Most entrepreneurs with an intriguing business idea want to see their concept transformed into a thriving company. However, this process remains one that’s highly risky. In fact, a large majority of new businesses simply end up in failure. This typically leads to significant losses in venture capital, as well as the time and resources spent trying to turn this new organization into a success.
This often repeated scenario remains a big reason for the growth of the venture studio – also known as a startup studio. These companies ensure an entrepreneur need not go about the process of business creation on their own. They provide critical resources in a variety of areas, including technology support, market research, HR, and legal. In short, partnering with a studio greatly reduces the inherent risk of forming a new business.
With a goal of helping you understand what a venture studio brings to the table, we provide an overview of some of the resources they offer entrepreneurs. Notably, these resources need not be brought in-house, hampering your growth potential. Use these insights to inform your own thoughts on transforming a compelling idea into a successful business. In the end, partnering with an experienced firm simply improves your chances of success.
Access to Technology Talent
If your new business idea relies on a great mobile app or website, you need an experienced software development team to build it. Nearly all venture studios boast top-shelf software engineers and designers, able to craft something that stands out from the pack. They also understand modern software development methodologies that help reduce both the costs and risks involved with any critical engineering effort. Mature proven processes ensure a smooth and efficient project without the high costs and hiccups encountered when going alone.
Additionally, the demand for talented technology professionals remains high as do their salaries. Trying to recruit this talent also involves a costly process fraught with risk. In short, a venture studio providing access to their software development team remains a crucial resource for most startups.
Market Validation for Your Business Idea
Of course, software developers might design and built the best mobile app in the industry, but if it doesn’t find a market, expect your startup to ultimately fail. Experienced venture studios also boast significant experience validating business ideas. Note that some studios focus on a certain vertical, while others work in multiple business sectors.
When researching venture studios as a potential partner, find one with a proven track record of success in the market your startup hopes to target. It needs experience testing business ideas to make sure they are viable in a competitive economic world. Again, this valuable resource ultimately plays a critical role in the success of your new business.
Experience Nurturing Emerging Startup Businesses
A mature venture studio boasts relevant experience growing successful startups. A focus on continuous improvement of the various processes involved in business creation makes these studios factories that effectively “manufacture” new businesses. This background helps your startup handle the typical pitfalls hampering startup growth.
Somewhat related to this concept, the Lean Startup software development methodology used in many top modern software shops found its roots in the Lean approach first developed in the manufacturing world. So the factory metaphor used to describe venture studios makes perfect sense.
Robust Network of Industry Connections
Along with significant experience growing startup businesses, veteran venture studios also provide access to a network of entrepreneurs and other business professionals. This knowledge base informs the processes used in software development and idea validation. For example, if a studio lacks in-house expertise in a certain business sector, someone from their network likely boasts this crucial knowledge.
Importantly, these network connections also serve as a useful source of managerial talent to potentially serve as COO for the startup as it grows. Again, it provides another example of why leveraging the many resources of a venture studio increases the chances of a successful startup compared to going alone.
Venture Studios Essentially Provide a “Product Team in a Box”
Analyzing these four resources reveals that a venture studio effectively provides entrepreneurs with a product team in a box. If you want to apply a cloud services metaphor to the concept, call it a product team as a service. It offers fledgling new business owners with the talent and expertise they need to grow their startup without having to hire and manage expensive full-time employees.
Note that many venture studios exchange their services for equity in the startup, assuming the founder is willing to trade. This approach also reduces the necessary operating expenses in a startup’s early stages. Ultimately, partnering with a venture studio greatly lessens the inherent risk of forming a startup.
If you are interested in partnering with a venture studio to help your business idea become reality, connect with the team at NineTwoThree. We boast extensive experience successfully assisting startups in making a significant impact on their target market. As such, we combine strong technical chops with deep business expertise. Contact us to discuss the possibility of a fruitful partnership.