How I Nearly Killed My Company and Spent My Life-Savings Building the Holodeck
A year and a half ago, on the 16th floor of a back-alley highrise in Hong Kong, the company that is now known as Sandbox VR was born.
With less than a million dollars invested, our team of 7 spent a year and:
1) Developed real-time multiplayer inverse kinematics technology to capture, animate, and render people with full-body motion capture in virtual reality
2) Designed a 30-minute full-body, free-roam VR experience
3) Constructed a brick-and-mortar retail Sandbox, which eventually became TripAdvisor’s #1 Activity in Hong Kong.
Today, we’re announcing a significant Series A round of financing led by Andrew Chen from Andreessen Horowitz, with participation from Mike Maples / Floodgate, Stanford University, TriplePoint Capital, CRCM, and Alibaba.
This is our story. But it almost didn’t happen.
In 2003, I founded Blue Tea Games in San Francisco, later moving here to Hong Kong and bootstrapping it to fifty employees.
We built free to play mobile apps and casual hidden object games for the PC.
I had been building games since I was 13, so I was naturally drawn to building narrative experiences. I found that the genre of hidden object adventure games was a good fit for that.
In the late 2000s, we released the Dark Parables series, a franchise that became a #1 best seller on Big Fish Games (the largest publisher of casual games in the world). It was a high point for Blue Tea Games — and one we would never reach again.
As mobile gaming exploded in the late 2000s, the platform shifted away from the PC, and our crew found it more and more difficult to make our titles successful.
In early 2016, I could see the writing on the wall. I knew that I would have to shut down Blue Tea Games.
There was very little to shut down. By then, there were only six of us remaining.
Soon, would be none.
I was in the middle of winding down operations, and planned to move back to the States from Hong Kong to find a job.
But this was late 2015. Virtual reality was just getting off the ground, and I became obsessed with the possibilities of this new medium and platform. At that time, my belief in starting any business was through bootstrapping, and there was no way I could’ve bootstrapped a VR startup.
What happened next still plays out in my mind like a classic movie scene. There I was, depressed from the failure of my company, and I found myself at a friend’s party one friday night, trying to ignore or drown out my sadness when a stranger walked up to me.
“I heard you make games. If you make VR games, I’ll invest in you. I can also get my friends to invest in you.” He actually said that.
“Is this the real life? Is this just fantasy?
Caught in a landslide, no escape from reality”
~ Queen, Bohemian Rhapsody
This may actually work, I thought.
So I took my savings and raised a small amount of money from friends and acquaintances. From that, Glo, Inc. was born, which later became the company known as Sandbox VR.
I took what was left of the Blue Tea Games team and the tiny bit of money we had raised, and we set out to help build the nascent VR industry.
Early 2016 feels like a lifetime ago. The Rift and the Vive had just been released amidst impossible expectations not just for the nascent hardware, but the entire VR industry.
I felt an intense pressure — both self-imposed and from our investors — to be an early mover in the game ecosystem.
But I had a backup plan. One so crazy that it might just actually work (more on that later).
I had built games before. Lots of games. And I assumed this brand new market would be hungry for content. Past experience told me that releasing a game quickly was a good bet, a safe bet. The plan was to build a VR PC game and release it by the holiday shopping season in late 2016.
Nine months later, in December 2016, we released our game for the Oculus Rift and HTC Vive. It was a puzzle game in VR, taking a lot of what I learned from developing casual hidden object games over the past 10 years.
It did not do well. Actually. It bombed.
We lost over 80% of our investment in the game. And, based on Steam data, our game grossed in the top 20% of all VR games. We were one of the lucky ones.
The market just wasn’t ready. Oculus and HTC didn’t release numbers for 2016, but estimates I’ve seen place HTC Vive sales by the end of 2016 around 420,000 and Oculus Rift at around 243,000.
Whatever the reason, VR has over-promised and under-delivered for far too many of us.
The memory of closing down Blue Tea Games just a year ago came rushing back again.
This is it, I’ll also have to kill this VR company.
Except this time, we had one more out.
While most of my team had been focused on the PC game, I had been working with our best engineer Kimkind on a backup project.
Our goal? To build the Holodeck.
When we started the company, consumer VR didn’t sit right with me.
We asked ourselves — is this really the VR experience that people actually want?
Do people really want to sit tethered to a computer in virtual isolation with severed hands and a disembodied head?
Is that the VR I dreamed about? Hell no.
I wanted The Matrix. I wanted The OASIS. I wanted the Holodeck.
I wanted an immersive experience with my friends, where they could reach out and touch each other and actually make a physical connection.
I believed that the real magic of VR would begin when someone could totally lose themselves in the magic of the immersive experience. The game, the interface, the disbelief would all fall away and only Experience would be left.
With the failure of our first VR game, we didn’t have much runway left, but it was enough to get us to a working prototype. By February, 2017, we had a rough demo where you could reach out and touch a friend on the shoulder.
I started pitching it to investors for a seed round. Nothing. No one was interested.
Who would want to invest in a pre-launch VR company with no content, building their own motion capture tech and having to construct a retail location? It’s a ludicrous ask.
But also our demo wasn’t that great. Being a VR tech startup in a back-alley high-rise in Hong Kong probably didn’t help either.
We couldn’t land any funding, but I never wavered in my belief that the Holodeck was going to be built. By someone. Eventually.
So why not us and why not now?
I sat down with our team of six to present the harsh reality — we were going to run out of money
I told them it was unfortunate that we could not be the company to build the Holodeck despite having developed some really cool tech that solved some of VR’s fundamental problems.
But I just couldn’t let go. I just wasn’t willing to walk away.
“This is how it is when you in the Matrix
Dodgin’ bullets, reapin’ what you sow.”
~ Kendrick Lamar
I did something you should never do (seriously, don’t ever do this). I took my entire nest-egg — all the money I had squirreled away from my time building Blue Tea Games over the last decade — and I invested its entirety into Sandbox VR.
I bought our team six more months. And raised the stakes even higher.
Initially, I was hoping to raise enough money for nine months of runway in order to build out a compelling demo for our next fundraising.
But since we couldn’t land any funding, nine months was a luxury we no longer had. I told our team we had six months. Six months to build, not a demo experience, but a full tech-stack, a fully-developed AAA experience, and we needed to construct the first physical Sandbox and generate real revenue.
I reiterated this was our only path — we cannot count on winning over the investors, so we must win over the consumers.
Our teams worked nonstop 7 days a week for six months. We had six months to figure out how to survive.
We did it in four.
On June 2017, GloStation (now Sandbox VR) unceremoniously opened its door. We were located on the 16th floor of a back alley high rise. The tenants on other floors included a few, well, let’s just call them “members only clubs” — obviously we were in a space where folks didn’t want to be seen.
Bookings slowly trickled in the next few days. It was everything we had come to fear — poor sales, signaling a lukewarm product, and with less than a month’s runway left, the reality of closing the company.
But what we also noticed is that everyone who visited were blown away by the experience. But it still sucks that we wouldn’t be open for much longer.
And then one morning, the phone at our Sandbox wouldn’t stop ringing. A video on Facebook featuring our experience was shared over 10,000 times that morning.
Sometimes a little luck goes a long way.
And then it started snowballing.
Guests who left the Sandbox were sharing the experience with their friends Their friends came and shared it with their friends, and so on. We were going viral.
Before we knew it our store was fully booked for 3 months straight, morning til night, 7 days week.
It was surreal to say the least.
Nothing makes fundraising easier than insane traction, and we closed a much needed seed round from Alibaba soon after.
A lot has happened since then. We demoed to Jack Ma and Kanye West. My college friend moved his family from Silicon Valley to Hong Kong to join us as Chief Product Officer.
Startups are always hanging by a thread, and I wake up everyday thankful that we’re still around, and that we get to work on making the holodeck a reality, and to bring it to every neighborhood in the world.
We get to build not just a virtual reality, but a better reality that transforms you and transports you.
We’re building experiences where you can bond with friends on new adventures.
To create a reality where you can be what you want to be and go wherever you want to go.
We believe this new medium is not about better movies or a more immersive game. It’s something else entirely, and we as an industry will need to learn from the best of both mediums — movies and gaming.
The future is yet to be written, and I’m humbled and excited to have a chance to write that future with our team, and with Andrew, Marc, Ben and the rest of the a16z team, along with all of our other investors.
Because all of this almost didn’t happen.