“Now is the right time to bring together experts, active people, create teams and work with startups,” says Olga Rotko, founder of the managing startup studio Spark venture studio, partner at Zborka labs. She told Pro Business about how the idea came about and how it is planned to develop and monetize it.
Why are we creating a new business model?
– I have a strategy for life “to develop and develop.” For more than 15 years I have worked in various projects in management positions, consulting, mentoring, investment fund, accompanied projects of transformations, changes and came to the conclusion that sometimes it is better to do something new than to redo the old.
It was clear to me that the continuation of development would be in the startup segment, since these projects, even within the framework of corporations, aroused my greatest interest: we have a match in terms of speed and potential.
I researched business models to understand where the limitations of systems are, how to take into account the specifics of the environment, talked with startups and found out where the founders see value and where the bottlenecks are. At the same time, a vision and a mission were formed, because where we are going should be in harmony with us.
In terms of the corporate world, a startup studio is a company that creates and supports the development of startups. In the venture world, they would say that this is a venture studio, a company builder. This direction is actively developing abroad, it is considered more effective than the approach of investment funds.
We can say that this is an incubator that brings projects from scratch and collects teams on its own. But, unlike an incubator, which provides a platform, access to the community and mentoring, this is a managed process. Our studio provides assistance with working on an idea, testing hypotheses, building a team, raising funds, traction, mentoring.
We give something that cannot be bought at the initial stages of the project: the experience of marketers, analysts, lawyers, and more. More precisely, you can buy it, but an hour of such consultations costs from 100 euros and more, and startups don’t have that kind of money.
We are interested in areas that improve the quality of people’s lives. Therefore, we start the studio track with EdEech, despite the fact that this is a difficult segment in terms of monetization models.
EdTech (from the English education – “education” and technology – “technology”) in a broad sense – a sector that, through technology, will increase the effectiveness of training, improve the skills, condition, abilities of people; this is the collective name of any technology for the educational process.
The speed of technology development, new professions and trends, changing cultures lead to life time learning concepts for everyone who wants to develop and be relevant. According to expert estimates, in 2021 the size of the EdTech market was estimated at $ 254.8 billion. It is expected that by the end of 2022 the EdTech industry will overcome the bar of $ 300 billion, and in 2027 will reach $ 605.4 billion. level of 15.52% throughout the period.
There are many directions in EdTech. The segments of skills and abilities development, engagement and performance management, management of physical and mental health and condition, professional development, mentoring are interesting for their impact on the quality of life of people and increasing adaptability not only through content, but also through the technology itself.
What are we doing
In fact, now in our market there are no big players involving thinking people. Whoever creates a system with a developing flexible interaction model will have access to the potential of people. That is why our model is relevant.
We work on the sector, determine the market need, help find an idea, select people for the project, form it from scratch, mentor, prototype the future product. We supervise teams, train, guide, help find experts and reduce errors – learning by doing. Even when a startup starts doing marketing itself, we have a specialist who can share experience and promote the idea faster.
I am the main founder and CEO of the project. We are gathering a team to have internal expertise of the studio at all stages of development until the end of the seed, we involve domain experts (EdTech in this case).
How it works
The technology itself consists of several stages:
1. Generation of ideas. We use the Foresight technology, which allows us to determine where the sector is going, what trends it has, problem fields. This is such a closed party where we invite experts, investors, project participants, psychologists and other participants. On average, this stage lasts 2-3 days. After determining which areas are the most interesting, we conduct sessions to generate hypotheses on how to solve the tasks.
2. Development of hypotheses after defining tasks, selection of CEO/project managers. We choose the most interesting ideas that can be quickly tested, we invite project managers / CEOs / products to jointly develop hypotheses and test them.
3. Formation of teams with the necessary expertise for the stage. We plan to gather 10 teams. Their task is to pass CustDev and develop the project. We call some people from the first stage. It all depends on the person, how he manifests himself, leads, what knowledge he has. This stage lasts 1-2 months.
CustDev (Customer Development – customer development) is an approach to creating startups, businesses, new products or services, in which the most important aspect is customers and solving their problems. This method allows you to find the answer to any product problem of the consumer.
4. Prototyping, collaboration and consultations with experts. After prototyping, 5-6 teams will continue to work. Yes, this is a high conversion, we are waiting for it because we already have a market analysis, an understanding of the client’s needs, and expert support. The studio team and invited consultants and mentors will work closely with the teams.
Prototyping is a quick “draft” implementation of the basic functionality of a future product/product, to analyze the operation of the system as a whole. At the prototyping stage, a working system is created with little effort. During prototyping, a more detailed picture of the system structure is visible.
5. Seed. This is the development stage of a startup. We test the product and product promotion channel, develop teams.
6. Attracting investments. This stage begins after about 6-9 months. But this is an ideal option – someone reaches this stage in a year or two, and some teams in a couple of months. There are corporations on the market who are interested in this. Our task is to find investors and sponsors to help these projects.
The markets differ in approaches to working with startups in different business models: studios can agree on 40%-80% shares in projects, incubators – 3-15%. We want to work in partnership, so we form a vesting for the share of founders and teams up to 80% in the project. At the same time, in terms of training, we collaborate with Zborka labs when necessary. If the project develops, the founder and the team gradually increase their shares in the project.
Vesting is a scheme for obtaining company shares depending on the time worked in it.
We do not have the task of doing everything for the team. We monitor, share expertise, help their development, and they “go” themselves. Then teams will learn quickly without wasting time on “I don’t know what I don’t know, so I can’t ask”, and will not lose the tenacity and flexibility that they will need to grow.
I am for creating opportunities, not waiting for them to appear. Yes, these are difficult times. And some people froze, but there are those who are looking for where to move and what to do. I see it in the response when I talk about the studio.
There are no similar projects in Belarus yet. There are incubators, accelerators, but this is a different model, we are not even competitors. And we offer partnerships to both projects and mentors/advisers with whom we interact on the EdTech track.
The complexity of this project is in conveying value and model. That is, we need to immerse people so that they understand the format of interaction and we can jointly create opportunities, build a business together. We do not have a task to do something once, the goal is to create a self-developing system.
Now we completely finance our idea ourselves and invest in it ourselves. We are at the beginning of the launch of a stream of projects in Edtech and we are already seeing a response from partners who have an interest in cooperation and people who see opportunities to interact with us in the role of mentors, experts, partners.