Business

Are company builders inherently superior?

I've been pondering this the last couple of months. To take the thinking further I would love to have your thoughts on the subject.

First off - what are company builders/startup studios? (I'll use quotes from a recent article to illustrate https://www.gan.co/blog/startup-studios-look-like-2020/)

"At a very high level, a startup studio (also called a venture studio, venture builder, or company builder) is an organization that comes up with ideas and products and finds executives to build companies around them. In other words, studios use both internal and external resources to come up with an idea for a company.

[For a startup entrepreneur, the internal resources are vast, usually covering:]

  • Software development
  • Sales/business development
  • Design
  • Marketing/communications
  • Product
  • Accounting
  • HR
  • Finance
  • Legal"


When I was first put in contact with this model it looked like the startup founders paradise. You have access to almost every skill you could ever need to get your product up and running. All the critical parts of funding an IT startup (as more or less all cases are) is covered. All I would need to do is to build an audience and find product market fit. I'm not saying that is easy, but taking away all the other problems of finding good partners in all these different fields looks like a gift from business heaven.

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Something that is easily missed, is that the people involved with the company builder become repeat players. They will be involved with the start-up phase of company after company, easily being involved with one new start-up every two years. This is a huge advantage in almost every single human endeavour, and especially in business.

Lastly, company builders are doing well in general. There are continuously starting more studios and/or expanding to new locations,

Are company builders so good that they will eventually out compete normal startups?

If we push the trend another 20 years in the future - what will we see? Probably several company builders in every city. In a world filled with competition, how can a normal start-up compete with a company builder.

Ponder two businesses started around the same time. One normal start-up bootstrapping and doing their best. One company builder using their expert knowledge in every single important area of the start-up process like rocket fuel.

My guess is that company builders will start to crowd out normal start-ups to a larger degree, eventually compromising over 50% of all the new jobs created in the start-up environment. They will not necessarily create the most unicorns, but they will create the most jobs.

Now I want to know what you think - please comment and let me know what you think about the rise of company builders and how that effects the ecosystem.

I'm not done with my thinking so I'm really interested in debating this and see where it takes us 🙂

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