These VR Entrepreneurs Believe In Next Gold Rush

These VR Entrepreneurs Believe In Next Gold Rush
February 20, 2017

Packed into VRigami’s kitchen-sized office with co-workers and gadgets, Experience Designer Colin Falconer builds virtual worlds.


Strap on the HTC Vive headset and step into his latest: a crane-safety tutorial. Blocky buildings and workers occupy a construction site, along with a big crane with a swinging payload. Navigate the site and complete tasks, but if the workers step into danger zones, the crane’s payload can injure or topple.


The graphics are less sophisticated than the lush, real-world experiences provided by high-end virtual reality games and simulations. That’s OK. The goal of VRigami’s Creator software is to enable a potential client — in this case, the U.S. Occupational Safety and Health Administration — to build employee-training modules that are more engaging than a PowerPoint presentation.


VRigami worked informally with OSHA to create the programs. Such training will become commonplace as soon as it is cost-effective and accessible, co-founder Denise Dunlap says. Building the virtual crane world took about seven hours, short enough to be cost-effective.


VRigami is one of several Treasure Valley startups vying for pole position as virtual reality marches toward mainstream products and services. At least four young companies — video production houses 360 ImmersiveBion Studio and Villusion Studios and game developer NurFACE Games — say they are already making money in VR, though each offer products or services in other media.


All the ventures are founder-funded and none has more than eight employees.




With six employees, 360 Immersive made 30 percent of its revenue last year from virtual reality products and expects that share to grow in 2017.


“We have seen how VR can represent a new medium of storytelling capable of transforming human experiences,” co-founder David Cleverdon says. “Immersive technology is the future of education, health, manufacturing, public safety and tourism.”




Founded by Colby Morgan, Bion has six employees. Morgan says he is nearly ready to start soliciting clients and designing whatever virtual-reality experiences they ask for.


“As the industry grows, there will be more than enough business to go around for the different studios,” Morgan says. “Boise is a really good environment to work together. That's what it will take to put Boise on the map as a VR market.”




Founders Jon Farrell and Barry Zundel left a career animating movies at Pixar Studios to start Villusion in 2014. Farrell works out of his Caldwell home. Zundel is based in Portland.


The pair builds custom apps, 3D video and virtual-reality experiences showcasing sites, stories or whatever else clients want. Their customers come from industries such as health care and tourism, including a seven-day shoot in Hawaii this month using 3D virtual-reality cameras, as well as a drone camera, to create video for the Polynesian Cultural Center there.


Villusion is making money, Farrell says.


“We built an app for a medical product company out of California,” Farrell says. “Their marketing team was having to carry around huge bins of product. They wanted a digital hospital that could basically be a hospital video game to showcase their products and how they worked. It’s been a huge success, and we are gearing up for a second phase.”




NurFACE Games is one man, Ryan Zehm, who gained a following after he went from a homeless former HP worker studying coding at the Boise Library to a successful game developer. Since 2012, he has won a handful of game-development awards, including for virtual reality.


Zehm says most of his revenue comes from selling VR development tools on the online store for Unity, which makes game-making software that makes it possible for small teams — not just large production houses — to build games. Zehm also has popular VR game-development training channel on YouTube and is building several computer and mobile games using overseas contractors.


Zehm also founded the Idaho Game Developers group on that hosts events for its 219 members.


“It’s finally getting to the point where Idaho may be a little bit on the map for game development and virtual reality,” Zehm says. “That’s really exciting.”




The VRigami founder team features two startup veterans.


Dunlap is co-founder and partner of Loon Creek Capital Group and a former executive director at TECenter, the Boise State University business incubator. She is a longtime member of the Boise Angel Alliance.


Co-founder Marcus Nigrin founded a photo-kiosk startup, Silverwire, that he sold to Hewlett-Packard in 2006. That sale allowed Nigrin to fund several game-development projects and investments as a member of the Boise Angel Alliance.


They use origami as an example of a complex task that anybody can perform with assistance from augmented reality — virtual reality that lets users see their hands. Animations can guide users through sequences of folding paper that would be much more challenging using two-dimensional diagrams in a paper manual.


“We wanted something that conveyed the image of creating something yourself, like folding paper to make cool and useful things,” Dunlap says.


The company launched a beta product in January for about 40 testers and hopes to generate sales this spring.




And then there is the bodybuilder’s digital gym, Black Box VR.


Ryan DeLuca, the founder and former CEO of Boise’s, brought his startup pedigree to the virtual-reality scene when he launched this company last year in Boise. His company is developing virtual gyms to guide users through intense workouts while navigating video game-style adventures.


DeLuca says he started working out exclusively using the Black Box prototype in December. The company has eight employees, making it the valley’s largest VR project, and it plans to hire 20 more in 2017, he says.


DeLuca also created the Idaho VR Council to serve as a rallying organization for the companies springing up. The council’s first goal is to host events in which more people in Idaho can strap on a headset for the first time.




The council organized its inaugural VR Bash in October and drew more than 1,000 attendees, DeLuca says. They included representatives of Bay Area venture-capital giant Andreeson Horowitz and HTC, the Taiwan company that makes Vibe. The bash was aimed at introducing Idahoans to virtual reality as well as pitching Boise’s potential as a virtual-reality hub.


DeLuca hopes the council will help establish Idaho, and especially the Treasure Valley, as a virtual-reality hub.


“I think it’s better to do it like this versus donating to a big association and writing checks to people,” DeLuca says. “It’s a value we can bring locally, and I felt it was something only I could do.”




Many Treasure Valley tech companies struggle to recruit talent, a problem exacerbated in virtual reality because there aren’t many experienced developers working in it.




DeLuca says that even for a well-funded companies like his, luring talent will be difficult if developers lack other local options should the companies that lure them to Idaho fail.


The Idaho VR Council’s long-term goal is to create a cluster of virtual reality companies here, so that incoming talent has confidence that there are other companies eager to snatch them up if their first company doesn’t pan out.


For that reason, DeLuca says Black Box’s success depends on the other virtual reality companies in the valley growing and thriving.


“Selfishly, if we aren’t able to find the potential engineers and network with companies doing similar things, it will hold back Black Box,” he says.


Dunlap says the talent shortage is the issue that “keeps me up at night.”


“Boise isn’t some Podunk city anymore,” she says. “My friends in the recruiting industry say there’s unrest out there in the Bay Area and other places you’d expect to find a lot of developers. Millennials are tired of the high cost of living.”


What home-grown talent the Valley does produce may not stay. Says Villusion’s Farrell: “We’ve got great, smart people here and amazing engineers, and people coming out of Boise State University. But then they leave, because there’s just not enough jobs here.”


Bion Studios’ Morgan says the valley needs a star company to anchor the others. “I think there needs to be some sort of breakout project that creates big enough splash to ... start bringing people in,” Morgan says.




The novelty and excitement surrounding virtual reality collide with a harsh reality: Not all of these Treasure Valley VR startups will make it, at least not in VR.


At least one company, IonVR, already stalled. The company developed mobile headsets for cell phones and tablets. Its founders hoped to find a buyer and have not shipped any pre-ordered units. Broken links litter IonVR’s website.


Zehm, who contracts work from overseas developers, says big companies aren’t seeing returns on VR apps and games despite throwing money at them. The most successful games and apps for Daydream Vision, Google’s $79 mobile headset that lets users plug in their Android phones, have only about 5,000 downloads, a far cry from the top mobile apps downloaded millions of times, he says.


Zehm says that while his VR work helped his NurFACE Games become profitable and grow, he plans to scale down virtual-reality work in 2017. The biggest game he plans to build this year will be for the PC.


“There will be lots of VR stuff in 2017,” Zehm says. “I’ll continue to make VR tools and do the education videos and making VR games. But I’m not making any serious virtual reality products when the best only get 5,000 downloads.”


“Everybody was guessing that VR would be like the next mobile phone or web gold rush, and it isn’t,” Zehm says. “People aren’t spending money in VR. People don’t look at ads in VR. We’ve seen those companies shutting down.”


DeLuca disagrees. Virtual reality is just going through the same growing pains that internet-based businesses did when he created in 1995, he says.


“Back then, I’d have to explain to people what the internet was, or how email worked,” he says. “People said it was a fad and said companies don’t really need websites. Now people know virtual reality is a powerful thing, but they don’t know how to get started.”



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