What even is a startup studio?
We’re Builders, a startup studio.
“You mean you’re like a VC?”
Nope.
“So kinda like an incubator then?”
Wrong again.
As a startup studio, we’re focused on building bigger and more impactful software companies year after year, so let’s take some time to explain who we are, what we do, and why we do it. As people dedicated to this field, my team and I sometimes don’t stop to think of the term ‘startup studio’ being a relatively new concept to everyone outside of the VC circle.
Venture-building from scratch is a process involving hard work with plenty of persistence, and theory doesn’t always translate to actual experiences- boy do we know! Studios maintain a core team of specialists in growth, HR, finance, research, product, design and tech who facilitate venture projects as per its business plan. As result, the startups we co-found can receive inputs from professionals and processes that they wouldn’t have had the means to if they operated outside of the studio system. But this means that the studio itself invests not just creativity, time and money, but also the best available resources to hire and run that core team.
This is why studios are generally the brainchild of seasoned tech entrepreneurs (with successful exits), and those with considerable experience in the venture capital field; we are neither. Repetition builds perfection, and in the studio world, building ventures back-to-back is key to perfecting the art and science of it. We call these rounds of venture-building our studio cycles. In each cycle, we research and validate ideas, incorporate ventures born of these ideas, launch and grow the startup and ultimately facilitate it well enough that it can scale and spin out successfully.
So for us, each success, failure and roadblock are lesson — in the literal sense. We learn and prosper as we pioneer here at Builders.
How did we start?
Builders has humble beginnings, especially in contrast with some of our big American counterparts; The foundation of today’s Builders Studio was in the form of Solware, a software development agency focused on building software applications for corporate clients. Along the process, we began servicing scale-ups and corporates to achieve the right product-market fit — and eventually also investing in them to achieve this landmark. While our experience grew with the creation of each new solution, hand in hand came frustration. We wanted to build the ‘perfect’ product but weren’t satisfied with only being involved in the product front; we wanted to be able to conceptualise, validate and build.
This was how ‘We Are Builders’ was born; In the beginning, we worked with corporate clients with the venture-building appetite to create software companies. As we developed experience, we realised that the sooner we engaged in the company creation process, the better impact and value of the software company. For this, going independent was our best option. With the expertise of our now Managing Partner Sharon Klaver joining us and securing the needed funds from exiting one of our portfolio companies, we rebranded as Builders in 2020 and officially made the shift from being a software solution-builder to a full-on startup studio.
Through this journey, we learned a lot about the finer details of idea validation, venture-building and the science behind it. Like any good samaritan in this industry, I want to pass this knowledge on to people wanting to set foot and do good in the startup world. So, here is a brief (but comprehensive) one-stop shop to inform you about the birth and growth of the startup studio model in laymen’s terms — with some personal experiences thrown in for reference.
What exactly is a startup studio, you ask?
A startup studio or venture studio is an organization that aims to build several startups parallelly. Startup studios take a co-founding role in the new ventures while providing operational and capital support like expertise, resources and infrastructure to all the startups being grown in the studio. Startup studios’ origins can be traced back to American entrepreneur Bill Gross, who founded Idealab as a new-age IT incubator in 1996. Check out Bill’s legendary TedX talk here. In the late-2000s, studios like Betaworks took this idea and rebranded it into a studio model, under whose expertise tech heavyweights including Bitly, Chartbeat and Giphy have grown. Over the years, studios like E-Founders, Obvious Ventures, Growthstory, and Expa have played critical roles in further establishing the model within the startup ecosystem.
Today, there are over 700 startup studios globally, half of which were founded post-2013. It is a growing model and a global phenomenon, for which another push came in the form of one of our earliest cheerleaders — the Global Startup Studio Network (GSSN). We first connected when GSSN was in its initial stages of development with just a few leading studios onboard; now, it operates as a strong network of vetted startup studios from around the world with median portfolio valuations of more than $148 million. Our parallel story of growth is a testament to the fact that the studio model works; more and more people, ideas (and funds) are coming on board every year.
Did you know there are different kinds of startup studios?
There are two broad categories of studios — ‘Builder’ Studios, and ‘Investor’ Studios. Investor studios identify early-stage startups and take them under their expertise to provide a financial and infrastructural endowment to help them grow. Builders Studio (as our name suggests) is a builder studio. Builder studios are focused on creating new companies from scratch based on internally researched and validated ideas for which suitable founders or entrepreneurs are matched.
Why did we decide to go this route, you ask? Well, for the first 4–5 years we exclusively handled the software-building bit of venture creation. Down the line, we thought, “if we could build a good, scalable and sustainable product for others, why not do it all ourselves?” We liked the process of identifying opportunities but did not want to limit ourselves to building software alone; we not only wanted to be an independent venture builder but also a comprehensive startup studio that participated in every aspect of building software companies.
Furthermore, the builder studio model is built on economies of scale i.e. the studio distributes centralised resources among its ventures to build them up in parallel. It can be financially draining to recruit specialist teams and purchase tooling for startups, especially at their fledgling stage; so studios like ours take on that responsibility from day zero. As the studio grows, they usually reinvest funds into new ventures, hence keeping the venture-building cycles continuous, parallel and eventually, self-sustaining.
For this, our business analysts deep-dive into industry trends to research the best opportunities, following which we validate the idea thoroughly before building ventures that help change the way of work and living in Europe and beyond. Our unmatched core team along with the partnered founder does this in collaboration; we decided to be based out of Rotterdam for this very reason. As the most diverse, and the second largest city in the Netherlands, we were quick to recognize the need to be centrally located to attract the best possible talent; of course, the shift in work culture in the past decade has helped decentralise this process quite a bit — we now have people working with us from all across the globe. With startups being built, launched, scaled and spun out continuously, we want the creme de la creme working and co-founding with us.
Looking Ahead
Whilst we’re still figuring out the studio model as we build, learn and grow, we do have a very clear vision of the future. Our endgame? Become an evergreen studio — a studio that self-finances through simultaneous and parallel rounds of company creation. The route to getting there is launching more than two software companies a year, establishing studios in at least two more European cities and of course, creating several impactful companies with great entrepreneurs.
If you want to get talking about the latest in the startup studio world that excites you, get in touch, and stay tuned for more interesting insights on startup studios, and the disruptive innovation it brings to the table in the startup ecosystem!
Michael van Lier
Founder and Managing Director at Builders
