Introducing the Peer-to-Peer Startup Studio
A Community-based venture building model for a connected world.
In this post, I’d like to introduce one37.xyz, the first attempt to build a peer-to-peer (p2p) startup studio.
My co-founder, Ted, and I believe nothing is more important than entrepreneurs in our society. They are a mysterious variable that makes our economic system work and ultimately reduces poverty worldwide.
As we begin a new startup cycle in the middle of an economic crisis (like in 2008) we need to build new tools to grow and support founders. The peer-to-peer studio has been designed to help a new generation of experienced founders and tech talent. At the end of the day,those who don’t need an accelerator (They are mentors themselves!)
THE RISE OF STARTUP STUDIOS
In the past few years studios emerged with the core idea of the lean startup by Eric Ries and customer development by Steve Blank. To industrialize the selection of ideas against a market via a core team and to pass it on to founders for launch and scale.
This model is very favorable to the investors who carry a lot of the initial risk and cost. This often leads to bad team dynamics since the founders often meet artificially to execute and give away a huge share of equity. In a way it introduces a new type of entrepreneurs, not really Entrepreneurs in Residence (EIR) but also not really normal founders either…
WITH REAL RESULTS
Startup studios are delivering great results so far, especially with models focused on copycatting ideas for different geographies.
We are flipping this model and focusing on the founding team instead of market validation. Startup Weekend did that on Friday night but with basically random people; one37’s general idea is to extend this concept to a longer period and rely on peer-to-peer mentoring with a selection of great founders. This is not founder dating. Its closer to what the core team of a studio is doing by bouncing ideas and testing them, we just believe this model can be more efficient by including the founders in the equation from day one.
THE P2P STARTUP STUDIO MODEL IN A MINUTE:
How it works: Experienced Founders and some great developers apply (2–5% get selected by the community). After selection, they meet online (zoom and maybe VR/AR in the upcoming years) to pitch each other and then form small clusters of 4–7 people who then meet over a weekend at an Airbnb to work on their next startup idea. Each cluster can have many startup ideas.
30% will launch a startup within the next 2 months; a p2p online support from the community will help the founders build their teams and raise to bootstrap in exchange for 1%-2% of equity.
Input: Talented founders and tech practitioners (Post exit founders — Ex-Google …) ready to start a new startup, with the same kind of profiles as YC mentors.
Output: Startups / Team members / Early Investment (case by case)
Value: Expand your network / Bootstrap friendly, not just VC/Remote Friendly
Cost: $1,000–5,000 per person (depends on travel cost)
Equity: 1% — 2% for the community chest to reward those who made it possible
Location: 90% Online /10% where you want (each cluster picks where)
Key differences from a normal startup studio: Welcomes non-venture path (like Zapier did with Startup Weekend) / does not capture much equity (1 to 2%) / does not rely on a local full time team of expert / you are the mentor (everyone is) / does not bring you early fund (but you can always raise if you want)
Upcoming experiments: Leveraging data / AI and Augmented reality to better connect over long distance.
THE PROOF OF CONCEPT: 2017 TELLURIDE, ONE WEEKEND 5 FOUNDERS -> $80M+ OF IMPACT AND A LOT OF FUN
Five years ago, with a couple of friends in between ideas (we all had startups but were looking for what’s next), we decided to meet and help each other during a weekend in Telluride, Colorado.
The idea came from my innovative consulting firm Recorp.co where we organized retreats matching 4–5 corp executives with entrepreneurs during a weekend. What surprised me the most with those Recorp Weekends (beyond their huge impact: like the spin-off of now one of the fastest growing french startups / sorry NDA) was how entrepreneurs loved them. I was surprised to find out; one even told me he would gladly join for free next time (we paid founders as consultants). Not only is was fun to them, but it also allowed founders to discover new b2b fields and to meet other great experienced founders outside of their networks.r.
Back to Telluride and our proof of concept, we spent the weekend being very honest. Many of us felt stuck, so we went on to pitch to each other not our startup ideas but our current challenges and what we were thinking about. After digesting some hard truth, we all agreed to commit to a goal for the next 3–6 months. One of them became a VC backed startu : joinmassive.com
5 years later, after launching another startup working on e-voting (electis.com) I had the chance to meet with Ted Serbinsky. We discussed what we considered was wrong in the current startup ecosystem (see the second part of this post). We agreed to take our lessons learned from running accelerators and Startup Weekend to experiment at building a very founder friendly model that would feel more like the early days of the startup ecosystem.
TO SUMMARIZE: STUDIO vs P2P STUDIO vs ACCELERATORS
Steve Blank recently wrote a great piece on startup studios. I’m relieved to see we both align on numbers and analysis of what a studio is. I always regard Steve’s work as a pillar of our startup community! Be sure to follow him if not already.
WHY WE NEED YET ANOTHER WAY TO BUILD STARTUPS?
“The only thing we know about the future is that it will be different.” Peter Drucker
The p2p studio is looking to fill the gap between startup studio and bootstrapping for experienced founders / professionals. This is needed, as one founder we talked to put it: “I’m 40 years old, went to YC and have a kid, I don’t see myself hanging out with 20 year olds drinking shots again” Experienced founders have different needs, and talented first time founders might look for experienced co-founders to reduce their risks… The key question could be why now? And the answer to that is::
- The volume of experienced tech founders as a direct result of the Cambrian explosion of venture funds / accelerators / startup events…
- Covid, has accelerated the ability to launch remote businesses allowing for online programs.
- The result of the past 15 years of programs like Startup Weekend, YC, and startup studios is that we now know these programs work at yielding stable businesses.
Finally the end of a tech wave in conjunction with a new one and a financial crisis looks a lot like the 2000s and 2008. Each new cycle brings updates to the startup ecosystem.
When Andrew Hyde and later Marc Nager, Clint Nelsen, and myself worked on building Startup Weekend back in 2009, it felt like a blue ocean of startup opportunities. The Financial crisis mixed with the rise of social media and the first smartphones were powering the next “Wave” as Steve Case would call it. What was missing was a startup community to support it.
Bringing back the fun in startups
We are now ready for the next wave and are facing a far bigger crisis. All crises are times for opportunities, and while the startup ecosystem is a lot better than 15 years ago, it is far from being perfect. This next revolution needs a new startup community, and we believe the p2p studio is going to be the foundation.
As the world gets more and better connected, with working remotely now an option on Linkedin, with the upcoming wave of AR/VR/AI revolutions, it makes sense to anticipate it and try new things, and web3 for lack of a better word, is also an exciting place to test a new form of governance (DAOs are still in their infancy)
Reflecting on the last decade, we are ready to do a lot better. Peter Drucker used to say: “The only thing we know about the future is that it will be different.”
The core motivation for the p2p studio has been to move the needle towards community models as long as supporting experienced founders without having to commit to pure venture capital (while still welcoming it). The vast majority of high growth ventures never raised capital and most high growth founders are in their 40s when they launch their company. These reasons drive us to support this amazing community with a new model.
What a founder centric p2p startup studio can do better?
In a capitalist system, we believe nothing is more important than founders. They are this mysterious element at the heart of what Shumpeter called the “creative destruction.” They see opportunities that no one else can. And somehow they create value from nothing, with technical innovation and from assembling existing “product bricks” in an innovative way.
The p2p startup studio model is not about capturing value but maximizing entrepreneurial serendipity. It is very possible to imagine 100s of p2p studios connected to each other. It is a trade of power for value creation, the studio is looking to maximize value over capturing it.
To conclude this post lets review the limitations of the venture capital centric startup ecosystem, it is important to keep those limitations in mind as we all work on the next version of it!
1. The current startup ecosystem is artificially Venture Capital Biased (not founder biased)
Bryce Roberts talks about it with Tim O’Reilly as his motivation to push indie.vc the main issue is that the current startup ecosystem is all about the next fundable milestone. This is an issue, especially when we know that 95%+ of high-growth companies did not raise venture capital in the US (see Origin and Evolution of new businesses by Amar V. Bhide) Venture capital is a great tool, but it’s not for everyone like Zapier demonstrated we can have startup communities supporting non-venture-backed startups. This will also lead to more diversity. Just looking at Alt-VC models like revenue based venture capital, it is a very needed move.
2. The startup ecosystem kills many startups that could have thrived
Because of the above and the nature of startups, the current startup ecosystem produces a lot of Zombies and failures!
While many venture capital firms call themselves founders-centric, the model prevents that from being true. It is designed for a high-risk / high-return business model that scales fast! Venture capital is designed to help the 6.10^-6 high-growth companies that need a lot of money before they can break even.
While most Scale-ups are not venture-backed (on average, they only need 15–25k of funding / we will get back to that later), many startups today are looking to raise from venture capital early on. From a founder’s perspective, what might look like a good deal before will either kill your startup or, worse, make it a startup zombie (good enough to stay alive but not growing enough to get the next round) in the later part of its startup journey.
3. The Startup Ecosystem does not recycle experienced founders, we will!
The startup ecosystem profits from the value created pre-incorporation without giving back to its community
Looking back at 2007–2008, there was one co-working space in NYC named New work city later copied and scaled by WeWork, maybe 2 in SF, and some 90s-style hacker spaces like HackerDojo, but not much compared to 2023.
I remember looking at Y-Combinator as a developer and having yet to learn what an accelerator was doing, nor did people know much or even hear about VCs. The post-90s and 2000s era have learned how to industrialize/democratize the startup ecosystem.
This is when we re-launched Startup Weekend as a non-profit and grew it as a community. We could not predict the tremendous impact it would have worldwide. With 500,000 attendees, our direct impact has been tremendous; considering it’s just a weekend and most first-time founders, we still had a couple of unicorns coming out of it, but what really matters is hard to measure! (Startup Weekend was the first startup program in Iran / Cuba / Afghanistan…) Many of the startup weekend organizers and facilitators became local startup ecosystem leaders.
There is no doubt it was a success but what was difficult was its business model. We had to rely on corporate sponsors but did not want to sell out the community. This led us to merge with Techstars and its community, which did a fantastic job keeping its community growing!
4. A centralized startup ecosystem in a connected world makes no sense anymore
Opportunities from a capitalistic perspective are now as global and diverse as ever, why can’t capital and the startup ecosystem align with that?
a. A geographic concentration
Each country claims to be a new startup nation. The truth is the real startup nation is California. Its challenger is the Bitcoin/Ethereum and co ecosystem, and its answer has been web3 (the idea of crypto startups centralized and, of course, venture backed)
b. A blatant lack of diversity
98% of venture-backed founders are men! 90% of VC partners went to Harvard/Stanford, and my guess is 90%+ of them must be based in a major city. While I’m not neo-Marxist, it is clear that we have something very wrong here. The beauty of capitalism is to reward anyone with a good idea and good execution; The origin, religion, gender, and original wealth or education of founders do not matter to customers. Many studies have been conducted, and while the risk is significantly reduced for founders with a wealthy family to back them up, it is clear the current Venture capital ecosystem is eager for unfair advantages leading to a very unfair choice of founders who will be venture-backed.
This is well known and heavily studied, but so far, the only solution I have seen working at bringing natural diversity has been nonclassical venture capital models like revenue based venture capital indie.VC Unfortunately, indie.VC stopped its program even though it had stellar results. The latest is based on a tweet from Bryce in August 2022 :
54% of indie-backed companies will do over $1M in Revenue this year. Nearly 30% will do over $5M in Revenue this year. And just over 10% will do north of $10M in Revenue this year.* *most having raised $1M or less
The vast majority of founders are non-venture backed, and the more we will support models like Startup Weekend and p2p studios, the more we will enable startups to grow from being bootstrap.
5. The Startup Ecosystem does recognize nor reward its startup community
No value is captured pre-incorporation and as a result, no value is shared with those who made pre-incorporation work possible. This means that the part of the ecosystem that helps founders to learn, to meet, to get inspired, and to get connected are not rewarded for the value they helped create. This leads to the collapse of that layer and, ultimately, a weakness in the current startup ecosystem.
For example, when startup accelerators began in 2007–8 they heavily relied on free mentors. Those mentors wanted to give back (and give forward), but a couple of years later, the quality of mentors at most accelerators collapsed due to the high volume of mentors needed and the tiredness of feeling “exploited” for free in an industry that generated billions…
Whoever attracts the best founders and talent will build the best startups. Rewarding that layer pre-incorporation is core to the p2p studio model thanks to its community chest. Startup Weekend created billions of impacts in retrospect, capturing 1% of that would have allowed us to pay our organizers/facilitators and coaches.
This was an important lesson learned for one37.
ONE37.XYZ: JOIN OUR FIRST PUBLIC BETA!
If you want to join our first season apply to -> one37.xyz
— Franck Nouyrigat
