the world, among which 17 have been built since 2013.[2]
Types
There are several types of studio models.
"Builder" studios
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A builder startup studio focuses on creating and developing a company, mostly from internal ideas.[3] Examples of this model are Rocket Internet, eFounders,TechnoFounders and Makeshift in Europe, Giant Pixel in the US and Stanley Park Ventures in Canada. This is the true startup studio model, offering balance between investing funds and resources to turn ideas into companies.[citation needed]
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."[3]
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 the elements that make it up were still in gestation. Nova actually invented the Venture Production Studio term, calling it a 'new approach to building startups.'"[3] The article also opined that the Samwer brothers at Rocket Internet were the "undisputed kings" in executing the venture builder model on a global level as of 2015.[3]
"Investor" studios
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Investor startup studios bring in early-stage external startups and help them grow by providing them both funds and expertise. US-based studios Expa, 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.[4]
"Incubator" studios
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Incubator startup studios are accelerators that get equity against a little of money and lot of operational resources. Spook studio and Founder.org are two startup studios based on this model.[citation needed]
Overview
Business model
Startup studios are often mistaken with startup incubators and startup accelerator, of operational Venture Capital firms.
The startup studio model is defined by three important criteria:[5][self-published source][6]
- 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 and resources dedicated to working operationally on the project, for an important 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
- 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:[7][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
References
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External links
- Idealab timeline
- "Build Together"
- Mike Jones and Peter Pham Talk About the Science of Tech Studios (Video)
- Can the studio model build a billion dollar company? Santa Monica’s Zuma Ventures is the latest to try
- Betaworks Uses Creative Methods to Find and Fund the Next Big Idea
- Garrett Camp’s Expa Raises $50M To Build New Startups
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