Startup studio
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]
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:[2][3]
- 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 work 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.
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.
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.[4]
Historically, startup studios are founded by successful entrepreneurs:
- Rocket Internet, created by the Samwer brothers, Oliver, Marc and Alexander Samwer, after selling Alando (company to eBay for $50 million
- Monkey Inferno, created by Michael Birch (businessman), co-founder of Bebo, sold to AOL for $850 million
- eFounders, created by Thibaud Elziere, co-founder of Fotolia which was acquired by Adobe for $800 million
- Science, created by Michael Jones (Internet entrepreneur), previously CEO of Myspace
- Expa, created by Garrett Camp, co-founder of StumbleUpon and Uber
- Superlabs.io, created by Mark Pincus, co-founder of gaming company Zynga
Types
There are three categories in the startup studio model.[5]
"Builder" studios
A builder startup studio focuses on creating and developing a company, mostly from internal ideas. Examples of this model are Rocket Internet, eFounders and Makeshift in Europe, and Giant Pixel in the US. This is the true startup studio model, offering balance between investing funds and resources to turn ideas into companies.
"Investor" studios
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. 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.[6]
"Incubator" studios
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.
In the world
| Rocket Internet | Betaworks | Science, Inc. | eFounders |
| Makeshift | Expa | The Giant Pixel | Suma Ventures |
| The Eleven | Founder.org | Human Ventures | HFV |
| RedStart | Mint Digital | Spook Studio | Elepath |
| North Technologies | MIT Ventures | Sherpa | LightBank |
| Differential | Forward Partners | Founders.as | IdeaLab |
| Project A | Liquid Labs | Nova Founders | Hanse Ventures |
| 9+ | Atomic Labs | Found Fair | Spark Labs |
| Stanley Park Ventures | Pollenizer | Human Ventures | Disrupted |
References
- ↑ Lapowsky, Issie (November 25, 2014). "The next big thing you missed: tech superstars build ‘startup factories’". Wired (magazine).
- ↑ Elziere, Thibaud (September 15, 2014). "Startup Studio: the 3rd Co-founder Model".
- ↑ Rao, Leena (February 16, 2013). "The Rise Of Company Builders". TechCrunch.com.
- ↑ Chernova, Yuliya (March 11, 2015). "Human Ventures Names CEO as Startup Studios Proliferate". Venture Capital Dispatch via The Wall Street Journal.
- ↑ Saba, Carlos (July 10, 2014). "WTF is a Startup Studio anyway?".
- ↑ O'Dell, Jolie (August 13, 2012). "In a valley of VC clones, Google Ventures does more than just write checks". Venture Beat.
- ↑ "Build Together".
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