Launching A Startup In 2022? Here’s Why You Should Build A Digital Venture Studio First

Written by Andrew Aman, CEO of Nine digital projects. Andrew Amann and his team created 45 products and 9 startups and featured in the Inc 500 in 2021.

So I came up with a great digital business idea with the potential to go viral, with the hope that it would lead to solid profits and ultimately global dominance. You may feel that forming a startup gives you the best chance of turning that idea into a mobile app or website. However, the current technology job market, among other reasons, may hinder your efforts in setting up a new venture.

For this scenario, creating a digital project studio first provides the best opportunity to get and hire the technical talent you need to turn your idea into a great app. This type of organization involves building an exceptional team to serve other companies in your field with the potential to become an incubator for new start-ups. After all, every new startup takes nothing but a compelling idea, a super skilled tech team and a project manager with the entrepreneurial pieces to ensure success.

Let’s take a closer look at some of the reasons why building a digital venture studio makes sense as a precursor to creating a startup. In the end, why limit yourself to just one successful enterprise? Build something capable of turning any spark into a game-changing!

Solo startup is a risky proposition

Simply put, launching a startup does not guarantee success. In fact, a recent study indicated that 90% of all startups fail for one reason or another. Even once the challenges of coming up with seed funding are overcome, it can often create unrealistic benchmarks and timelines that stymie a startup’s growth. This is why most investors and entrepreneurs aim to launch or invest in many startups with the expectation that only a few will need to succeed to generate a positive return.

To be successful, your startup needs enough funding and a runway for your engineer to fully achieve the company’s goal. The traditional way of starting a startup makes this a risky proposition.

How global talent realignment affects startups

Turning a compelling business idea into an easy-to-use mobile app or interactive website requires exceptional talents in software engineering and design. Needless to say, these top-notch programmers and designers don’t grow on trees, nor are they available on Upwork. A focused effort to obtain and hire the technical talent you need – including a project manager – is a must.

Adding to this hiring complexity, the shift to remote work has been accelerated by COVID-19. We’re seeing Silicon Valley companies start hiring engineers in the Midwest. In response, some Midwest agencies began looking abroad, and it continued. This talent realignment significantly expands candidate pools for companies looking for talented and experienced tech professionals, but some also need to offer increased salaries to compete.

For this reason, many startups face recruitment challenges, in large part due to the high salaries demanded by today’s workers and the fact that “remote work” is no longer a rare feature. A generous compensation package and growth opportunities are certainly important when convincing experienced technical professionals to join a startup organization.

The demand for overseas development services is now increasing

With the talent realignment and funding crunch, more companies are looking to outsource their development to digital project studios. This is especially true as companies look to expand into AI and blockchain with the desire or ability to bring in experts within the company. In fact, the global market for outsourcing services continues to rise, approaching $100 billion annually.

This presents an opportunity for young entrepreneurs who have a startup idea. If building programs using the latest technological innovations requires experienced professionals, then an agency is a profitable way to cultivate and develop this talent.

Go Gradually: nurture talent by building your own digital project studio

Given all these hardships, and securing the talent needed to quickly turn your great idea into a captivating digital project, my team and I succeeded by nurturing top talent within the Digital Projects Studio. While it is difficult for startups to find and bring in a full team of developers, agencies can take a more incremental approach. Creating a digital project studio allows you to find and nurture talent while slowly building up a team of developers.

Whereas traditional agencies may find it difficult to keep all of their developers busy while they’re up and running, digital project studios can use any lulls in client work to put engineers into their startups. This approach enables you to slowly build a talented team full of exceptional engineers, designers, and managers.

Hiring a few experienced professionals to serve as leaders and mentors allows them to nurture those new to the field. Focusing on team building creates a group with the right mix of turning your original great idea into the digital project you’ve always wanted. But now you own an agency and you can repeat this process over and over again. Using your team to incubate both new startups and client work limits their downtime. It also takes advantage of the growing market for outsourcing services.

Launch a lot for just one: Use your profits to fund new startups

I am not trying to persuade you to abandon your initial business venture and go entirely to agency services. A profitable digital venture studio also serves as a reliable source of funding for new startup ideas. Following this business model essentially creates a feedback loop that revolves around new companies as outputs. As your organization expands and builds new competencies, your engineering team expands as well, allowing you to take on more projects.

In the end, this approach significantly reduces risk while increasing the chances of profitability. Instead of building just one startup, use that spark of a business idea to create a cutting-edge organization capable of turning multiple ideas into successful businesses. The creation of the Digital Enterprise Agency ultimately provides a greater opportunity for unparalleled success.

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