Usually, when you launch an incubator or an accelerator you have to staff up. The staff and their advice, of course, is one of the most important parts of an incubation experience. An incubator without coaching would be no different than a venture capital firm. However, when Los Angeles-based O Labs launched this last week, it didn’t see the need to staff up- the new joint venture will be pursuing a novel labor structure.
O Labs is a joint venture between three companies with different expertise: Originate, a software development firm, Manatt, Phelps & Phillips, LLP, a law firm and ICM Partners, a talent agency. The new company will not only pool money from its partner companies but also will borrow staff from its founding members as needed.
Founder and CEO of O Labs, Mathew Pierce, said the idea came together after a lot of back-and-forth discussion between the member companies on how they could best invest themselves in the growing LA tech scene.
“If we could find a way to take advantage of the things we are already good at then we wouldn’t have to just put money into an accelerator and just hope for the best,” said Pierce. “Each member company has dedicated resources to O Labs. What was key was making sure everybody is putting really good resources behind the company.”
“One of the hard things about a service commitment, is it feels like a higher commitment then a money commitment. If you start a new company then your pulling off lawyers from Manatt, then your pulling off software developers from Originate and your agents from ICM,” said Pierce.
Because of the company’s unique structure “Everything we bring into O Labs has to be unanimous. It has to be something we can all bring something to and knock out of the park,” said Pierce.
To hit their money and service investments out of the park, the O Labs collaboration also won’t be bringing in regular classes of startups. Instead, the company envisions just incubating three to five startups per year. And those startups will be focused on serving the needs of large enterprises.
Pierce sees O Labs as a way for companies to solve problems outside their typical framework. “A lot of these enterprises have these huge needs to evolve and grow and explore and exploit existing markets. They need new ways to address new problems. O Labs allows them to do that with known expertise,” said Pierce. “It’s a way they can access innovative new ideas without having to hire hundreds of new people.
And O Labs has a broad vision for the companies it plans to create. “Any area where we can bring the skills and talents of these three members of the joint venture to bear O Labs is a good fit. Sometimes the technologies will be very difficult, sometimes the regulatory, legal or branding is difficult,” said Pierce. Those areas of difficulties are O Labs’ advantage.
O Labs first venture is a company called Versus. Versus is a platform for gambling real money in video game tournaments. The software for Versus was built by an Originate development team, legal counsel was provided by Manatt’s experts in gaming intellectual property, advertising and sweepstakes law and ICM Partners contributed expertise in brand positioning, sales and marketing.
Ultimately, Pierce believes startups like Versus when paired with large enterprises could unlock huge potential. Especially because most corporations have huge cash reserves stored up. “They have a ton of dry powder and a huge need to innovate,” said Peirce.