Hello everyone, welcome I am Idil, I am a business developer at Anova And, with another fellow business developer at Anova, Cécile We are going to present you the origins of the startup studio model platform venture capital venture builders company builders startup studios they actually all stand for the same thing a company that builds companies but to really understand the origins of the startup studio, let’s go back a bit in time well, actually people always wanted to create new things and find new ideas so financing risky businesses is as old as the human history as an example when the maritime explorers wanted to discover new lands they weren’t the ones who had money but they had to finance a ship and they had to hire a crew so, how did they get their financing? what happened is that the wealthy, royal families provided the financing for these explorers but of course, they didn’t do it for nothing they would get the majority of the goods, which were brought back from the new lands and this percentage was given to the wealthy families, who financed these travels and the same concept is still used in this model which is called carried interest let’s go a bit further in time the venture capital model as we know today is new actually, a Frenchman called Georges Doriot created the first venture capital in 1946 he started financing risky businesses and he found institutional investors as well as private investors to do so but there was the consensus that financing is not enough to create a successful company companies need more than financing they need operational support and then they realized that venture capital model has started to evolve a good example to this is a platform venture capital, which is called Andreessen Horowitz based in U.S. and they are a platform VC to give a specific example they have different teams different specialized teams within the venture capital they have a market development team marketing team and many more different teams within their platform so that they would help the startups to create their companies as efficiently as possible there is not much distinction between these startup support models anymore it is really fluid there are two axes as you see in this graph there is the financial aspect of these startup support systems and there is the human capital aspect, which we can also call operational support aspect of it and it really differs, where they fall in between these axes so venture capitals are more in the financing axes but they also give of course mentorship etc. but startup studios, they are really focused on the operational support axes of this system if we try to understand the startup studio model there is of course not one type of startup studio there are three types of startup studios the first type is the builder studio what happens is that the startup studio itself finds the idea within the studio and then creates the startup and recruits the team afterwards the second model is the corporate studio which is Anova’s model we address to the pain point of corporate companies and create startups which would scale out of these pain points because these pain point are shared within the industry and the third model is the investor studio which we can also say platform venture capital these are basically venture capitals which give a lot of operational support we can at the end say that startup studios right now are not only giving financial support to find America they are really giving a map and a compass so that the startups don’t have to discover the America all over again so that they can have the best opportunity to create great companies now my colleague Cécile will explain you more about the history of startup studios Now that you know everything about the history of Venture Capital and you have a little more understanding of what we were talking about, we will focus on the history of startup studios, since when do they exist, try to see a little bit of what is being done in the United States, and focus on some iconic startup studios The history of startup studios began in the 1990s, with the creation in 1996 of Idealab, considered as the first big startup studio even if it was more of an incubator than a startup studio. What is the difference? In an incubator, an entrepreneur will come up with an idea, and will be supported by the incubator that will give him funding, and a lot of human support, as Idil told us. But in the end, the startup is not really created in the incubator. While in a startup studio, the startup is created, and it will be born from A to Z in the startup studio. So it started off in a rush in 1996, then after the movement ran out of steam with the bursting of the Internet bubble in the 2000s, and it was then necessary to wait until the 2010’s for the movement to regain a breath and develop in a really important way. The first startup studio as such, which has been known, which has developed, and which has been creating startups since the beginning creating the idea and then recruiting entrepreneurs, is Betaworks created in 2007 and which has finally launched the wave a little. Then the movement accelerated in the 2010’s. Here in Anova we like to talk a lot about PreHype, which developed and popularized the concept of corporate startup studio. That is to say, a startup studio that creates startups in B2B, with corporates, for corporates. This will allow it to have an excellent product-market fit, since the corporate who will be the first customer will also be the design partner of the startup, and will therefore design it so that it meets exactly the expectations of customers. Then the movement accelerated, especially in the United States, and we can talk about the creation of Atomic, in 2013, which is financed by the two American billionaires Peter Thiel and Marc Andreessen, who give it a huge budget, and therefore huge teams, who will offer absolutely huge support to startups, especially accounting or finance teams who will support startups so that they only have to focus on developing and selling their product. This has allowed them to make great successes, but with a risk, which may be the risk of infantilizing the startup, which will once it leaves the nest find itself all alone in the world trying to develop on all fronts at the same time, whereas it will not have been used to managing at first, especially in terms of finance and accounting. Finally, one startup studio that is worth mentioning is Pioneer Square Labs, because they have an excellent startup validation process. Indeed, it is not a corporate startup studio, so they could create startups, which would have the problem of not having an excellent product-market fit. So as soon as they have an idea, as soon as they create a startup, they will submit it to a very complete, structured validation process, which will allow them to delete 9 out of 10 startups at this stage. Thus, the startups that continue after this validation process, we are sure that they have an excellent product-market fit, a strong traction on the part of the public, and that they will be able to continue under the best possible conditions. Now that you have an even better idea of what startup studios are and you have seen some examples, I would like to present to you the reflections we had at Anova on the place of corporate startup studios in the innovation matrix of large groups. Indeed, for a large group, there are many ways to innovate when they want to meet a business need, and sometimes using a startup studio can be an excellent idea, but sometimes not necessarily the right idea. There are therefore several questions to ask yourself before embarking on the adventure: One of the first questions to ask yourself to answer a business need is “is there already developed software that could answer this need?” Because if we have no reason to redevelop this software ourselves, there is no reason to innovate, just rent this software if it is accurate. It is the fastest, cheapest solution, and it can be completely fine. You have to ask yourself the question even if it may seem a little obvious. Then, you can decide to acquire a startup. It’s going to be a much more expensive process of course, but quite fast in time, but also with many drawbacks, including the fact that you may want to buy a startup to have a completely customized product; but if you buy a startup mainly to hire its employees, it’s the phenomenon of acqui-hire, to buy especially to hire the startup’s brilliant engineers, employees can lose motivation if there’s a problem between the culture of our big company and the culture of their startup, they can lose motivation and leave after 2-3 years and so all the value will be lost. Then, if, for example, we want to avoid this pitfall, or if the solution has never yet been developed, there may be internal R&D. It is a process that can work well if the corporate has a good internal innovation process. However, there are also many pitfalls here, including the pitfalls of having a big boost at the beginning, of devoting a lot of human financial resources to the project, and finally seeing the project run out of steam because it will take too long, for example because of a lack of availability of key people, or a change in policy within the company. Finally, if we think about these three solutions and none of them seem to be really adapted, and to meet the personal needs that we have in our business, using a corporate startup studio can be a good idea, because it allows us to have an extremely personalized product, because we will be the design partner of this solution, while benefiting from the externality of the startup studio, its structure, and all its processes. We hope that now you are experts in startup studios, that you enjoyed it. You can now visit www.anovastudio.com to know more about it!