On the heels of an entrepreneurial era a new model for innovation, the venture studio, is taking shape; and things will likely never be the same, as inventions and innovations solve problems for a rapidly changing world and its inhabitants. The venture studio concept has been around for at least a decade and is being embraced by researchers, scientists, technologists, corporations, and individuals – that very mix is part of what makes the venture studio model appealing, accomplished, and increasingly prevalent.
Venture studios pull aside – and together – groups of people who continually explore new ideas, foster and validate them, assemble experts, and back them with financial resources. They allow small teams to venture into new territories with unknown outcomes and provide the freedom to both explore and fail. When an idea begins to stick, a venture studio may build on it via acquisition, integration with resources of a BigCo, or by assembling additional expertise needed to build it from the ground up.
A distinguishing attribute of a venture studio is that, unlike accelerators and incubators that recruit startups and back them financially in exchange for equity, venture studios assemble their own teams of experts and investors to hatch and nurture – or acquire and build – new ideas. They are heavy in resources, and light in barriers, silos, and bureaucracy. And, because they operate as cross-functional teams, venture studios are able to support themselves financially, intellectually, and emotionally – attributes that lone entrepreneurs did not have. The isolation of the solo entrepreneur has contributed to the evolution of venture funding, innovation, and the venture studio model. Today, three types of venture studios are taking shape – standalone, internal, and partnerships.
Standalone, utilizing the resources of expert advisors
In the age of entrepreneurism, great ideas were explored and given life by individuals who may have then reached out to others for funding and resources to fuel growth and scale the new business. Conversely, a tenet of a standalone venture studio is that at its foundation is a team of experts. The standalone venture studio model perpetually seeks and affirms new ideas and opportunities. And once an opportunity is deemed viable, the studio recruits a well-rounded team of experienced mentors to rigorously pursue the venture. Over time, venture studios such as DataTribe, develop an ecosystem of resources which include experts, investors, and community and which have the potential to become increasingly efficient and effective over time.
Internal, backed by a corporation but with autonomy to explore independently
BigCos are seeing competition from startups and are addressing that by creating space for startups of their own with the goal of bringing innovative products and solutions to market quickly. Kraft Heinz funds Evolv Ventures which has introduced a meal planning tool named Meal Hero to connect consumers to grocery e-commerce. Meal Hero effectively provides shoppers with their own nutritionist and menu planner, and guides their decisions in light of personal health and nutrition goals. Four years ago, CPG giant Procter & Gamble opened its studio Ventures which has brought four brands to market. The most recent is Zevo, a line of people-and-pet-safe insecticides. P&G credits the venture studio model with taking the complexity out of decision-making to deliver impactful solutions in a fraction of the time of standard product rollouts.
Partnerships that leverage resources
Venture studios may also take the form of partnerships, such as the model High Alpha is pioneering. Focusing on innovative software solutions, High Alpha partners with corporations who provide financial resources to support new ventures and bring ideas to market. Its portfolio of investment partners provides funding and helps speed processes and decision-making, and provides founders the opportunity to focus on the idea and the business they are building.
With dedicated teams and spaces taking advantage of available resources, the venture studio model may be the most expedient and least risky means to bring innovative and compelling solutions to market.
We’ll be continuing to lean in and share more about venture studios and their role in enabling BigCos to operate more like startups.