For startups, the sky is the limit. But even the best ideas need the correct environment to thrive. Over the past years, the startups ecosystem has expanded vastly – from accelerators and incubators to angel investors and venture capital funds – entrepreneurs today have multiple options to choose from when looking where to start. Recently, venture studios or startup studios have also added to this network.
In this article, we will look at the differences of these options, and explore how they can help entrepreneurs execute their ideas. We will also explain how to get the most from this cooperation.
Bill Gross, Idealab founder (it started over 100 companies, including Picasa and GoTo.com) once mentioned in his TED Talk that ideas only accounted for a 28% of a startup’s success. Funding accounts for even less – 14% of success, he added. Timing accounts “for 42% of the difference between success and failure”, said Gross, speaking at TED Talk. Team and execution came in second. As an example, he reminded that Airbnb “was famously passed on by many smart investors” because people thought that nobody would rent out a space in their home to a stranger. However, “that company came out right during the height of the recession when people really needed extra money”, said Gross to prove his point that timing may be crucial for a startup’s success.
Let’s start with explaining accelerator and incubator. And when should one choose them?
With nothing more on hand but an idea, an entrepreneur can apply for an incubator. They provide mentorship, teach how to set up internal procedures and put the entrepreneur in the community of like-minded people, which may be as important as anything else.
Accelerators and incubators have a lot in common. While both provide training and introduce to the community, incubators welcome startups at the beginning stages of their development, and accelerators also can help business on more later stages. But though incubators and accelerators are often used interchangeably, they have a few different features. While incubators are fee-based, accelerators often ask for equity.
Among the most famous examples of the described organizations is Y Combinator that launched, among thousands of others, AirBnB and Coinbase. Accelerator TechStars stands behind Uber.
So, in a nutshell, when the entrepreneur has an MVP, a team and an understanding of how the competitive advantage that will be attractive to investors, an accelerator may be a good option.
But what if one does not want to spend time and money on trainings, has no understanding of how to launch the product on the market? This is the time when a startup studio comes to the rescue.
What is a startup studio?
According to Enhance Ventures, there were 560 studios three years ago, In 2022, the market included over 780 studios. This rapid interest spike and current boom on the market is largely due to the fact that a studio offers a different approach to launch a startup than does an accelerator or an incubator.
Just like an accelerator or incubator, a startup studio (or a venture studio) is founded by people who know how to set up businesses. Moreover, a studio creates a series of startups, not one. This serial approach and repeated processes allow studios to be top-notch experts at every stage, from idea validation to business scaling.
Venture studios have access to in-house experts or advisors and their own funds, like we do at SKL.vc. Unlike accelerators and incubators, though, a studio does not just provide mentorship or introduces the entrepreneurs to experts, it becomes a co-founder, while experts and professionals go beyond just sharing their expertise – they become a part of the team. For every new project, the studio would select a customized team and give funds.
Since the startup studio is not just an investor, but rather a parter in the future business, it is aimed at launching the business on scale, at speed and with maximum efficiency. The studio also ensures the venture follows the development path rapidly with less trial and error experience, given the experience and professional skills of the people who work on the project.
How can a startup studio actually help?
1. It can check the idea
Before jumping on a project, studios test and validate the idea, as they will then focus all their resources on developing promising startups. At SKL.vc we do idea-testing rapidly and make decisions within one or two meetings.
When choosing a studio, with nothing but an idea on your hands on an MVP, it may be worth looking at those who have their niche on the market. In the end, as a famous quote says: “If you know everything, you know nothing”. Many venture funds, accelerators and incubators work with a specialization. SOSV have programs in hard tech and health, while Innovation Works develops projects in life sciences in addition to hardware and software, and Boomtown has, among others, specialization in sportstech.
SKL.vc launches projects in generative AI, consumer apps, BCI, and others. We think big, and for this we explore the market and find segments that are of top interest and demand. We are focused on creating big global projects that will eventually become unicorns.
2. It can build the best team
The studio differs from an accelerator or an incubator in a way that it integrates the mentors and experts in the team, instead of just providing the guidance. Studios work with a hands-on style, as they become partners with the entrepreneurs, and put their heart and soul, not just money, in the business.
Very often, studios help to build all internal procedures that are necessary to ensure functioning of the business, from marketing to financial planning. Given their vast experience and network, they already have or know the best human capital for the project, acting as a matchmaker between great ideas and experienced professionals.
The customized team then does not alternate its time between several projects of the studio and focuses solely on one startup. In SKL.vc, we put our words where our actions are and have large experience working with remote teams around the globe.
3. It can help to build a strategy and business development path
Startup studios offer more hands-on approach and focus less on teaching how to build business strategies, but rather actually build it. Every project requires a lot of work and investment of resources, so often studios may advise with the strategic vision even after the company’s launch. They often have a representative on the board after the startup’s exit.
4. It can build internal procedures.
The studio brings together unique experts and professionals. It gives access to valuable human capital that no other organization can do. The team at SKL.vc has experience in venture capital, marketing and other fields. We know how to scale business. We possess skills that entrepreneurs with the best ideas lack sometimes. We know what every step of the process should look, so we start building it instead of wasting time to make strategic plans and presentations on paper. We do not waste time on numerous meetings and endless discussions.
Finding a perfect option to partner with when you are an entrepreneur is crucial and a challenging task. Yet, making the right choice and getting the most of it may lead to creating a business that will navigate the long way to success. So weigh your options and give us a call if you are ready to disrupt the market.
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