Yammer and EventBrite founders announce Giant Pixel startup studio, look to crack the code of parallel entrepreneurship

By Michael Carney , written on April 14, 2014

From The News Desk

The accelerator model of startup building routinely comes under fire for questions of effectiveness and financial viability. But that hasn’t stopped them from popping up like weeds after a heavy rainstorm, as savvy investors look for additional leverage deploying their early stage capital, and eager entrepreneurs look for any type of competitive edge and market validation in these heady times.

But there’s another slightly less common model of parallel startup building that arises more often when its founders are entrepreneurs themselves rather than investors, and want to continue building, only in bulk. Incubators, or technology studios as they’re often called, typically involve a team of former entrepreneurs looking to deploy a pile of capital to test and build multiple startups simultaneously under a shared roof and, in many cases, on a shared technology platform.

So it is with San Francisco’s latest startup lab, Giant Pixel, which is the brainchild of Alan Braverman, Elliot Loh, and John Cwikla. The men are collectively responsible for building EventBrite, Geni, Yammer, and Xoom, representing more than $3 billion in enterprise value. The “startup studio” has been operating in stealth for the last 18 months, Loh tells me, and now has three greenlit mobile projects in various stages of development. Today, they’re pulling back the curtain and announcing Giant Pixel to the world.

The startup studio’s innovation model is a loose one. Essentially, the three founding partners and their team of employees have created a list of dozens of ideas and markets that they’d like to tackle and now plan on checking them off one by one. Giant Pixel has built a custom mobile development platform including rapidly deployable server instances, a shared backend, and design templates that it hopes will accelerate product creation.

Some ideas will wither on the vine and be shuttered, while others – hopefully – will grow into standalone enterprises. Nascent companies will remain under the watchful eye of the mothership, including receiving financial backing and development resources until they’re ready to raise a Series A funding round and stand on their own. In some cases either Braverman, Loh, or Cwikla will act as the founder and CEO of a newly formed company, while in others they will install senior management and maintain board level oversight.

“So, our structure is different from most companies: we love our team, but they know that the whole goal is to kick them out into the world, prepared to take their new company on to huge success,” Cwikla said in a statement today.

“We’re not an accelerator,” Loh says. “We’re not going to recruit teams or ideas in and put them through a program and then kick them out after a fixed period of time.” He adds, that the studio model allows them to be more flexible than a standard accelerator and make decisions on company-by-company basis.

The furthest along of Giant Pixel’s three projects is Antenna, a news and talk radio app for the mobile era. The group is also working on an SMB project management solution and a third company that remains in stealth, but which Loh called a fresh take on messaging. Each has more maturing to do before it’s time to consider leaving the nest, he says, but the plan is to continue building out new ideas alongside these existing ones.

Giant Pixel has yet to raise outside capital, Loh tells me, operating entirely off the backing of its three founders. But the longer-term plan is to raise capital this year and to increase the rate of company formation. Given the team’s track record, it’s a fair bet that the money will be available when they decide to go looking. The exact format of the funding is up in the air, Loh admits, but the trio is leaning toward that of a company rather than a fund. This would mean investors would own shares in Giant Pixel or a related entity, rather than membership interests in a fund, and there will likely be no management fee or carried interest.

“We’re not really big fans of the incentives that management fees create,” Loh says.

Giant Pixel isn’t the first entity to try the startup studio model. Santa Monica-based Science, Inc. applies a nearly identical shared platform model to the ecommerce sector and also views itself as a company building startups, rather than a fund or incubator. The model has produced Dollar Shave Club, DogVacay, and Urban Remedy, as well as a dozen other early stage companies. New York’s Betaworks has taken a similar approach to building Web and mobile companies, but has been equally willing to buy assets rather than build them from scratch. The group is responsible for Summize, bitly, TweetDeck, Chartbeat, Digg, Dots, and Instapaper. And the granddaddy of them all is Bill Gross’s Pasadena startup factory Idealab, which has been his personal toy box for nearly two decades and includes successes like CitySearch, Overture, eToys, Evolution Robotics, and UberMedia.

So what is it that sets Giant Pixel apart? Loh acknowledges the similarities between his studio and these predecessors, but points to the fact that Giant Pixel’s founding team are engineers and designers first-and-foremost rather than businessmen as a differentiating factor. He’s also confident that the rapid prototyping and ability to scale businesses on Giant Pixel’s shared technology platform will give it an advantage over many other similarly organized entities. We’ll have to wait and see.

But the thing that may prove to be the biggest obstacle to Giant Pixel’s success is the very thing that it was created to accomplish: parallel entrepreneurship. Braverman, Loh, and Cwikla are builders who like to get their hands dirty and plan to be intimately involved in many of the companies that Giant Pixel creates, including in some cases acting as CEO.

It’s a natural desire for successful entrepreneurs to look to repeat their past success but on a bigger scale and with more leverage. But parallel entrepreneurship has proven time and time again to be a fool’s errand. Even the great men like Musk and Jobs who appear to have pulled it off talk about how miserable and unsustainable an undertaking it is to try to dedicate 100 percent of yourself to two projects for an extended period of time.

And so that begs the question, what happens when Giant Pixel’s founders choose one of their projects to commit to? Will they keep one foot in the Studio and another in the CEO’s suite? And if so, what will that split focus mean for each entity? And finally, how does this model scale beyond three companies? Giant Pixel plans to create many more than three companies per year, so how much input will its founders be able to have in each if they are at the same time operating their own startups and attempting to continue creating new ones?

These are questions that Loh and his partners have considered, he tells me. The answers to all of them, however, is essentially the same thing: “We’ll cross that bridge when we come to it.” And so it goes. The luxury of creating several billion dollars in realized startup value is that you get the luxury of writing your own rules for a while, and potentially some cash from a few believers to spend in doing so.

Giant Pixel promises to be an interesting experiment, if only for the men involved and for its apparent willingness to fly in the face of conventional startup building wisdom. Whether the group can crack the code of parallel entrepreneurship or can truly find leverage in the startup studio model remains to be seen. Just don’t tell Loh and his partners that their ideas are crazy. It’s that very way of thinking that got them this far, so the hell if they’re going to take anyone’s advice at this point.

Good on ‘em.

[Image via MileHighYouthCorps]