Our second StudioHub Member Spotlight is with Hola’Up, a startup studio based in Sophia Antipolis in the south of France. Here is what we learned about their approach and model through a conversation with the co-founder, Jean-Luc Fretard.
How did you start your studio?
My co-founders and I spent the last 15 years, more or less, acting almost like a corporate startup studio. We worked with innovation departments at many large-scale companies, where the innovations we developed became subsidiaries or joint ventures.
However, these big companies are more and more focused on execution by design rather than innovation by design. So in 2018, we decided to create Hola’Up, with a strong core team. It took about 12 months to organize, so we officially incorporated in 2019 to start working on our own startups.
Why a startup studio? What are your thoughts on the studio model?
Startups are like going on a sailing adventure on your own homemade boat. You need to act with agility and only act with whatever you have on board. And eventually you have to reach a welcoming island to secure new sources of food and water.
Nowadays we have come out of the glamorous idea of startups being created in garages and basements. The startup model is starting to become more industrialized, so the startup studio model is a natural progression. The startup studio model ensures that all the right skills are present to create successful startups.
The studio model really focuses on minimizing the risks of creating a startup as much as possible. Only a few startups succeed – a common figure is 1 out of 10. With a startup studio, we are able to take advantage of the massive advances in technology and the decades long knowledge of successes and failures to increase the success rate of a startup.
What were your biggest challenges in creating your studio and how did you or are you overcoming them?
The biggest challenge was to mobilize the core team and network. The timing was key to having a full team with the right skills and commitment. It is a matter of finding people who share the ambition of the studio and are available to dedicate their time and resources at that moment.
It is important to keep in mind that people are key to a good startup studio. It is necessary to have a skilled group of people who are committed in order for the startups to succeed. A startup studio needs a variety of people with different skills – ideation, design, marketing, technical skills, talent coaching, human resources, etc.
Another big challenge is to explain to people what a startup studio is. It is a small challenge, but it is still a challenge. We need to tell people that it is not an incubator and not an accelerator. In many cases, it is better for us to describe the startups we are building rather than talking about the studio model itself.
How does your startup studio find the right team for your studio and your portfolio companies?
With just a startup, few focus on building a team with a diverse set of skills. Sometimes founders go to accelerators where they get access to some people with administrative skills like legal, accounting, etc., but it’s not always the right set of skills.
We look for people with the right networks and skills to join the team. For instance, we have among our partners, people who are experts in funding, so they can help us prepare our studio to take the next steps. We also have partners and investors who are entrepreneurs on the vertical markets we are targeting. Of course the idea is to build startups on their domain together. It facilitates and reduces the time to access the market.
What have you learned in developing your startup studio that you wish you knew before you started?
It is too soon for us to tell, since we are just starting.
However, we quickly realized that you can’t create a studio without a full team coming together. But you also can’t have a studio without the right projects. It is a kind of chicken-and-egg problem, where you can’t create projects without a full team, but then you can’t attract a talented team without the right projects.
We had a lot of discussions with partners and experts, and I think we lost some time focusing on this too much. Then, we made a decision to generate our portfolio of ideas before creating the companies. We decided to start with a portfolio of 8 concepts and develop the first two ideas to get something started and start building the studio.
Without spinoffs or startups ready to go, the studio model is just a concept. When you have generated a portfolio of some concepts, then it is easier to build the studio. If I can give advice to people aiming to create a studio, it is to create a portfolio before starting.
How does your startup studio develop new ideas for potential companies? And how do you select the best ideas to focus on?
We use an in-house ideation process, and we work on markets and technologies we best know. At Hola’Up, we mainly focus on tech, and our community of entrepreneurs are experts in Artificial Intelligence, Blockchain, etc. who love innovation and exploration.
When you develop a startup idea, it is easier to address the markets you are comfortable in. Because in these fields, you already have a huge network, you know the business, you know what problems need to be solved, etc. So before going into unknown markets, it is better to concentrate on what you best know.
When we generate ideas, we do a permanent market survey. We love crossing vertical markets and technology to inspire new ideas – if we combine this industry and this technology, what would happen? Of course, like any other startup, we focus on the key problems that this combination might solve.
We also support companies to accelerate their innovations through excubation programs. So in addition to creating our own startups, we also create startups for other companies.The CEO of the company can decide to either integrate the startup in their business or to create a separate company with Hola’Up. We work mostly with medium sized companies of 10-15 million in revenue. These companies are strong enough to run sustainably, but do not have the resources to create and hire people for an entire innovation department.
How does your startup studio find funding and investment?
Funding is still a big question, and in fact it is a question for all startup studios. We knew that before, but it is very difficult to follow a traditional funding approach if you are a startup studio in our market. The traditional funding approach relies on the traditional startup model, where investors support a single startup. But this doesn’t work for a studio because of the exit trajectory within a studio.
We tell our investors that if they invest in studios, they invest in several companies, so they reduce the risk. We tell them that they will have invested in 10 startups over multiple years, giving them a greater chance for success and also the ability to exit multiple startups. But oftentimes this is a difficult conversation to have.
As a studio, we decided to stay autonomous in the investment of our concepts up until the MVP. To finance the concepts, we use our own cash and time investment. We use our own team internally, so we do not rely on external engineers, etc. And so far, we have not needed any external funding to create the first ideas.
When we are ready to spinoff, then we will find investors using the traditional funding approach. This way, we can approach investors just after we prove that the idea is validated and successful. And then we can tell them about the studio model and see if they would be interested in the studio as a whole.
What startups are in your portfolio now and what startups do you have in the works?
Right now we are working on Fintech and Insurtech. Recently we have been crossing artificial intelligence and back-office insurance processes to see what new ideas could exist.
We have been looking into “death tech,” a field very close to insurance, life insurance etc. It is a growing market, unfortunately. If you look back to 10 years ago, it was very difficult to speak about death. But nowadays, it is starting to become more common to consider what to do to prepare for death – to prepare your assets and things you will leave behind for your family – and technology such as Blockchain could provide some interesting solutions.
We have also been exploring tangible investment platforms. How can regular people invest in particular, rare and desirable objects that have huge potential such as art, luxury wine, classic cars or jewelry, but generally require a lot of capital to invest.
What is your vision for your startup studio and how do you see your studio developing in the future?
The vision for Hola’Up is to validate our model. Our strategy is quite simple – we want to replicate our approach into new vertical markets to see how we can apply some of the innovations we have developed into new areas. Our plan is 10 startups in the next 5 years, built from 12 concepts a year, one each month.
We also want to make sure our spinoffs interact with each other, so we start building an ecosystem of companies that build on each other into a sort of value chain. This will hopefully create something much stronger and is one of the benefits of the startup studio – to be able to use the success of one project to enhance future projects.
We are also working with Mamazen in Italy on something called cross-acceleration. We want to see how we can combine the efforts of multiple startup studios to scale ideas between markets. How can we as a startup studio community collaborate more closely in order to build something together that we can take to the whole of Europe while massively reducing the risks and cash needed to do it independently.
This may not apply to all ideas, but in many cases, this will allow all of us to approach new markets with much lower risks and cash consumption. After all, the best place to accelerate a startup created by a studio is another studio.
ABOUT THE AUTHOR
Shyaam Ramkumar is currently the Network Coordinator for StudioHub Europe. He is also a PhD Candidate in Economic Sociology at the University of Milan. Shyaam has been involved in various startup initiatives and programs as a mentor and adviser. He was previously the Knowledge and Innovation Manager at Circle Economy in Amsterdam, responsible for keeping up-to-date on various startups and innovations related to sustainability and the circular economy.