Preface Part 1- What’s a Virtel?
Over the last year, I have been able to reflect on the time I spent co-founding, building, and in the end, shutting down Virtel. I’ve decided to write a series of short blogs to highlight a lesson I learned from the startup I co-founded in each blog. Hopefully, this can help me share a little about what I learned and how I plan to improve the next go-around.
I do want to say if you are reading this because you would like to start your own startup I recommend reading Paul Graham’s essays on How to Start a Startup and The Lean Startup by Eric Ries.
This preface is designed to give you an overview of Virtel, how we started, and a rough timeline of events.
Student Innovator of the Year — March 2017
Every year Brigham Young University (BYU) has a competition called Student Innovator of the Year. Dozens of students with inventions apply to pitch in front of a panel of judges and compete to win cash prizes that can be used to start their venture. I was always interested to see what new things my fellow students decided to come up with so I decided to attend the demo day where all the contestants had their inventions on display outside of BYU’s Wilkinson Center.
As I perused the booths nothing really caught my eye until I came to one with an interesting virtual reality (VR) idea. There I met Jeff and Ben who had come up with an idea to build a language learning tool in VR. I looked around their booth and saw some nearly illegible charts and graphics printed out on standard printing paper hastily pinned up onto the booth’s back wall. Then after talking to Jeff for a little I discovered that he was a master’s student studying engineering working on his thesis for material sciences. Ben was also looking to start a master’s degree in Spanish and was currently teaching an entry-level Spanish course at BYU. Jeff and Ben were self-proclaimed cousins and I could tell they had a tight bond. After introducing myself as a strategic management student who had made past attempts at starting my own venture, I asked if I could see their demo. That’s when I got hooked.
It wasn’t as if the demo itself was particularly impressive (it had actually been coded the night before demo day by Jeff and one of his friends) but it captured my imagination. I asked Jeff if there was a way to contact him. He and Ben had me fill out a google form with my information.
After finishing up some homework on campus, I rode the shuttle home to my apartment and on the way, I found myself constantly thinking about the possibilities for this new venture. As soon as I arrived home I began researching everything I could about VR and decided I was going to convince Jeff and Ben to let me be involved.
Over the course of the next couple of weeks, I met with Jeff and Ben multiple times. They asked why I wanted to work with them, what I was bringing to the table, and where I saw the venture going. My main point was that right now their demo was simply a gimmick but I could help them build a real business. I shared my vision for a true enterprise capable of taking on the complex educational market. Although I’m still not sure why they decided to bring me on, I became a co-founder of this unnamed venture and the real work began.
Finding Dallin — April-August 2017
Jeff was adamant about one thing; he was not a coder. Even though Jeff had some limited coding experience he didn’t have the expertise required to write a complex program to teach a language in a 3D simulation. We decided we needed to find a talented developer who could not only write stellar code but also lead a development effort that would require multiple developers and animators.
Now finding a talented developer is no easy task but we got really lucky. Ben at the time was teaching a beginner’s Spanish class and had a woman in the class who had worked for Word Perfect. Ben approached her and asked if she knew of anyone who could help us out. She told us about a guy who was the son of an old coworker who she knew to be very talented. She put us into contact and we scheduled a meeting with Dallin.
The three of us sat down with Dallin and we began explaining to him the vision of what we wanted to create. I told him that we not only wanted to develop a language learning tool but a complete system by which learners could come into our platform and receive feedback based on their performance. The curriculum would adapt to their learning needs and we could collect performance data to drive users to develop in areas where they were weakest. Dallin, being a calculated thinker, took a minute to ponder everything we told him. He then asked a question that grabbed my attention “Are you guys all in on this venture? Or is this just a side project?” We answered that we were definitely “all-in.” Dallin said he would take time to think it over and then answered back a week later saying that he would be happy to join the team if we were going to take this seriously and try to build everything we had talked about.
The Proof of Concept — Summer and Early Fall 2017
From there the real work began. We decided we would set a goal of going to TechCrunch Disrupt that Fall to display what we had done and collect some early feedback from investors in Silicon Valley. To do this we would need to make a lot of progress in the next few months. This included developing a business plan, registering as a business, obtaining a provisional patent, designing our system architecture, creating a curriculum, reaching out to schools and early beta testers, figuring out how to get our first dollars into the company, etc. Over many meetings of storyboarding and discussions with professors and language students we decided on a few key decisions for our first iteration:
- The first language taught would be Spanish because it had the largest market in the U.S and we had Ben and the whole BYU Spanish department at our disposal.
- Focus on building one lesson that we could demo and iterate our product on.
- Design and build a platform to track performance data within the application.
- Create a development framework to cut down on the time we would need to iterate from one build version to the other.
- Build partnerships with schools and other institutions to help develop the early curriculum and collect pre-orders.
Ok I know, this was a LOT to accomplish in a few months. And guess what? We didn’t get everything done in time for Tech Crunch Disrupt but believe me it was an adventure.
Tech Crunch Disrupt San Francisco — September 18th-20th 2017
To go to Tech Crunch Disrupt we needed money. I proceeded to research different grants that were available and ended up finding out about the BYU Rollin’s Center grant for new tech ideas. I met with the Rollins Center and told them we wanted to go to San Francisco to validate our idea and meet potential investors. They signed off on a small grant for our travel expenses and event tickets.
After locking down travel plans for the event our development efforts went into overdrive. At this point, we had decided that our first lesson would be preparing a meal in a kitchen in Mexico. There were so many moving parts that needed to be finished that we decided to simplify the demo in order to finish on time. The demo would simply be to pick up an object off of a table and the name of the object would display as well as an audible pronunciation of the object. We thought this would be too simple to grab anyone’s attention but at this point, we didn’t have a choice.
Early in the morning on September 17th, we loaded up my car and began the 12-hour drive with all of our equipment to San Francisco. Even though we were all stressed it was an enjoyable trip and was the most amount of time any of us had spent together in one sitting. We listened to startup podcasts the whole way there and discussed what our gameplan for our presentation day would be when we arrived (you get to present one day out of the three and we would present the second day). We arrived that evening at our Airbnb and began to make final preparations for when we would present on the 19th.
Final preparations for a conference usually entail going over some notes and making sure the demo is working. For us, this meant finishing the demo and trying to get at least a few hours of sleep. Dallin who had to do most of the coding ended up being awake all that night and the next to get our VR demo working. We were all crammed into this tight Airbnb room with the sensors needed for the VR headset spread across the room while we repeatedly picked up different virtual objects to make sure everything was working properly. It was hell but in the end, we finished.
The next day we attended the first day of the conference. The night before we had gotten little to no sleep. To make matters worst we realized we had brought a tv that was way too large for our booth and had to go purchase a new monitor at Best Buy. Also, while we were shopping we finally got the documentation we needed to file our provisional patent. We had to file the provisional patent before we could present our product the next day. I ended up filing a provisional patent on a laptop in Best Buy while my cofounders shopped for a new screen. After Best Buy and us having a small emotional meltdown, we hurried over to dinner with one of the partners of a prominent VC firm called Founders Fund (yes Peter Thiel’s fund) at a sushi restaurant nearby called Blowfish.
Finally, it was our day to present. We had no idea what to expect. When we arrived we were grouped together with other VR and AR (artificial reality) startups into these tiny booths where we could discuss with conference attendees about our startup and give product demos. We were all nervous that people would scoff at our demo. It was so simple and yet it ended up having a huge impression on everyone that tried it! People loved it! It felt so satisfying to finally see people try on the VR headset and move around in the virtual kitchen we had created to teach Spanish.
The day we presented, I also had scheduled meetings with a few different investors from the area. They met with us and discussed our progress thus far. During this time the VR space was hot so investors wanted to see if any of the many startups had seen “real” traction. We were so early on in our startup they all simply handed us a business card and assured us to reach back out to them when we started to see more traction with users.
We took the lessons we learned and returned to Utah where we made plans to determine how we could take our venture to the next level.
Startup Competitions and Building Our First Lesson — Fall and Winter 2017
Upon returning we decided to focus on three objectives, raising money, making sales/building partnerships with our first users, and finishing the development of our first Spanish lesson.
To raise money, we began pitching to various investors in the area, applying for more grants, and participating in startup competitions.
Despite having had some positive feedback at Tech Crunch Disrupt, we quickly realized nice words did not equal dollars. To change this, I set out on a pitching spree. We pitched any investor that would hear us out and competed in all the competitions we could enter. I spent countless hours going over pitch decks, reading about how venture capital worked and practicing our pitch. Although this helped to educate me and my team about what we should actually be focusing on in our startup it didn’t do much to bring dollars into the business. (Note: Whenever I discuss Virtel with someone, venture capital and raising money is a topic that everyone seems to have questions about. I will be covering this in-depth in a later blog.)
After being mostly rejected by investors and at competitions, we decided that the best course of action would be to build relationships with the people who would actually be using our product. At the time it wasn’t really clear which customers would be best for us to focus on, schools or at-home users. We initially were drawn to schools but after conversations with small charter schools and larger organizations like Granite School District in Salt Lake City, we decided that there was simply too much bureaucracy in the school system for us to move quickly. So we devised a plan to have a soft launch for early testers through Reddit and hopefully garnish some pre-sales. After reaching out to multiple subreddits we landed on one that would let us host an Ask Me Anything (AMA) about our product and pin us at the top of their page for the day.
It was time for our AMA and we had prepared a short video that highlighted the different features of our nearly complete first lesson. (If you would like to watch that video click here.) The excitement was palpable as I sat in my apartment and answered the questions from these Redditors. They asked a variety of questions like, how much would it cost? How many lessons would be included? What type of headset did it require? I worked to answer in-between homework and encouraged them to go to our website to make a pre-order.
In the end, we had just over 100 upvotes and only one pre-order. Looking back I’m surprised anyone ordered at all given how little we were offering. The Reddit post opened my eyes that it was time to try a pivot. We were becoming overwhelmed on all fronts. The development was bogging down with the complex requirements we had placed on our team given they were still in school. The sales strategy we had was falling flat. User feedback on our first lesson had been positive, but we needed to pull off a technical feat of wizardry to finish the language platform. I realized this just wasn’t possible with our tiny team and an even smaller budget.
We needed to make changes and we needed to make them soon.
