New Business Trend: The Startup Factory

Some people dream of starting a successful startup so they can strike it rich, sell the company, and retire on a beach sipping mojitos. Others entrepreneurs nurture their one big idea and dream of creating a stable company that they guide through its growth for many years to come.

But the serial entrepreneur is a person with dozens, hundreds, even thousands of business ideas, who relishes the challenges and excitement of starting a new venture. Many serial entrepreneurs start one company after another, waiting just a couple of years for it to become stable before passing on the reins and diving headfirst into another startup.

The popularity of serial entrepreneurship has spawned a new business trend: the startup factory, or startup studio.

A “startup factory” is a moniker for a type of business that exists to create new businesses. Often launched by successful entrepreneurs who have exited their startups and are looking for the next challenge, startup factories work on multiple startup projects simultaneously. Often their projects are pitched to the same funders and customer base and built using the same technologies, but sometimes they work on completely different ideas, like throwing spaghetti to see what sticks. The startup factory model allows these businesses to experiment with different ideas instead of focusing all their resources on just one.

One example is Mint Digital. Founded by Andy Bell, Mint Digital is a startup studio that’s working on creating custom cardboard avatars and delivering craft beer to your office, among other ventures.

Just Add Red is another startup studio, founded by a group of successful internet entrepreneurs. They’re working on facilitating the renting of conference and meeting spaces, bringing together a community of pet lovers, and promoting socially responsible and sustainable luxury products.

While you hear more about individual entrepreneurs than startup factories in the news, the business model is behind the scenes for many popular startups, including Twitter and Tumblr.

Are startup factories the future of entrepreneurship? Check out the graphic below for a behind-the-scenes look at the workings of startup factories.