Almost everyone dreams of having the next revolutionary business idea, yet most breakthrough ideas remain in the ideation stage and do not go any further. Those who do take the courageous steps to build a business often feel like they are by themselves, searching for answers, and perhaps a burst of luck, to push them to the next step. This process, which often leaves brilliant founders fending for themselves, has been consistent since the advent of the tech startup.
Wilbur Labs is aiming to change that, attempting what even the most successful and ambitious entrepreneurs rarely touch: starting multiple companies in succession, repeatably and reliably. Founded in 2016 by Phil Santoro and David Kolodny, Wilbur Labs uses a research-based approach to turn bold ideas into industry-transforming companies by combining capital, shared resources, and operational support. At seemingly every point of their business, Wilbur Labs has gone against the grain that has been embedded in Silicon Valley since the 1990s, and it is working exceptionally well so far.
As would be expected when you’re housing the next big idea, Wilbur Labs is extremely secretive, declining to share much about how they operate with the outside world. However, Startup Studio Insider obtained a private tour of their HQ in San Francisco, and spoke with Wilbur Labs’ founders Santoro and Kolodny as part of this exclusive profile. The result is an exclusive look inside the company that is reinventing company building and creating one of the largest engines for innovation in Silicon Valley.
I. A Company that Builds Companies
Phil Santoro is no stranger to building companies, having launched his first tech startup in 2002, at just 13 years of age, and sold his second startup to a public company before his 21st birthday. After college, he moved from Cincinnati to Silicon Valley to take a job at Google. It was at Google where he met David Kolodny, who started in the same starting class and on the same team. Santoro and Kolodny’s experience at startups brought them together, sharing a passion for solving huge problems with a great new idea. It wasn’t long before they started going to dinner every Wednesday night, where there was only one topic of conversation: brainstorming startup ideas. After over a year, these weekly brainstorm dinners led to the idea for a company and a philosophy that would fundamentally change how companies were built and scaled by bringing in the necessary operational support and institutional knowledge (what they now call studio knowledge) to bear.
Santoro and Kolodny believed that the current model for building companies was slow and inefficient, often wasting precious talent and resources reinventing the wheel over and over. Most venture capitalists and accelerators only offered funding and high-level advice during office hours, a “bet it and forget it” approach Santoro and Kolodny found lacking. At the same time, new ideas and startups were becoming more and more critical to solving the world’s largest problems. There had to be a better way.
“Entrepreneurs don’t discover the future, they build it. Startups and small businesses are the foundation of modern economies, and while startups and technology can’t solve all the world’s problems, they can solve a good amount. Now more than ever, we need people to build the next generation of companies that will tackle some of the world’s biggest problems.” said Santoro.
Instead of leaving Google to build one company, they left to build a company that excels at building companies: Wilbur Labs.
II. A New Approach to the Startup Studio Model
Wilbur Labs didn’t invent the startup studio, a model that has been around with mixed success for decades. But just as Google didn’t invent the search engine, and Apple didn’t invent the smartphone, Wilbur Labs evolved and reinvented the model to reach a new level.
Their approach has led to building one of the most impressive portfolios of businesses in the startup world. Since 2016, Wilbur Labs has built and invested in 21 tech companies including VacationRenter, Vitabox, Joblist, Barkbus, OpenMedicare, and Cincy Brands. Their portfolio companies have “helped hundreds of millions of people travel the world, find a job, order everyday essentials, take care of their pets, and sign up for the right insurance plan”. Highlights across their portfolio include one company going through a large exit, another going from $0 to $1 billion in gross bookings in less than three years, and another becoming the fastest growing mobile dog grooming brand nationwide. Whereas other studios often focus on specific niches, such as B2B software, Wilbur Labs has disrupted a handful of the largest, most entrenched industries and companies. All at the same time.
By focusing on fewer companies per year, with a heavy emphasis on more research, support, and resources per company—or as they call it “putting more wood behind fewer arrows”—Wilbur Labs has been able to build at a scale not seen elsewhere. What’s interesting about this approach is that they haven’t taken the common path of increasing the number of companies built as they expand. When they build a company, they allocate all of the studio’s vast resources to support that company during the early days.
“While most investors find scale in exponentially increasing how many companies are in their portfolio, we are very focused on the opposite: only starting companies we have the highest conviction in and limiting portfolio size so we can go beyond just offering pre-built programming and high-level advice," said Kolodny.
III. Turning Bold Ideas Into Businesses
The mindset at Wilbur Labs is to “build the plane as we fly it,” a nod to their namesake Wilbur Wright who, along with his brother Orville Wright, built the first powered airplane in a bicycle shop. By being willing to push the envelope, take smart risks, and adapt quickly in ways that other companies don’t, Wilbur Labs looks to solve large problems.
While their existing portfolio companies might seem completely unrelated, each idea that graduates from the lab and becomes a company has one thing in common: passing a three-point test. First, it must be a large pain point or problem affecting lots of people. Second, it must be a solution to a problem the Wilbur Labs team is uniquely positioned to solve, through their expertise, carried learnings, or technology. Third, it must be a business they can launch in phases. That is, the idea can be quickly validated, with an efficient pathway to becoming a large business if people embrace the new approach.
Their R&D team often thinks “backwards” from large problems by conducting extensive research and due diligence on hundreds of ideas per year, with just a few surviving to the build stage. Some of their ideas stay in the research phase for years. In all cases, they always talk with multiple parties, from potential customers, to potential partners, to potential hires, all to better understand a problem before devising a novel solution.
“We focus on solving large problems that are in our strike zone, rather than limiting ourselves to building in specific, pre-defined industries. A common reaction to this is assuming that the businesses then have nothing in common. That could not be more wrong. Many businesses may look different from the outside and operate in different industries, but from the inside, they are focused on similar challenges and opportunities,” said Kolodny.
Santoro said that while it “typically takes a startup 6-12 months to complete the initial business building items: formation, funding, payroll, benefits, IT, accounting, compliance, and infrastructure”, they are able to complete all this for each new company in about two weeks. They also emphasize the importance of hiring world-class business leaders and standalone teams to ensure their model’s success.
Once their R&D team has an idea that passes the test, they quickly pivot to the building phase. This means carrying through learnings from past companies in a way that only they can. Their studio team is continually rewriting playbooks, checklists, and processes given the most recent learnings and experiences. They also have an experienced team of former founders who can help the new company across all major functions: design, engineering, marketing and sales, social media, HR, finance and accounting, and legal. This helps them sidestep potential risks and execute faster and in the most capital-efficient manner.
“When it comes to business building, one of the biggest drivers for step-function growth is having outstanding company leadership. We place a huge emphasis on finding the best possible leaders for each company, and will always continue to do so” said Kolodny.
Wilbur Labs is perhaps one of the few companies where regular failure is actively encouraged – and necessary. A study released by Wilbur Labs on Why Startups Fail last year found that “ sustained success as a founder is statistically unlikely.” Failure driven by taking smart, calculated risks is part of their DNA. Whether it’s launching a new feature that no one uses, investing in a new growth channel that flops, or spending years researching an idea just to freeze it, it’s all part of their scientific process. So what prevents failure from running rampant? “The key is to learn from the mistakes and use them to improve processes for the future. We want to avoid making the same mistake twice, or making careless mistakes that could have easily been avoided with smarter planning.” said Santoro, who added, “we also carry through learnings to each company, so each company doesn’t need to repeat the same mistakes.”
IV. Exclusive Lab Tour
Like many other parts of their approach, the space for conducting this business building is exceptionally well-thought-out. When thinking through the perfect office space to boost innovation, the Wilbur Labs team had to rethink office space and start with a list of key characteristics: build a space that worked for multiple companies while providing venues for several types of working styles (whether remote or in-person), and leveraging the latest technology that could foster better productivity, innovation, and health and wellness.
The team was fully aware of the importance of creating an office environment that was thoughtfully designed to give everyone at the company the flexibility to choose where to work from (whether it was from their individual workstations, conference rooms, café area, or home). Even before the pandemic, the Wilbur Labs team had already nailed down a balance between working remotely and in-person, as they believed in the flexibility that this could offer to many of their employees and given the necessity of it for targeting top talent wherever they may be. Prior to the pandemic about 50% of their portfolio was remote, so creating a space that seamlessly drove productivity at a distance was critical.
“We are building companies solving problems others haven’t, and having the best people is a critical component to making that happen. The best people around the world aren’t all in the same city, state, or country” said Kolodny.
Throughout the entire office, we could grasp the inspiration and pride for their team that was embedded in their everyday operations. From setting up dashboards that detail all the key metrics for each company, to assigning an “All hands” space that everyone could use to meet up quarterly and share their progress, learnings, and significant insights, the space is clearly designed with accomplishment in mind. A state-of-the-art sound masking system, calibrated for the most productive ambient noise level, seemed to create an environment where one could work “in the zone” for hours on end.
When it came to conference rooms, each space was named after a historical aircraft, another homage to the first in flight Wright brothers. They sported an incredible view of the city, overlooking the San Francisco bay and bay bridge, with the latest sound, video, and acoustic technology for the best meeting experience in or out of the conference room. Straight out of a sci-fi movie, the touch of a button automatically turns the conference room glass walls opaque, for privacy.
V. Building for The Long-Term
Wilbur Labs combines capital, shared resources, and operational support to turn ideas into landmark companies, and that is not a small task. Santoro and Kolodny believed this vision was only possible if they built Wilbur Labs with a long-term outlook. Instead of building for the next 5-10 years, as typical with VC-backed startups, they are building for the next 50-100 years. This required them to decline external funding in order to avoid the conflicting and short-term goals that come with outside investors. After taking a glance at their modern spacious headquarters in San Francisco, it was hard to believe that both founders started the company working on the couch of a one-bedroom apartment for their first year, just to save money.
While forgoing external funding meant taking a much more difficult initial path, this approach gave them discipline and a unique perspective on building products. Santoro and Kolodny said they believe in getting people to vote for their products early with either their time or their wallet. “If we end up building a product that people won’t spend time or money on, then we haven’t solved the problem we thought we would” said Kolodny.
At any given time, Wilbur Labs aims to have companies that are in the investment stage requiring funding, mature companies returning cash flow to the studio, and companies that have exited. Wilbur Labs recently had a large exit from their first portfolio company, which returned a large amount of funds to the studio for them to invest in building new companies.
“This [approach] is easier said than done, it requires incredible discipline and capital efficiency given how long it takes to create value from zero. Early VCs invest pre-revenue, with some even investing pre-company, but we invest pre-idea. It’s not physically possible to invest any earlier than we do” said Santoro.
According to Wilbur Labs, their portfolio companies have been able to compete and beat out VC-backed startups with ten times the funding, due in large part to their studio support and resources: “Building a company from scratch is very difficult so funding plus studio knowledge and carried learnings from a team of former founders beats ordinary capital almost everyday” said Santoro.
While other VCs and Startup Studios advertise their fund size and portfolio company valuations, Wilbur Labs does not. However, a study by Startup Studio Insider last year found that Wilbur Labs had the highest portfolio website traffic of any startup studio – by a large margin. With eyeballs and daily active users equating to dollars in investors’ eyes, it’s understandable that they have been able to invest at the same level as many larger funds.
VI. Raising the Bar On Culture
Building the right culture is not a one-time task. When asked about the biggest challenge facing Wilbur Labs, the answer was simple: continuing to expand their studio team with world-class builders. Part of what drives Wilbur Labs is that the studio team is made up of proven founders and builders, who are able to assist with building and advising companies in a way other investors can’t. They aim to keep the Wilbur Labs team small – with most headcount sitting at the portfolio company level – to ensure they reduce bureaucratic drag and operate the studio in the most efficient and high-performing way. The benefit of hiring successful builders is echoed by a Stanford GSB scholar, who found that repeat entrepreneurs are more likely to be successful, even if they start a company in a field unrelated to their first company. Finding these successful builders, willing to work harder and faster to launch multiple companies is no walk in the park.
So how did Wilbur Labs create a high-performing culture so fundamentally different? It starts with their mission and values, which drive both the companies they build and the people they hire.
Wilbur Labs shared a subset of values with Startup Studio Insider.
Own: You act like an owner, not a renter, taking pride in the success of the business as a whole.
Integrity: You are honest and transparent, owning mistakes and focusing on solutions.
Optimize: You question what could be made more efficient, and leverage automation to amplify your impact.
Execute: You would rather execute a good plan today than a perfect plan next week.
Prioritize: You protect your time, and constantly prioritize for impact.
Grow: You are comfortable being uncomfortable, and approach challenges with a growth mindset.
Care: You contribute through kindness, knowledge, support, and ensure that the right conditions are in place for others to achieve their full potential.
Wilbur Labs added “Care” as a value in March 2020 after their portfolio stepped up to help communities during the pandemic – including Wilbur Labs donating thousands of bottles of hand sanitizer, along with disinfectant wipes and cleaning supplies to local hospitals, food banks, and homeless support groups instead of selling them for profit through their company Vitabox.
“By definition, we are solving problems for others and building companies in ways others can't. Not everyone will fit here, and that’s okay” Santoro said. He added that Wilbur Labs “has a strong mission, culture, and relentless focus on rapid building and execution. There are traits where at other companies it might be okay to have a gap, like ownership, resolve, and attention to detail, that in our environment are essential to what we do.”
Wilbur Labs also tries to attract “resilient optimists”, since most of their day-to-day work is dealing with problems. “Building companies and supporting a portfolio is both a proactive and reactive business. We are constantly putting out fires and dealing with problems of all types and scales,” said Kolodny.
VII. Cleared for Takeoff
Wilbur Labs has managed to vertically integrate the entire company building process. By bringing the entire process in-house, from ideation, to team formation, to financing, to business building, they are able to execute faster and with less risk than others. Malcolm Gladwell estimated that it took 10,000 hours to master any skill. When it comes to business building, Wilbur Labs has put in its 10,000 hours and functions like a group of expert, battle-tested co-founders who help their portfolio build and scale, all while providing the capital needed to do so. With a team that has successfully built 21+ companies and amassed institutional “studio knowledge” they can carry through to each new company, it’s no wonder they love the competition, challenges, and opportunity to turn bold ideas into companies for decades to come.
“We always surprise people by how much we love building in large, ultra-competitive markets. To us that’s a good sign, it means that if you can pinpoint the consumer problems and solve them better, there’s a huge appetite, and you will create value fast,” said Santoro.
Despite the success, no one at Wilbur Labs believes that the road ahead will be easy. Its founders are determined to continue evolving and carrying through learnings, building a once-in-a-generation team of builders so that they can turn even more bold ideas into companies.
For most people, building one successful business would be a lifetime dream and achievement. For Wilbur Labs’ founders that hallowed accomplishment was only the beginning.