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What the heck is a startup studio?

Startups are super hard. Luckily, there are plenty of 'startup institutions' helping founders to not screw everything up.

For example, you may have heard of 'incubators', 'accelerators', or 'co-working spaces'? But when I say, 'startup studio', most people haven't heard of this newer model.

A startup studio (also known as a startup 'factory' or 'foundry') takes bits and pieces from other models and adds an agency-style approach.

Before getting involved in the startup space I worked in agencies. This gave me a lot of exposure to this idea of a centralised team of talent, who are all working with each other to pump out high quality work for lots of brands at once.

When I started launching tech startups, I found it weird that there weren't any available options with this same centralised team model.

How does a startup studio work?

The model is simple.

You hire a bunch of incredibly talented people: designers, coders, copywriters, marketers, and so on. Startup studio teams usually begin by working on their own in-house projects to get the hang of working well together.

Then, just like an agency, you open up your doors to the public to allow other people to hire your team for their startup.

The biggest difference between startup studios and incubators or accelerators is how hands-on they are. An incubator or accelerator will generally have small teams who focus on strategy and mentorship, whereas studios do the same PLUS deliver essential services like designing, coding, marketing, and more.

NOTE: There is nothing at all wrong with incubators or accelerators, we are partnered with some awesome ones. The only downside is that they only work with A-grade fully fledged teams, so any founder without this team won't be accepted into their programs.

What's great about studios?

There are lots of cool things about startups studios, but what we like most is that they give everyone the opportunity to launch their idea.

Through our experiences and research, we discovered a startup needs 10+ key skillsets within their team to get their idea off the ground and to the 'traction' stage. But a startup will never have enough funding in the beginning to hire all this talent full-time. This is what we call the 'black hole' of the startup space. Check out our graph below to see how this works.


As you can see there are three categories of startup teams:

1) Been there done that types

Wealthy people doing their second or third startup will burn hundreds of thousands of dollars to hire these 10+ key skillets from day one. So they don't need any help until their 'Seed Round'.

2) A-Grade teams

Amazing teams who have a few multi-talented people can actually perform all the skills needed in their company. These are the teams who easily raise funding and get accepted into accelerator programs.

3) Incomplete teams

What about those awesome entrepreneurs who have a great idea but no team surrounding them? This group falls into the black hole and, unfortunately, most don't make it out.

The startup studio model helps founders avoid this black hole. This is why we chose this model, we've seen it happen (and experienced it ourselves) too many times.

What's not so great about startup studios?

For founders without a team (the third category in the table above), there really is no downside of using a studio. But commercially, startup studios are bloody expensive to set up.

Unless someone wanting to start a studio has a million bucks (or more) per year ready to spend, don't bother. Startup studios only work well when you have all of the skills required to keep it in-house. It can't be a group of random freelancers working in different locations. The whole point is to run like an agency, so the team needs to be a unit that works super well with each other.

The cost to start and run a studio is the very reason there are literally thousands of accelerators and incubators around the world, but only 100 or so studios.

Over time, we believe more and more startups studios will emerge as they are a very important part of the ecosystem. Without studios, getting traction is too big of a challenge for entrepreneurs who don't have an amazing team yet.

  • By Adrian Osman
  • Posted on 22.11.2016