From past to present: Venture Building Model



Venture Builders (VB), also called "start-up studio", "Venture Studio", "Start-up Factory", dates back to 1996. IdeaLab, the first of its kind, was founded in 1996 by Bill Gross, one of the PIMCO investors. IdeaLab successfully created over 150 companies with more than 45 public offering and acquisitions. Startups could be provided with significant advantages, especially through access to computer systems at this time when cloud technologies were not yet common.


As for the first wave of VBs, they became prominent with examples like Betaworks and Rocket Internet when the internet started to rise, mobile technologies began to shine out, and virtual server systems were available. Its more secure and long-term support organization made the VB model stand out with the financial crisis of 2008. Startup accelerators such as YCombinator (2005), Techstars (2006), startup Wise Guys (2009) and Startupbootcamp (2019) launched in those years were at a very early stage; this was another factor that also supported the trend. Rocket Internet headquartered in Berlin is an VB, especially in internet and e-commerce retail businesses, of which successful models are followed in other countries. Inspired by Zappos in 2008, Zalando is prominent as a listed eCommerce platform with over $25 billion.


Mainly the rise of social media, cloud technologies and API technologies paved the way for the second wave of VB in 2013. Startup accelerators was becoming popular in 2012. When YCombinator formed a program for startups with no business idea, TechStars launched an integrated program in collaboration with Microsoft. The VC world was becoming competitive. Providing both financial support and operational support & contributions, VCs such as a16z came forward.


In 2014, the consulting firm Boston Consulting Group launched BCG Digital Ventures and led to change in consulting firms for the VB model operation in companies.


Whereas Ernst&Young bought the VB company etVenture in October 2017, Deloitte followed this trend buying Makers.do, another VB company in the same year and month.



Mobile-first products, cloud technology and instant service are popular for the 3rd wave VBs, in use nowadays. Access to the right methods & information networks is more significant than access to the server or technology nowadays.


Platform and data based business models in particular need strong B2B collaboration while expensive and time-consuming technologies such as artificial intelligence demand a lot. That's why we expect the VB trend to continue in the future. In this new period with the gradually challenging access to competent human resources and increasing costs, we expect the need of sharing certain competencies (cloud, mobile, devops, AI, data analytics, UX, etc.) reinforce the VB model - particularly in early stage startups. Our opinion is that solid consultation services received from competent sources can create a difference in entrepreneurship in this period - when the true collaborations are not only business-oriented, but with technological adaptation & success as well.


Umut Esen

Managing Director



Sources

GSSN Data Report, 2020

Maximilian Hamida, Understanding The Startup Studio Incubation Model ,University of Gothenburg School of Business, Economics and Law

PLDT Investment in Rocket Internet AG: Global Investment and Strategic Partnership, PLDT LIVE DIGITAL

Scaling to Startup Studio 2.0: An Industry Overview, Cachaça Consultancy LLP, November 24,2014

Efounders, Building Startups The ‘’3rd Co-founder model’’

https://www.slideshare.net/eFounders/building-startups-the-3rd-cofounder-model

The Origin and Evolution of the Startup Studio

Rise of the Venture Studio

Can a "full stack Accelerator" work better than existing VC models for early stage?

Dissecting the Venture Studio Model

Silicon Valley's 'Pixar': Why The Startup Studio Behind Hims' Breakout Success Just Raised $150M

The Past and Future of Venture Building



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