5 mistakes we made – Mamazen Startup Studio

Many Startup Studios are born agnostic (not focused on a specific Industry). The idea that you can build a business spanning any industry as long as there is a product-market fit, I admit, is very mouthwatering, and we have fallen for it, too.

This approach has often proven to be high-risk (lack of specialization, difficulty attracting talent in so many areas). Moreover, given current trends, in 5 years, the studio market will be saturated. There will be studios highly specialized in specific Industries, and these will be able to attract talent precisely because of the high specialization.

It is better to be the best at something than mediocre at many things.
Mamazen, for example, specializes in digital services aimed at the microenterprise market.

Being focused allows the Studio to assemble a management team, partners, advisors, mentors, and experts in a specific field, contributing to rapid growth. Being an expert in a field allows you to attract founders interested in the Industry.

Many emerging Venture Builders are too busy seizing opportunities and filling their bellies only to be left high and dry. One who wants everything may lose it all.

Many emerging Studios offer Corporate Venture Building, incubation, and acceleration services. At Mamazen, we started by proposing both Corporate Venture Building and stand-alone Venture Building. We decided that it was better to concentrate on pure venture building rather than splitting our small team among two opportunities.

Focusing all your energy on one approach and constantly improving processes is better.
Choose one path and pursue it to the end. After all, how could it be otherwise?

Many VCs are skeptical of the Startup Studio model because they fear that a founder who comes on board with someone else's idea is more likely to throw in the towel when things go wrong.

It is important to be committed, and that can happen in different ways. Certainly, a model that treats the founder as a "manager" has little chance of success. However you feel about it, one thing is sure – it is essential that the founder is not a manager but a true parent.

My question is, doesn't someone who adopts a child feel equally parental to the child? Is someone who has had a child in a "natural" way necessarily a better parent?

There are many cases of successful startup studios generating ideas internally. Certainly, much of their success stems from the fact that the Founders of these Studios are "celebrities," which is undoubtedly true of Science, who founded Dollar Shave Club (sold 5 years later for $1B to Unilever). The same is true of Betaworks.

Whether you decide on one or the other approach, it is critical to choose the people with whom you co-found your startups. The team is everything. Luckily we avoid indulging in such a mistake.

Creating a Venture Builder is an undertaking that requires muscle and capital. The annual Budget for a studio is about €700K for an emerging one and €3M for an experienced one.

In short, it is essential to raise enough capital to support your operation for at least 5 years, considering the cost to launch each Startup of about €250K. The minimum capital if you want to support the Studio and have pre-seed money for the startups you are launching is €10M.

You must also take into account that, for at least 5 years (this is the game we play), there will be no returns, so if you do not raise enough, you will need to raise again before the end of the 5 years. Harvesting again when results have not yet been brought in, as you imagine, will be difficult.

We live in an age when content matters. Few studios have embraced this opportunity (as the good Arnold Schwarzenegger says, “Work your ass off and then advertise it”).

Many Startup Studios decide to operate "in the shadow of darkness". I believe this approach is detrimental.