Startups Studios: accelerating startups innovation

Spread the love

 

Building startups is notoriously hard. Often, entrepreneurs have to spend too much time on scraping together the basics. A few people who can hack together an initial product. Some funding so they don’t have to starve for their big idea. If you ever tried to build a startup, you know the feeling.

And from the investor’s point of view? Every time they want to invest in a new company, they have to search for new people, go through all the basics again and again.

And the result? Nine out of ten times startups fail. The team scatters, founders face downtime, sometimes even depression.

Startups Studios are a new kind of accelerators for innovation: instead of accelerating startups previously settled, like traditional incubators and accelerators do, they participate to the set-up of the start-up. A start-up studio is a company that starts companies:

  • Sometimes they generate their own genuine ideas, and find out the right team to execute (like eFounders -focused on SaaS ventures- Nextstars, or partially RocketInternet);
  • Sometimes they develop untapped ideas coming from the outside, brought by corporations or entrepreneurs, and shape startups to execute them  (like Co.builders, TechnoFounders, Btwinz -dedicated to SaaS ventures-, or StartupFactory);
  • Or they can also help develop creative ideas raised by corporations, provide support from ideation to implementation, and liaise with relevant startups on the domain, (like Eurogroup Javaness, Orange CrossLab, Accenture Paris Innovation Centre , or Digilityx).

 

Thus, startups studios are also called startup factories. Year after year, they develop, reuse and optimize an infrastructure (office space, back-office solutions, legal advice, management processes, a multi-disciplinary team, product design, and hosting service) and a know-how in shaping startups teams, and helping them to start their business.

Here are the 7 basic steps to build a startup studio:

  1. Take a core team & entrepreneurs in residence;
  2. Add a shared infrastructure & in-house funding;
  3. Generate ideas internally (or in some cases, act as a cofounder);
  4. Build multiple startups in parallel;
  5. Trash what doesn’t work, reassign team;
  6. Spin off what works and get follow-on funding;
  7. Grow. Exit. Repeat.

Business model

Startup studios are often mistaken with startup incubators and startup accelerator, of operational Venture Capital firms.

The startup studio model is defined by three important criteria:

  • Startup studios focus their business on creating startups

Unlike startup incubators or VCs, the main goal of a startup studio is to build a startup from the ground up. This implies an important involvement of time, dedication and resources to working operationally on the project for a period of time.

  • Startup studios build several startups following a repetitive process

One focus of a startup studio is the rapid development and prototyping of new products. They work on multiple startups and projects simultaneously instead of building one project at a time.

  • Startup studios build an infrastructure that enables an efficient venture building process

Startup studios own an infrastructure made of pooled resources: technical tools, management processes, and a multi-disciplinary team. By building several projects a year with the same team, startups studios can re-use this infrastructure, software and best practices across products.

“Foundries”

IdeaLab

Idealab was started in 1996 and created some massively successful companies. They had more than 30 exits on ~75 companies created. They were involved with eToys, Overture, Shopping.com, Commission Junction and Compete.

Betaworks

Betaworks is a company which builds companies in. Their studio in NYC is currently focused on Bitly, Digg (which they recently acquired), Chartbeat and SocialFlow. They also double as an early-stage investor.

Redstar Ventures

Redstar is a company builder focusing on 3 different themes: aging demographics, the future of media and the underemployed. Their first startup is LoopIt.

Archimedes Labs

Started by a TechCrunch co-founder, Keith Teare, Archimedes is a foundry, incubator and investor, which recently spun out Just.me Launch Code Launch Code is building a platform to launch consumer internet companies, working out of RAA Venture’s office. They’re focusing on subscription e-commerce in the beginning.

Atomic Labs

Newish product lab in SF, who built Everalbum, Accuvit and Zenreach.

Roniin

Former Lightbank employees in Chicago.

Startup Foundry

Vehicle in Chicago who spun out Crowdspring.

High Alpha

Very solid startup studio in Indianapolis, founded by former ExactTarget founders.

Efounders

A Paris-based foundry which is probably one of the most successful ones, given they already launched Mailjet, TextMaster, PressKing, Mention, Front and Aircall.

Sea/Salt

New foundry / incubator in Brooklyn

Pioneer Square Labs

A new foundry based in Seattle who recently raised $12.5M

Stanley Park Ventures

Canadian foundry in Vancouver

1/0 Capital

Fintech specific venture builder and investor

 

 

Europe

Rocket Internet

Probably the most famous one, having built Alando, StudyVZ, Jamba, BigPoint and a million other clones, but most European countries have a lot of them.

Fastlane Ventures

Fastlane is Russia’s Rocket Internet, they launch companies in 50 days out of their office in Moscow.

Makeshift

Created HireMyFriend, Attending and more.

Bright Bridge Ventures

Fintech specific builder in London, backed by Blenheim Chalcot.

 

Let’s dig in into two exemplary cases.

eFounders

eFounders generates creative ideas internally, with a focus on SaaS, designing software for mid-size companies with 200 to 2000 employees. The creation process is a follows:

  • Internal ideation, funneling from hundred to a few ideas in 2 months;
  • Recruitment of a CEO or a CTO, who will receive 50% of the startup shares;
  • 18 months of transformation, turning the idea into an independant company; eFounders brings resources to support the set-up, with expert skills in product marketing, design, coding, content, strategy, marketing, …
  • The process is renewed once or twice a year, up to 4 to 5 times a year, and concurrently, resources are staffed to support venture’s coaching;
  • The born-startup is fully autonomous and independant at the end of the coaching.

 

The flow of candidates is significant: eFounders receives 150 applications monthly, and around 5 are met weekly. eFounders looks for entrepreneurial patterns: keeping morale up even when the weather is bad, facing and fixing issues, being determined up to the end. As Jeff Bezos says, ‘being both stubborn and flexible’.

An emblematic success story is Front: Front is a professional email service with workflow and collaborative features. Their founders left for the US, where their main market relies, they were accelerated at Y Combinator, and raised recently $m 10 among investors including Slack’s founder!

 

Other emerging startups cover cloud emailing (Mailjet), collaborative translation (Text Master), brand monitoring on online media (Mention), instant admin solution for developers (Forest), or corporate credit cards (Spendesk). Cloud telephony softphone Aircall attended 500 startups accelerator program in San Francisco, and raised $2.75 million with Balderton Capital, FundersClub and business angels. Congratulations!

Digilityx

Digilityx has been created in 2015 to address one of the most complex challenges traditional companies are currently facing: how to innovate fast in a competitive digital world, and deliver quickly creative projects. Based on the experience of the 3 founders, and the impressive growth of French Tech players, Digilityx is bridging the gap between large companies and agile startups, unfolding enablers and accelerators for digital corporate projects. Digilityx brings its extensive knowledge of tech accelerators ecosystem, and unique know-how, to ensure an effective cooperation between young entrepreneurs, and traditional organizations.

 

Digilityx’ partners deliver innovative and agile solutions in domains such as big data (datascience, big data as a service), customer experience monitoring (NPS, semantic engine, conversational bots), and IoT (security, IoT data hub). Digilityx sets up occasionally partnership with vertical business solutions on specific use cases (well-being, wearables) for insurance or health industries.

Digilityx worked as well as a team to deliver its own innovative solutions; a first platform, Youberjob.com,was designed in 3 months: it supports jobbers to sort outhow they can earn money thanks to collaborative economy or “uber-like” platforms. Digilityx team members worked then as a start-up using persona, customer journey, MVP, and lean start-up methodologies, great playground to test new concepts and new partners’ solutions. Finally, if the concept is mature enough, Digilityx will propose its team members to invest in a new company created to bring the solution to the next stage.