First the idea—then the founder

The story of entrepreneurship is often described as that of a person with an idea. The founder identifies a problem, comes up with a solution, assembles a team, and together they build the company. But a new study shows that there are alternative paths.

In so-called venture studios, companies are created in a completely different way. There, the idea is developed first and then tested. After that, the people who will develop and build the company are recruited.

The researchers behind the study examined 16 venture studios in the U.S., Europe, and the Middle East, among other regions. Venture studios, sometimes referred to as startup factories or venture builders, are organizations that build new companies from the ground up. They initially take on the role of idea generator and co-founder, and then recruit founders for the company and serve as advisors, among other things.

A Reverse Model for Entrepreneurship

In traditional incubators and accelerators, entrepreneurs often come in with their own ideas, either on their own or as part of a team. Incubators and accelerators can then provide networks, expertise, coaching, and capital. Venture studios operate differently.

They can identify problems on their own, gather insights from industry experts, researchers, investors, customers, or business partners, and then develop potential business ideas. The ideas are tested, compared, and narrowed down through structured processes.

The researchers describe this as a situation where the business idea and the founder are separate. First, the business idea is developed and tested. Then, the recruitment process begins to find the right people to build the company.

Founder Wanted

When an idea is deemed to have sufficient potential, founders or a founding team are recruited. This often takes place in a manner similar to standard executive recruitment. The study shows that venture studios evaluate qualities such as leadership, perseverance, teamwork, commercial acumen, and the ability to accept feedback. In some cases, the studio puts together an entire founding team to ensure the right mix of skills needed to bring the idea to life.

The study highlights several potential benefits of this approach. A venture studio can build teams more systematically, reduce reliance on a single individual’s network, and provide the company with access to extensive resources right from the start. One challenge is how a recruited founder can develop a genuine sense of ownership of the company.

When Ownership Must Be Built

The researchers show that venture studios must actively work on fostering a sense of psychological ownership. A founder who came up with the business idea on their own has a strong personal connection to it. For a recruited founder, that connection needs to be built.

That is why some studios involve prospective founders early on in the development of the idea. Others focus on equity ownership, clear incentives, and a gradual transfer of responsibility. The goal is for the founder not only to carry out a task, but to feel a genuine sense of responsibility for the company’s future.

What used to be the founder’s responsibility—identifying an opportunity, testing the idea, gathering resources, and shaping the early-stage company—is now handled by an organization: the venture studio.

The founder doesn’t disappear. But their role changes. In the venture studio, the person who will lead the company may not join until the business idea has been developed and tested.

More about the article and the authors
The article Founders for hire? The role of venture studios in breaking the individual-opportunity nexus has been published in the academic journal *Journal of Business Venturing*.

The authors are Constanze Coelsch-Foisner, MIT Sloan School of Management, U.S., Laurens Vandeweghe, ETH Zurich, Switzerland, Bart Clarysse, Imperial College Business School, United Kingdom, and Fiona Murray, MIT Sloan School of Management, U.S.

See also:
Venture builders: Startup factories that create the companies of the future