Why Specializing Is The Key To Winning As A Venture Studio

What’s the golden rule with startups?

No, not “build something people want” — the other one.

If you try to serve everyone, you’ll end up serving no one. Ah yes, the classic “niche” rule. It’s as true today as it was decades ago, probably even more so.

Lately, I’ve been thinking about specialization.

When I talk to Studio founders or work with emerging Studios the first question I ask is “what’s your focus”?

Fun fact: “B2B SaaS” is the wrong answer.

Is it HealthTech? FinTech? E-commerce? PetTech? Web3? Future of Work?

What is your Studio going to be known for? What kind of ventures do you want to be best in the world at building? Exploring this, making a decision, and sticking with it long enough to reap the benefits of economies of scale is key to Studio success.

But what if you can’t “pick a lane”? Or, what if you have been successful in a certain space and wish to expand? Good news. There’s precedent for that.

eFounders rebranded late last year into “Hexa”.

Hexa builds Startup Studios. They have 3 so far — a FinTech, a Future of Work, and a web3 Studio. Instead of trying to do all of these types of ventures under one umbrella, they developed, staffed, and funded 3 different Studios to keep the main thing the main thing.

This may not look like a big deal, but this move will have a massive positive impact on their cost to build, talent recruitment, and speed to market. when you specialize as a Studio, you gain the advantage of getting really good at one thing and curating a team of experts to support efficiency and success.

Hexa isn’t the only one who has done this. In October 2021, High Alpha launched its third Studio. They kept a B2B SaaS focus but niched down within various vertical domains to capture economies of scale and keep their fast momentum.

All of this demonstrates the importance of specializing in the Studio space but also in the startup space more broadly. Be clear about who you solve problems for and become obsessive about getting better and better at building, validating, and launching ventures in your chosen niche.

That is how you win.