Making an Impact in Silicon Valley VR Scene

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Success at Innovate Manitoba’s 2016 Venture’Challenge and Launch’Pad Bootcamp has Manitoba’s Campfire Union startup team burning up the virtual reality (VR) scene in Silicon Valley.

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Campfire Union CEO, Lesley Klassen

This is a long way from where the VR company was when it landed third place in Venture’Challenge last year. At that time, founder and CEO Lesley Klassen admitted he was surprised by the win, but immediately saw what the $100,000 prize would mean.

“When we pitched at Lift’Off our product Flipside was still conceptual, although we had a working demo,” he said. “We were at a very early stage so the $100,000 capital offered through LEAP was incredible.”

Accelerating Growth with Help From Innovate Manitoba

LEAP, which stands for Launch’Pad Entrepreneur Accelerator Program, is a pilot project funded by the Province of Manitoba to assist promising startups accelerate their growth while reducing risk through world-class mentorship.

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Flipside is a virtual TV studio

Klassen said the capital and mentorship opportunities the program provides have helped him and co-founders John Luxford and Rachael Hosein move much farther and faster along the runway of crafting their product, conducting user testing and talking to customers. “We now have a fully functioning product and can pitch to high level customers in the YouTube and animation spaces,” Klassen said.

Luxford explained that the LEAP funding is provided at distinct stages as the company works towards milestones set out by their lead mentor, startup genius Alistair Croll and Innovate Manitoba’s president, Jan Lederman. 

“We’ve already completed several milestones,” Luxford said. “Innovate Manitoba assigned Alistair as our lead mentor and he’s been incredible in working with us in connecting those milestones to proving our business model.” He added that during their four-month stint in the Valley, they’ve been able to prove that there is a demand for the video output they’re producing through Flipside.

Getting a Big Boost

One big step for the company has been participation in Boost VC, described as a “family of founders making sci-fi a reality.” Twice a year Boost VC invests in 20+ startups. The three-month accelerator program includes housing and office space in Silicon Valley and brings together top technologists to work together to solve problems in a wide range of disciplines, including VR.

The team had applied and were accepted into the Boost VC program before their Venture’ Challenge win. Klassen said they would not have been ready to take advantage of what Boost VC had to offer without having first completed Innovate Manitoba’s Launch’Pad Bootcamp and had the opportunity to work with Croll. “I was nervous going into Boost VC, to be sitting at the table with all the hot Silicon Valley startups, but I quickly realized the training we received at home fully prepared us to optimize our experience. We are just as advanced, and in some areas, more advanced than many of these companies.”  

The Founders Benefited Immensely from Working with Croll 

Hosein said Croll has helped them understand the need to structure development in a way that makes the most sense. “That’s involved looking at the order of how we’re doing things and proving out small pieces at a time,” she said. One example was the need to develop 2D viewership first. “We were really focused on the 3D VR market, but Alistair stressed the need to create something using VR hardware and our app in a way that would bring along 2D viewership as well so we weren’t isolating the market.”

The focus has been on using available data to develop a structured plan of attack. 

Klassen added, “Alistair has really pushed us to use analytics and data to make more strategic business decisions.”

Croll reiterated this point. “Funding and visibility are helpful; but realizing you have specific goals and milestones to satisfy backers is a hard lesson for any founder who’s been able to shoot from the proverbial hip. It’s better to learn these lessons before signing significant term sheets.”

“I think the biggest lesson any founder can learn is that, in today’s scarce-attention market, the risk isn’t whether you can build something—it’s whether anyone will care,”

Anna Sweet, former head of social VR content at Facebook has also come aboard as an advisor to the team. Sweet was at Facebook when Campfire Union was first talking to the social media giant. “Anna is deeply connected with the VR ecosystem and is an incredible asset to our advisor team,” said Klassen.

Currently Boost VC is the only other investor in the company but more deals are in the works said Luxford.

Taking on Silicon Valley Market

The focus of the team’s time in Silicon Valley continues to be on forming partnerships with the appropriate platforms, such as Google, Facebook and HTC, as well as with animation studios. 

Klassen said they are making good headway. “We’re being noticed in Silicon Valley and there’s a definite need for what we’re making—a product, like Flipside, that puts the ability to create compelling animated VR content into the hands of non-technical creators.” This, he said, is the largest market. “We’re bridging them into a new medium, without having to be technical themselves.”

Having the ability to quickly and affordably create and distribute quality animation will give customers an edge, Klassen said.

The market is huge. With over 200 billion a year spent globally on animation and a customer pipeline that includes YouTube creators with over 22 million subscribers, as well as interest by a top US animation studio, the opportunity to grow Flipside is enormous.

The Campfire Union products, including VR animation and publishing platforms, are subscription-based. Pricing is still being determined.

Klassen described their recent successes as only a start but the momentum is growing.  “It’s like a snowball rolling down a hill that keeps getting bigger and bigger.”

Luxford said it’s like a cat poised to pounce. And it will pounce.

Croll is happy to see how far the company has come. “It’s clear that their time in Silicon Valley has changed them,” he said. “But that started before their departure. We went through a fairly rigorous process of figuring out where the big risks were in their business model, and then setting metrics to test whether they had overcome those risks.”

While he admits that the outlook for many startups can be bleak, his hope is that the lessons that have been learned will help the Campfire Union beat the odds.

“They’re smart, and they have a way of hustling and figuring things out. I think they might surprise the odds-makers; they have a genuinely new approach to content creation that works well for certain forms of entertainment.”

He concluded, “I think they’re much more pragmatic than they were, without having lost the zealous enthusiasm that sustains a startup from day to day.”

All Send Accolades to Innovate Manitoba and LEAP

“I think the [LEAP] program has great aspirations,” said Croll.

Klassen said, “The Launch’Pad Bootcamp weekend helped us to stop thinking of the product in isolation and to start thinking about it as a business. Having access to the investment mentors at the time forced me to think more about business and the relationship with customers. It was a course correction that put us on the right path.”

Hosein added, “Thanks to the Venture’Challenge win and LEAP prize, we’re able to focus on the product and not worry about where the income is coming from while we do that. We’ve been able to develop much more rapidly and I don’t know if we could have done that without this opportunity.”