STARTUP STUDIO

By Ashok

What is Startup Studio?

A startup studio, also known as a startup factory or a venture builder, is a studio-

like company that aims at building several companies in succession. Just like a movie
studio that creates multiple movies in succession, using shared resources.

Venture Builders basically build businesses from scratch by providing ideas,

expertise and resources to entrepreneurs. So Venture builder is essentially a startup
that builds startups.

In Simple terms Venture builders are the nest, start-ups are the eggs and eventually
those eggs are going to hatch into beautiful tech birds and fly away.

When (History)?
 Idealab, founded by Bill Gross in 1996, was one of the first to introduce the
'incubator industry'. Idealab is the longest running technology incubator. They have
created over 150 companies with more than 45 IPOs and acquisitions.

Data presented at 2015 article. There are already more than 300 startup studios in the
world, with nearly half of them from Europe. Investments into studio-based companies have
also grown by 48 percent year-over-year since 2010.

List of Startup studio

https://docs.google.com/spreadsheets/d/12THR5auNmKTLdp6LKq93tQJCXnfzT71
PmMEnnipV7Go/edit#gid=0

How Does it works?

Core Team &

Spin - off
EIRs
Yes

Infra & Works ? Dedicated

Startups Grow
Funding team

Ideas Follow on
No
funding
Trash
f
EIRs Refers to Entrepreneurs in Residence

There are many different operating model among startup studio .

Startup studios basically operate in the following models – Builder, Investor, and
Incubator.

Builder Model Focuses on creating and developing companies, mostly from

internal ideas, and providing critical resources (Rocket Internet, eFounders).

Investor Model Brings in early-stage external startups and helps them grow by
providing both funds and expertise (Betaworks, Science).

Incubator Models Focuses on developing external companies by providing

mentoring and operational guidance (Spook studio and Founder.org).

Some Startup Studio work for investors, others provide their services to
corporations, or are part of corporations themselves. Each has a particular business
model.

Three business models for venture building

Working for investors: industrializing entrepreneurship

Business angels and VCs invest in the startups that spring from venture builders as
they would in any other startup. Investors are hoping that the expertise and seniority
the venture builder accumulates will offset part of the risk that comes with
entrepreneurship.

Working for corporations: venture-building-as-a-service

A second version of a venture builder is the one that works for corporations. In this
consulting model (venture-building-as-a-service) corporations are simultaneously
the investor and the client.

In-house venture building: empowering innovation

The corporate world is renewing its efforts to innovate and fight disruption — or be
the agent of disruption. Creating a venture builder under the corporate umbrella is
an emerging model chosen by the firms which are most committed to the future.

Five core activities

Core Activity

Business Idea Build team Find capital Lead ventures Shared Services

Identifying business ideas can be done in different ways. Some clone existing
models. Others choose an opportunity space where they develop research projects ,
explore different ideas and prototype concepts. Regardless of the specific approach
used, the goal is to come up with a viable business idea.

Venture builders create teams from the ground up. This is undertaken once the
business idea is clearly identified

Venture builders facilitate access to capital for the startups they develop. They do
this either through a fund they own, or by connecting the different ventures to their
network of investors

Venture builders help lead the ventures. They can have a governance role, they
can participate in the management of the companies, or both

Venture builders provide shared services to their ventures, such as legal, design or
accounting

Source of funding
Studio founders may opt to raise money from outside investors

The most common one is the founder’s wealth

After having one or more successful exits, an entrepreneur may use his or her own
funds to open a studio and build multiple startups at once

Another option is corporate funding

A corporation may choose to launch a startup studio internally as a means of

spurring innovation. In this scenario, the corporation will fund the studio directly.

Focus

Another important decision for studio founders to make is whether to specialize in

certain industries, geographies, emerging trends in technology, etc. Specialization
will allow for a greater number of synergies to be created between companies

Founder decides either of the following model B2B, B2C, or SaaS. This can then be
drilled further into certain industries/markets. Some studios refer to this as their
―thesis‖, but it actually speaks to what their strengths will be.

Examples: B2B (Business to Business) – Amazon Business, B2C (Business to

Consumer) –Decathlon, SaaS (Software as a service)- Zoho CRM application.

Why?
Offers Pooled Resources

A startup studio employs a team of designers, developers, marketers, and

administrative staff for the early stage startups associated with them. This provides
startups access to the help they need in launching and working on their ideas without
hiring and thus saving the cost of expensive consultants during its prototype phase.

Enabling entrepreneurship

Depending on the specific approach the studio takes, the studio is often enabling the
founder(s) of the studio to start more companies or enabling other people who might
have otherwise had trouble starting a company.

If A Startup Fails, the Team Is Reassigned and Doesn't Scatter.

Startup studios also make it easier to deal with failures. 8 out of 10 startups fail. If a
startup studio startup fails, the team will simply drop the ideas that didn’t work,
learn from them, and redeploy them in a new business idea.

Build Faster

As startup studio employs devoted team of expert’s working day to day, help building
business faster.
Appendix

Reference links

https://medium.com/@victornoguera/how-to-start-a-startup-studio-design-
choices-studio-founders-need-to-take-87bbba66cfa8

https://www.bizjournals.com/bizjournals/news/2015/04/15/what-the-heck-is-a-startup-
factory.html

https://medium.com/le-studio-vc/the-300-startup-studios-taking-on-the-world-
6e3c44b52d20

https://pakwired.com/wp-content/uploads/2015/04/Start-up-factory-2.jpg

https://www.whoishostingthis.com/blog/2015/04/07/startup-factories/

https://www.linkedin.com/pulse/venture-building-new-model-entrepreneurship-
jorge-garc%C3%ADa-luengo/

https://medium.com/appnroll-publication/the-start-up-studio-model-what-are-
venture-builders-33f8d4961d38

Scaling to startup studio 2.0 by Report by: Cachaça Consultancy LLP