Explaining the concept of a startup studio to people has been challenging. Many people think of the words “startup studio” as an oxymoron. The word “startup” implies the need for “singular focus”; thus, working on more than one startup at a time suggests a lack of focus and consequently higher risks associated with these ventures. What I have also realized is that most of the comments describing startup studios are generally broad and misses the details of how it actually functions. I realize that there is a need for a clear conceptual framework to position startup studios so as to foster greater understanding and appreciation of what a startup studio does and what it tries to achieve.
Startup studios are still relatively new. Alphabet is in a lot of ways a startup studio working on multiple different ideas and fields at the same time. Diversification and working in multiple domains is something that many big companies like General Electric do. Diversification I believe is at the heart of a startup studio’s strategy. However, while it is easier to comprehend diversification with the big companies, there is a barrier to acceptance with smaller, early stage companies.
One model that I find useful in explaining a startup studio is that of a laboratory. The definition of a laboratory in Wikipedia is appropriate, “A laboratory is a facility that provides controlled conditions in which scientific or technological research, experiments, and measurement may be performed.” Academic laboratories at universities often explore multiple projects at the same time. The projects are normally related, but doesn’t have to be the case. It often depends on the principal investigator and his or her interests and the funding acquired for the projects. Increasingly, the academics are looking to take their research outcomes to the next stage and spin them off as companies. Bob Langer at MIT is an excellent example having spun off a multitude of companies. The MIT Media lab is another example. Collectively more than 150 companies have been spun off from the Media Lab.
Similar to an academic laboratory, a startup studio engages in multiple projects concurrently, with each project being handled by a team. Funding for each project (in our case) comes from the studio itself. The team adopts a method in moving from an idea to a business. The studio provides the facilities to carry out these experiments potentially leading to a viable business.
While an academic laboratory explores scientific research questions, a startup laboratory explores business questions. An example of a business question is “Can we supply baked products through home based bakers using underutilized ovens?” Just as how there is a scientific method for how research is done, the method that a startup studio adopts is key in this process of exploring and experimenting in pursuit of answering business questions. At SIC, we have been focused on developing this method.
This ability to experiment with business ideas could be greatly beneficial. It is difficult for larger companies to experiment as they generally tend to be more conservative in their exploration for various reasons. The exploration and experimentation today occurs at the ecosystem level. Each startup is experimenting on its own business idea. The ecosystem is therefore continually innovating.
A startup studio overall is formalizing and institutionalizing the exploration and experimentation of business ideas. Essentially, just as academic laboratories exist to create new scientific knowledge, startup studios could play the role of creating new business ideas. Just as how an academic laboratory could create breakthrough technologies, startup studios could create breakthrough companies.