It can be intimidating for entrepreneurs to launch a startup, as 90% eventually fail. Although there are many successful solo founders, there are various options for entrepreneurs looking for additional support, including startup studios. This business model, also known as venture studios, has continued to increase in popularity across the world, with hundreds of startup studios globally and more than 625% growth in the studio market over the last seven years. Let’s take a look at what the startup studio business model is and how they’ve become a proven business model.
What is a Startup Studio?
Startup studios, or the venture studio model, are companies composed of industry experts that specialize in building other businesses, with the primary goal to address and provide solutions to consumer pain points. And unlike accelerators, who have a limited timeline of support (usually three to six months), startup studios provide businesses with key advantages including a team of designers, developers, administrative experts, and marketers to help the startups throughout their various developmental stages.
Since startup studios provide tools, ideas, and funding assistance for the startups they work with, they’ve mastered venture building and helped to mitigate risks commonly associated with startups.
Startup Studio’s Global Expansion
The startup studio business model has benefited from its growth in new networks and regions across the globe. Startup studios can support businesses virtually, which means it’s no longer necessary for the startups to be physically located within the same area. This factor has helped startup studios expand their support to companies across the world, allowing them to invest their resources in the startups they truly believe in.
As of 2023, some of the most successful venture studios are not based in Silicon Valley or the United States, which was traditionally recognized as the top startup studio business ecosystem. Since Silicon Valley and the United States were originally traditional centers for startups, there was a market gap in various markets that are now being filled with the help of startup studios.
Additionally, due to remote work flexibility, startup studios are able to recruit top resources and offer startups access to diverse talent.
The Value of the Startup Studio Business Model
While accelerators and incubators are great options for some startup founders, their benefits can be limited compared to startup studios. Accelerators speed up the growth of an existing company, with a focus on business scaling. These business models typically have a set timeline of support of three to six months, and many founders find they need support throughout more business stages. Incubators, on the other hand, have the main goal of nurturing disruptive market ideas when developing a business model or company and are mainly focused on innovation.
However, the startup studio business model focuses on the earliest stages of a startup, often working with companies to test and validate new ideas before they even have a team or product in place. Startup studios also help provide early-stage funding and give access to the equipment, tools, designs, and team needed in order to support the startup. Due to these compiled resources, startup studios provide a more comprehensive and hands-on approach to startup development, compared to accelerators or incubators.
By providing founders with a wide scope of tools, strategic mentorship, and funding, startup studios provide the resources and support needed to substantially decrease risks commonly associated with startups. As the startup studio model continues to evolve and mature, the opportunities to create innovative solutions to the world’s persistent challenges will increase along with it. Check out Startup Studio Insider to learn more about the startup studio ecosystem.
Jeena Alfredo is a passionate digital marketer at The Business Goals. She is working with other companies to help them manage the relationship with The Business Goals for the publications.