Startup Studios and Impact
Summary:
Welcome to another great episode of Startup Junkies!
On this episode of Startup Junkies, host Jeff Amerine, Caleb Talley, and Davis McEntire sit down with Josh Stanley, CEO of Cartwheel, a startup studio that creates B2B SaaS companies. Josh is a serial entrepreneur with vast experience in developing startups successfully and sharing his knowledge with others. Throughout the episode, Jeff, Caleb, Davis, and Josh discuss the methodology behind Cartwheel Startup Studio, the difference between venture and startup studios, and how regional growth is beneficial.
Show Notes:
(1:15) Introduction to Josh Stanley
(5:45) About Cartwheel Startup Studio
(9:08) Methodology behind Cartwheel
(18:36) Cadence of Startups
(24:00) Differences between Venture and Startup Studios
(27:09) Advice for People without Access to a Startup Studio
(40:30) Future of Cartwheel Startup Studio
(43:54) Cartwheel Startup Studio’s Mission
(45:00) Regional Growth
(50:40) Remote Work Narrative
(57:17) Closing Thoughts
Links:
Quotes:
“This is the right model…the idea of pulling forward failure…fail before you form and fund failure. Fail before you put time, people, resources, talent behind an idea. Fail first, then only fund the things that make the most sense…” – Josh Stanley, (7:11)
“If you get emotionally attached…you’re going to seek data that suggests this is the right idea. So, we remove that kind of cognitive basis layer that exists in all of us through this model. We take a macabre approach. We’re trying to kill ideas. If you look at it as, ‘How can I kill this idea?’ And if that idea won’t die, I guess I have to form it then.” – Josh Stanley, (9:55)
“There’s nothing wrong with that model…but, you are inheriting a change management problem. You have to change either culture, processes, ways of working, or just straight up talent…you’re inheriting mostly a blank slate. You’re not inheriting a finished product by any means.” – Josh Stanley, (31:40)
“I want to bring people off the sidelines. I want to help. We want our reach to be broader than just starting up new companies…we want to be immersive…what’s next is whatever the region needs…and hopefully the things we believe will add value, truly will add value.” – Josh Stanley, (43:54)
“That’s part of the energy that is tangible here…it doesn’t feel like a zero sum game. It doesn’t feel like you have to compete against others to win.” – Josh Stanley, (46:52)
Startup Studios and Impact
On this episode of Startup Junkies, host Jeff Amerine, Caleb Talley, and Davis McEntire sit down with Josh Stanley, CEO of Cartwheel, a startup studio that creates B2B SaaS companies. Josh is a serial entrepreneur with vast experience in developing startups successfully and sharing his knowledge with others. Throughout the episode, Jeff, Caleb, Davis, and Josh discuss the methodology behind Cartwheel Startup Studio, the difference between venture and startup studios, and how regional growth is beneficial.
Methodology Behind Cartwheel
Cartwheel’s model doesn’t assume there’s an existing entrepreneur with an existing idea. It allows you to divorce yourself from any kind of love affair with a particular idea and forget your bias toward it for a second. In return, you are able to find the right person to run it when the time is right. Once you’ve attached someone to an idea, they’re going to inherit it. Startups are an emotional game. So, Cartwheel tries to get as much consultation and validation done upfront before they attach someone to a startup who is going to, by nature, start forming an emotional attachment.
The startup studio’s model aims to do its own discovery around problems, and be efficient and targeted with what that process is. They do research and create stage gates to determine if that idea can make it onto the next stage gate, and to figure that out, they are going to demand experiments and testing. Then if it makes it through the testing, they look to find somebody who can eventually become the co-founder or CEO of that idea. That person is responsible for taking it through that last stage gate.
“If you get emotionally attached…you’re going to seek data that suggests this is the right idea. So, we remove that kind of cognitive basis layer that exists in all of us through this model. We take a macabre approach. We’re trying to kill ideas. If you look at it as, “How can I kill this idea?” And if that idea won’t die, I guess I have to form it then.” – Josh Stanley, (9:55)
Differences Between Venture and Startup Studios
The difference between a venture studio and a startup studio is that with a startup studio, you don’t have your own fund. You have to go out and get it. A startup studio can have a fund, but it is only used for pre-seed funding, it’s not follow-on funding. Therefore, startup studios have to facilitate the funding of the pre-seed stage gate. As far as financials go, startup studios build them from an audit-ready perspective, which allows them to make predictions and document growth along the way.
With venture studios, there can be a cult mentality if you purchase an already established business, and it’s more about turning the business around rather than developing it from the ground up like in a startup studio. Startup studios start with a clean slate. They don’t have all the baggage that comes with a more established entity. Both studios can attract the same talent that doesn’t want all the pieces figured out yet, the difference is each studio starts putting the pieces together at different starting points. To put it simply, venture studios remodel houses, whereas startup studios build houses.
“There’s nothing wrong with that model…but, you are inheriting a change management problem. You have to change either culture, processes, ways of working, or just straight up talent…you’re inheriting mostly a blank slate. You’re not inheriting a finished product by any means.” – Josh Stanley, (31:40)
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