VR Distribution: Evolve or Die!

Adam
Adam
Aug 22, 2017 · 3 min read

You know that feeling when you realize that 3 companies own the fate of an industry…and then you watch as entrepreneurs get creative out of necessity and build channels that might fundamentally shift the balance of power back in their favor? That’s where VR is right now.

In the Virtual Reality market right now, there is an expectation miss-match between where the market is, and where the expected growth should be. This makes numbers the most important factor in the confidence of a VR startup. Quickly founders are realizing that there are really only 3 means of growth to attain those numbers — Google, HTC (Steam), and Oculus. And if your game, experience or product doesn’t check the boxes of these institutions, they won’t feature you. This has led founders from our portfolio and elsewhere to seek and create traction elsewhere. This conundrum (haha Conundrum would be a good name for a startup) has led to the talent flooding the VRarcades, focusing on web distribution (Rather than existing platforms), or doing door to door sales. In any industry, distribution is the most important topic, and in VR we are still discovering new channels, so I thought it would make sense to highlight it.

The VR Arcade Approach — The future platform is the Arcade, deal with it.

Vivian Tan, the CEO and founder of Beast Pets (also Tribe 9 Boost VC company) saw this early on:

“VR arcades and entertainment centers are where the vast majority of people will encounter truly immerse, high-end VR experiences for the first time.”

— Vivian Tan CEO, Beast Pets

She has been committed to going the direction of Arcades for quite some time now, feeling that it will give her an edge on distribution differentiation for the future of her business, which is allowing people to have pet dragons in VR. Over the last 4 months she has spent time speaking with the likes of every VR Arcade franchise creating a relationships to give her a long term competitive edge.

Making a bet on VR Arcades obviously has its own inherent risk, but gives you so much more control over where you can be. Still a slog to create the relationships, but like Forbes said, VR Arcades are about to be a thing.

The, The Web Approach — Lots of people use the web… use it.

Others like Sophie Thompson with Virtual Speech are distributing products using the old fashioned rails, rather than redesigning and building out a new source of growth.

“We’re building out our customer base by introducing users to VR alongside something they are already familiar with — online courses.”

— Sophie Thompson, Co-Founder, Virtual Speech

I’m seeing this approach a lot. Instead of depending on the corporate goliaths to distribute, use more traditional ways to get the word out. Virtual Speech is selling their VR communication training program on the web as an addition to a normal corporate communication programs rather than an isolated product. This gives people access immediately, and then if they want the more advanced features, the customer can add Virtual Reality experiences to help them have an enhanced experience.

The Door To Door Approach — Let’s get back to basics.

I have also been witnessing the door to door sales approach. A lot of people don’t know that VR is a thing yet, which means that when building a B2B product for the enterprise the most important thing you can do is just knock on doors until one of them opens.

“We describe our sales process as ‘babysitting’ our customer using VR. The customer knows that VR is cool and the future and all, they just don’t quite know what it’s useful for — so we teach them.” — John Voorhees, CEO of Primitive.io

John was the first person I ever met to pitch VR for the enterprise, and I think it’s definitely going to pay off. The consumer approach will happen, but I think that we also need to find the Excel Spreadsheet of VR. Because if VR will actually add value to someones job once a week — this thing will take off like a rocket.

Conclusion

Here are three ways that we have been seeing startups take control of their distribution. We would love to hear of other ways that people are doing it. Right now, no one KNOWS what strategy will work, but the thing I love seeing is entrepreneurs carving new paths. They see that one system is gamed, they build a new system. Virtual Reality is going to surprise people in the next 18 months, and I’m very excited to be on the winning team. EVOLVE OR DIE — BE THE COCKROACH.

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Adam

Written by

Adam

Managing Director of the @BoostVC Accelerator. Host of The @BoostVC Podcast. http://www.boost.vc/podcast,

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