Studios vs. Startups

Every great startup eventually becomes a studio.

  1. Startup = Growth.
  2. No company can grow forever with just one product.
  3. The best startups launch, buy, and grow many products.
Alan Kay at Xerox PARC with the Alto.

The old way to invent is to make a studio inside the startup:

The new way to build to make the whole startup a studio:

  • Google → Alphabet
  • Facebook → Meta

This generation of founders is starting younger, growing faster, and running their companies longer.

  • Keeping their startups in perpetual studio mode is key to staying relevant for another generation.

I’ve now been running my indie startup studio Utopic for 7+ months after being founder & CEO of my VC-backed startup Labdoor for 9+ years.

  • Running an indie startup studio means doing everything yourself, from building your own website to manufacturing your own products.

Here are the 6 biggest differences I see between studios and startups:

1. Home Runs vs. Singles:

  • VC-backed startups are incentivized to go $1B+ or bust every time.
    • That’s great for VCs, but horrible for founders who strike out.
  • Startup studios can build a portfolio of profitable businesses.
    • Swing for singles and some will go over the fence.

2. It’s actually easier for studios to focus:

  • Startups have to keep chasing larger target markets as they scale.
    • This forces them to aim too wide.
  • Studios can focus each of their products on precise target markets.
    • Studios often have many different products in their portfolio, which can be hard to operate.
      • But each product in a studio usually has its own leader(s), which makes them easier to run.

3. Studios are harder to fund than startups.

  • Most founders can’t raise money for a studio until they’ve gotten a successful startup exit.
  • Startups have thousands of investors they can target for early-stage investments.
    • Accelerators, angels, and VCs each specialize in different phases of startup growth.

4. Studios can target a wider range of asset classes:

  • Studios that follow a hits-based model are still great investments for VCs.
    • VCs can invest in specific startups that “graduate” from studios.
    • VCs can also back funds that invest in every startup created by specific studios.
  • PEs, endowments, and family offices might prefer to invest in the studios themselves.
    • These funds can back more profitability-focused studios.

5. Studios require two types of focus: zooming in and zooming out.

  • If you love being zoomed in, own your own business.
  • If you love being zoomed out, be a VC.
  • If you love both, startup studios are for you.

6. Both can bootstrap with services, but studios keep those businesses:

  • Startups and studios can both use services businesses to cover early costs before they raise money.
  • Startups almost always shut these businesses down once they get funded, but studios can keep them as cash cows.

I believe more founders should start studios instead of just startups.

  • Parallel entrepreneurship, not serial entrepreneurship.

I’m now building Utopic, the Dreamville (or Roc-A-Fella) for startups.

If you’re considering starting your own studio, please DM me. I’d love to talk!

Published by Neil Thanedar

Neil Thanedar is an entrepreneur, investor, scientist, altruist, and author. He is the founder & GP of Utopic, a pre-seed biotech VC fund investing in the future of science. He is also the founder & chairman of Air to All, a 501(c)3 nonprofit medical device startup, and Labdoor, a consumer watchdog with $7M+ in funding and 20M+ users. He previously co-founded Avomeen Analytical Services, a product development and testing lab acquired for $30M+ in 2016. He has also served as Executive Director of The Detroit Partnership and Senior Advisor to his father Shri Thanedar in his campaigns for Governor, State Representative, and US Congress in Michigan.