Strike Labs is a holdco/product studio for a series of underlying companies built by a network of highly-skilled professionals who participate in the upside of the underlying businesses. The goal of Strike Labs is to build independent revenue streams that combine to produce more profit per teammate than most of the companies of the Fortune 500.
Strike Labs was founded in 2018 by an entrepreneur, having been involved in the founding, operating, and selling of a few FinTech companies. The following important lessons learned from his experiences led to its creation:
FOR UNICORNS, LUCK > SKILL Unicorns are next to impossible to build, and require not only operation skill, but a great deal of luck.
SMALL OPPORTUNITIES Fortune 500 companies need large returns to affect their bottom line. It is not worth Facebook's time to pursue an opportunity that would produce $15m in revenue. This leaves an overabundance of smaller business opportunities available for monetization by teams of highly dedicated professionals.
DOUBLES OVER GRAND SLAMS Small, scalable companies that require operational excellence, and produce $1 to $15 million in annual profit are much more tangible than building the next Amazon.com, and can have significant impact on the investor's returns and the team's life.
MOTIVATION EQUALS PRODUCTIVITY A small group of A+ talent will run circles around larger groups of simply good professionals. People are more productive when they are excited about the work they are doing, see their direct impact on the revenue of the company, and benefit from that revenue. You will witness a surprising amount of completion when you provide a rockstar medium-term financial incentive to solve difficult problems without bureaucracy.
GREAT PEOPLE ARE ALMOST ALWAYS UNDERUTILIZED The largest first year expense at a startup is the people. When working on one product, Tier 1 professionals are not used to their fullest capacity the vast majority of the time because of the natural ebb and flow of the work required.
The underlying product companies have the following attributes:
They don't require a significant amount of capital to build, and can be market-tested very quickly.
They offer a very niche product, solve a very specific pain point, and operate in a B2C market without a strong competitor.
They are as valuable to the first client as the millionth.
They target cash flow positive within 3 months, and$0.25m in revenue in 12 months. The total addressable market from each product may not be greater than $15m at initial modeling.
They are able to be built with today's technology, often levering those techniques from one industry and applying it to another one.
They are not manual service related businesses.