Proven cockroaches versus fragile unicorns
Too many times, the founders of a new studio want to rush to VC-s with their big promises asking for investment for a team that didn't even prove it's capable of building and scaling multiple businesses in parallel.
I understand that it's tempting to burn through the cash of others. But in the long run, it's much more rewarding to stand on your own feet.
Like successful startups that bootstrapped their way up, the startup studios that have a solid agency background have the right mindset in their DNA:
1. Don't try to compete on price. It's hard to make lucrative business with a 1% profit margin. Specialize and focus on a high-margin segment, where you can give unique value and make a high profit. This enables you to grow your team beyond fulfilling the agency workload - so you will have the extra capacity to build your own startups.
2. Leave behind the urge to force an idea on the World - we've seen enough 'Uber for cats' type of things. Time to focus on real issues. Follow the clients' money, and with every own startup, build solutions on proven market needs instead of unfounded ideation. Know who your first client is and that they will pay for your
3. Plan for the long run. Even if everything works out, a studio needs 3-5 but more like 7 years to give you the fortune you are looking for. And this will require a solid culture, a Team and Management that is able to scale, trusting relation with future investment partners and a commitment to your market.
Hard? Yes. Can be done? Definitely. Your first step: Chose to be a proven cockroach over an imaginary unicorn. Leave behind the common urge for an instant-win. Commit to results over promises. Then study the examples of those who already made it.
Attila @aszig