Venture Lab Manifesto
“We’re kind of like a venture capitalist with product engineering…”, I pondered out loud, “… like an innovation lab with access to capital and customers… so, like, a hybrid venture capitalist meets innovation lab…”, I said to my partners Dylan and Dennis, “… we’re a VENTURE LAB!”
*dramatic eye rolls + audible sighs*
Ignore the bad name for a second (and the haters) and listen up — give me a chance to explain why the Venture Lab Model (TM pending) is something different and better than what’s out there today (i.e. labs, VCs, studios, incubators, accelerators, dev shops, etc.).
“Ok, Ryan, tell us what this thing is…”
I thought you’d never ask! To distill the intro dialogue (monologue?): The Venture Lab Model is a convergence of venture capitalism and a lab / incubator. We’re a partner for companies of all sizes that brings all the most important growth ingredients — innovative product engineering, capitalization options, experienced advisory and a broad client network. More specifically, we’re a full-service partner for young startups ready to bust out, mid-sized companies ready to scale, and large companies ready to innovate. Straightforward, right?
“Alright, kinda cool. But, why?”
A lofty response: Our team’s “why” is to create, invent, and discover, towards impact and value for us, our stakeholders, and the world (without being too pretentious about the latter). By being a company that creates companies (ignore that cliché), we can scale that ideal more readily. To be a company that creates companies, we need to drop multi-faceted value — money, tech, product talent, a network, etc. on our partner companies. Anything short of the full package seems a half-assed contribution to the partners you’re invested in.
An emotional response: From building our own products / companies, we were frustrated by early fundraising efforts and our interactions with dev shops / agencies / incubators. Investors and accelerators seemed overly predatory, taking disproportionately high percentages of early equity in exchange for lacking benefit — writing a check, dropping a couple pointers, making a few intros just isn’t that valuable these days. Dev shops / agencies were wild cards, promising unpredictable quality of services, lack of higher-level advisory, and overpriced rates. We don’t want that passive / leach-y relationship with out partners. We want to be in the trenches (in all facets of the company), have skin in the game, and give them / us the best chance at winning (mutual success).
A pragmatic response: Why not? If we have money, product expertise, valuable advice, and a broad network, why wouldn’t we provide it all? Why not control the important variables in a companies growth, and ensure success? Why not treat our technical and creative assets the same way as capital — it’s just as scarce, right? Why wouldn’t the most talented entrepreneurs want that relationship with an early partner?
“Hmmmm, interesting — I’m getting it now. How does it work though?”
I’m not going to tell you everything — it’s our secret recipe after all. But, in general, we started by using our consulting business to recruit deep product engineering expertise, learn hard / valuable lessons, build up our in-house tech assets, secure a broad client network and generate a nice chunk of cash. That early effort put us in a cool position to help a lot of different companies:
Start-ups / in-house incubation. We like to find leaders with ideas, or leaders for ideas. Meaning, if a strong leadership team approaches us with a viable business plan, we engage; if we have an awesome business plan, we go find some leaders for it. Either way, we catalyze that business with our expertise, development / creative resources, and financing (from us or our capital partners). It’s like Amazon for launching a company — we provide easy access to everything you need.
Mid-size companies. Some partners already have a good business, but they need to get to the next level. They don’t have the technical resources, product expertise, capitalization strategy, and / or agility to get there. Or, simply, they want to mix in some fresh perspective. Either way, we shoot for a joint venture in this scenario. Our partners get our product expertise and we get their path-to-market. It’s a mutually beneficial relationship, and it’s just stronger when both sides have skin in the game.
Established companies. You might think the model breaks down here since Fortune 500’s hardly need the cash and we wouldn’t get any upside investment benefit — you’d be wrong. Large companies need agility and expertise outside of their traditionally rigid structures. We bring an entrepreneurial mindset, big ideas, emerging tech and speed / agility that they can’t foster or retain internally (despite some admirable efforts). They give us a safe haven to experiment / innovate and cash to fuel our machine. It actually works really well.
If you still want to argue that the typical agency / dev shop / consulting firm / VC model is better for any of those companies, i’m officially not listening (jk, I’ll argue with you until you’re convinced).
Conclusion.
I’ve said too much! But, seriously, I’m not saying this is a total revolution, or that we’re a snowflake, or even that we’ve totally figured it out. What I am saying is that we think we’ve found the beginning of a better path, we’re taking a shot at it, and believe it will better for everyone — oh, and, most importantly, that we’ve proven that it works.
Looking forward to the future.
RR
