Today, there are a number of paths an early venture can go down to augment the skills that reside inside an organization with help from the outside. Of course, a startup can forgo outside help entirely and insource via the talents and capital of the founders alone — call it bootstrapping. If they do look outside however, they can turn to family and friends, or smart angel investors, an informal network of folks with some capital and possibly some knowhow too. Additionally, they can tap the resources, mostly network and space, of an accelerator or incubator program. Further, they could seek capital, advice and a much more formidable network of institutional investors. Or, you can do some combination of any or all of the above, each as a stage in the overall growth journey.
A pattern is easy to pull out of the above options: capital and network. These might be the two most common areas of need, and therefore where the offers of support most commonly lie, but what gets left behind just because it isn’t as scaleable? What’s a startup to do if they want or need help in other areas?
The “Startup Studio” (or Business Builder, or Venture Studio, or Startup Factory) is an emergent model that aims to combine the capital and network resources of a VC, with the space and structure of an accelerator, with the services of a design and development agency, and the hard-won process and strategic savvy of successful operators/entrepreneurs. It’s a bold vision that’s now proliferating.
The Global Startup Studio Network (GSSN) has the current tally of studios at more than 200 and rising fast. And the shared services model is showing efficacy at helping more startups succeed overall (higher exit rates and bigger average outcomes), in addition to earning revenues (and reaching profitability) earlier, navigating pivots more soundly, retaining founder-friendly amounts of equity on the cap table, and a slew of additional benefits.
And studios even build on the niche offerings that have long existed to serve a single area of need on the list — for example, design or development. Specialized firms offer “off the shelf” services in these areas, and the studio doesn’t compete with them, rather it can access them as needed — operating as a one-stop-shop for high quality shared services, ensuring that you get the right partner for the job and also that decisions aren’t made based on cost alone.
At our venture studio, PX, on behalf of corporates and their intrapreneurs, we offer the full stack of services, providing temporary co-founders who are those experienced operator-entrepreneurs, hyper-skilled in finding product-market fit and getting from MVP to first customers, first revenues, and paving a path to profitability. We plug in the necessary support resources as needed, cost-agnostic — whether ops, sales, legal, design, dev or other — it’s an all-inclusive offer, not an a la carte tapas menu that will get costly fast.
In our view, an early stage company needs these elements in order to expand (oversimplified for the point of this post):
- Up first? An originating idea, grounded in a real human need or job-to-be-done. How do you get there? Research. Proper human centered design research in addition to desk research, hopefully.
- Where to from there? Low-fi prototypes. How to? Design, prototyping tools. And more research, involving real, live customers.
- Next? Higher fidelity prototypes for a persistent test (call it a beta test). How do you do that? Development resources, operational support, more staff likely, even pre-sales support for acquiring those beta testers.
- Then? Pilot, or soft launch. How? New dev skills, likely different or at least new capabilities since the beta showed something slightly different needs to be built to deliver maximum value; proper sales, customer acquisition resources to bring customers in and keep them coming; customer support personnel to serve and retain those users as they engage; your first product manager; your future CTO (if not you); even legal and the beginnings of a scalable ops team.
Put another way, your early venture needs:
- Customer support
- Operations, including Legal
- Something else, surely
Sound like more than a one-person job? More than your team of entre- or intrapreneurs is able to serve, especially in the early going? We feel that the venture studio services model is differentiated in its amalgamation of startup support approaches and capabilities, and helps bridge a high-risk gap in the life of an early stage venture. And, from our experience, that this can drive particular value to large corporates. What do you think?