For every successful Startup, there’s an ocean of failed ones.
Survivor’s bias and the media celebrating Startup success stories, in the face of great uncertainty, makes people think the risk isn’t too bad. But there’s something far more intrinsic that outlasts social recognition of startup success.
Greg Isenberg, in a Nov 2020 edition of his Late CheckOut Substack, predicted that product studios represent the future of Startups. Studios might give a way to eliminate much of the risk without losing out on the possible reward.
A Product Studio is built on the premise of rigorously experimenting with multiple ideas, then turning them into businesses.
Greg states that we’re entering into a Golden Age of Studios.
That’s because, over the last few years, the process of experimentation has become fast. New technology allows you to create an e-commerce website into existence using an app on your phone. Each attempt at testing an idea costs little.
Studios’ diversification and rapid experimentation reduces much of the risks that Startups face in pursuing one single idea to exhaustion. Good execution of the Studio model can result in multiple successful products in a year.
Generating and testing multiple ideas doesn’t mean a Studio lacks focus. The best studios are hyper focused. If you want to win with the studio model, choose either a vertical, a category or psychographic to go deep on. This allows you to apply the insights, gained from each attempt, to the next.
Greg lists three main ways to bring in capital before your first successful products:
1. Run a services business: This can be either consulting or contracting.
2. Raise Venture Capital
3. Acquire a profitable business
After creating a couple successful products, you can use their revenue to fund the studio. That’s where the studio model really shines.
So how exactly does Lights Out fit into this?
Lights Out is a D2C (direct to consumer) hyper-focussed creative studio that works with high-growth brands globally, to improve their customer experiences. Now that’s 3 levels of segmentation already. Lets go over it again:
- Direct To Consumer
- Customer Experience
The sort of challenges we tackle on a day to day basis are:
- Helping these brands acquire more and better customers. Thereby lowering their CAC & increasing possibilities of LTV.
- Helping these brands retain their current set, by creating community driven experiences. Thereby lowering their CAC & increasing possibilities of LTV
- Helping these brands re-brand, re-position or launch into a new territory / new product. Thereby lowering their CAC & increasing possibilities of LTV.
The business model is fairly unique. We condemn the agency culture for more reasons than one. And vehemently call ourselves a studio. It’s for these reasons:
- Because we’re working on solving critical challenges for the business, we end up working as extended partners and not just outsourced teams.
- We only have a team of senior strategists, in-house. This ensures high pedigree data driven solution oriented frameworks that we’re able to bring forward.
- And our in-house team is complimented by our expert network of world-class specialists. We operate via this model for two reasons:
- Every business is unique and needs specialists in respective fields to work on the challenge.
- No single (in-house) team can be the best at everything. It’s wiser to bring in nuanced experts to add in a layer of specialisation.
- Our focus is our team and the individuals who form it, rather than the projects we work on. It shifts focus from a client centric mindset to an ownership driven one. And that’s your recipe for delight.
In addition to its core service offering, we’re also passionate about building original content that can help our current and prospective relationships with actionable insights in the field of customer experience. To this effect, we’ve launched several successful IP’s of podcasts, newsletters and research papers that get published every week. That’s our way of sharing our experience & knowledge with the world at large.
We’ve already embarked on the second leg of our studio’s journey. After running this venture successfully for 3 years, we’re now also looking to invest in exciting D2C brands.
That’s our entry into the hyper-growth zone of studios.