StudioHub Europe had a chat with our founding member, Mamazen, a startup studio based in Italy, to learn more about their approach and model. Here is what we learned from the CEO, Farhad Alessandro Mohammadi.
How did you start your studio?
Mamazen’s seed was planted in 2011 and has grown up inside me for 6 years and now is alive. My initial idea was to create a company were every employee would have the possibility to use company assets to create his own company.
In 2013 when I was founding Pony Zero, the idea evolved into an agency model in order to help startups grow using shared and vetted resources. But I was still missing the complete picture. Then in 2015, the idea evolved again and the focus shifted to go-to-market - this is an area where I felt founders needed the most help. In 2016, another evolution made me think about creating a model in order to build a better process for financial planning and fundraising.
Finally, after exiting Pony Zero and after a year of interviews and conversations with a lot of startup studios around the world, another manager of Pony Zero and I launched Mamazen and our first company using the studio model, along with Giulia Pettinau. By 2018, we started growing Mamazen and we found our “secret sauce”
Why a startup studio? What are your thoughts on the studio model?
Because a startup studio is the best way to build new companies. It reduces the risk of failure and definitely increases the success rate. I think that the startup studio model is the only reliable way to build new startups because it helps us predict the outcome in the long run. Statistics are good but fixing issues in addition to having statistics will lead to an awesome outcome.
What were your biggest challenges in creating your studio and how did you or are you overcoming them?
The biggest challenge is the team. It is all about execution, so even if you have the best processes, the best ideas, and the best resources in terms of money and data, everything will be wasted if you do not find the best co-founder and the best team.
How does your startup studio find the right team for your studio and your portfolio companies?
We are building a strong network of start-uppers and consultants, as well as partnering up with Entrepreneurship schools, universities, and Master's Programs in order to have a flow of talent.
What have you learned in developing your startup studio that you wish you knew before you started?
As always when you start you make a lot of mistakes. I wish I had more information about how to generate good ideas, how to analyse and prioritise them and how to do it quickly.
How does your startup studio develop new ideas for potential companies? And how do you select the best ideas to focus on?
At Mamazen, our generation method starts by analysing a specific market and interviewing stakeholders in the market. From this, we brainstorm a lot of ideas for a new business - nearly 100 ideas.
We then look abroad to see if any of these ideas exist in other markets overseas, particularly the United States. We also look to the local competition to see if these ideas exist in our local market. If we find similar ideas overseas, we dig deeper into funding and performance of these startups to gauge how successful they have been. From this we narrow our initial list of 100 ideas to 50.
With these 50 ideas, we go through a detailed vetting process to understand the viability and potential for these ideas. We study the various business elements to understand the pros and cons of each idea. This narrows our list of 50 ideas to 10.
Next, we do some market testing with these 10 ideas. This can be creating a landing page and some advertising to see which ideas have the greatest traction in the market. This allows us to further narrow down the list and prioritise a list of top 3 ideas.
Starting with the number 1 idea, we achieve a checklist of items. We create an MVP, we find co-founders, and we raise funding. Then we build the idea and create an independent company after 12 months. Once the company is independent, we move onto the 2nd and 3rd idea from the list of top 3 and repeat the process.
If somehow an idea is not successful, then we reassign the team and the founders to a new idea.
How does your startup studio find funding and investment?
We do not seek funding for each startup we build. Instead we partner up with investors that believe in our studio model so that we have a fixed term sheet for our startups.
Our network of investors agreed on Mamazen taking back the expenses (a maximum cap on the round) on the first investment round.
What startups are in your portfolio now and what startups do you have in the works?
The first startup that we launched is Orangogo.it - a marketplace for sports clubs - it connects consumers with sports clubs they are interested in.
The next startup is in stealth mode. We will announce it in September, so stay tuned.
What is your vision for your startup studio and how do you see your studio developing in the future?
We are building human centered companies. Our vision is to become the startup studio with the highest success rate and the lowest failure rate. In the future, we will be a 100% impact-based startup studio focused on creating human-centered companies. We want our companies to follow consensus-based decision making methods. We want our companies to have a salary formula that takes into account good behaviour and ethical considerations of the employees. And we want to make sure our companies have distributed ownership for stakeholders with an independent director that represents their interests. We believe that a company in order to be successful needs to commit to focus on social and environmental concerns just as it does on profits.