Brilliant entrepreneurs are wasting their talents trapped inside Seattle’s big tech companies like Microsoft and Amazon. Pioneer Square Labs wants to give them a startup to run. Today with $12.5 million from 12 VCs and 50 angels, Pioneer Square Labs launches its startup studio.
Based in Seattle, PSL’s team of experienced founders, investors, and former CTOs will test tons of startup ideas, focusing on consumer services and lightweight business applications. Within four months, they’ll either conclude an idea won’t work and kill it off, or hire the right entrepreneurs to be co-founders and spin the startup out of PSL.
It’s not a seed fund, or an accelerator, or an incubator. Unlike studios like Betaworks that do external investing, and grow succesful products in-house, PSL will exclusively found, and then fold or farm out its companies. The closest thing to it might have been Kevin Rose’s North, which built photo sharing app Tiiny and watch enthusiast site Watchville before he shuttered it to become CEO of watch blog Hodinkee.
If PSL works, it could churn through ideas much faster than lumbering giants or scrappy single startups. And by keeping a founder-level equity stake in each startup it spins off, the team could be rewarded handsomely if they can birth unicorns and then put them up for adoption.
PSL was founded by VC and Rover.com founder Greg Gottesman, Madrona Labs co-founder Ben Gilbert, prolific angel Geoff Entress, and aQuantive co-founder Mike Galgon. Former Apple manager and Prismatic CTO Aria Haghighi, Ryan Kosai of ExtraHop Networks and Athleon, and Marcelo Calbucci of EveryMove and Seattle 2.0 round out the team’s engineering prowess.
Gottesman spun Rover.com out of Madrona Labs and wanted to do something similar, but faster and at a bigger scale. “We’ve been here for a month and already killed two ideas,” Gottesman tells me. “We can really quickly test, fail fast, and when something gets traction, put additional resources behind it and double down.”
The two big challenges will be actually coming up with great startup ideas, something there’s no real formula for, and then finding the right entrepreneur to run them. Gottesman says being in Seattle is perfect for solving the latter. “There’s a huge number of people at the Amazons and Microsofts that are wanting to do a startup if given the right opportunity. They’d love to do it, and they’re the right kind of people. They’re execution-oriented. But maybe they don’t have the perfect idea.”
PSL will give them the skeleton of a startup, co-founder-level equity, and the financial backing so they doesn’t take all the risk themselves.
Pioneer Square Labs could be an alternative to investors that are sick of putting money into startups, then seeing the idea not pan out, but the founders refuse to kill their darlings and pivot. Gottesman insists “You have to be brutally honest about whether something’s working.”