In the age of digital and technological revolution, you’ll find that innovation – in all its many shapes and forms – is what drives the majority of your business decisions. But there is no right way of doing innovation; building new businesses from the ground up will always come with its obstacles, regardless of your product or amount of funding. In fact, only 1 in 10 start-ups actually make it onto the market – the remaining 9 fail, and sometimes miserably. Now, as the constraints on value capture and business development keep on multiplying, the business model known as the venture studio has “grown organically out of [...] the evolving market for entrepreneurial talent” and quickly established itself as the dominant start-up ecosystem on the market – and for good reason. From tailored business solutions to long-term co-founder relationships, the venture studio has a whole lot to offer for start-ups looking to scale their business in a sustainable (and profitable) way.
After you’re done reading this guide, we hope to have helped educate you a bit more on the venture studio business model – what it is, how it works, and the many advantages it presents to the start-ups that choose to work with it.
Before we dive into what a venture studio can do for your start-up, let’s have a quick look at what exactly constitutes a venture studio. Simply put, the venture studio is a relatively new business model that directs all its capital into building start-ups from the ground up. Our main objectives are to identify new business opportunities that solve one or several pain points in the existing market, and to provide a team of diverse expertise that can help your start-up in its mission to reach product-market fit. While we often work on several projects simultaneously in order to maximize efficiency, at its core, the venture studio is all about offering hands-on support and guidance for each of its venture companies, making it the perfect long-term business partnership that is sure to stand the test of time.
We like to think of ourselves as a business building factory. What we mean by this is that within our services lies a full-stack offering of venture building, market research, ideation, product development, and growth strategy – all of which is backed by a entrepreneurially minded team of talents that are willing to work day and night to ensure that your business reaches its full potential. Regardless of business or industry, it is the people that make up the core of any venture, mission, or engagement. So, instead of going at it on your own and hoping for the best, enlist the expertise and diversity of a venture studio and let is serve as your guiding star in navigating the ins and outs, the ups and downs, and the pitfalls and peaks of building a successful business.
When we founded Levels back in 2016, it was with the intention of building a strong team of diverse, talented, and endlessly curious individuals that together would be able to help start-up businesses translate innovative technologies into game-changing opportunities. The result is nothing less than a full-service offering – a team defined by widespread expertise and with an entrepreneurial mindset, ready to assist our partners and clients scale their businesses and reach new digital horizons within strategy, venturing, product design, technological development, talent acquisition, and business scaling.
Tying into the previous point about the incredible team-building assets of the venture studio, working with an experienced and well-connected team of professionals will aid your start-up in avoiding common pitfalls and mistakes that may impede the growth of your business. In fact, beyond being dedicated to helping founders with the operational side of business development, Venture Studios are specifically designed to solve real problems in-market, making sure that your start-up reaches problem-solution fit as quickly and efficiently as possible.
When we talk about start-ups and problem-solving, we often refer to what is commonly known as ‘wicked problems’ – “a social or cultural problem that’s difficult or impossible to solve – normally because of its complex and interconnected nature.” Start-ups, compared to larger and more heavily-regulated companies, are by nature better equiped to solve these types of problems, turning seemingly impossible ideas into reality. But an idea isn’t enough, and neither is venture capital – while essential, investment money does not come with the guidance nor the expertise needed in order to effectively manoeuvre the initial idea into a product-market fit. The venture studio, on the other hand, can and will offer your start-up all the tools and resources needed in order to help solve any and all problems you may face along the way.
In the world of start-ups, time and resources are (at least in the long run) often more valuable than equity, and in sparse quantity. Finding the right resources on your own while still being able to effectively manage your time and meet important deadlines will quickly prove to be both costly and constraining.
One of the core values of any venture studio is to significantly reduce the time it takes to scale start-ups in a way that remains sustainable and cost-efficient. Having an advanced set of infrastructure in place from the get-go, the venture studio is able to work fast yet methodically, often pooling its technical resources and manpower in a way that best suits the need of its many ventures. The infrastructure used to help build a specific start-up can then, in turn, be reused as a prototype for future projects – either with the same company or others with similar needs.
If you’re in any ways familiar with the world of venture, you may be aware that other start-up ecosystems such as accelerators, incubators, and even venture capital firms, tend to more often than not take on a rather aimless methodology when investing in start-ups – what you may call a “spray and pray” approach. On top of this, the equity that these ecosystems provide tends to be injected into their ventures a little too late, resulting in missed opportunities due to a disregard for the incredibly important early stages of venture development. Most importantly, as we’ve already touched upon, your start-up won’t get access to the same levels of hands-on support or business-related guidance needed in order for your business to successfully make it onto the market.
Unlike incubators and accelerators, venture studios like to enter their collaborations with start-up companies as co-founders. What this means is that not only do we offer the resources and manpower needed to build your business, but we also make sure that our venture partners are provided with all the human capital necessary, from venture developers to in-house support staff, in order to maximize successful growth. While we may work on several projects simultaneously, as co-founders we share both risk and upside of the start-ups we choose to help build; this dedication ensures that our partnership creates an impact far beyond short-term business performance. With great emphasis placed on building long-term relationships with mutual trust, profitability, and of course excellent quality, we remain right alongside your start-up on the journey towards success.
At its core, the venture studio participates in company creation by investing time, money, and resources into repeatable processes. The creation and maintenance of a successful start-up is wholly dependent on innovative ideas, a diverse team of manpower, equity, and long-term support. As opposed to traditional start-up ecosystems, the venture studio will be able to provide processes that support how and when to allocate talent, capital, and operational support along the way. We have the unique ‘re-use capacity’ crucial for a start-up to avoid repeating common mistakes in timing, technological development, use of resources, and leadership. On top of this, the venture studio can reduce the friction that may arise amongst founders by taking over complicated tasks and time-consuming administrational work. Hence, the founders are instead able to focus on further developing their ideas, and allocating time and effort into the development of their business roll-out and overall scalability.
At the beginning of this article, we stated the fact that only 1 out of 10 start-ups successfully make it onto the market, while the remaining 9 crash and burn along the way. Now, let’s have at look at how drastically these numbers change when the start-up decides to team up with a Venture Studio. According to a report from GSSN, "Disrupting the Venture Landscape: Why the Startup Studio Model is Where Investors Find Capital Efficiency" (2020), “84% of startups coming out of studios go on to raise a seed round," and out of these "72% [...] make it from seed to Series A." In the end, compared to the 10% success rate of traditional start-ups, "60% of all companies created out of studios make it to Series A."
These numbers truly attest to the reliability and lucrativeness of the venture studio business model. Still, it’s important to remember that numbers will only take you so far, and they can never fully attest to the numerous benefits of working with the expertise and support of a venture studio. We hope that, having read about at least some of the reasons why your start-up should partner with a venture studio, you’ll allow us to assist you in taking your business to the next level.
