By Andrew Amann, CEO of NineTwoThree Venture Studio, a two-time Inc. 5000 Fastest Growing Company. Andrew & his team have created 50+ products & 14 startups.
Forming a new business remains a risk-prone process, as many startups simply fail, with any investment ultimately lost. However, incubating a fledgling company within an emerging entrepreneurial concept known as a startup studio can help mitigate those risks. As such, startup studios—also known as venture studios—continue to grow in popularity throughout the business world.
Part of the reason for the continued growth of startup studios relates to the repeatable processes these businesses hone over time. As studio founders gain more experience fashioning new organizations, they leverage any lessons learned to become more efficient and more effective in their efforts. This ultimately helps reduce the risk that comes with new business creation, resulting in improved ROI for those funding these concepts.
However, one question arises: How do startup studios source new business ideas? Some studios take advantage of opportunities arriving on their doorstep from interested entrepreneurs looking for a studio partner. Other organizations take advantage of a robust internal ideation process. Many also leverage both methods. With the goal of increasing your startup studio knowledge, let’s take a look at all three strategies.
Attracting Entrepreneurs Looking To Build A Business
Experienced startup studios with a sterling reputation for successfully incubating new businesses attract interested entrepreneurs. This model is most like an accelerator or an incubator—the entrepreneur gains a team of experienced business builders to help develop their idea. Partnering with a known entity with a proven track record simply offers a healthier opportunity for truly making an impact in the business world.
Additionally, any studio with a mature process for developing technology solutions—especially state-of-the-art mobile apps and websites—can provide an entrepreneur with a real chance at success. However, don’t forget that deep research of the target market for the new business also remains critical. This research-based approach provides critical insights, ensuring the new app or website actually solves a problem for the user community.
While the entrepreneur brings the idea, the startup studio offers advisors, strategy and execution through full end-to-end development, to bring the idea to market. Because these studios are invested in the venture’s growth, they generally have a well-established vetting process to focus on businesses that have the best chance of success.
Generating Business Ideas Internally
Other startup studios sport a robust ideation methodology aimed at generating promising business ideas. As part of this process, each potential concept undergoes thorough vetting to ensure it boasts real potential for success. This effort analyzes the viability of the technology involved in the entire solution, including the industry, competition, innovation and growth potential. The studio then invests the funding, advisors, human resources and other business necessities to assist the startup to success.
Once again, researching the potential target market also plays a crucial role in this ideation process. It also helps if the leadership or other employees at the startup studio boast relevant experience in that business sector. Without these insights, any emerging business effectively flies blind while trying to successfully launch and maintain profitable operations.
Collecting External And Internal Ideas With A Hybrid Model
Some startup studios source ideas internally and externally. The work done to support other entrepreneurs provides experience and insight to power internal idea generation. These studios gain critical insights by working within different industry sectors. It also provides studio employees with exposure to the operational pain points within a certain market.
At the same time, experience in taking an internal venture from concept all the way to market can be applied to external ventures. Entrepreneurs that bring their ideas to this type of studio benefit from the studio’s past startup-building experience.
With Startups, Practice Makes Perfect
The common denominator for all three ideation models is the idea that startup studios improve over time. This is why they have a higher success rate than traditional startups operating independently.
We started with more of a hybrid model and eventually found that focusing on attracting entrepreneurs and executing their ideas was the most successful for us. If you’re considering starting your own startup studio, capital and current market experience should be major factors in determining where your ideas come from.
Whether ideas are generated internally or externally, startup studios can leverage past startup experience, market research and industry connections to test and develop an idea and reach the strongest iteration possible.