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Build Predictable Startup Models by Forming an Agency

Startup studios continue to grow in popularity as incubators for new businesses. Rather than simply launching one startup, the startup studio model creates an organization whose business is launching startups. This allows the studio to develop processes, well-organized development teams, and growth plans. These can then be repeated and improved on with each successive startup.

There are many different types of startup studios. But I recommend entrepreneurs and prospective business builders consider the Agency Builder model. Forming an agency helps build predictable startup models, learn about industry pain points, and generate startup funding.

Industry-specific domain experience becomes critical when identifying operational pain points ripe for transformation.  This could be by using a mobile app, interactive website, or some other digital platform. So an entrepreneur forming a startup studio benefits from having experience in the industry sector they hope to serve.

Forming a digital agency that performs work for clients in addition to incubating startups provides a host of advantages compared to a singularly-focused startup studio. Client work serves as an additional source of revenue to form new startups. It also provides critical domain experience in a variety of business sectors.

The Advantages of the Digital Agency Model for a Startup Studio

Following the digital agency model for a startup, studio offers significant advantages to entrepreneurs. Let’s provide a high-level overview of some of the most critical benefits of this approach.

Critical Alternate Source of Capital Funding

A digital agency also performs project work for third-party clients simultaneously with incubating new startups. This outside work provides a valuable source of revenue able to be used to fund operations. It also helps bootstrap new startup businesses. Over time, this revenue reduces the dependency on outside venture capital sources. It provides the freedom to partner with entrepreneurs and reduce the costs of agency work in exchange for equity in their startup. This allows the studio to retain a larger stake in internally funded startups and gain equity in other startups through partnerships.

Understanding Pain Points Within Multiple Business Sectors

Business domain knowledge plays a crucial role in the ultimate success of any startup. Digital agencies enjoy the opportunity for project work in multiple industry sectors. This provides both valuable experience and an understanding of the operational issues within each sector. Ultimately, this knowledge helps generate compelling business ideas for new startups.

Build a Talented Team of Technology and Business Professionals

Being able to hire talented professionals remains a difficult proposition in the current job market, especially when sourcing experienced developers, designers, and project managers. Outside project work for clients helps to assemble talented development teams. It fine-tunes the processes needed to properly manage these teams and execute projects. The agency is also exposed to professionals and managers who could end up as business leaders for the studio’s next startup.

Keep Employees Engaged When on The Bench

Having both startup and third-party project work available keeps any technology staff busy on both client and startup work throughout the year. This approach exposes IT pros to the latest technologies while providing experience in many different business sectors. It’s also a great way to operate an efficient digital agency with a high utilization rate.

In the end, the digital agency builder model helps build a powerful business able to both complete high-end digital ventures for clients as well as successfully incubate new startups. It’s an approach that ultimately offers the potential for exponential growth and higher levels of success as the business achieves operational maturity. Expect a predictable model of forming new startups as a result.

Strategies For Building a Digital Agency’s Teams and Procedures

A successful digital agency requires a discerning approach to building a talented staff as well as sharply-defined operating procedures and a playbook for startup development. Also, when recruiting technology talent to an emerging digital agency, having a clearly detailed vision and a welcoming company culture focused on technology innovation helps successfully recruit those picky modern tech professionals.

Why It’s Critical to Choose a Modern Software Development Technology

Additionally, it becomes critical to choose a modern software development methodology suitable for crafting digital ventures. Old-school approaches like the Waterfall methodology remain too risky for businesses still in a highly revenue-challenged state early in their operations. Consider Agile or one of its variants for a flexible approach to building top-shelf mobile apps or interactive websites.

For example, Lean Startup offers many benefits to emerging organizations, especially considering its focus on crafting a minimum viable product (MVP). The MVP effectively functions as an evolving prototype, helping provide critical feedback on the efficacy of the app’s design and coding throughout the project. If necessary, it also helps determine the validity of a potential target market before too much money gets spent on promoting a substandard product.

Today’s Talented Engineers & Designers Need Top-Shelf Tools of the Trade

Providing an agency’s growing technology team with state-of-the-art tools for modern software development also becomes critical. It becomes difficult to effectively source today’s talented software engineers and designers without providing them with the top-shelf tools of the trade. This is especially the case if expecting the agency’s client work to provide the bulk of its revenue during the early stages of operations.

Great procedures go beyond technology and development methodologies. Over many different startups and development projects, successful agencies can develop a playbook for how to build and grow a digital app that works for any industry. A playbook makes each new project and digital venture even more likely to succeed than the last. This is the greatest power of the startup studio model.

Ultimately, taking a proactive approach to building an agency’s policies, procedures, and technology teams makes it easier to begin successful project work for third-party clients. This approach provides the critical experience, insights, and revenue to start incubating new businesses. Simply stated, it provides the backbone of any successful digital agency.

Key Aspects of Any Successful Digital Agency Builder

Understanding the attributes of a successful digital agency provides a roadmap for new businesses hoping to follow a similar path. It prevents reinventing the wheel, while also providing insights and advice, leading to both a lucrative stream of client projects as well as intriguing new startup ideas.

At the top of the list resides relevant business domain experience for the agency’s managers and technology professionals. After all, it becomes difficult to brainstorm great ideas to solve industry pain points without exposure to any current operational difficulties in that sector. The experience of the agency’s initial founders likely dictates early business domains to target. However, quickly determine other sectors worthy of interest and try to hire leadership and tech talent experienced in those areas.

Agencies Need Well-Defined Procedures for Startup Development

In addition to well-defined procedures for modern software development, an agency also needs to take a similar approach to craft a process for startup development.  This starts from business idea generation and goes to launch. Industry best practices somewhat help in this effort but ensure they stay mutable, so they evolve as the agency gains more experience over time. The goal needs to be a well-defined process, eventually achieving continuous improvement. Veteran agencies enjoy higher efficiencies as a result of their developing maturity.

Digital agencies benefit from experience in multiple business domains as a source of new startup ideas. Always foster a culture of creativity to keep the fresh exchange of compelling new ideas flowing. Not all may end up as successful startups. But, any agency benefits from the process improvement gained by going through these steps in a repetitive fashion.

Finally, it bears repeating that digital agency work for third-party clients eventually provides significant revenue. This can be used as capital for new startups and the ability to invest in the startup’s growth as the team builds the product. When combined with an approach towards continuous improvement, it provides a predictable and repeatable model for startup incubation. This scenario remains arguably the biggest advantage of following the agency builder model for a startup studio.

Manage Agency Growth to Expand at a Proper Rate

Once a digital agency’s operations begin to mature, leadership needs a strategic tack to properly manage its growth. The difficulty involved with sourcing enough talented technology professionals remains a critical risk during this time. This highlights the importance of fostering a culture focused on learning and technical excellence. Provide a robust training program and flexible schedules to keep software developers happy and professionally satisfied.

A healthy variety of work makes it easier to keep technology talent, and even project managers engaged. Each time the agency successfully adds a new business sector, it becomes a target for fresh startup ideas. This offers a cornucopia of new ideas and potentially an influx of new employees experienced in this domain. These different points of view keep the agency growing and developing its culture. Again, as various company processes mature, expect higher levels of efficiency as a result.

Developing Top-Shelf New Startup Businesses Has Top-Shelf Benefits

Becoming known as an incubator of top-shelf new startup businesses attracts talented management professionals looking for an opportunity to operate these new businesses. Project managers with an affinity for entrepreneurship remain an ideal option as potential leadership for an agency’s startups. The experience of “mini CEOs” gain transforming a startup from idea until launch serves as a useful litmus test. It helps them to see if they possess the skills, vision, and insights to run the business moving forward.

In the end, forging a digital agency with the skills, expertise, and experience to serve a variety of business sectors offers a robust potential for success. This broad-based approach ultimately reduces the risk of successfully bootstrapping a startup business, especially when only targeting verticals.

Instead, having a wide range of experience in different industry domains forges a larger knowledge base. This makes it easier to brainstorm new ideas and attract talented professional candidates. It ultimately forges more successful startup businesses. So consider the predictability of the agency builder model when deciding on the formation of a new digital agency.

Featured Image Credit:

Andrew Amann

Andrew Amann is the CEO and co-founder of NineTwoThree Venture Studio, a two-time Inc. 5000 Fastest Growing Company in the United States, and the leading mobile app development agency in Boston as ranked by Clutch.co. Since co-founding NineTwoThree Venture Studio in 2012, Andrew has helped launch 50 apps for funded startups and tech brands and launched 14 startups internally-funded startups. He is an expert in understanding how products are built and assists clients in conceptualizing, designing and launching revenue producing applications while teaching best practices in business-building.
Amann is an experienced intrapreneur and entrepreneur. He is responsible for three patents for supply chain processes while he worked as a nuclear submarine engineer. He has successfully launched fourteen startups, including the digital business card solution, Inigo App, acquired by Royaltie, which is now the fourth fastest growing company in Canada.
Amann excels at bootstrapping startups without the involvement of venture capital and tweets about how to build and maintain profitable companies.
Amann graduated from the University of Connecticut with a B.S. in Mechanical Engineering and took his MBA classes in the University of Strathclyde.

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