What fuels success behind the startup studio model? This is a combination of cultivating a team of industry experts, offering an ongoing level of extended support, such as strategic mentorship, access to top tech tools, and deep insightful market research that most businesses alone cannot achieve alone. While we’ve covered the different resources that startup studios provide, in this article, we’ll discuss how startup studios leverage the latter to create business opportunities.
It’s no secret that startup studios leverage their team’s innovation when developing a startup, but what information does this team rely on to make key decisions? Winning, and successful, teams leverage their access to advanced technology to optimize their findings. These findings are grounded in data, which allows the team to create strategic approaches. Major players like Atomic, Wilbur Labs, and Rocket Internet are making waves in developing successful, thriving businesses across various industries that solve real problems for consumers.
The creation of a startup studio begins with ideation, the formation of ideas or concepts, and has to move past the validation phase next. Once the idea is determined to be feasible and scalable by conducting market research and running tests, the validated idea can begin to be brought to life through creation. During the creation process, successful founders use working prototypes to receive customer feedback. The company will operate for a short period of time before letting the new business spin out and work under its own executive team. The last process is scaling up, which is when the founders determine if they’d like to work independently or work alongside the startup studios. So how do startup studios manage to gather all the data and proof points needed to validate their ideas in order to go through this entire process?
Let’s take a look at the key ways data-driven startup studios develop and launch a successful startup.
Market Research & Validation
Typically, startup studios will not launch a startup without substantial research and data to prove that there is a market for the offering and that the business model is viable As startup studios generally build companies that tackle certain market needs and customer gaps, well-conducted research will be necessary to establish the right goal and strategies for each business. To fully understand if there is a market need, startups go through the process of validation. Validation refers to the process startup studios use to determine whether a certain idea is of interest to a specific market. Validation utilizes real-world data research and insights and is conducted within the early stages of the startup development process.
For startups looking for investors, there’s a need for creating an investment thesis. An investment thesis is backed up by market research and in-depth analysis, and is an argument that supports or rejects a particular investment strategy. Investors and startup studios determine their investment decisions on a thesis, which is why having market research and in-depth analysis supporting your product or service is crucial to its success.
Startup studios leverage data to make key decisions, including identifying and targeting a specific market segment. The ability to properly target the correct, and narrow, market segment is backed by extensive market research. Once the market research is conducted, the team is able to clearly define their intended audience and create an appealing approach to their consumers. This phase is commonly referred to as the “market exploration phase”, and according to Studio Hub, “This requires detailed qualitative and quantitative analysis of the target groups. This is supported by various design thinking methods.” The most successful startup studios create strategies developed using the extensive data found within the market exploration phase, in order to develop and launch their startup.
AI’s ability to recognize patterns in data and predict likely outcomes has raised hopes that it can play a bigger role in decision-making in many industry fields. Now, similar bets are being placed in venture-building practices. Automating these processes would enable founders to re-direct their workforce towards higher value-add activities, leading to cost savings for organizations such as startup studios and better quality of work for individuals.
While startup studios bring a unique approach and methodology to support startup growth, the field of AI, in particular, is well-positioned to benefit from the AI studio model. Due to their structure and high-selectivity processes, startup studios may take longer to bring a product to market, but this allows the final product to reach its full potential by getting rid of any errors or risks. With the nature of studios being highly competitive and strictly selective with the ventures that they work with, getting some help from technology, such as AI, comes in handy, empowering startup studio team to better predict the most successful outcomes prior to investing, building, and launching any venture. Furthermore, many AI studios are now looking for new ventures that leverage the newest developments in AI to create interactive experiences, allowing users to experience a unique story based on their choices and preferences.
Entrepreneurs minimize risk by leveraging data, and their data-driven decisions result in a calculated approach in developing and launching a startup. Read this article to learn more about how entrepreneurs minimize risk, innovate, create, and profit.