The Startup Chat with Steli and Hiten
368: Creating or Working with a Company Builder?
Dec 7, 2018
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In today’s episode of The Startup Chat, Steli and Hiten talk about the concept of company builders or company studios.

But what is a company studio? According to Steli, a company studio is a corporate structure that brings together talent and people, develops ideas and prototypes with those people and once those ideas or prototypes become something viable, they infuse capital into that project and incorporate it into a new business. It’s basically something in between starting your own company and being part of an accelerator like Y-combinator.

In this episode, Steli and Hiten share their thoughts on what company studios are, the benefits of joining them, the challenges of running one and much more.

Time Stamped Show Notes:

00:00 About the topic of today’s episode

00:35 What is a company studio.

01:51 Benefits of joining a company studio.

02:20 Why this idea is appealing to entrepreneurs and first-time founders.

03:19 The different ways of learning how to run a business.

03:57 How company studios function.

04:47 Another key benefit of joining a company studio.

05:06 How these companies differ from Y-combinator.

06:03 The challenges of running a company studio.

06:27 Examples of successful company studios.

3 Key Points:

A company studio is a good match for all parties involved, but it’s very difficult to pull off.
There are different ways to learn how to run a business.
One of the benefits of company studios is that you get to work with people who have done it before.

 

[0:00:01]

Steli Efti: Hey everybody this is Steli Efti.

 

[0:00:03]

Hiten Shah: This is Hiten Shah.

 

[0:00:04]

Steli Efti: Today on the Startup Chat we want to talk a little bit about this concept of company builders or company studios. What is it? How does it work? Is it good? It is bad? Who should participate in that or think about that? First let me give a definition on a company builder or a company studio. This is the concept, it's kind of something in between starting your own company and being part of an accelerator, like Y Combinator where there's a bunch of companies that are started in the very early stages that go through a three month period of pivoting, developing, launching, changing and then raising money to go off on the races. A company builder or a company studio is one corporate structure that brings together talent and people, develops with those people ideas and kind of rapid prototypes these ideas and NVPs them. Once that NVP or prototype of a very early stage of an idea has some legs, the company builder basically infuses some capital, puts together the team and incorporates it as a separate entity and kind of like bursts a new company that is being pushed out of the existing corporate structure. It's this idea of having one company that's launching off companies, that's starting off new companies. As a team member when you join a company builder or a company studio, the idea is that you're an entrepreneur but you're in a much more supportive environment where there's going to be money and infrastructure and expertise to come up with the idea. To name the company, to infuse it with money. Only if the early test work out and you have a promising opportunity that's tested and proven, then you get to take the team and the idea, whatever was accomplished internally in the company builder studio and run with it and become a real entrepreneur in kind of a safer bet or higher chance for success bet. This idea I think has been around for a very long time. It's very appealing especially for entrepreneurs. A lot of entrepreneurs like the idea of starting a company builder because they want to start so many different companies. It's also an appealing idea for first time founders probably that are like, "I want to be an entrepreneur but I have such a lack of experi...

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