You are not a Startup Studio!

You are not a Startup Studio!


And here it is, the new Buzz Word: Startup Studio.

I adore all these LinkedIn headlines popping up like mushrooms after the rain! "Venture Builder," "Company Creator," and "Startup Builder" – they are just so original and insightful!

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Hold on: let's get this straight.

Does your agency assist startups in building their products by providing software development or marketing support in exchange for equity instead of cash?

No, you are not a Startup Studio. You just decided to "sell" your consulting services in exchange for company shares.

What are the potential risks associated with this approach?

  • If the idea is invalidated, you have just made a bad investment.
  • If you don't "invest" in enough startups, you are taking on too much risk that, with a perfect chance, will not be repaid by the results.
  • If you have to invoice by trade, you will probably either not invest the right amount of time, or you will divert your resources as soon as some turnover has come in and thus negate the investment.

You've built so many companies "from zero to one," so you already know how to do it, and the Startup Studio means multiplying the effort, right?

It is a Lie. I wish I could tell you that it works but having experienced it firsthand; I can tell you that it doesn't. Knowing how to build a company from scratch does not imply knowing how to launch multiple companies in parallel. It is equivalent to saying, "I am a good restaurateur, and therefore, I can launch a chain of restaurants." Ain't the same fuckin' ballpark, it ain't the same league,?it ain't even the same fuckin' sport.

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Have you co-founded a company with an entrepreneur by deploying resources and money?

No, you are not a Startup Studio. You only co-founded a company, and the fact that you did well doesn't mean you will succeed again.

Do you select early-stage startups with unvalidated Business Ideas and provide them with money, resources, and other services to build the product?

You are not a Startup Studio. You are simply investing in kind and money instead of just money.

Do you pitch ideas internally and select them through a pool of experts?

No, you are not a startup studio. You are merely increasing the number of people telling each other a story.

What steps must a Startup Studio take to attain exceptional outcomes?

Yes I know, you've been told that Startup Studios fail less, but that's not true. Surprised?

Startup Studios fail sooner and are cheaper. And do you know why? Because they use a validation process.

The failure rate "decreases" because you fail sooner and at a lower cost. The degree of safety and, thus, the possibility of "default" decreases because there are clear gates and GO/NO GO decisions at each step.

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Another critical point: if a Startup Studio does not follow specific rules, it is unlikely to get good results. They need to:

  • Focus on portfolio construction
  • The focus of the firm
  • Founder selection
  • Lots of money
  • Centralization of certain resources

Repeat with me, "I am not a Startup Studio, I am not a Startup Studio, I am not a Startup Studio."

Woodley B. Preucil, CFA

Senior Managing Director

1 年

Farhad Alessandro Mohammadi Very insightful.?Thank you for sharing.

Ahmad Abutaleb

Venture Builder at Modus | Innovation & Strategic Activator | Built 20+ Startups | Coaching people to be Genuis Achievers in a 12 Weeks

1 年

Important thoughts to increase the awareness of what is really a startup studio. Appreciate it ??

I was thinking about writing a post like this, you beat me to it ;-) There is definitely an inflation of the use of the word “studio” and the role “venture builder” on Linkedin these days. There are some benefits to the hype but unfortunately, the wrong use of the nomenclature makes it more difficult to educate the ecosystem on the benefits of the studio model.

Riccardo Petrantoni

Tech Entrepreneur & Executive | Startup Advisor

1 年

Interesting article Farhad Alessandro Mohammadi . A “startup studio “ is nothing new on the market. It’s just a new way to define “ incubators”.

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Alex Veiga

Beanstalk Agtech | CFA-ESG | Multi-Exit Founder and Investor | ex-Rocket Internet and Whirlpool

1 年

Love it! It's part of the game to see people appearing right and left saying that they are doing the thing... its just a clear sign of product market fit (or a bubble, but not in this case).

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