They help startups get off the ground in strikingly different ways.
You’re an entrepreneur with a million-dollar idea that you want to turn into a multimillion-dollar business. You know in your gut that it’s the kind of idea that would gain exponential growth if you could bring it to reality and the market.
The startup ecosystem has never been more ready to help businesses like yours, but the choices can be overwhelming. When discerning the best place to foster your company’s success, it’s crucial to pick the right option for your business.
You’ve most likely heard of the accelerator, and you might have heard of the emerging growth of startup studios in the last five years. But what’s the difference, exactly? And, more importantly, which one is better for you?
Startup studios will get involved earlier in the game—and stay later.
Let’s start with the most significant difference: the timing of when each entity gets involved.
Accelerators typically work with startups that already have traction. When a company is accepted into an accelerator, the startup often has a business model already. In most cases, they’ll also have a minimum viable product (MVP) that is attracting customers or clients. Their business might be bare-bones, but it’s functioning with real potential. They just need to get to the next level of growth.
Accelerators take an idea that has already been baked, and they want to figure out how to best enter the market to sell it to everyone. In many ways, they’re a boot camp for young startups that want to have the how-to of mature companies. To do this, they foster strong mentorship programs and seminar-like classes. Then, after working on their product for weeks, the program culminates in a demo day, where investors are looking for a piece of the next big thing.
Startup studios can jump in earlier—as early as the ideation stage, even when it’s just one single entrepreneur or a set of co-founders trying to solve a basic problem without knowing a complete solution. A startup studio will help you look at the issue through different lenses and at different angles through deep research.
At this stage, they are a bit of an incubator, helping teams figure out product-market fit and connecting you with trusted mentors along the way. They also advise on early business models, helping you decide which direction to push a business and how to attract clients or customers.
Within a startup studio, the focus is less on demo day and more on implementing next steps. In a startup studio, you’re introduced to executors, not just coaches, advisors, or mentors trying to help you gain investors. A startup studio will help you even after you have funding, steering that funding in the right ways—often right out of their studio.
Accelerator programs take place within a time frame
Accelerators are highly structured programs, usually taking place within 12 weeks. In a way, it can feel like a college semester. There are required seminars that focus on leadership skills, elevator pitches, and identifying key performance indicators (KPIs). Within these meetings, you’re given assignments that you’re expected to execute within a certain time frame and share with the directors and advisors leading the program.
Startup studios, on the other hand, aren’t as focused on exact timing. Since their approach often involves execution of the product, they believe that there’s no one-size-fits-all solution when it comes to a time frame. So depending on the startup and at what juncture they jump in, you could be interacting with them over a few weeks or several extensive months.
Startup studios are more flexible on location
Due to the seminar nature of accelerators, they put a lot of emphasis on being at the physical location. After all, much of what they provide involves in-person collaboration. However, this is a big ask—especially since this could mean time away from your own home. The ability to uproot your life for a few months can feel impossible for certain founders. Many have obligations and can’t just up and leave.
Startup studios, however, typically have more flexible options when it comes to collaboration. Due to their advising and execution style, there are fewer hinges on your constant physical presence. And while startup studios will likely want you physically present sometimes, it might be in the same capacity as a business trip rather than a months-long relocation.
Startup studios focus on one company at a time
When you’re in an accelerator, you’re with other founders, co-founders, and early employees. You’re all in the program simultaneously, experiencing the same seminar classes and sharing similar stories of growing pains. While the directors are focused on several companies at once, you’re also given the opportunity to watch and learn from other startups, asking advice from those in the trenches with you.
Startup studios typically don’t operate the same way. While there might be overlap between startups’ resources, startup studios typically stagger the companies they work on, organizing it so that one company is their sole focus. In many ways, this is a positive aspect of a startup studio. However, you do lose the camaraderie that you get in an accelerator.
Startup studios use more internal resources
When it comes to resources, accelerators are all about networking. They will seek to connect you with the best mentor who understands your space and can help you find the right people to grow your company or manage seed funding.
Startup studios, on the other hand, have internal resources on-hand. They might use external help in certain situations that call for specialized needs, but they mostly turn to an in-house team to execute the business plan. This is an experienced, highly efficient, multidisciplinary team—often including designers, branding experts, digital marketers, financial advisors, and even recruiters for down-the-line hiring needs.
Accelerators put a large focus on funding
Money is crucial to a startup, and accelerators focus on this fact wholeheartedly. They want your business to succeed. Not only does it give them a return on their investment, but it makes their business look good as well. And when it comes to exponential growth, money is necessary for the J-curve to take flight. Again, this is evident with the accelerators’ programs culminating in a demo day.
Startup studios also know the value of money. However, instead of trying to woo venture capitalists to start major growth, startup studios usually have venture capital money baked into their programs. Just by joining the studio, you have a connection to the funds you need. This is crucial because it can significantly cut down on time and prevent brilliant startups from faltering due to improper funding.
What works best for you?
There are successful startups that have been born from accelerators, and there are successful startups that have blossomed from startup studios. Both are proven programs that can make your idea soar. The main question is: which one is right for your company, your leadership personality, and ultimately, your product?
For more information about the P&G Ventures startup studio or a chance to share your game-changing innovation, visit www.pgventuresstudio.com.