We have been raving about NoCode and the Startup Studio model for a while now, and it seems we are not the only ones spotting the opportunity.
Greg Isenberg recently wrote a short but sweet piece about the benefits of the studio model, well worth checking out.
In a nutshell: NoCode has obliterated the biggest constraint studios had before – The upfront cost of building, testing and iterating on an idea before it becomes profitable.
It has allowed Studios and Individuals alike, to:
- Go all-in on multiple bets
- Validate in a fraction of the time
- Build MVPs for (almost) free
- Make evidence-based decisions (and avoid common founder biases)
- Build a portfolio of profitable businesses
- Benefit from the network effects of Learning by Doing
We will explain this with the help of the Startup Studio Flywheel.
The Conventional Model
The unchanged reality is - most startups fail. That's why investors follow the Pareto principle – <20% of investments return >80% of the fund.
Good for them, but it does nothing to improve the success rate of individual founders.
What's more, founders spend so much time convincing people that their idea is the next big one, they often delude themselves in the process. Trust us, we've been there.
It can lead to passion-blindness and a refusal to accept defeat – even when the market is sending all the wrong signals.
The Studio Model
- Studios on the other hand, take a more lab-based approach: they create and test multiple ideas, develop ideas into products and products into companies. i.e. They make More Bets, which helps them find The Right Audience.
- Studios do not delude themselves or fall in love with any one idea, because they develop many. Decisions are made based on More Evidence, not personal opinion.
- As a result, and they will see More Viable Products. I.e. More products that, given The Right Proposition, generate revenue or even a profit.
- More products sold in the right way will generate More Revenue. And if Studios employ The Right (investment) Model, they will reinvest part of their profit to make new bets – so the cycle repeats.
The strength of the studio is the compounding efficiency of idea generation, selection, validation and go to market, with every Flywheel Cycle
Product studios aren't [new] (...), but I think we're entering into a studio golden age." – Greg Isenberg
The model used to be much riskier, because it needed 2-3 years of runway for testing and development.
Studios had to be smart about resource allocation, not going to narrow nor spreading themselves too thin.
NoCode changes that. Building cost and speed are now greatly reduced.
As the barrier to create More Bets has been lowered tremendously, studios no longer have to guess what to bet on - they can test ideas first using NoCode prototypes.
Instead of trying to build one big 'hit' product, they can build a diversified portfolio of profitable products & businesses.
The idea behind a flywheel is that it accelerates itself with each rotation. NoCode has greatly amplified the efficiency, the oiling if you will, of the wheel.
The four steps of the flywheel are mini-flywheels of their own. Let's zoom in and truly understand the model.
The number of bets a studio can make greatly depends on its building speed. This is where NoCode Development makes the largest impact – building speed is reduced to days, not months.
But to make more bets, a studio has to spot more opportunities. The right processes and selection criteria have to be in place in what we call the Idea Lab.
The Idea Lab is the place where trends analyses, user interviews, and market predictions are translated into potential audiences, their needs and early product ideas.
One of the most important lessons in our industry is to fall in love with the problem, not the solution. – Marty Cagan
This is not always a linear process. Many opportunities are discovered after putting an MVP in the hands of real users.
An often overlooked part of the Idea Lab equation is in the intangibles: Culture. Check out our Article on Mindset Shifts to get a better idea of what that culture should be.
Just building is not enough to validate or launch an idea.
We see many driven new founders, excited by their newfound NoCode superpowers, go from building straight to launch. Unfortunately skipping over validation in the process, and failing to find an audience as a consequence.
The best Studios resort to the right Validation methods, and have standardized processes for analyzing the result in order to get the right evidence.
The gathering of evidence is greatly enhanced by Building in Public. The core idea being one of transparency and authenticity about the building process.
Putting your ideas out there early accomplishes two things:
- You get feedback (evidence!) early and often
- You start building an audience for when you eventually launch, reducing your dependency on paid distribution.
The best way to learn is often to get your product in the eyes / hands of customers.
More Viable Products
Your first swing is rarely ever a home run. The more products you build and launch, the better you will get at building & launching products. This is not something you can learn from books. You can only Learn by Doing.
The main value in the Studio Model is in its Platform. Learning by Doing enhances almost every other process in the Startup Studio Flywheel.
With experience, you will find ways to go through cycles more effectively, as processes standardise and optimise.
This accelerator is multiplied by focus on a specific niche Audience. As Greg Isenberg points out:
"Focus is crucial because it allows you to get better with every new idea you explore. If your studio has a strong focus, you get to apply the learnings from one experiment to the next. It’s network effects 101." – Greg Isenberg
On top of that, once you build a name for yourself, i.e. Credibility, people will be excited for your products just because of who you are and because your last product was great.
This is where credibility ties back in with building in public.
Instead of building a new audience from scratch each time, you can target the same audience with multiple products, and reap the benefits of network effects that way too.
The. Most. Overlooked. Part. Of. Building. A. Startup. is. Distribution. Again, just building something and throwing it into the ether is not enough.
You must have your distribution strategy thought out and tested. The better your strategy the more revenue will come pouring in.
Building in Public can give you a head start, but this is no excuse to hold back on promotion. After launch it should take up 80% of all your efforts.
Another benefit of building multiple products for the same niche-audience: Product Ecosystems.
If your products complement each other and work together, like the Adobe Suite or everything Apple, they become more valuable than the sum of their parts. From the customer perspective, upgrading to the suite is a no-brainer.
The more products you add, the stronger the Lock-in effects become – and the more revenue you will generate.
The Single-Player Model
Thanks to NoCode the studio model can scale all the way down to Solo makers.
The skill-gap that used to exist between an idea and a product – coding – has been closed by NoCode emphatically. Creatives everywhere are having a go at building, and with great success.
The cost and time required to build are so small that even an individual can easily muster it. And so NoCode builders become Single Player Startup Studios. Founders with a portfolio.
For solo founders building is often a side-hustle. Their income doesn't depend on it, so there's a smaller need to de-risk and validate everything.
As a result, we see people embark on passion-driven creative pursuits, which has its downsides (bias), but is wonderful to witness.
Welcome to the future of making!
One more Thing...
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- How to find and define your Niche Audience?
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👋 That's all, peeps!
See you next time.