How Do You Know You Have A Sellable Product?

You're listening to an episode recorded during the time innovation fuel was part of University Canada West. We are proud and grateful for the work we've done together and we want to thank the university for being in our podcast. We are now excited to continue the journey of Innovation Fuel into its next chapter. Thanks for listening. You're listening to Innovation Fuel Business Podcast by University Canada West. Bringing you fantastic stories for accomplished entrepreneurs and key industry professionals, let's explore the entrepreneurial world through local businesses and our university community. Hello, Galari. Hi, babe. How are you today? Well, it's weird because typically I'd be able, for our listeners out there, I'd be able to see Galari, but I can't. I don't know how she's going to respond to what I say. So I'm going to say stuff and I hope she will. Galari, I think one of the things that we talk about a lot and we've talked about this a lot in our journey is customer validation, customer journey. We know that's in trying to figure out, hey, if you create an idea, how do you get it to the customer and how do you validate that that's the right idea, the product market fit. And I think sometimes we overthink these things. And sometimes we try to do too much and we take so much time to go do it versus, hey, humility is great. Humility is a learning element and by us going out and maybe creating something and throwing it to the market and see what the market responds to. Based on some kind of information or some kind of hypotheous that we've come up with, might be a starting point for us. Yeah, it is actually and it's really important how much changes we need to do for our products and testing it. You know, create something, test it, create something and test it and sometimes pivot or something, even change a product by itself, you know, come within you total product. The whole process is it's time consuming it costly and sometimes or not, all the people willing to do it. Well, I think that's the biggest thing. I think that's the biggest thing in entrepreneurship is that the fear of execution, the fear of just throwing something out there. No matter what, hey, so it's not perfect, who cares? See your questions respond to it and then make iterations as you go. And I think, and I think, Larry, I think that we might have someone today that might be able to answer this question for us or has gone on this journey multiple times. Yes, we are going to have Evan Jones, see your phenomenal virtual esport arena. Let's welcome, Evan. Welcome to another episode of Innovation Fuel brought to you by University Canada West. Yes, we are here with our friend Owen. We have so much to cover. VR might be in that, that conversation, you know, we've heard this world of virtual reality. But we also hear some things around pivoting and changing and meeting the value of our customers' needs out there and finding that opportunities. But before we go there, my friend, we need to know a little bit about you. Tell us, give us a little bit of a story about you and your background. So, I would say my entrepreneurial journey started, you know, a long time ago. Every time I tell a story, I'm like, oh, my God, I feel older and older. But, yeah, so I would say, I was at Concordia University in Canada in Montreal when I graduated in political science. I love political science. It was amazing. You know, you get to learn about so many geopolitical things that are happening in the world. It's phenomenal. I loved it. And when I graduated, I realized that, oh, my goodness, there's actually no drops out there for me, you know? I didn't actually, like, you know, I didn't really, like, at that period in time of my life, you know, I wanted to study something that I really enjoyed, that I really loved. When I graduated, I was like, okay, well, what am I going to do now? Okay, well, I'm going to do something that comes naturally to me, and that was sales. And so, I started working at a place called CDI College, which was basically selling education, right? And during that time, so I was, you know, big into music. I was producing music. I was teaching in after-hours and clubs and stuff like that. And I really liked this, this music thing. And coincidentally, my sister, she was in New York City, and she was, she was, she was starting to become a recording artist as well. And I was like, oh, I'm like, well, I was like, well, let's, you know, let's start working together. And so, you know, I slowly started working with my sister, and we started recording songs together. And it started, you know, started doing better and better and better and better and better. And by the way, I'm going to give you guys advice on what not to do and what to do. And then as things started becoming bigger and bigger, at my job that I was working at, I was, you know, hitting all my sales numbers. And in all of that extra time, I put it into the label. And over time, you know, we started selling thousands and thousands of records. We started touring and stuff like that. And then I eventually got a deal with universal music. And we started making it bigger and bigger and bigger. And so on, at one point, I was able to leave that job and do this full time. And that's when I really started like my entrepreneurial journey. Now, we had talked about this a little bit before. So some of you are probably a lot younger on that are might be listening to this, but there was a period in time that you had to go into a store to buy a CD. Yes, I know it's crazy, but you have to buy, you have to go, I know you have to go into the store and you have to go and buy a physical product, a CD to listen to it. Now, around that time, around that time, as I was producing that my last album, Napster and Limewire and all that were really starting, they started getting a lot of momentum, a lot of momentum. And the labels were kind of freaking out. They're putting up quite a bit of pressure on me saying, I want what are you going to do? What are you going to come up with? What are you going to do in marketing to help sell the record? This is kind of like a foreshadowing of all these things that are happening now on the internet with disruption after disruption after disruption after disruption after disruption. But the first real disruption on the internet is music, guys, it was music and I was right there in the heart of it. And let me tell you, when disruption happens, you can bring down multi-billion dollar companies like that. And a much shorter time than you could even father. I had a friend who came back from Japan and she was like, hey, I want to sell this really cool technology out there called Augmented Reality. And I was like, oh, what is that? And I started looking into it. When I saw it, my mouth felt like, run, I thought it was a magic trick, right? But at that time, it was only for webcam. You kind of have a marker, you'd point it, you'd go like this in front of a webcam and an experience will pop out. And I said to myself, I just had an iPhone, an iPhone 3, and I knew the iPhone 4 was about to come out with a dual chip and I said to myself, I'm like, hey, I think we can create an app that could come along with the CD. And when you scan the CD, there would be an experience that would pop out. So even if you are a fan, even if you are a fan of the music and everything, if you really, if you really, really want the full experience, you go buy the CD just for that, just for that. And so I created the world's first AR app for an artist. We launched it along with the CD right when the iPhone 4 came out. So we also got a little bit of boost and we sold thousands more records. We were in a top 10 in the app store download. So it was really a phenomenon. And then I, a couple of weeks later sat down with the folks over at Universal and they're like, wow, this is amazing. We love it. What are you going to do next? And I'm like, no, guys, I don't think you understand. You know what I mean? This whole, it's only going to get worse for us. It's only going to get worse for you. If it's the bulk of your money, you're making it all from distribution of physical sales of CDs, you need to change your business model and they did not want to hear it. They did not want to hear it. And so that's where I was like, okay, well, I think that all of you are going to lose your jobs. And I think that this whole thing is going to go from bad to worse to worse to worse to worse. And I think none of you guys are prepared for this tsunami of technology. It is about to happen over the next little while. And you know what I mean? And without arrogance, you never want to say these things. You don't want people to lose their jobs and stuff like that. But at the same time, on the other hand, they're so used to making billions of dollars on basically just printing plastic that they didn't want to hear it. And so I said, OK, you know what? I think I'm I think I'm going to leave the music industry. I think there's a real future in this new thing called augmented reality. So, you know, augmented reality makes reality a virtual reality all of a sudden. So I started an agency. Like I said, not because I was the best or anything, just because well, I was the only one who was doing it, right? And so these brands, they were really interested in technology. And so these all these big brands were willing to give me, you know, that a little bit of money to create something cool for them for their marketing initiatives. And so we started doing that. And then with there, I started employing more people and all of a sudden, you know, we're 25 people, 30 people, and then we start working huge brands from, you know, from a GP Morgan to Twitter to universal pictures. And we had started doing a lot of virtual reality from 2013 onwards. And until the fact of we started working with, you know, universal pictures and last one we worked with with Tom Cruise, where I'm not sure if you guys saw the mummy, not the best movie, just letting you guys know ahead of time. But there's a scene and there's a scene and zero, zero gravity. And so my brother was the creative director had to fly on the plane with with Tom Cruise and, you know, do all those, do all those scenes in virtual reality. And that was, that was a real trip. And and then after we released it at South by Southwest with IMAX universal pictures and it was amazing. But then after when we started asking people what they thought of the experience, they all loved it. And then when we asked them, would you do it again? They said, no, and I said, well, why? And they said, well, it's because it's like a movie. And if you look at movies, you see them maybe once, maybe twice, maybe three times, right? Do you not going to see it over and over and over again? And I said to myself, okay, well, I think I'm done making other people's stuff, you know what I mean? Because as much as I'm doing a work for universal pictures or Twitter or whatever, it's not my work, it's their work. They've paying me a service for it, right? And it's to myself, okay, well, I think I'm done doing that. And I really like to create a product. where people can play over and over and over again, would replay ability and competition that's built in. And so I sold my company and I had learned the hard lessons of what it's like to build a product without testing it with the market first, because no matter what you're gonna build, I don't care who you are, Steve Jobs, Elon Musk, put Neem here, I don't care who it is, you're gonna fail, you're gonna have problems, and it's not gonna be exactly what the market wants. A little bit of knowledge that I acquired over the years with my first startups, I said, okay, we're gonna create a series of prototypes. And the people that I want to sell at to is a location base, those are arcades, family entertainment centers, amusement parks, et cetera. Let's get a little place where we can test out these games and see what people like. So I was lucky enough I made a deal with the real estate partner and we got some free rent and we started testing out the games. And I kept asking people, I'm like, what do you think of this? What do you think of this? Would you play it again? It was always no, no, no, no. Until one day we created something new and really original, where all people could play together inside of a space and people kept coming back over and over and over and over again, and I said, f**king got it, I got it, right there. That's the first sign, that's really the first sign of when you know you have something and that's what we call good signs of product market. Not product market fit yet signs of product market fit, okay? Don't get those two things confused. And so with that, we started packaging the prototype, started selling it because that's the next thing is like you may have a great product but you may have good signs of a great product, but if you can't sell it, you don't have a great product. Actually, you're missing, there's something wrong, you know? So you wanna get there, you wanna sell it as soon as possible. So we started selling it. Of course, the thing was buggy as hell, you know what I mean? I was having problems, this, that and everything. But we learned, we kept iterating, we kept changing, we kept making it better until the clients started becoming happier and happier with the product. And that's how we kind of built out phenomena. - I love what you're saying, because again, you know, we come back to that element and we talk about this all the time is that value creation, how do you create value? In a market, you need to go to the source of where you're trying to solve the problem. And yet, you might give one iteration like you said, and you might be like, aha moment, yes, we've got something to start with, but it's not the final thing, 'cause we got to continue to address it and change it to adapt it to meet the future needs of a bigger market, a bigger segment, and you know, work out the bugs, like you said, but I love it, but also, you ran into a challenge, I think. You ran into a challenge, all of a sudden, you were dealing with something that you had, and then COVID hit, and then you had to do something different. - Yes, yes, so well, oh man, COVID, I don't even know what to say, and I'm like, oh my God. I remember today, guys, I remember in March 18th, I remember when the politicians got in the news, and I was like, oh my God, what am I gonna do, you know? What we did during the COVID era, and I'm gonna say this because we're an Acadian podcast. I do believe we are in the greatest country in the world, my friends, and I believe that what Trudeau, you can like Trudeau not like Trudeau, I'm not getting political, but what Trudeau did during the pandemic, just in terms of keeping people working, I believe that we're gonna see the ramifications of all of those innovations over the next coming years, because of what just happened. I truly believe that because with us, we used all of that time to say, okay, this is working for us, now let's go deeper. We guys, we get a chance of pressing pause and working on innovation the entire time, so that when the world comes back online, so to speak, we're ready, we got it, we got it all. We can hand it over to you, and we know that you're gonna be happy with the product, because you were buying it when it was full of bugs. So that, for me, the pandemic was at the exact same time, the darkest period of my life, you know what I mean? And just in terms of an entrepreneur, and the greatest period of my time, at the, literally at the exact same time, exact same time. I hope that all of you took that time as well, just to improve, man, to get better in some ways, shape or form, whether it's skill wise, whether it's product wise, whether it's whatever wise, you know. - I want to a little bit talking about your product, and how you're operating now. So what exactly is your product, and how you're operating? - Location-based entertainment centers, right? So when I say that, I just mean family entertainment centers and amusement parks, theme parks, they were having a lot of not problems, I would say, but I would say like frustrations with bringing that new generation of kids into their centers. Think about this for one second. If any of you guys have kids, or you know, some of the audience has little brothers, little sisters, or whatever, think about this for a second. It's not the same thing as when we were kids. When we were kids, you know what I mean? There was not video games that they were built for 200 million dollar budgets that you could buy 40 bucks, or actually in Fortnite that's free. The stuff didn't exist. You know, there was not Netflix that you'd get at 10, 15 bucks. You know, the stuff didn't exist. So now to get a kid, or to get the younger generations off the couch or out of the house, you need to have something that's 10x better than them, right? 10x better than what you get at your house. So whatever you're building for your clientele, for my clientele, which was location-based, it had to be 10x better than what they can get at their house. What can't you do at your house? Well, you can't run around your house right now in virtual reality with a bunch of friends and have an experience. You can't have that. So we built out that experience for location-based entertainment where a group of people can put on VR headsets and compete within a set space. And that's what we call the VR esports arena. And so that's the value creation that we did for our customers and up to now, you know, people really love it. So we're very happy about that, and fortunate. You've gone further during this innovation period 'cause you started off with what I understand was you had one offering. This whole period of COVID, you then went and built on that element. So, okay, so the first version was just a, basically it was just a game that we built. It was kind of really just put together by kind of like hacking all of these headsets, put together, and it was kind of complex to put it all together. And we said to ourselves, well, what happens if we want more games in the future of other people want more games and we start scaling this thing? It's like, it's not gonna work, it's just gonna break. So we said, okay, we have this time now. Let's go and build a platform where all of the other content can live on top of it, right? And so we built out the platform. We knew we already had one hit game. And so we started building other games as well on top of it. And now the platform is open up to other developers as well who wants to put their free roam for throughout the games on our platform. And so that was kind of the steps of how we did it. So it's, again, it goes back to what I said before. Early little signs of product market fit that people are willing to pay for this and they're willing to use it. You know, you get your product, put it in mixed panel, look at the data. The data will confirm your observations. And they're gonna point you in the right direction. >> Where does it go next for you? >> So moving from the arcade system into what's next? >> Okay, so I'm gonna tell you guys a little bit of the problems that I used to do in the past and a little bit of what we're doing now. And I hope that this will be a little bit of a gem for you guys. When an agency all it was was built something cool, a new built something cool, a new and I feel that a lot of entrepreneurs like that's the way they feel the graph, they have to build something new and it's cool, it sells and then after that, they go right back into that cycle again. But it should be, you have an innovation. It's working, your customers are buying it. Instead of coming out with something new and new innovation, you should be making your product better. For an extended period of time, make it better, better, better, better, better, better, better, better, until there's nothing left to improve anymore. Then you create something new and innovation. Not with, I guess, the biggest difference between what I did in the past and what I'm doing now. Now it's just about improving the product that's as is. But not spending time, resources, everything, and say, okay, well, how can we do an entire new innovation? You know what I mean, you don't need to do that. Innovate first, then after that, improve the product for a long period of time. You would be surprised how many things you've overlooked that may annoy your customers. So fix those things, you'll have better retention. When you have better retention, you have better cash flow and you have better cash flow. You have a better looking company. It'll be easier for you to raise capital, be easier for you to develop things in the future because there's going to be money in the bank for you and your company, your employees are going to be happy as well because you're going to be giving them bonuses a lot easier because the money's going to be rolling in. It's just a good, it's a good thing to do that. That's what I'm trying to tell you guys. Our customers and many more customers that are in a similar space, what they want more than anything else is reliability. Like think about the first iPhones that you had or the first Android phones that you had. They sucked, they didn't work properly. And what was the thing that I know you more? It wasn't about getting new apps or new this or new data. No, make the shit work properly. That's what you want it, right? And so every single iterations of the phones and every single new updates, the OSs, the products started working better. That's what I mean. That's the first initial innovation. And then the product just works better and better and better. And as the products that works better and better the frustration of the user decreases, retention increases, and then off that there's room for new things to come in. - That is very important, important of that one. But what about the cost of changing and coming within new products? I'm talking about what is the pressure we come new company or startups or small businesses such as you for keep having new products. - I, like I said, it's just a little bit of what I've built on before. But if you've built, if you've built a great product that's innovative and you keep on improving it and you have strong retention, Galera, you're gonna have more money. Your company is gonna be financially a lot better. And when your company is a lot financially better, you have more breathing room. When you have more breathing room, like, okay, I'll give you an example. Let's say you have a startup, right? You've just gotten your precede to your seat, right? And your stuff is working really well. well, and the money's coming in and you have strong retention in terms of your product and people are not churning, that means you can forecast how much money is coming in over the year. You can look at how much money is coming into the company forecast over the year and you can say, "Okay, these new features are going to cost four months or five months or six months of dev time or whatever," and you can calculate that and you can predict the next things that you're going to build without putting your company at risk in terms of operations. So, sorry guys, I know I'm an entrepreneur and you're supposed to go towards risk, but that's not true. Actually, the initial risk is at the beginning, but then after I want something, want something to work, you should be trying to decrease your risk at all times, decrease, decrease, decrease that risk. And I love what you're saying because it's a different story that you're used to hearing out there. I think by continuously investing in your product or your service and continuing to make it better and better and better, yes, you're right, you're going to make more money. And eventually, you can put that little money off here and you can eventually add more to these things and expand. Now, going down the world of technology, let's spin the conversation to the world of technology. VR. And where's the future of VR going? The agency was, we were really bullish on augmented reality and we felt that this was, this was the next window of the world, of the internet, you know what I mean? Instead of your phone here looking at it this way, well, you know, you mean you're just going to have glasses and you're going to see the world around you and that's all going to be augmented, but, but here's the thing guys, here's the thing and here's the way technology works. There's often leaps and bounds in technology that brings you up to a certain point. But then after that, the technology gets almost like locked in a sense of like for the next things to come out, there has to be a lot more technological breakthroughs. And the ones that I saw in 2016 of what AR needed to go through was too far away. And I was like, no, this is impossible. You need to have all these developments of spatial environments and optics and everything. And I was like, I'm like, that's going to take 10 years. I'm like, I don't care what anybody tells me, that's going to take 10 years. But this VR thing, VR thing is now, right? It's now I can make, I can build a product right the second and it's still very early days. And so that's the reason why we decided to really just focus on one single technology which was virtual reality. And then when we looked at the virtual reality landscape, we said to ourselves, okay, well, we, again, this goes back to, you know, what is the market? Who are the customers? What kind of product do you want to build? And for us, we really liked location based because we felt that that's where the money was first, not at home. And so that's why we focused really on location based and the problems that they were having farming team centers, theme parks, which I just talked about before. And yeah, we focused on that and we were lucky. It worked. Where is next? You've come with AR. You've come with VR. Your head of the game. You're jumping into all these different areas. Is there something else that we should be thinking about in the future here? Of course. Like, look, we call it the VR eSport arena, right? So that's what we, that's what we call our product. And there's a reason why I call it the VR eSports arena, especially the sport part. If you look at any sport, it has four main components. Doesn't matter if it's hockey, soccer, whatever insert sport here, they all follow the same thing. So let's take basketball as an example. If you want to be a basketball player, right, you need to first have a, you need to be able to go to a basketball court, right, and practice and play with your friends, right? So that's a, so that's the look. Imagine that's a location based entertainment portion. Then after that, you want to practice at your house, right? So whether you have, let's say a basketball net, you practice by yourself, maybe you'll practice one other friend, that's the at home version, right? Then after that, you need to be able to create leagues out of it. So you need to professionalize the sport, right, which is what we're doing now. And then after that, the last one is broadcasting. You want the Joe Rogan of UFC commentating on your stuff, and that's a streaming portion. So these are all of the building blocks that we're building over the next coming months, over the next coming year, where we are going to be able to play the VRE Sports Arena at on location. You'll have a different version at home. You'll be able to, the product is going to be streamed on Twitch, and we're going to be creating these new leagues. They're going to be starting next year. So the next, we're actually in Montreal, off every in Montreal, December 3rd. I welcome all of you guys to come. We're going to be having a VRE Sports Arena tournament. We're going to crown a champion, sponsored by Telliz, national by Canada, Panasonic, HTC. So if you guys want to come, it's free and Zoom Montreal, so I welcome all of you guys. That's it as a home. That's what we're trying to do. Dave, we're turning it into a sport. So instead of just looking at it as a technology, you're looking at it, instead of looking at it as VR, you know, look a little deeper, look a little deeper. What can we do with VR? It's like, it's like, do you know the Roland 808? What did it take? It took a new order to come up with that song, and then you'd realize that, oh, my God, we can make this kind of this new music, kind of called electronic music. And then the 909 came out, and then what do we do? We started making raves with that music, you know what I mean? Sometimes the technology is just the instrument for what can come after. As you've said, my friend, the value creation, find the value in those elements, find the technology. I love our conversation today. It's absolutely brilliant. But before we wrap up today, we always ask our guests to throw out a challenge. Now the challenge could be a macro challenge that we should be thinking all about, or is it individual within your organization challenge that we can get our students engaged in? Okay. Alright, I'll challenge. I'll throw a little challenge. By the way, guys, I'm not saying anything new, this is not my wisdom. This is like, straight up copied and plagiarized from all the talks I see from YC and from all these other great entrepreneurs, much better than I am. So build a product in less than three weeks. Build a product less than three weeks. If it takes you more than three weeks, if you're not ashamed of what you're publicly posting and you can't get customers, you can't get one customer out of it, you're doing something wrong. So if you're an entrepreneur and you would you build, took longer than three weeks, you're doing it wrong. You want you to take something, build it in three weeks, release it, try to get one customer to pay for it. It doesn't matter the price. Pay for it. And enough of that iterate, iterate, iterate, iterate and you'll be on your way to building your first product. It doesn't matter if this product is not the product that you visioned down the line or just start with something, start with that exercise. Build something. Throw it out there. See if the world likes it. Is it solving a problem? How deep is that pain that you're solving and you can do this in three weeks? Figure it out because that's the path to entrepreneurship. There's no magic formula. There's none. It's building something. Get it out there as soon as possible. Do you want this? Do you want that? No, you don't want it? Okay. You don't want it. Why don't you want it? Oh, because of this, this, this. Okay. Well, you just now got the answer of what you need to change in your product for that person to buy it. Okay, go change it. Okay. Now, do you want this now? Okay. Yeah. You do? How much do you want to pay? 20 bucks. I'll pay $15. Okay. Perfect. Well, now you can sell your product for $15. Okay. How many of those do I need to sell in order to build a profitable company? Okay. Okay. Perfect. Now, how do I scale that? You know, is my total adjustable market big enough? How? What's my going to be? What's my going to be my go-to-market strategy? But it all starts from that, that little project I just told you guys to build it in three weeks. Build it in three weeks, release it out the world, see if you can sell it. And if you can, you're onto something. And these are all the building blocks for when you want to build the next Tesla. It's the same. It's the same. Perfect. Thank you very much, Robin. It was great. Thanks, guys. That was another episode of Innovation Fuel. Thank you for listening to Innovation Fuel. We are on all podcast streaming platforms. Google, Spotify, and Apple Podcasts. Visit our website at www.youcanwest.ca/innovationfuel. Also, follow us on Instagram and @innovation_fuel.