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Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

Startup Studios - a better model to build startups? (1)

Build, measure, learn’ has become a mantra for building tech startups. Rather than rushing from idea to final product, you first develop a minimum viable product (MVP), test it with your customers and learn from their feedback to improve and adapt.

In our research, we constantly meet entrepreneurs, innovative startups and other organisations trying to apply the lean startup model. So we asked ourselves:

‘Rather than just studying startups, could we apply some of their approaches to improve our own work?’

Here is what we tried, what we learned - and why it is working well so far.

Build - create a minimum viable workshop

On June 17th 2014, we held a workshop and event at Nesta on new trends in the startup world. Mike Butcher (Editor, TechCrunch), Reshma Sohoni (Founder, Seedcamp) and others helped us understand an emerging model, Startup Studios. Are they a better model for building successful tech businesses?

The idea originated months earlier, when Nick, co-founder of Makeshift, pitched us the Startup Studio concept. We knew little about what these startups are, how many exist and if they are even a ‘thing’ - in short, not much to go on except a helpful initial definition and list of potential Startup Studios Nick provided us with.

The default way to proceed would have been (in simplified terms):

Startup Studios research steps

However, we are in the process of actively rethinking who our audiences are and what outputs will be most useful to them. Over the past months, we heard too many times that Nesta's thought process is not very visible or that we end up 'locking away knowledge in pdfs'.

This time, we wanted to start differently, by engaging the people involved in and with Startup Studios right at the start - as a source of knowledge, as co-researchers and as end consumers.

That’s how our minimum-viable workshop was born.

Measure - get insights and feedback

We welcomed Startup Studios, entrepreneurs, investors and policy makers to our workshop, to a) produce a shared understanding of this model and b) generate questions for a future research project.

The analytical energy and enthusiasm of the group was impressive - even cookies, fruit and coffee were not strong enough to lure us out of the room for a break! Here are the three different models of Startup Studios we fleshed out:

Startup Studios models

Examples include Makeshift (operator model), Mint Digital (agency model) and Forward Partners (VC model). The potential benefits of Startup Studios are testing ideas more efficiently and hedging against failure by incubating different products. On the other hand, these startups come with their own challenges - how do you strike the balance between creativity and focus? Are investors willing to invest without knowing what product will ultimatly be developed?

There might even be more types of Startup Studios. We already know that the three models we identified are not clear-cut; for example, Forward Partners started off as a digital marketing agency and only merged into its current form in 2013. Betaworks, a Startup Studio in NYC, builds products in-house but also added a VC arm to their business. Finally, to find more Startup Studios we will probably have to look beyond the term studios - these types of companies have been labelled or labelled themselves in different ways, from startup factories and labs to foundries and company builders.

Learn - how we go forward

How did all this help us learn?

Firstly, we confirmed the idea that Startup Studios are a thing and worthy of further investigation. We also gained a lot of insights into their potential challenges and benefits, given the short timeframe of a two hour workshop. Finally, participants helped us to generate potential research questions and project outputs.

The most popular output seemed to be detailed case studies of Startup Studios and the three (or more) different studio types, their business models, pros and cons.

That’s what we will do over the coming weeks. Some of the questions we want to answer include:

  • How exactly do Startup Studios work?
  • What are Startup Studios trying to achieve - are they the beginning, the journey or the final destination of a startup?
  • What will happen to these businesses in the future?
  • What can we learn form Startup Studios about the process of innovation?

You can start to explore these questions in the videos below and see what Mike Butcher (TechCrunch), Reshma Sohoni (Seedcamp), Nic Brisbourne (Forward Partners), Tim Morgan (Mint Digital) and Nick Marsh (Makeshift) had to say.

And leave a comment at the bottom of the page - to take our 'lean research' to the next level.

Startup Studios - what are they? What are their benefits and challenges?

Where will Startup Studios go next? Are they sustainable and even applicable beyond the digital sector?

* Thank you very much to all workshop and event participants and our panelists for their contributions on the day, and beyond.

Special thanks go to Dave from Makeshift for helping us organise the day, and Nesta's events team, for doing a fabulous job during an unbelievably busy week.


Valerie Mocker

Valerie Mocker

Valerie Mocker

Director, Development & European Digital Policy

Valerie and her team focused on helping policy makers, corporates, entrepreneurs and society make the most of the digital transformation.

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Shane Murphy

Shane Murphy

Shane Murphy

Research Assistant

Shane was a research assistant within the Policy and Research team.

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