Welcome to the Startup Factory

If you think you know the startup landscape and environment, think again. While there are staple atmospheres for startups, such as co-working open spaces and mainstay accelerator digs, the startup factory has revolutionized what you think of as overhead.

It’s part incubator, part co-working space, and bypasses the issue of nobody really understanding what a “startup space” looks like. A startup factory, just like any type of factory, can come in many different forms. Maybe it’s a high-tech lab tucked into a Fortune 500 company (Google and FedEx have them). A lot of times, major companies want to bring in startups, and those startups need space to do business.

There’s the famous Madrona Venture Labs in Seattle, which was created by entrepreneur Ben Gilbert and has zero geographical connections to a major company’s headquarters. Startup factories can be found in rural places, big cities, and everywhere in between. However, it’s a new kind of environment that optimizes the efficiency and creativity of startup culture.

From the Ground Up

While all startup factories are different, they have some common traits. They allow workers to focus on multiple projects at once, instead of the traditional “one project at a time” mantra. They allow entrepreneurs to maximize existing resources, such as pitching numerous potential projects to the same client database. Most startup factories are rented or created by successful entrepreneurs (and these entrepreneurs have a knack for working on multiple projects). Featuring teams that are well-trained, “cross-pollination” is encouraged so that people rotate between projects.

Types of Startup Setups

There are three main types of startup factory setups: operator-led, company-led and investor-led. With operator-led startups, the factory is the place where operators will discover their next big idea. It’s all about becoming a genuine startup, and the plusses include teams that know their industry, ideas popping up quickly, and ideas that are well executed. However, ideas can also become “babies” that don’t grow and sometimes ideas aren’t dropped at the right time.

Company-led factories are usually the result of an existing business. This means they are connected to a company and have the luxury of more time, money, and resources. That infrastructure is a great support and provides a team with the necessary skills that is at the ready. However, it can be tough to strike a balance between new projects and existing ones, higher capital can be required, and the startup culture might clash with existing cultures.

Finally, there’s the investor-led startup factory. Most of the time, these occur from early stage investing houses, and the great thing about them is that they come with ready-made mentors (investors). However, these factories often require more equity than others.

Final Thoughts

There’s no “right” or “wrong” type of startup factory, but the main ingredients include passion and the ability to multi-task. If that sounds like the makings for your next startup, think outside the box — or factory, as the case may be. A startup culture and environment doesn’t have to look like all the others. If they did, they wouldn’t be a startup.


Originally published at www.johnrampton.com on November 29, 2015.

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