The startup ecosystem is growing. You can find disruption and failures in almost any industry. In the spirit of building and growing a business, many entrepreneurs approach incubators where they find some collaboration during the early stages of business development until they go to market. Then, they incubate the ideas and help the entrepreneur turn them into a business model and eventually a sustainable business.
While in an incubator, the entrepreneur will have the support of mentors, advisors, office space, connections, and various other support. There is no real involvement of the incubator advisors to work side by side with the entrepreneur to develop the business. This is why 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year, according to the Small Business Administration of the United States of America.
The important thing, then, is that the entrepreneur has an experienced team willing to work with them (not only to advise them) to help them develop the business in a versatile, innovative, and flexible way while reducing the possibility of failures. In this context, over the last five years, the so-called Venture Studios have begun to position themselves as the best option for developing new businesses.
Three factors characterize these Venture Studios: they are versatile because they adapt to the circumstances of the entrepreneur; they reduce the risk of the projects because they have teams with proven experience in launching new businesses, and they are flexible to detonate innovation companies because they have the capacity not only to develop a company but also to operate public relations, marketing, funding, etc.
The Studio's role begins with refining the startup's business model, from setting goals, building the brand, and creating specialized teams that oversee conceptualization to market launch and beyond. Its mode of operation is with the continuous presence of experienced professionals who arrive with all the necessary resources to build a startup from scratch rather than advising the entrepreneur. They co-founded the company by capitalizing on the experience of the Studio's professionals; this ensures that the business will be a reality with the minimum of risk and in the shortest possible time.
A Venture Studio works with the entrepreneur because a participation agreement is signed once an idea is chosen. From there, the Studio assigns 2-4 people from its innovation team to work side by side with the entrepreneur's team, from refining the idea to bringing the product to market. Once the product is positioned (usually after six months), the Studio's consultants start to be replaced. Finally, its human resources experts carry out, the selection and recruitment of ad-hoc elements according to the characteristics of the venture.
By bringing the business to life with an initial investment and the mobilization of specialized teams, Studios mitigate the risk of failure of a new business and help entrepreneurs focus on what matters without even worrying about making a bad hire, as they are always surrounded by industry-proven Studio professionals.
A Venture Studio usually provides the entrepreneur with a whole team including software developers, designers, marketing and communication specialists, product developers, accountants, human resources specialists, financial advisors, and legal representatives, among other specialists.
All this makes the big difference between an incubator and a Venture Studio: the incubator provides support, but does not work alongside the entrepreneur; although both work with entrepreneurs and their teams in the launch and development phase of a new business, the difference lies in the versatile, flexible and secure approach that a Venture Studio offers. Incubators do not co-found companies, Venture Studios do. That is why they are currently the best place to do innovation and entrepreneurship.
Venture Studios have some distinctive features: a repeatable and standardized process for turning ideas into businesses from 0-100 with minimal risk; shared resources for the fastest development and growth of a new business; and operational involvement by experienced teams who have already launched several companies. Typically, their infrastructure, tools, and processes were created and developed after repeated testing, so they represent a safe way to jumpstart a venture.
The biggest advantage of a Venture Studio is that it provides the venture with the opportunity to work on several stages simultaneously. This versatility increases the chances of success, as it channels the right resources and allows the entrepreneur to devise and innovate by building new and better solutions.
Due to its versatility and reliability, large companies have already started creating their own Venture Studios, such as Kraft Heinz funding Evolv Ventures to invest in emerging technologies or Procter & Gamble opening P&G Ventures to produce four successful wellness brands. This implies that as this business model evolves, expect many more Fortune 500 companies to move away from traditional research and development to invest heavily in the new Venture Studios model.
Because of their distinctive characteristics of versatility, flexibility, and concern for de-risking, Venture Studios have become particularly attractive to entrepreneurs over the past five years, especially when they have good ideas but lack the experience, financial backing, or team to realize their vision. In addition, Studios act as an operational safety net, taking care of the business's operations so that the founder can focus on the idea.
Venture Studios exists to give the idea a chance, whatever a startup lacks, capital, development, or a go-to-market strategy. This means bringing all the human and resource capital and learning from their entire customer base to produce something greater than what a traditional independent startup usually achieves.
All this can be achieved through the “secret sauce”: EBELI, Evidence Based Entrepreneurship & Lean Innovation is a proven framework built sequentially in different stages, that stack one over the other, creating the pace and tempo that startups need to achieve success.
Any entrepreneur in need of hands-on help (technology, marketing, design, growth hacking, product development, etc.) should consider working with a Venture Studio rather than an incubator, as they are undoubtedly the best option for new business development.
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