Opportunity with BetaPopcorn
Itay has raised Seed capital to operate a 'product studio' also known as 'startup studio' or 'venture studio'.
Forbes just published a story with the catchy headline: "This Entrepreneur Raised $2M With A Five-Slide Presentation -- About Nothing"
We took a closer look to see what's going on, and if we think there is an interesting opportunity here.
Itay has raised Seed capital to operate a 'product studio' also known as 'startup studio' or 'venture studio'. There are many examples of this concept around the world, including those on this great list by Stefano Bernardi: List of Venture Studios (Nov 2013). The model does not require a clear idea of what the product or business is going to be, but promotes making small experiments, taking small incremental steps, and asking the audience frequently for their feedback, which can be incorporated into future iterations. The model is somewhat opposite to the development model promoted by Steve Jobs, expressed in this quote: “It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them.” There is a great debate about the two approaches on Help Scout here.
Looking at Itay's background, we see he is an experienced tech industry veteran who has started several companies and developed deep expertise in online traffic trading, affiliate marketing and online marketing. It is not surprising that, per the interview, his role model is Bob Parsons, founder of GoDaddy!
And given this track record, it is not at all surprising that Itay was able to raise a decent-sized Seed round for this venture, especially from a non-traditional venture source - a private equity firm based in London, Brazil and Colombia.
In our view, impactful and sustainable innovation is more likely to come from an entrepreneur who has a deeply-held belief developed and nurtured over a long time about something that should exist in the world but currently doesn't. In other words, we are unconvinced by the studio model.
A distinctive aspect of Itay's approach is his stated preference for experience over youth. He states: “my goal is to build a team of five to six people, all veterans with a proven track record, all over the age of 35, to create that next big thing, whatever it may be ... Most startups hire 20-year-old kids who are willing to work day and night at the office ... I don’t believe in that. I’d much rather hire an older, more experienced employee to work a regular eight-hour workday and who will get more done in that time than an inexperienced 20-year-old kid would in a week!”
Bucking the age trend - seeking to hire more experienced professionals
Experienced leader with deep experience in online marketing
Vastly more failure than success in the studio model
A role model (GoDaddy) who is known for chauvinism, objectification of women, and is running a $200m annual net loss, 17 years into its existence