Startup Studio: what it is?

December 5, 2019

A Startup Studio is not a startup incubator, nor an accelerator, and it's not a Venture Capital either.

Sorry, I lied.

I won't tell you what a Startup Studio is - or at least, I won't tell you what it is before telling what it's NOT.

What a Startup Studio is not

A Startup Studio is not a startup incubator, nor an accelerator and - before you ask it - no: it's not a Venture Capital either. It's somehow like Balto: "Not a dog. Not a wolf. All he knows is what he's not".

One business, many names

Let's start from the name. We called it "Startup Studio", but not everybody likes to call it so. It is also known as:

  • Startup Factory
  • Venture Builder
  • Startup Foundry
  • Company Creator
  • Company Builder

What's a Startup Studio

Whatever you call it, you have to know that it's an enterprise whose goal is to build other enterprises. It's a Startup industry: it creates them. It doesn't accelerate nor accompanies them, but produces them.

I hope you like metaphors because here's one:

when we talk about circuits, we know we can put them in a series on parallel. But, when it comes to entrepreneurship, people always think about the serial entrepreneur: somebody who, after successfully creating an enterprise, keeps on creating another and another.

A Startup Studio is instead an enterprise that creates startups in parallel rather than in series. It's parallel entrepreneurship.

I believe that when something works in a specific context, often it's possible to solve an analogue problem in another context just by applying the same reasoning.

Metaphors somehow follow this way of thinking: maybe that's the reason we use them.

Know-how (to keep it)

Talking about our serial entrepreneur, we can say that if it's possible to keep the know-how acquired in the creation of an enterprise and to use it again in the production of a second one, it's also possible that a group of entrepreneurs systemizes not only the know-how but also resources, data and all processes related to the business in order to create many companies faster and more successfully.

It's possible to industrialize processes to create companies in the same way one does it to create products. Funds and asset managers teach us that the more one diversifies his portfolio, the higher are the chances to succeed.

I can already hear the first objection coming: "Ok, nice theory", you would say, "but we can't rely on theory alone".

You're right. Now I'll tell you how to put it into practice and which are the ingredients for the perfect recipe - but mum's the word!

The Startup Studio Recipe

Let's pick a team of experienced entrepreneurs and managers:

  1. Mix them and put them into an office;
  2. Knead them to generate internal ideas. Done that, look for a co-founder. Some external founder has kneaded a valid business idea and came to us? Perfect, then let's be the co-founder;
  3. Launch more MVPs in parallel;
  4. Do quick validations, throw away what's not functioning, reallocate the team (luckily experience is reusable);
  5. Do the Spin-Off with New-Co and create an independent team;
  6. Spin-Offs grow, then Exit.
  7. Repeat the whole process endlessly.

So, I revealed the ingredients for the Startup Studio recipe: but will the result be good for real?

In qualitative terms, (also taking something from Startup Studio Playbook) Startups created from Startup Studios usually:

  • get quicker to an exit;
  • need less human resources to grow;
  • have higher growth rates
  • use money more efficiently;
  • use less money in general.

But are there any successful Startup Studios? And how many?

I counted around 300 and, of course, some of them are successful. I'll mention a few of those based in Europe:

What do I need to create a Startup Studio?

A team that already got around for a while - so not at its first experience. Track record, a good network of investors and partners, and the will of getting hands dirty. Is to say: less mentorship, more hands-on.

Can it be done in Italy?

In Mamazen, we're trying.

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