June 21, 2022
This is Part 1 of 6 in a series on team building for startup studios. So you don’t miss out on Parts 2-6, follow StudioHub on LinkedIn and join StudioHub’s Startup Studios LinkedIn group.
When I cofounded the B2C “charity tech” startup, Niceable, we were changing the world, making charitable giving more rewarding, trustworthy, and impactful. After three years and one pandemic, we decided to pack it in, just like 65.0% to 91.6% of all startups. [1], [2], [3], [4], [5]
I want to create a bunch more impactful startups and do it in a way that’s likely to succeed. That’s why I want to work at a startup studio.
Startup studios—also called “venture studios,” “venture builders,” “startup factories,” and “startup labs”—bring startups to the world through creating them from scratch or growing them in partnership with an early startup team as their “extra founder.” Compared with accelerator-backed startups, sources note that studio-based startups have a higher chance of successful exit, higher investor returns, and faster time to seed and Series A, though it’s unclear who raises more per round. [6], [7]
As a user researcher, I can help startup studios with one of their most challenging tasks: quickly and accurately evaluating a high volume of ideas at their earliest stages.
There are many people out there who can deliver value in areas of special need at startup studios. They just need to know what opportunities exist and where they’ll fit best.
This article is the first in a six-part series on startup studio careers, team building, and functionality. For this series, I interviewed an assortment of people in the startup studio ecosystem with the aim of uncovering:
I’m not the first to interview startup studio leaders, but this series appears to be the first targeted examination of studio team needs and functionality that speaks to both studio leaders and prospective team members.
Now, let’s explore studio life to see if it’s the right fit for you.
“Studios can be an excellent option if you have an ambitious mindset but don’t have a clear idea of what you want to build,” say Shilpa Kannan and Mitchel Peterman, in their recent book, Venture Studios Demystified. Like a startup, startup studios enable you to do something big—in fact, many big “somethings.” Building a product that could end up being used by millions is exhilarating and the uncertainty of the result can be part of the fun.
Studios also tend to be startup-like in how they function. “We're very much a startup that builds startups," says Chiara Burns, Idea Sorceress and Head Storyteller at Nobody Studios. Unless you’re at an unusually large studio—probably a VC arm like BCG Digital Ventures—you’re going to need to be super hands-on, wear many hats, take major ownership of your areas, and assume some degree of risk (because not every studio survives). For startups and studios alike, hiring someone who isn’t prepared to be hands-on can be a killer. If you have that proactive, gap filling, grinder mentality, studio life may be right for you. "We're looking for the psychology,” says Roy Dequina, CEO of ELEV^TE Venture Studio.
“No, no. Never…. Building a startup hurts.” [8] These were the words of Paul Graham— confirmed deity of the startup temple and founder of the preeminent startup accelerator, Y Combinator—when asked by super angel and podcasting addict, Jason Calacanis, if he plans to become a startup founder again. Life as a founder is mega stressful and can end in financial ruin—I’ve ridden that ride myself—but as a studio employee your commitment to making a startup’s mission a reality will be tempered with the knowledge that your job and nest egg are likely to be safe regardless of the outcome. If a few startups you build fail, unemployment and despondence won’t inevitably follow.
Startup founders and early employees chase glory, lavish career bumps, and the prospect of hitting the jackpot---and sometimes they get it! In under two years, Henrique Dubugras and Pedro Franceschi went from kids in Brazil trying to get into an American university to 22-year-old cofounders of Brex, a billion-dollar fintech company. [9] As a studio employee, that won’t be your journey, but maybe you’ll be able to help the founders you partner with get there. That can be gratifying, but it’s not for everyone.
Luckily, startup founders and early employees aren’t the only ones who earn valuable equity—studio employees do, too. When one of the startups you helped build is acquired or goes public, you’re going to profit. Every studio has its own employee equity compensation plan and maybe you won’t get rich, but unlike your friends working at startups, you have a whole portfolio full of potential liquidation events. Like an investor, you’re diversifying your investments.
Studios can furnish you with clearer and healthier boundaries than early startups. In the words of Steve Blank, father of the customer development movement and grandfather of the lean startup movement: “If you’re not passionately engaged [as a startup founder], waking up at three in the morning making notes, it’s not the first thing you’re thinking about in the shower and convincing your family that this is the thing you need to dedicate your life to, don’t even think about doing it…. This is not a job. [10] Some studios may understandably want you to see your work as more than a job, but startup founders and early employees may not even have a workday—your waking hours are your workday. There’s no off switch.
Working at a studio may also be better for your mental health. Despite a shortage of reliable data on the impact of early startup life on mental and physical health,[11] maybe it’s no accident that we have a podcast called the Startup Therapy Podcast and Silicon Valley therapists trying to get cofounders into couples therapy. We have numerous stories of founders dealing with depression and maybe the pressures of working at an early startup aren’t very good for us. In contrast, while some early studios involve similar pressures, many studios can provide a wonderful balance of risk and opportunity.
Studios deliver stimulation in the form of new challenges to solve, new industries to learn, and new people to meet. This is because studios regularly add new startups to their portfolio—“PortCos,” for short—and their most successful PortCos eventually become self-sufficient. Whether you’re a user researcher interviewing people to better understand your key market, a founder relations manager bringing new founders into your founder community, or an investor relations manager preparing to pitch the studio’s newest PortCo successes to investors, there’s always something new. As an extrovert, studio life is ideal for me, since a single week may include interacting with numerous internal team members, product users, PortCo teams, VCs, partners, agencies, freelancers, advisors, and more.
Studio life can promote professional growth and personal satisfaction. You may even be able to choose the direction of that growth. Several people I’ve interviewed have told me that their studio empowers team members to work on the projects that most interest them. “You get a lot of ownership at Share,” according to Ben Goldin, a Product Designer at Share Ventures. This level of ownership can result in new skills, new networks, or becoming an insider in multiple industries. It’s even possible that a team member falls in love with a specific PortCo and ends up becoming a full-time employee for the PortCo, transforming their relationship with the studio into something new.
Personally, identifying and growing beautiful, impactful things and then handing them off for others to carry across the finish line while I move on to the next beautiful, impactful thing is the biggest attraction for me. If I can help dozens of companies create a better world, that’s a big positive footprint I’ve left.
Being an innovator goes beyond bringing new entities into being: you can build the future of the startup studio industry. The studio space itself is ripe for improvement. Through interviews with studio insiders, challenges studios are facing include:
Joining a studio gives you a chance to shape the future of our industry and therefore countless startups that will change our world.
Ultimately, it’ll likely take self-reflection to figure out if you’re a studio person. I asked Attila Szigeti—who in 2016 literally wrote the book on startup studios, Anatomy of Startup Studios, and followed up in 2019 with the Startup Studio Playbook—for his biggest piece of advice for those considering joining a studio. Szigeti recommends to “think deeply about your core values, preferred working style, and what you want to accomplish in 5-10 years. If you come to the conclusion that the studio environment is a good match, you should join.”
So, think studio life may be right for you? Excited to learn more? Already a startup studio insider?
I want to hear from you! Share your thoughts and questions in the comments and feel free to reach out to me anytime!
[1] Global Startup Studio Network. “The Rise of Startup Studios: White Paper.” 2019. Available at: https://www.gan.co/wp-content/uploads/2020/03/The-Rise-of-Startup-Studios-White-Paper.pdf.
[2] Tom Eisenmann. “Why Start-ups Fail.” Harvard Business Review. 2021. Available at: https://hbr.org/2021/05/why-start-ups-fail.
[3] Sean Bryant. “How Many Startups Fail and Why?” Investopedia. 2022. Available at: https://www.investopedia.com/articles/personal-finance/040915/how-many-startups-fail-and-why.asp.
[4] Startup Genome. “Global Startup Ecosystem Report 2019.” 2019. Available at: https://startupgenome.com/reports/global-startup-ecosystem-report-2019.
[5] Joe Camberato. “2019 Small Business Failure Rate: Startup Statistics by Industry.” National Business Capital & Services. 2020. Available at: https://www.nationalbusinesscapital.com/blog/2019-small-business-failure-rate-startup-statistics-industry/.
[6] Attila Szigeti. Startup Studio Playbook. 2019.
[7] Shilpa Kannan and Mitchel Peterman. Venture Studios Demystified: How Venture Studios Turn the Elusive Art of Entrepreneurship into Repeatable Success. 2022.
[8] Rip Empson. “Paul Graham Shares Lessons Learned From 630+ YC Startups, But Don’t Expect Him to Launch His Own.” TechCrunch. 2014. Available at: https://techcrunch.com/2014/02/24/paul-graham-steps-back-at-yc-but-dont-expect-him-to-launch-a-startup/.
[9] Kate Clark. “How the 22-Year-Old Founders of Brex Built a Billion-Dollar Business in Less Than 2 Years.” TechCrunch. 2018. Available at: https://techcrunch.com/2018/10/05/how-the-22-year-old-founders-of-brex-built-a-billion-dollar-business-in-less-than-2-years/.
[10] Stanford Graduate School of Business. “Steve Blank: ‘Entrepreneurship is a Calling.’” YouTube. 2012. Available at: https://www.youtube.com/watch?v=r51eQ2vPZSs.
[11] A plethora of articles and videos urge us to watch out for “founder depression, often insinuating that being a founder leads to depression. These sources usually base their claims on a misinterpretation of a single, never-published study focused on lifelong conditions. The source itself pushes against the idea that entrepreneurship causes depression, instead asserting that people with mental health challenges are more likely to become entrepreneurs. Alex Turnbull, a startup founder who has struggled with depression, calls the notion of founder depression “a lie we tell ourselves,” a statement intended to get founders to seek treatment rather than see depression as a normal, inevitable part of startup life.
About the Author
Adam Valerio is a Senior UX Researcher at the PropTech startup, RentSpree. Former Chief Product Officer for Niceable, Adam received his PhD training from Temple University, where he taught the science of problem and product validation for startups. A life-long Knicks fan and former startup co-founder, Adam knows perseverance. Connect with Adam.
