Approach to Building and Investing in SaaS Startups
Vast in both scale and diversity, Alaska is a place of great connectedness, where people and technology shape the land, and the land shapes the people and technology.
The Alaska Startup Studio by Geeks in the Woods leverages the unique environment in Alaska and partners with tech entrepreneurs to build scalable software-as-a-service (SaaS) businesses. In this partnership, the entrepreneur and our startup studio join forces as equity stakeholders. We work hard together to drive the product/service, and/or company forward. Without necessarily providing direct seed-stage funding to the startup, our startup studio accelerates the growth and value of the startup by providing our own resources.
We bring hundreds of software startup ideas into the top of the funnel. Then, during a sprint process, we take the best ideas and transform them into business concepts - complete with branding and positioning, software click-through models validated by buyers and users, a go-to-market strategy, and a business case. These concepts are then built out collectively by our startup studio team and the founding entrepreneur/startup team.
The Geeks in the Woods team provides design, product, marketing, finance, and talent services that allow our studio companies to grow quickly and efficiently. Their resources allow the studio companies to avoid some of the early pitfalls that sink startups during the critical stage of finding product-market fit.
"They have attained relatively little scale, but are propelled by a big idea and the internal strengths of the founder’s mentality: namely, a missionary zeal for changing the standards in their industry, obsession with the people and the work done at the front line of business; and the owner’s mindset, a sense of deep personal responsibility for results that leads to a bias for speed and against bureaucracy." The Founder's Mentality by Chris Zook and James Allen
Investing in Software Startups
Our startup studio invests our time, passion, and resources - our Founder's mentality - to help you accelerate your startup idea into a software company that soon becomes the scaling insurgent of your industry. Our full-stack approach to building tech startups with entrepreneurs drives the startup idea through to the finish line.
- Focused on investing in and building Software-as-a-Service (SaaS) businesses.
- Our structure allows each business the opportunity to grow or fail independently.
- Our bootstrapped approach enables entrepreneurs to bring their SaaS businesses from 0 (idea) to 1 (product/market fit).
- We leverage the Slicing Pie model to fairly allocation equity amongst cofounders.
- We lead by example - harnessing the Founder’s mentality.
Famed Computer Scientist Alan Kay said it best, "In order to predict the future, you have to invent it." As a startup studio, we invest our resources to help you build a successful startup that positively changes the future.
We work with passionate startup founders, not wantrepeneurs. Startup founding teams are inherently self-motivated and risk-seeing. They naturally take on a bootstrapped approach, trying to understand the product market fit with the resources they have. We fuel this self-motivated effort. If you and your co-founder(s) are sticking with your cushy day jobs and waiting for somebody else to give you permission to start a company, then you are not startup founders, you are dreamers. Jump in. Get started already.
What is the Slicing Pie? Slicing Pie is a universal model for fair equity splits in early-stage, bootstrapped startup companies. It is the only way to ensure that every participant in a start-up gets the exact % of equity they deserve - no more and no less. Slicing Pie: Perfectly Fair Equity Split by Mike Moyer
Dynamic Equity Allocation with Slicing Pie
Usually companies "slice the pie" on equity before the pie is baked. This means that the percent of equity owned by each co-founder is fixed in the beginning before the idea is turned into a business. Later on, someone on the team may resent the fixed equity split when team members are not pulling their fair share. Great startups and relationships are lost over disagreements on equity. Slicing Pie resolves this problem by creating a simple and fair model for valuing a person’s contribution to the startup.
Slicing Pie is a simple formula where a person's percentage share of rewards equals their share of at-risk contributions into the grunt fund. There are two basic types of at-risk contributions: cash and non-cash like time, ideas, relationships, and supplies. These contributions are tracked as part of a grunt fund - which is a legal vehicle to dynamically allocate equity. Because contributions are constantly being made, the model is constantly self-adjusting to provide a perfect equity split. It looks like this:
An Individual’s % Share = Individual’s Slices / All Slices
We love implementing the Slicing Pie model with the startups in our studio. The model always aligns with people's incentives so that they make the right kind of decisions. They inherit the founders mentality. Managers and employees will be aligned in their interests to get to cash flow breakeven as soon as they can so they can freeze their share. When the equity divided using a fixed model it does not really matter when the company gets to breakeven because it won’t impact one's percentage of ownership and ultimately their total compensation.To build innovative companies the corporate structure of the startups in our studio need to be fair and equitable. The startup and its structure needsto be innovative and flexible to capture and compensate the best talent. It needs to be built on a foundation of innovation for now and into the future. It needs to reward participants based on the risk that they accept with each of their contributions.
Learn more about Slicing Pie and SlicingPie.com.
Building Software Startups
There’s a common misconception that shapes today’s startup landscape: you have to raise money in order to successfully launch and scale a company. The media glorifies companies getting early-stage investment funding from Venture Capitalists. From many perspectives, securing funding from venture capitalists is seen as validation of success, when the reality is:
- 75% of VC-funded startups fail,
- 95% of VC-funded companies don’t deliver the returns expected, and
- only 1% of companies get VC funding
Angel investors and early-stage VC firms focus more on financial capital - they provide funds to help their portfolio startups develop, sometimes along with guidance and strategic help. However, angels, angel associations, and VC firms rarely invest in pre-revenue companies. By insisting that startups achieve revenue prior to considering an investment, they are, in effect, de-risking their investments. Put another way, the startup must prove they have a product, a market, and paying customers. Long gone are the days when a VC firm would invest in just an idea.
The primary focus for our startup studio is the rapid development and prototyping of new products. We have developed a uniquely competitive infrastructure made of pooled resources, technical tools, management processes and a multi-disciplinary team. For each new software startup, we leverage this infrastructure to increase your likelihood of success.
If you are a solo entrepreneur or a pair of two co-founders with an idea for a software startup that is pre-revenue, and would like partners to build the business, consider our venture studio. After many years of building enterprise SaaS companies, our founders have gained a strong passion for helping other entrepreneurs launch and accelerate their businesses.