I’m one of the partners at Helm Experience & Design, we're a digital product studio that transforms founders ideas into realities. Nine years ago, we launched our studio with a vision to foster innovation and act as a design partner for new technology startups that we believed would start to sprout up in our hometown of Buffalo, NY.
This belief came from a combination of factors, there was a strong grassroots movement of technical people that wanted to found companies paired with a push by our City and State to create technology jobs through new exciting initiatives.
Our hypothesis was largely correct, and through the success of programs like 43north, startups were founded or began to move to the region. Our work at Helm has enabled us to support many of these companies as they grew in Buffalo. But over the past near decade we’ve noticed a few challenges that hinder the continued growth of our startup culture.
Buffalo, New York, was once an industrial powerhouse. Like many American cities, we have been reinventing our region into a technology hub. Currently, the city is home to many innovative startups and tech firms, fueled by local universities and support from local government and private investors.
Yet, like many mid-size cities, Buffalo struggles with a gap between the number of potential startup founders and the technical talent necessary to bring these ideas to life.
This is a common issue all over the country; startup founders with industry-specific knowledge and the ability to sell a product find it challenging to connect with the technical talent needed to launch. For example, in 2022, colleges in Western New York graduated 1,100 computer science students, but only about 300 of these graduates stayed in the area. Of the 300 who stayed, there was fierce competition among larger corporate entities to retain this talent. This competition leaves a dearth of options for would-be founders who might create the next unicorn startup.
At Helm Experience & Design we’ve met and partnered with many non-technical startup founders to build sustainable companies. By creating a system where non-technical founders can get their ideas to market this will increase the number of startup companies in the region and ultimately create more opportunities for technical talent to stay.
Enter the Venture Studio…
A Venture Studio, often referred to as a startup studio or a startup factory, is a structure designed to build startups more efficiently. Venture Studios are organizations that create new companies, typically by identifying market gaps and developing novel solutions to address these needs. They often operate by providing a mixture of initial capital, strategic direction, and crucial resources to startups, including product management, design, and technical development.
In essence, a Venture Studio is a hybrid of a venture capital firm and a product development agency. It does not merely invest in existing companies, as a traditional venture capital firm might, but rather it takes a hands-on approach to build companies from the ground up.
In a technology market like Buffalo's, potential founders are everywhere, we meet them all the time. These individuals have specific industry knowledge and want to build a company that aims to solve a problem in what is usually an industry that is has been overlooked by technology.
The founding of Helm client ACV Auctions is a perfect example of what's possible when a non-technical founder has an idea to solve a problem deep in the industry they work in:
The company was born when co-founder Joe Neiman walked into the Z80 Labs technology incubator, which Dan Magnuszewski was running, to talk about using technology in the wholesale car market. Neiman ... had been selling used cars in Albany and had returned to Buffalo to work at a large new car dealership. There he began to understand the inefficiency of traditional automotive auctions ... After hearing his idea, Magnuszewski says, “I can build that.”
This fateful meeting of a used car manager and developer created a multi-billion dollar company and 1000s of jobs within WNY's economy. How many more opportunities are missed because a founder can't connect with a developer to build a product?
1. Adding to the top of the VC funding funnel: Angel investors and Venture Capital Firms looking to cut checks in a Series A or earlier struggle to find opportunities in places like Buffalo, NY. This is mostly due to would-be startup founders not having technical-cofounder or early product. The Venture Studio solves this problem by partnering with founders to create a team that can build an MVP and potentially stay with a founder as they scale. Creating more opportunities to fund angel and Series A companies. More funding creates the odds for more successes which in turn creates the opportunity for even more funding and this wheel is how healthy tech ecosystems are sustained.
2. Filling the Talent Gap: Venture Studios provide in-house teams of experts in fields like design, engineering, and business strategy. This pool of technical talent bridges the gap between the founders' vision and the technical skills required to actualize that vision. By doing so, it becomes possible to rapidly prototype, iterate, and launch new products, increasing the overall speed and efficiency of the startup process.
3. Mitigating Risk: The initial stages of a startup are often fraught with uncertainty and risk. Venture Studios, by providing early-stage funding, mentorship, and resources, can help mitigate this risk, thereby increasing the likelihood of a startup's success.
4. Shared Success: Unlike a traditional VC, a Venture Studio is intrinsically tied to the success of the startups it fosters. This alignment of interests means that the Venture Studio is motivated to offer continual support and resources, leading to a deeper, more productive relationship between the studio and the startups it supports.
5. Community Development: Venture Studios can act as a catalyst for local tech community development. They can foster a culture of innovation and entrepreneurship, attracting more tech talent and investment to the city, and stimulating overall economic growth.
Venture Studios offer a promising path to harness the potential of cities like Buffalo, turning great ideas into thriving tech startups. At Helm Experience and Design, we're proud to be part of this movement, contributing to the growth of the tech landscape in Buffalo, and beyond. We truly believe that every mid-size city with technology ambitions needs a Venture Studio to catalyze their tech scene, nurture startups, and pave the way for a brighter, more innovative future.
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