Product studio vs Venture studio
Gio Kakhiani
5 replies
A product studio and a venture studio are two different business models that focus on developing new businesses, products, or services. They might seem similar at first glance, as both aim to create successful startups or projects. However, they differ in their approach, collaboration model, and risk-sharing.
1. Approach:
Product Studio: A product studio focuses on designing, building, and launching cutting-edge products and applications. They often work with clients, including big companies or entrepreneurs, with their core strength being the development of innovative solutions for a broad range of industries.
Venture Studio: A venture studio (also called a startup studio or company builder) focuses on generating, developing, and launching new startup ventures from scratch. They ideate, validate, and build startups internally, often providing shared resources, mentorship, and funding to their created ventures.
2. Collaboration Model:
Product Studio: Product studios typically collaborate with external clients and charge fees for their services, like consulting and product development. They might have equity participation in the client’s company or charge a larger amount upfront in return for lower equity stakes.
Venture Studio: Venture studios create their startups in-house, using their resources and expertise, making them the startup’s co-founders. As the ventures grow, they spin them off as separate entities but retain a sizable equity stake. The studio may provide additional funding and support as the startup scales.
3. Risk-sharing:
Product Studio: Product studios share the risk of creating new products with their clients, who are responsible for the market success of the products. The primary goal for product studios is to deliver effective solutions while earning revenue through service fees and sometimes equity participation.
Venture Studio: Venture studios take on a higher level of risk as they co-create and invest in the startups they build. Their success depends on the growth and prosperity of their portfolio companies. If a startup takes off, the venture studio benefits from the significant equity stake it holds.
In summary, product studios collaborate with clients to design and create various innovative products, while venture studios focus on building and investing in new startup companies they create. Both models contribute to the growth of new businesses, but they do so in fundamentally different ways.
Generated and written by AI at www.googooduck.com
Replies
Bakemono Fra@bakemono
Interesting, thanks for sharing!
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Agreed, product studios and venture studios have distinct approaches and collaboration models. Both contribute to new business growth, but risk-sharing differs. Understanding these differences is crucial for entrepreneurs seeking the right partnership.
I am transitioning from Product to Venture now because of AI, but also a realisation that doing a venture studio with my friend is a lot cooler than working on someone else's project.
@officialtaras Agreed. I guess it's harder financially wise in the early days but when you get to a point of owning multiple $-generation SaaS apps you're good. You can think of scaling operations too.
@bestbubbledev 100%. Also, you don't need to choose one approach or another. Combining them in the early days can be very beneficial for cash flow, but the danger is falling into client work more and more instead of just building your own project.
A product studio focuses on developing and launching new products or services, typically within an existing organization. It provides expertise in product development, design, and marketing to help bring innovative ideas to market. In contrast, a venture studio is more involved in creating and incubating entirely new startups. It often provides capital, resources, and support to entrepreneurs, helping them build new companies from the ground up. As per Miami film studio, both studios aim to foster innovation, a product studio specializes in enhancing existing businesses' product offerings, whereas a venture studio concentrates on nurturing brand-new startup ventures.