Virtual reality: where the money is spinning and how to create your startup

According to forecasts , the virtual reality industry will surpass the mark of $ 75 billion by 2021. But for this, new market participants must constantly appear. Unfortunately, creating your own business in the field of innovative technologies is a difficult task. Under the cut, I will try to explain what opportunities and hidden stones can expect you if you decide to build your VR / AR business.



VR Starters and Money



Each of the founders of startups has its own history, but everyone agrees on one thing: there will be a lot of difficulties on the way, and the key one is to find money.



Sarah Hill, the head of StoryUp, has spent 20 years working as a reporter on a local television station in Missouri. But then she managed to start everything from scratch and created her own business in VR.



“ To set up your own company, whose activities will be built on the latest technologies, you need a lot of money. The first expenses in the amount of $ 50,000 left the family budget only for the purchase of necessary equipment. And my husband and I have already invested about $ 100,000 in the creation of a company with all the necessary equipment and a staff of specialists , ”says Sarah Hill.



René Pinnell - the founder of the Kaleidoscope VR community - says that it’s very difficult to enter the market with a total of less than $ 50,000. And even harder - to create something in demand. Pinnell traveled with his experts in many countries around the world: “ We asked the designers the same question: what did they lack first of all? The answer was almost always the same: money . ”



Arthur Goykhman - the head of Surreal VR - says that it took several years to create a platform that allows you to quickly create animation for VR. And even despite this, the development of a new product has to spend at least $ 100 thousand at the initial stage.



Currently, there is not much hype around the technology of virtual reality - there are only special cases of its successful application. In addition to games, you can select virtual tours, 360-degree video, comedy stand-ups and live broadcasts in VR mode. But the cases when such a business brings great profits are rare.



However, startups can get funding. This is mainly engaged in large companies.







Where is the money spinning in VR?



Kaleidoscope helps prospective programmers implement their ideas. The organization has found about 120 investors. Of these, the largest are the manufacturers of VR helmets.



The owner of Universal Studios, Comcast, has invested $ 6.8 million in a small VR studio Felix & Paul in Montreal, which has managed to work with Funny or Die and the White House.



The development of virtual reality also invests the New York Times. For many years, it has been creating 360-degree videos.



Facebook also announced plans to allocate half a billion dollars to support companies that create content for various platforms. With the same goal, HTC also invested its funds - it provided $ 100 million to develop its Vive platform. Other major market players - PlayStation, Google and LG - also contributed by investing about $ 700 million in the VR market.



René Pinnell comments on these investments like this: “ Large companies understand that they need to expand content, popularize technology and attract new customers. Only in this way will they achieve an increase in sales of their devices . ”



According to him, many people invest in VR only as a marketing tool - to attract attention: “ It is more interesting for them to own intellectual property rights, which may appear as a result of some research .”



But, according to the expert, there are other market participants. Those who see in virtual reality are more than just a way to make money. They look at it as a new milestone in the entertainment industry.



And what about the domestic market? Unfortunately, most companies are only looking for themselves in this area. However, there are pleasant exceptions. For example, the company VR Concept . The guys have developed software that allows visualizing CAD models in virtual reality systems and interacting with them as with real prototypes: assemble and disassemble, check ergonomics, track collisions, etc. At the moment, a solution has been developed for virtual reality helmets and professional projection systems. By the way, it will be possible to watch the program in action very soon. The developers have already received an agreement in principle from several foreign and domestic investors to support the project and hope to proceed to the final stage of implementation by the end of the year.







VR without commercial gain



Some companies see in VR not just technology, but whole art. Therefore, they use it in various fields. For example, a small British team called Amoeba worked for three years on the development of VR solutions for galleries and museums. At the same time, it is impossible to say that they were in distress: they were paid from 19 to 77 thousand dollars for one object.



For example, they designed a VR exhibit for the Timothy Tailor gallery, where they rebuilt a temple from the Indian city of Kalimpong.



StoryUp, led by Sarah Hill, also does this sort of thing. For example, when Google closed the Google Glass project, it threatened the existence of virtual tours to the World War II memorial in the United States. Sarah’s company developed its own version of the VR-panorama, calling it Honor Everywhere and giving veterans the opportunity to visit the monument in the format of virtual reality.



“ The reaction of the veterans was encouraging. They didn’t just see the memorial, but seemed to be there. Therefore, we wondered how the immersion effect affects the brain , ”says Sarah Hill.



Today, StoryUp is creating social VR projects. For example, they developed a VR solution for the American Heart Association. It immerses the user in the history of the person who suffered a heart attack. People had the opportunity not only to look at the consequences, but also to learn about possible signs of a problem in themselves, which would allow them to prevent a possible attack. Medical foundations and charitable organizations noted the importance of such work.



Now StoryUp offers its solutions on a variety of platforms: Vive, Gear VR, Daydream, PlayStation and others. At the nearest Cannes Film Festival, the company presented several projects to attract public attention to the benefits of VR, not related to money.