You’re a young entrepreneur with a great idea. Should your first stop be to a Startup Studio? Perhaps. A Startup Studio (also called a Venture Builder or Startup Factory) exists to help you transform your great idea into a strong, independent company. Startups don’t run programs as accelerators do, and they don’t have cohorts as incubators do. The advantage of a startup studio is the way they work on your business idea. The business term for your idea is your “operational model” but let’s keep things simple since you’re new to the game.
Successful startups operate by coming together with you and your great idea. They then use technology and funding to build it up, equip you and effective staff, and help launch it into the real world. If all goes well, the startup studio “spins off” your new venture. The studio will now recognize the new company they’ve helped develop could be huge and will help you find some people to run it as an independent startup venture.
Once they’ve recruited a team to help you run your new venture, the studio team hands off the venture to this new team and gets back to work on the next great idea. This is what makes them unique. Startup studios differ from accelerators, incubators, and other innovation programs. Instead of using financial and physical resources to help entrepreneurs accelerate ideas, a startup studio uses its own internal team to do it. It’s a great solution for young entrepreneurs to get their venture off the ground and enlist a team that’s beneficial to both sides.
If you’re that person who says, “I have an idea, but I can’t launch and scale a startup on my own,” you’re not alone. If you’ve ever had a great idea, you know the frustration that comes from, “What do I do next?” Startup Studios were built to help you solve this problem. They’ll listen to your “pitch” and help you take the next steps.
Should the startup studio decide to collaborate with you on your idea, they will typically set up an agreement where you’ll keep roughly half of the equity in the venture. The studio gets the remaining equity. The Studio employs their own team members to work together with you to launch the idea.
They’ll handle the market research, validate the concept, fund the tech development, run the analytics using their own resources, develop a business plan, work on building the product or service out fully, set up the foundations for fundraising if needed, and recruit any remaining staff necessary, such as a dedicated tech engineer, a UX designer, a marketing professional, and other strategic positions.
You will stay with your new company as the CEO or COO as the startup studio moves into the investor part of the process. This is where the startup studio begins to run more like a traditional startup model. Once the investors are on-board and your venture is funded, your company is now “independent” and the startup studio goes to work on their next young entrepreneur.
If your idea is a bit further along in the process, meaning you have an idea, a small team, some form of a product built, and some proof of traction, a startup studio can still be of use to you. If what you really require is operational help, tech support, and connection opportunities, you can approach a startup Studio with a specific “ask” such as “our team needs help building the full prototype” or “our startup needs beta testers.
A reputable startup studio should provide much more than capital, advice, and connections. The true test of a great Studio is whether they employ their own internal team members to work alongside you on your new venture. They should tell you they can help build up your company in a variety of ways using their own internal resources and connections. Think of a great startup studio as your own personal consultant, a place where you can plug in and get started to make your dream a reality.