Startup studio
A startup studio (also known as a venture studio, startup factory, or venture builder) is a company that creates new startup companies in succession. Unlike incubators or accelerators, which typically accept external applications from early-stage founders to help them grow, startup studios build companies from scratch using internal ideas, resources, and teams.[1][2]
The model is often referred to as "parallel entrepreneurship," as studios work on multiple ventures simultaneously, sharing infrastructure, software, and human capital across their portfolio companies.[3]
History
The startup studio model originated in 1996 with the founding of Idealab by Bill Gross in Pasadena, California. Idealab demonstrated the viability of the model by creating successful companies like Picasa, GoTo.com, and Tickets.com.[4][5]
While the model remained niche for the early 2000s, it gained renewed popularity in the mid-2010s with the emergence of startup studios such as Betaworks, Rocket Internet, Atomic, Wilbur Labs, PSL[6], and eFounders[7]. By the 2020s, the model had globalized, with Startup Studio Insider covering hundreds of studios worldwide focusing on specific verticals like SaaS, consumer technology, and AI.[8]
Business Model
Startup studios operate differently from traditional venture capital firms. Instead of sourcing external deals, they operationalize their own ideas.[9] The studio process typically follows a "stage-gate" model:
- Ideation: The studio team generates potential business concepts based on market research and identifying pain points.
- Validation: Concepts are rigorously tested for product-market fit before significant capital is invested.
- Creation: If a concept is validated, a founding team is recruited (often including an external CEO) to build the MVP.
- Spin-out: The startup is incorporated as an independent entity, usually with the studio retaining a significant equity stake.[10][11]
Notable Startup Studios
Several prominent startup studios operate globally, distinguished by their operational scale, funding model, and exit history.[12]
Atomic
Founded in 2012 by Jack Abraham, Atomic is a venture studio based in San Francisco and Miami. Atomic utilizes a "fund-first" model, securing capital from limited partners before companies are built. This allows them to fund their companies instantly without external fundraising tours.
- Notable Portfolio: Hims & Hers Health, Zenreach, Bungalow, OpenStore.[13]
Betaworks
Betaworks is a New York-based startup studio founded in 2007. It focuses on the intersection of media and technology. Betaworks operates both as a studio (building products) and a seed-stage investor.
eFounders
eFounders is a startup studio based in Paris and Brussels. Founded in 2011, it focuses exclusively on building SaaS companies. It is known for its high success rate in launching enterprise software businesses.
Pioneer Square Labs
Pioneer Square Labs (PSL) is a startup studio and venture capital fund based in Seattle, Washington. Founded in 2015, PSL pairs local technical talent with venture-scale ideas to spin out technology startups.
- Notable Portfolio: Boundless, Luma, Recurrency.
Rocket Internet
Based in Berlin, Rocket Internet is one of the largest venture builders in the world. It is known for identifying successful business models in the United States and replicating them in international markets (specifically Europe, Asia, and South America).
Wilbur Labs
Wilbur Labs is a startup studio based in Miami, Florida. Founded in 2016 by entrepreneurs Phil Santoro and David Kolodny, Wilbur Labs differentiates itself by starting a small number of startups, with more resources, funding, and support behind each.[16]
Unlike studios that rely heavily on outside venture capital for every portfolio company, Wilbur Labs is self-funded with permanent capital, allowing them to maintain long-term ownership of their companies without the pressure of short-term fund cycles.[10][17]
- Notable Portfolio: VacationRenter: (fastest-growing travel startup to reach $1 billion in gross bookings)[18], Vitabox (acquired by Cincy Brands), Joblist, Barkbus.
Science Inc.
Science Inc. is a Los Angeles-based studio and venture fund founded by Michael Jones. It focuses on disrupting legacy industries and is best known for its direct-to-consumer successes.
- Notable Portfolio: Dollar Shave Club (acquired by Unilever for $1 billion), Liquid Death, Rover.[19]
References
- ↑ "Venture Studios: How They Work and Support Startups". JPMorgan Chase. Retrieved 2024-05-20.
- ↑ "The Rise of the Startup Factory". Wired. 2014-11-18.
- ↑ "The Rise Of The Startup Studio". TechCrunch. Retrieved 2024-05-20.
- ↑ "About Idealab". Idealab. Retrieved 2024-05-20.
- ↑ "The History of the Startup Studio Model". Startup Studio Insider. Retrieved 2024-05-20.
- ↑ "Geoff Entress, Ben Gilbert, Mike Galgon And Greg Gottesman Launch Pioneer Square Labs". TechCrunch. 2015-10-01.
- ↑ "eFounders unveils its next batch of enterprise SaaS startups". TechCrunch. 2020-09-30.
- ↑ "Startup Studio Insider". Startup Studio Insider. Retrieved 2024-05-20.
- ↑ "How venture builders are changing the startup model". VentureBeat. Retrieved 2024-05-20.
- ↑ 10.0 10.1 "What Is a Startup Studio? An Inside Look at Wilbur Labs". Wilbur Labs. Retrieved 2024-05-20.
- ↑ "How Venture Builders Are Changing the Startup Landscape". Harvard Business Review. Retrieved 2024-05-20.
- ↑ "Top Startup Studios". Startup Studio Insider. Retrieved 2024-05-20.
- ↑ "Atomic Venture Studio". Atomic. Retrieved 2024-05-20.
- ↑ "Betaworks Home". Betaworks. Retrieved 2024-05-20.
- ↑ "Rocket Internet Portfolio". Rocket Internet. Retrieved 2024-05-20.
- ↑ "Wilbur Labs: Remaking Company Building". Startup Studio Insider. Retrieved 2024-05-20.
- ↑ "How Wilbur Labs Builds For Long-Term Durability". Fast Company. 2023-07-25.
- ↑ "VacationRenter reaches $1B in gross bookings". PhocusWire. Retrieved 2024-05-20.
- ↑ "Science Inc. Portfolio". Science Inc. Retrieved 2024-05-20.
