Where Startup Studios Fit
In my work with startup studios, one of the most critical early insights to deliver is the recognition of where studios fit on the venture landscape.
I’ve written previously about The Difference Between Startup Studios, Accelerators, and Incubators and on comparing Studio Resources to Venture Capital. These articles serve as a good foundation for operators, investors, and founders to help determine which entity is best suited for their needs.
In this article, I’ll explain where startup studios fit in the venture ecosystem and why emerging studios should focus on one very specific stage.
I’ll also provide criteria for studios to use as evaluation to determine if a startup fits the model and what best practices are in terms of investing.
This article is also helpful for future founders and early-stage entrepreneurs interested in working with a studio. Not every venture is right for studio partnership, and there’s a very specific phase in which it makes sense to work with a studio. Reading this will give you a good understanding of studio “fit”.
When Studios Work
I very often refer to the above chart from Global Startup Studio Network to describe the stage in the entrepreneurial journey where studios are most valuable. On the x-axis are the phases startups go through and on the
Y-axis is the “innovation catalyst vehicles” that help with launch and scale.
Studios are the earliest player in the game.
Studios are often the first in. Very often they get involved before the friends and family round because by that stage you’ll want to have a business model and at least be able to describe how you’re planning to execute and make money which assumes you have some idea of the solution you want to build. At the Angel round you need to have some proven demand, even if that’s just customer discovery interviews. Beyond that, you need actual traction.