For the last few months, our team at Startup Studio Insider has received plenty of messages from entrepreneurs and emerging professionals who are actively looking into new ways and methods for building startups. As a result, the term “startup studio” has surfaced as a top startup business model in the last few years and has proven an effective and simple way of hiring a team that provides enough human capital to help entrepreneurs with their business idea, from the beginning ideation stages to a successful launch and beyond.
So what is so extraordinary about startup studios? As a relatively new concept, startup studios act as co-founders with other startups by bringing an array of tools and proven processes that they know work because they’ve used them before. Instead of trying to find the best tools and spending all the resources looking to get a startup going, startup studios offer a method that is consistent, sustainable, and the best part, that works.
Something important to note when looking for startup studios to work with is that not all of them operate in the same manner. As Beeso Studio explains, startup studios come in three main forms: builder studio, investor studio and incubator studio.
Builder studios handle operations internally, conduct research and develop ideas for new businesses and products, figure out how to optimize those ideas for mass appeal, provide the business with funding, teams, and resources, and build up a startup until it can stand on its own. Then we have investor studios. Here, entrepreneurs with ideas and fresh startups approach an investor studio, and the studio offers money, as well as their team and resources to work with and guide the startup to a successful place. This is distinct from a traditional venture capital firm, which provides funding in exchange for equity, but provides no other assistance. These first two versions of startup studios operate in a more closed environment and they typically don’t accept applications from outside investors.
On the other hand, incubator studios are focused on accelerating a startup idea from scratch to production. While they have their own established teams, resources, processes, and funding, they are open to leveraging these resources to grow a new idea into a startup with as minimal hassle as possible with the help of outside entrepreneurs.
With all this being said, startup studios have several defined benefits over other forms of investment and capital.
It’s exceedingly common for a business to take off, however, the harder part usually comes after the fact, leaving founders wondering how to deal with it all. With sudden access to money, resources, pitches from legitimate and less legitimate firms, and a lot more, it’s easy to make mistakes. Failing to leverage that opportunity leads to many businesses failing to capitalize, faltering, and inevitably failing. Studios have a wide range of knowledge and experience working with sound partnerships that will allow the business to flourish rather than flounder in the midst of it all.
Startup studios are made up of people who have already developed their own successful businesses. They have teams already put together, tools established, partnerships made, and money on hand. All of these resources become the resources of the startup they’re working with, to ensure the success of that startup.
Startup studios have successes already under their belts. They know how to navigate the treacherous waters of business, and they know the common mistakes that startups make. They know how to avoid scams, how to capitalize on opportunities, and how to deal with mistakes when they happen. A startup studio helps their startup avoid those common pitfalls that they would otherwise become mired in, eating up time and resources.
Startup studios are teams that are proven to work together. More importantly, the startup studio team sticks together regardless of the success or ultimate failure of the startups they’re working with. Even if the startup they’re working on fails, the studio can keep the team going and roll them into working on another proven idea or starting another new startup from a new base idea.
With all this in mind, you might be asking yourself, how can I decide if joining a startup studio is right for me? So for those looking to break their careers into the world of startups, there are a few things to consider.
It is fair to say that startup studios are a great option for those who have a driven and ambitious mindset, but require help putting together the steps and process to build it from the ground up. The great part of this model is that all the people involved in the venture-building process benefit in an equal manner. Both startup founders and studio employees earn valuable equity from working together on a project. When one of the startups you helped build is acquired or goes public, you’re going to profit. Every studio has its own employee equity compensation plan with the added benefit that you will end up with a whole portfolio full of potential liquidation events. Like an investor, you’re diversifying your investments.
That being said, every studio member should be aware of the great deal of effort and time that working on a startup studio requires. Oftentimes, we hear stories of founders that wake up at three in the morning making notes and taking countless meetings with investors and other stakeholders, but that doesn’t mean that studios are not equipped to provide a balance between the work and the opportunity for success. Studios deliver stimulation in the form of new challenges to solve, new industries to learn, and new people to meet. Studio life can promote professional growth and personal satisfaction. You may even be able to choose the direction of that growth.
If you think studio life might be right for you and you’re excited to learn more about this ever-growing business model, make sure to check out more of our content here at Startup Studio Insider. Don’t forget to also follow us on LinkedIn, Twitter and Instagram for more information about the startup studio model.