CORRECTION: why every startup should be a product studio?
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HELLO EVERYONE SORRY TO BE ON YOUR INBOX AGAIN, WHEN THIS WEEK’S ARTICLE WAS SEND OUT, I REALIZED, IT WASN’T THE COMPLETE VERSION OF IT, SOME LINKS WERE BROKEN, SOME INFORMATION WAS WRONG AND IT HAD GRAMMATICAL ERRORS.
HERE WE GO AGAIN, THIS TIME IT’S ALL GOOD
SORRY FOR ALL THE TROUBLE
why every startup should be a product studio?
Let start with an exercise,
Imagine for a second you’re starting a startup today
When you woke up, you got an idea you think it will change the world,
You do research and found out that nobody has done it before
You’re really excited to start but then you realize it will cost a lot to finance your project
What do you do?
Do you ask for a loan from a bank? do you try to find an angel investor? or maybe ask for money from your family and friends?
Maybe yes or maybe not
All of these options are valid but there should be a better way to find the money and the validation to go full-on with your ideas
Today I will talk about the way you can use it if you are in this position. It’s a business model, still new to some but a better option to some of us.
Today, I will talk about product studios, why if you want to build something you should consider this model as an option, benefits, and some examples of companies that are doing it.
When you are about to start something new, you know risk will always be nearby.
You have seen too many intelligent people failing after trying to get an idea off the ground and you are scared to start your own.
I know it’s a little scary but what about if you could start small and then grow it until a point you never dreamt of.
Entrepreneurs take on this crazy risk because the possible reward is huge. Startups that make it through the years are some of the best businesses in the world, with high possibilities and practically unlimited growth potential
But what ifthere was a way to eliminate much of this risk without losing out on the possible benefits?
Today you will found out how you can do it
What is a product studio?
This kind of studio is a place where you came up with lots of ideas, think about their functionality, develop it and launch it as fast as possible. In here you could test and see what idea you could turn into businesses.
With this type of model, you do not focus on building just one thing but many in their simpler form to deliver faster and get going with what’s working and leaving what is stopping you. A studio allows minimizing the risk by doing all sorts of things. You’re never focused on just one but take different shots by creating anything you could think of.
I’ve seen this first hand, some companies or founders try to come up with something first just for fun, to experiment but then they realize it could become a part of their work or a company.
you show the world an MVP of every single idea, which makes the cost of each attempt less expensive than it would be for a normal startup and users get excited about an idea coming.
A well-managed studio can deliver multiple products each year.
On what these studios focus on?
The studio model can seem a little unfocused to some since studios move quickly from idea to idea. In reality, the best studios are very focused, their focus is just for little time compared to normal startups.
What a studio does is develop an idea, launch it, and then after getting feedback from users, it decides if the project should continue or be taken down. Focus for a moment on the idea and then decide the future of it.
If you want to win with the studio model, choose ideas you could be able to do in a matter of weeks, not months or years.
Focus is crucial because it allows you to get better with every new idea you explore. If your studio has a strong focus, you get to apply the learnings from one experiment to the next.
How do you fund a studio?
Doing experiments is great and all, but how do you make money while you are trying to find your winning ideas? How to survive is key to product studios.
I said above that this model could be better than just focus on one idea. When building a startup you may need thousands of dollars to get off but with a studio, you just need way less money to start.
There are two main ways to bring in the capital before your first successful products:
Run a service business
This can be either consulting or contracting.
You could start selling your building expertise to others and help them with their ideas. Using that money to invest in your experiments.
For example, You know how to build on Bubble, a no-code tool to build apps, and with this knowledge, while you’re building your own things, on the side you’re learning more by lending a hand to others who want to do a similar project.
Raise VC (not from a hedge fund but from friends)
You could ask for external money to start but it makes sense in some cases. Since the studio model minimizes risks, you may be able to afford to add some risk back in.
The costs of running an experiment can be really cheap, think: to start a landing page, custom domain, some free services it could cost $10 or even less to do the first step
Build with others
You could share the expenses with other builders. As it never been easier to meet like-minded people over the internet, you could share or build a team to start.
After creating a couple of successful products, you can use their revenue to fund the studio. That's where the studio model really shines.
Turning ideas into companies
The core function of a product studio is to create awesome businesses under the same umbrella. To do that, you need a process to get ideas alive.
Think of your process as a series of challenges that every idea must overcome to become a business. If an idea fails any of the challenges, scrap it.
Here's how a normal studio process work:
Generate an idea, here you think of something cool to do
Flesh out the idea: Once we've had an idea, you try to refine the idea and create a plan on how to do a prototype.
Launch an experiment: Show the experiment to others to gather data on the idea.
Create a project: If the experiment goes well, start building the product. The focus here is to create an MVP that will let test out the distribution.
Decide to continue or delete, in here you take the decision if you need to continue with the project or move on to another idea
What about going all-in?
Some people worry that the studio model could keep them from going all-in on any one business.
The studio model doesn't keep you from going all-in, it just lets you check the road for roadblocks before you do - that's what your process is for.
You build as fast as possible and then you decide whether to start with a new idea or keep going with the same
Famous Product Studios
Some companies using this type of business are the following:
MSCHF, the internet sensation that every time it drops something it becomes viral
BADUNICORN, almost every week you see a new product from them, it can be really silly or funny product but the implement it’s fantastic
NessaLAB, specialized in e-commerce products
LateCheckout, a product studio that designs, creates, and acquires internet communities
Should you start one?
Product studios aren't a new idea but we're entering into a new age of creating
Over the last few years, experimentation has become absurdly quick, cheap, and easy. You can get tools that are incredibly powerful, and no-code tools have given non-developers the ability to build. You can literally drag and drop an e-commerce website into existence using an app on your phone.
These new technologies have changed the game for how to build technology in a good way. The opportunity cost of running experiments is now getting smaller.
There's never been a better time to start a studio. Jumping from project to project, startup to startup makes everyday fresh and interesting. Keeping you learning all the time.
To finish, let me ask you some questions?
Are you a person who has interests in different topics?
Do you have a constant desire to build new projects/businesses?
Are you the type of person who loves working on something for some time and then move on to other things?
Do you consider yourself somebody really curious?
If you answered yes to almost all the questions, you’re someone who has the spirit of a founder or entrepreneur maybe consider starting your own studio in the near future.
You’ll never know what you will get until you start
see you here next week,
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Talking about this, have you seen the latest viral drop? it’s called Millions, a website where you need to pick six numbers on its website, follow the @Millions Twitter account, for a chance of winning $1 million. Heard that MSCHF and some others were involved in building it but what a nice way to get everyone’s attention.
Elon Stocks from BadUnicorn is so funny to see it live, a clever to leverage someone's power and following. They said When Elon mentions a stock in a tweet, we'll send you a text*. You’ll never miss what everyone is talking about.