Did everything go exactly as planned? (⚠️ spoiler alert: it didn't. ⚠️)
But did we learn from our experiences? (after all, why else would we be sharing this article?)
In any case, we're excited to present our five pivotal learnings and insights. These have also shaped our blog and LinkedIn posts over the past year, feel free to explore some of the linked resources.
1️⃣ Early Stages Vary Significantly
As a start-up studio, our initial target was early-stage entrepreneurs and small founding teams, with or without a first success, and with the company already created.
However, we rapidly encountered a series of unique challenges in this target group of which the main ones:
Unrealistic valuations by young founders (even as market valorizations were going down)
Misaligned cap tables due to an excess of stakeholders or the presence of the wrong individuals
Realizing a diminished value proposition for the Studio when it appeared that the company was already on a promising trajectory (you have to stay honest with yourself and the venture in front of you)
In response to these challenges, we decided to broaden (shift) our definition of early-stage, venturing even further back in the development process to focus on:
Ideas in the crucial phase of validation, which includes scrutinizing aspects like pain points, market viability, viable solutions, willingness to pay, and achieving product-market fit (pmf)
Engaging with 'Ideators,' individuals with promising concepts but potentially lacking the requisite skills, motivation, or confidence to transform these ideas into flourishing ventures For a deeper understanding, explore our piece on 'Finding Your Role in the Venture Journey.'
2️⃣ Unveiling the Unfamiliar
In our efforts to explain our own venture, we often found people attempting to pigeonhole us into conventional categories: "Oh, you're somewhat like business angels," "Aren't you just another accelerator?" or "Isn't that what an incubator does?" and even "So, you invest like a VC?”
"No, we don't fit into any of those boxes. Studios belong to a category of their own.”
It kind of surprises us that many individuals have never come across, let alone heard of, the concept of studio venturing, despite the presence of behemoths like Hexa (formerly known as eFounders) in Belgium.
Hence the numerous resources available online comparing accelerators, incubators, and venture studios:
Therefore, we had to assume the role of evangelists for the studio concept, highlighting the significance of a long-term, personalized co-founder commitment, distinct from the involvement of VCs, business angels, or incubators.
And don’t get us wrong, parties like imec.istart, Start it @KBC, and Birdhouse have made substantial contributions to the Belgian startup landscape, which they continue to do.
Nonetheless, we firmly believe that not all startups or founders are ideally suited for the fast-paced trajectory these entities offer. Some necessitate or thrive better with, more comprehensive and enduring engagement than accelerators or incubators can deliver.
3️⃣ Studio Bootstrapping, a balancing act
At our core, we're a startup studio, driven by the desire to build innovative products, foster exceptional teams, and birth thriving companies.
However, the startup studio model, as thoughtfully explored in Matthew Burris’ article, ‘Can’t raise enough to fund your venture studio day one?’ exposes you as a studio operator to a unique set of challenges concerning capital acquisition and the realization of successful exits.
To secure our own operational autonomy and lay a robust foundation for potential investors, we made a deliberate choice early on to combine venturing with advisory services.
And we are aware that some in our industry may perceive this as unconventional, and also regret to acknowledge that, occasionally we hear or read about the uncomfortable situations where a venture became a mere cash cow (which we disapprove of). Hence the decision to offer our advisory services only to corporates and scale-ups.
And let’s not forget, how many startups have not ventured into supplementary activities to support their endeavors until they were fully launched in the market?
4️⃣ Culture Eats Strategy
We engaged in numerous discussions with founders, ideators, startups, and researchers. It took us almost a year to engage with an Ideator - why? The answer is simply ‘cultural fit’.
What defines cultural fit for us:
Embarking on the rollercoaster of startup life with someone you know inside-out, someone who welcomes challenges and possesses a strong opinion
Deep passion for the industry you immerse yourself in (Link to why a #sport.tech startup failed )
Shared work ethics for long-term collaboration
Ensuring a balanced cap table to avoid future conflicts and failures
We increasingly still witness startups failing due to misaligned cultures. Our own journey began coincidently while working as advisors at a startup. Working closely and sharing a common vision solidified our passion the last year for studio venturing even more.
5️⃣ Vertical or Horizontal Challenges?
Startup teams encounter a range of challenges, from horizontal ones such as product discovery, PMF, and funding to vertical challenges like exploring new markets or industries.
While some startup studios focus solely on vertical challenges, and (only) venture accordingly. We found value in addressing both horizontal and vertical concerns. An interesting read by Matthew Burris on sector focus.
Our primary focus areas are #prop.tech, #log.tech, #health.tech, and #energy.tech, driven by our hands-on experience.
However, as our journey unfolded. We realized that it’s primarily our passion and the encountering of the right Ideator that propels us to venture beyond our primary areas.
Interested in following our journey? Follow us on LinkedIn for more content.
Side note: as you might have already spotted (at least, if you're reading this at the time of posting), our website is currently stuck in a time warp with its old positioning. Time for us to roll up our sleeves and get our website up to date 😉🕒
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