“Don’t worry about failure; you only have to be right once.” – Drew Houston
💎 Why It Matters
Companies founded by startup studios tend to produce better returns and scale faster.
About 90% of startups fail.
Startup studios take a systemized approach to building companies.
They apply accumulated knowledge and resources from building multiple companies.
- Betaworks • Focuses on digital consumer products like Dots, Bitly, and Tweetdeck. Also an investor.
- eFounders • One of the first enterprise-size startup studios focused on enterprise software.
- NineTwoThree • Operates as an agency builder for funded startups and tech brands.
- Human Ventures • Focused on businesses which ‘meet human problems’.
- Idealab • Has created 150+ companies and 50 IPOs+ or acquisitions.
- Rocket Internet • Builds and scales internet companies globally.
- HVF Labs • Created by PayPal co-founder Max Levchin to solve problems on a longer time horizon.
Companies from Startup Studios
- Crew • Facilitates the hiring process for moonshot missions. Backed by eFounder.
- Katoo • Madrid-based mobile platform that connects restaurants and suppliers.
- Playbook • Streamlines the financial planning process. Backed by Atomic.
- GoTo.com • By IdeaLab. Created contextual advertising and was acquired by Yahoo!.
- DollarShaveClub • Razor subscription club backed by Science Inc. and sold to Unilever.
- Liquid Death • Trendy sparkling water brand backed by Science Inc.
- Nestpick • Collects listings of fully equipped apartments around the world. Backed by Rocket Internet.
- Cheaper prototyping will make it easier for startup studios to try new ideas quickly.
- Matt Brezina from Sincerely launched 3 different versions of its product under different accounts. He never spent more than 4 weeks developing a release.
- Jim Zarkadas spent 1.5 hours designing and prototyping his iOS app for a client using Framer.
- Andy and Nelson explain how they iterated on Tettra after an unsuccessful first launch. It now generates hundreds of thousands in revenue.
- Startup studios will host hackathons to attract founders. Entrepreneurs-in-Residence lead new startups within studios.
- DataTribe hosts its annual DataTribe Challenge to select potential recipients of $2m in seed funding.
- Crisis’ venture studio hosted the Hackathon for Homelessness to find people-powered approaches to ending homelessness.
- Startup studios will focus more on community building to attract founders with big ideas.
- Founders Club began as a community of early stage investors which then decided to leverage its network to create MVP fund.
- Revelry attracts founders to its studio by focusing its marketing efforts on community building. They help founders deepen their networks by contributing to accelerators, universities, and other networks.
- Do a hardcore year. Build your own mini startup studio.
- Jennifer Dewalt built 180 websites in 180 days.
- Pieter Levels launched 12 startups in 12 months. His businesses now make 2.7mm ARR and he was voted Product Hunt’s Maker of the Year.
- Kevin Leneway built A Startup A Day.
- Jon Yongfook planned to build 12 Startups in 12 Months. On month 7 he built Bannerbear which now makes 553k+ ARR.
- Gamwe6 built a directory of people who’ve taken the 12 startups in 12 months challenges.
- Become an expert at validating demand. It’s easier to recruit and raise money when you have demand.
- Buffer built a landing page with features and payment plans before launching its product. They used email sign-ups to understand what customers wanted.
- Ryan Hoover built a 20-minute MVP using existing tools to test ProductHunt. He attracted 170 users in 2 weeks.
- Bram Kanstein built EarlyOnes after his fourth business was acquired to help Web3 startups validate demand for ideas.
- Ryan Yost is a developer who explains the process he used invalidate his automated assistant for ‘adult stuff’ with a landing page, surveys, and simple ads.
- Lachlan Kirkwood writes about his two-year process of learning to prioritize validation.
- Shane White uses no-code MVPs to validate SaaS ideas like Memory Share.
- Run a services business to fund your startup studio.
- Muhammad Bin Sabir (A Trends Pro member) used a growth consulting and no code development services business to fund his studio. 4 of his 6 companies raised pre-seeds within 6 months.
- Late Checkout does 30 day design sprints with leading companies looking to become community companies. They get paid to learn.
- Unstuck Labs offers prototyping, development, and ‘rescue missions’ for products.
- Accenture helped Airbus optimize aircraft assembly and increase productivity 500%.
- Differential partnered with Big Ass Fans to drive sales through a custom platform. They partnered with TaylorMade to automatically track golf strokes to deliver insights to improve customers’ golf games.
- White Label has led product development and growth marketing for 50+ clients.
- Build multiple low-maintenance businesses simultaneously as a solopreneur.
- Joe Procopio is the founder of Teaching Startup and Spiffy and writes about how to operate multiple startups simultaneously.
- Jakob Greenfield is an indie solopreneur who runs TweetsOnDemand, NewsletterStory, BusinessBrainstorms, EnrichMyList, and Newsletter Spy all at the same time.
- Damon Chen quit his job to make testimonial.to, seeyafuture, embed, and supportman. He’s surpassed $300k ARR.
- Lola runs a product studio called Lunch Pail Labs and curates the Integrations Directory.
- Dan Rowden created the twitter growth tool Ilo as well as Cove Chat and Codelet.
- Weak Incentives • Entrepreneurs-in-Residence give up an average of 36% equity to studios. That’s not including dilution from future fundraising. Founders with much less equity may not approach the business with the same level of devotion as other entrepreneurs.
- Opportunity Costs • Studios are constantly forced to spend resources on ideas with a lower expected ROI than the leading product. A single successful startup shouldn’t need to compete for resources with lesser businesses.
🔑 Key Lessons
- Join a venture studio when it will improve your access to talent, technology, or capital. Deepen your network with qualified and connected people.
- Corporations should use internal startup studios to incubate new ideas that leverage their existing resources and advantages.
- You can start a one-person startup studio as an indie hacker by building multiple products and seeing what sticks.
🔥 Hot Takes
- Working at a startup studio is a safer choice than a startup. Your career is insulated from a single idea’s failure.
- Corporate startup studios often restrict innovation by tightly controlling teams. Startups from corporate programs have a 3% lower success rate.
“Isn’t this the same as an incubator?”
Incubators offer founders a workspace, investment and community to help validate their product. Unlike startup studios they are not core team members working daily towards helping the business succeed.
“Startup studios made sense when the barrier to entry for entrepreneurs was higher. Server costs alone used to be prohibitive! The value proposition for studios is gone now that anyone can build a startup.”
Things like no-code tools have made it easier than ever to build a product. But there is no substitute for experience when it’s time to go to market.
“Aren’t the weaker or failing companies in the studio consuming resources that would be better used to grow the successful startups?”
Yes. It’s the startup studio’s responsibility to validate products quickly and cut the ones that drain resources without sufficient traction. Studios that fail at this will likely fail altogether.
“Why would I give up so much equity to a startup studio as a founder when I can raise capital on my own?”
Raising capital is one of many advantages that a studio offers. But that doesn’t mean the studio approach is right for you. Ask yourself whether the resources, network and capital are worth the equity that you’ll give up.
- Startup Studios — Bullish or Bearish? • The tweet behind this report.
- The Origin and Evolution of the Startup Studio • History of the startup studio.
- Is A Career In Startup Studios Right For You? • Weighing the pros and cons of working at a startup studio.
📁 Related Reports
- No-Code • Use no-code to test ideas quickly as a studio.
- Micro-SaaS • Start a one-person startup studio with a multitude of small profitable products.
- Agencies • Fund your startup studio with an agency.
- Growth Hacking • Template your growth procedure for a variety of startups.
- Presales • Presell to validate new ideas.
Thanks to Shashank, Sam Hickmann, Jeff Dyer, Brian Ball, Sean Hua, Mike, Muhammad Bin Sabir, Stewart Townsend, Anthony Hernandez, Vajresh Balaji and Soma Mandal. We had a great time jamming on this report.
✏️ Harry researched and wrote this report. Dru researched and edited this report.
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