Startup Studios: A model for building successful tech companies?


Today, as part of
London’s technology week, brought together a group of
staff from the start up world to basically discuss start
up [INAUDIBLE] model, its problems,
pitfalls, and promises, and where it’s
going in the future. I think actually that there will
be some very applicable models from the start up studio world,
applicable to other kinds of businesses, whether
it be hardware, robotics. Obviously it’s borrowing
some of the elements from existing businesses
like the design world. And in fact the discussion
that we had today was even referencing
the Eames chairs in the 1950s and designers
who both worked for clients but also produced
their own products. I think it works well when the
capital efficiency is still [INAUDIBLE], it worked
very well with their model, and so for hardware
business I’m excited about us investing a small
amount of capital getting companies to the point
where they can do a kick starter a campaign
which then gets in the next chunk of capital. So I think it can
be very applicable. What is going to
mark out studious from any other kind of model
to produce technology companies is things like exits. Exits and businesses
which become sustainable in their own right. So businesses built on revenue. I think it has to
probably evolve into getting those
products commercial, so I think if you can
have enough of a momentum and cycle of products that
come out of the studio and become commercially
successful, I think it can definitely
be sustainable. Or if you have someone who
has a very long term view and can fund you for 10, 20
years, that’s also sustainable. It’s only sustainable if it
produces real businesses. If it doesn’t, then
they’ll fall away, just like the incubators
of the 1990s fell away. I think clearly start ups, start
up cultures here in the States, it’s a very exciting time
to be an entrepreneur and hopefully as we get
more– particularly in the UK, more exits and more experienced
entrepreneurs taking money that they’ve got from selling
their companies, [INAUDIBLE] see they’re recycled in
increasingly different, more innovative ways in
terms of company building. So I think it’s just
getting started. So I expect to see
even more variety in terms of the type of start up
studios, how they emerge, talk to entrepreneurs setting them
up and hopefully extending a little bit beyond on the
internet sector as well. I think you can see already
two ideas developing. Firstly, one which
is very high growth, and it’s connected to
the investment community, intimately connected to the
venture capital and angel funding and other
forms of investment. On the other side you see almost
a kind of a slow food model. This is the slow start ups. You’re at studio, you come
up with ideas internally, you’re funded perhaps
by wealthy backers, perhaps just built internally. And then you come with ideas
which actually some of which will work, some of which won’t. But you’ll given that
pace and that ability, that runway to make
a few things work over the course of the
life of the studio. I think a more hybrid
model will emerge. I think the most interesting
trend at the moment is traditional venture
capitalists becoming more like start up studios
in that they are increasingly higher in areas of expertise
within a venture capitalist to then deploy over a portfolio. And if those two
things keep on going, I wonder if you’ll see a blur
in between venture capital and start up studio. But I imagine, either way,
it’s quite a long way away. In every, again, every
industry, they’re going to be those
who survive and excel and others who just sort
of fall by the wayside. For the startup
studios, they have to think about what’s going
to really make them stand out and excel and build
amazing products. So I think absolutely there’s
a future for the studio model. But ultimately,
it does come down to that fundamental atomic
unit of entrepreneurship, the entrepreneurs and the
people behind the entrepreneurs.

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