SKL: Reinventing venture studio model

The VC winter wiped out millions of cool ideas and significantly slowed down the development of the consumer tech market. This will lead to fewer disruptive mass products and a lack of product stars and unicorns in the next few years. Every conference, investor, and startup is focusing on B2B.

Everyone with a superficial understanding of the venture industry understands why this happened. The numbers didn’t add up (easy-peasy). The business model and unit economics of venture funds in B2C have not worked out.

Why do we focus on the consumer market? And how did we manage to create a successful business model?

First of all, it’s exciting. Through our projects, we hope to impact a great number of people and change the world. It gives my co-founder, Artem, and me great pleasure to know that a number of people use our products and experience happiness. Believe me, this alone is enough to deal with mass markets.

And secondly, our business model fits. Many perceive SKL as a venture fund. The secret, though, is that we are neither a fund nor an ordinary venture investor, and we do not have a conventional business model. We invest in ourselves.

How does it work? Very easy. We do not provide funding as a financial investor to external teams. We integrate these teams into our organisation, bring them into the SKL venture builder, and begin working on projects from the inside out.

With the help of a single team, we build projects from external or internal flow ideas through testing, prototyping, and MVP, then discard those that do not meet our success scores at every stage. Projects that have made it through move into separate teams, and product leads and product owners are getting a share or option. After achieving a stable unit economy, certain growth metrics, and revenue, we spin off the company.

You may say it looks like a venture studio model. The difference between us and a classic venture studio is that a venture studio usually “helps” individual teams, mostly at an early stage. On the other hand, we are fully involved in all processes, providing all the possible resources, from the back office to marketing and financing.

Why is our model more effective than VC investment and venture studios?

• We optimize costs for the same employees, making product launches more cost-effective.
• We are focused on product development, not fundraising.
• We believe in each team member since they are proven professionals.
• We do not perceive project closure as a tragedy; it is part of our process, which increases our resilience and makes entrepreneurship psychologically easier.
• The success of one product offsets the failures of others.
• We constantly share our experience and best practices from different industries and market segments.

Our unique advantages over VC funds are that we’re fast, super flexible, and super effective.

For whom does our model work?

• for those who don’t believe in the illusion of “freedom” of startups funded by venture capital (if you know what I mean).
• for those serial entrepreneurs who are tired of fundraising and being reborn like phoenixes after every failure.
• for great professionals who have outgrown the executive level and want to try entrepreneurship. But in a more comfortable way, without struggling for resources or survival, and focusing on high-quality products.

Do you have 30/50/70 percent equity in your company that raised a venture round of $1,3,5,10 million? We bet that our product owners, who have 5–10% anti-dilution provisions, in 5–10 years will have much more upside and freedom.