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Who rules the world: major startup studios of the world

Wednesday, November 3, 2021

Startup Jedi

We talk to startups and investors, you get the value.

Now you can hear the term “startup studios” literally everywhere: in the interviews with entrepreneurs, on conferences, discussions, workshops, etc. And if that's not enough, then there are plenty of terms-synonyms: venture construction, venture studios and startup factories. And sometimes you strive for specifics: show us how these startup studios work! Tell me the names, successful projects, passwords and safehouses. Please explain why it is such a trend and not a simple hype. Sometimes, the specifics in all the arguments about the success of startup studios are really not enough, but we have it! 

Today, we’re talking about startup studios with raw facts and specific people: we’re going to tell you about the most important international studios, dive into their history and tell about their most successful projects — startups that were born on the conveyor but managed to become unique and successful companies.

Idealab (USA)

Founders: Bill and Larry Gross

We should definitely start our list with the very first startup studio: the one that appeared 20 years ago, before the venture studios boom and 10 years before the emergence of accelerators — right at the dawn of the Silicon Valley and the era of startups. In 1996 in Pasadena, brothers Bill and Larry Gross founded IdeaLab, a company with a discouragingly bold concept: businessmen launched several ideas at the same time and then developed the most effective one.

By the time IdeaLab was founded, Bill and Larry already had a successful and considerable business experience: they founded GNP Loudspeakers, which produced audio equipment, and Knowledge Adventure, which produced educational software. And still, just imagine 1996, where there is still no concept of MVP or castedev, no UX design, no social networks, no millions of websites with analytics and useful tools... Idea Lab became the "first shot" far ahead of its time... The next studios emerged in 2007, when the Internet had already changed the world beyond recognition, Betaworks, Rocket Internet and other iconic start-up studios appeared, which we will discuss a bit later.

And yet, IdeaLab succeeded: there are 45 successfully grown startups out of 150 projects launched by the company. And later, Bill Gross formulated the main principle, which he managed to prove in the course of the studio's work in one of his studies: The more important are the right moment of launch and the speed of implementation, then the idea itself. It is the very principle that underlies the success and relevance of modern startup factories.

Startups:

GoTo.com is a company that has created Overture Service, the first system of contextual advertising in the world.  It was bought by Yahoo!

Picasa is a program for working with digital photos on the Internet. It was purchased by Google in 2004 and for quite long, it has been a part of the Google ecosystem. The project has been closed since May 1, 2016.

AirWave Wireless is a wireless network producing company acquired by Aruba Networks in 2008.

The full list of IdeaLab startups you can find here.

Science Inc. (USA)

Founder: Michael Jones 

Science Inc. was created in 2011 in California by Michael Jones, and now, 10 years later, it held a position of one of the most successful venture studios in the world. The studio doesn’t have any niche specialisation: the team works with business projects in different directions; they prefer to create companies from the scratch or join the future startup at the idea stage.

Global Startup Studio Network’s research has categorized Science Inc. as Venture Builder in their classification of startup studios: these are the type of studios that create companies from the scratch. On average, approximately $250 000 of startup capital is invested in each such company.

Startups:

Dollar Shave Club: when entrepreneur Michael Dubin came to Science Inc. with his idea of ​​selling inexpensive shaving kits by subscription, his project sounded like sheer madness: fighting a giant monopoly of the market like Gillette seemed impossible. But the charisma, tenacity of the entrepreneur and, of course, his creative video with the presentation of the project, hooked the management of the studio (by the way, you can watch the video here). In 2012, the project entered the market, by 2015 the company's sales amounted to $153M, and a year later. the company already occupied 8% of the market. In 2017 Science Inc. led a startup into a $1B deal with Unilever.

Other famous projects of this studio: PlayVS, Liquid Death, Pray, Arrive Outdoors, Mammoth Media, Springrole.

Rocket Internet (Germany)

Founders: Oliver, Alexander and Mark Samwer

Rocket Internet is an “old-timer” in the world of startup studios: the company was founded back in 2007 and since then it has only gained momentum. Currently, it is the most famous startup studio in Europe and one of the biggest in the world.The headquarter is in Berlin.

Rocket Internet's strategy differs from Science Inc.: according to the same research by the Global Startup Studio Network, this company belongs to the Racer Studios type, which means that it identifies successful startups and tries to replicate them in different regions. This is a more frugal way, as it requires less resources and finances. The studio also has specific niches in which it operates: e-commerce, food technology, travelling.

Attila Sigetti, the author of “Anatomy of Startup Studios” and CEO of Drukka studio, formulates the working principle of Rocket Internet as follows: the studio finds a large market and an available niche in the necessary field, and then creates a company and starts to “actively and even aggressively promote this company”.

Startups:

Nestpick is a startup that collects listings of fully equipped apartments and rooms around the world. The audience of the service is not only travelers who want to relax in comfort, but also students, who move to another country for study and are interested in finding the best accommodation at a reasonable cost and in a short time. Annual website traffic is 1.64 million users.

Home24 is an online store of goods for home and garden with a variety of products and improved possibilities of use.

Global Saving Group: the service mediates between businesses and their potential customers, increasing sales and business traffic with its proprietary tools.

Betaworks (USA)

Founder: John Borthwick

Betaworks from the USA is another “old-timer” in our list. The studio specializes in digital products that will be in demand in the work with the Internet among users from all over the world. The headquarter’s in New York. The studio works with startups in a variety of ways: it doesn’t only create startups from scratch, but also acts as an investor, who’s funding entrepreneurs' ideas at an early stage.

Startups:

Giphy is a specialized search-engine for gif-files. The startup was launched in 2013: in the first round, they received investments of $1M, then $30M, and then another investment of $300M. In 2020, Giphy was bought by Facebook.

Bitly is a world famous service for shortening links. In 2013, the service revenue was $4.1M and two years later — $12M. The service continues to grow: in 2018, it processed 37.5 billion links. The company's exact profit remains a trade secret.

Other successful projects of the studio include: Chartbeat, TweetDeck, Digg, Instapaper.

Atomic.vc (USA)

Founder: Jack Abraham

The power of the startup studio from San Francisco, founded in 2012, is in the synergy of the best minds. One team includes founders with experience in founding startups with turnover of billions of dollars and entire groups of experts in various fields: law, finance, design, engineering. Startups gain access to the studio's $250M fund, from where they can make the first and most important investments in the project. The annual traffic of users of the three largest studio projects is 23.3M people.

Startups:  

hims is the company that creates personalized medical products for men's health. The product line helps to solve a wide range of problems, from depression and anxiety to sexual health and hair loss. Now the company has already gone public and it is estimated at $1.6B.

Bungalow is the app that relieves users of the eternal problem —  loneliness in a new place after moving; it offers access to the community of carefully checked neighbors. This is a kind of social network for neighbors that will help you feel comfortable, find like-minded people and solve important everyday issues.

Zenreach is a service that works in the b2b market and helps to combine online marketing strategies with the performance of offline retail outlets. This allows the company to quickly understand the effectiveness of a particular strategy and its impact on actual sales.

It is pretty clear that we can continue this list, since there are eFounders, Pioneer Square Labs, Human Ventures, and right now, there are new startup studios emerging all around the world, and each of them can “pop” and become the next unicorn! 

But analyzing the history of the first and oldest studios described above, we can be sure that the era of venture studios didn’t begin a year ago. This is a long and logical process, which began with IdeaLab in the distant 1996, gradually developed and eventually led to today's startup studios’ boom.

So now, in the era of startup studios, there is a true Golden Age!

3 Nov 2021

 

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Comments

Adam
Wed, 06/29/2022 - 10:24
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Excellent article highlighting some heavy hitters in the studio space! If you're interested in the pros and cons of working at a startup studio, check out the first article in my six-part series on team building for startup studios. Part 2, which covers idea generation and evaluation at startup studios, will be out in early July: https://www.studiohub.org/why-i-want-to-work-at-a-startup-studio-is-a-career-in-building-startups-right-for-you/ Another great article, Elena!

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