Unlocking Immersive VR Consumption For Everyone – with CEO of VeeR VR Ayden Ye

Transcribed by Charles Bai; Edited by Jules Qiu and Peter Vanderslice

Link to SoundCloud (here), also available via Apple Podcasts, Google Play, etc.

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Before VeeR: VC in the U.S.

Adam: Why don’t we start with your experience of working as a venture capitalist in the US before coming back to China?

Ayden: I grow up in China, studied computer science and electrical engineering in college, and got a master degree in computer science at UC Berkeley. Then, I joined a 32-year-old VC firm called Sierra Ventures and worked there for over 3 years. It was a pretty unique experience, as we invested in both US and China. This is how I got exposure to the tech world in both countries.

Adam: You invested in a really interesting company called Ximalaya, which looks like a version of SoundCloud with more functionalities and feature set. It is doing very well and has attracted a lot of attention today. Can you tell us a little bit more your decision to invest?

Ayden: Ximalaya was one of the best investments in the portfolio of companies ranging from market place to mobile to SaaS during my career at Sierra, and I was also an active user of its products. The company was based in Shanghai, and provided podcasts on trends of the Chinese tech world. After talking with the founder of Ximalaya, I led Sierra's investment into the company. It is currently one of the largest internet companies in Shanghai, and will probably go public in next few years. I enjoyed this special experience of working closely with a content platform. Ximalaya is similar to SoundCloud but it’s innovative in not only its product but also its business model, and its strategies in monetizing from its users have been crucial to its current success.

Adam: SoundCloud tried to monetize by charging the creators on the platform for using SoundCloud’s tools to create content, but it is freely available for general users. Recent struggles have made SoundCloud rethink its business model, while Ximalaya is monetizing really well. What’s your point of view on that?

Ayden: I think the key factor of Ximalaya’s successful monetization is their unwavering focus on knowledge. They brand themselves as the Taobao of knowledge. In China, the pressure people get both socially and economically has made them eager to make time to learn something new, such as during commuting. That’s why people, including myself, are willing to spend a lot of money buying subscriptions or other forms of access on Ximalaya. I learn about technology and internet startup through their podcasts, and it has been very valuable for my own career.

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The VR Landscape

Adam: Let’s talk more about VR landscape and your company VeeR VR. What’s the current trends in the VR market? How has it evolved from the early days to where it is today?

Ayden: My first experience of VR was in 2013 even before Oculus was acquired by Facebook. A friend of mine, Eric Romo, the founder of AltspaceVR, showed me the very first DK1 experience. I have kept an eye on the industry since then. In 2015, I visited hundreds of VR companies around the world as a venture capitalist and tried to build up my own thesis around what were the new developments and what was the future of VR.

I believe that VR is going to be a mainstream medium. It is a higher dimension medium compared to photo, audio and video sharing and it’s going to become more and more mainstream over the next few years. It will take a while, but eventually VR will change the way people consume media. It’s comparable to the early days of smart phones when the capability of the technology itself is not catching up yet with the basic human needs. But the two lanes will intersect in the next one to three years. The screen is evolving very fast from 4k to 8k and to 16k in the near future, and there will be millions of content units created every single day. The 360 cameras and engines are getting cheaper and easier to use as well. Moreover, headsets are becoming more comfortable and lightweight. At that point, people will suddenly find VR headsets all over the world.

There are a lot of pain points and value that need to be created in this industry. Our research ranges from the hardware to the middleware all the way to the software side to identify these pain points that VeeR VR wants to solve. There’s a disconnect between the content creators and consumers on the VR platform and this is similar to the pain point that YouTube solved a long time ago for web videos and Instagram for photo sharing. Although at this point, VR is still in the early stage, I strongly feel the existence of this pain point and I want generate value by solving it for the content creators and consumers.

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VeeR: A YouTube for VR?

(Source: VeeR VR)

Adam: Industry experts and investors have identified a lot of drivers of consumer interest in VR, such as more content, better screens, cheaper headsets. But you are creating, as you mentioned, a YouTube for VR videos. Can you elaborate on this analogy? How does your product connect creators with consumers, and what how you envision the content on your platform would look like?

Ayden: I think describing it as the Youtube for VR is an easy way to understand it, in the sense that the problem we are solving is similar to Youtube: connecting creators and consumers. However, unlike Youtube, we are not just providing VR videos such as 360 videos, which is only a basic simple format for VR content. VeeR is interested in a more general format, and it supports 360 photos and in this coming month, interactive content as well. From our point of view, VeeR wants to become a platform which gives people tools so that they can create VR experience with their own imagination. 360 photo and video, and maybe in the future, 3D objects, are just basic components of VR content. Imagine users as cooks, and VeeR wants to give them tools so that they can use the ingredients to cook the best dishes. That’s one way to describe VeeR. VeeR will never limit itself to images or photos. I think what the content in the future will look like will largely rely on how people actually create it and we still don’t know the dominant form. Probably picture or video or a mix? VeeR wants to embrace this endless possibility so that people can create content with its powerful tools.

(Source: VeeR VR)

Adam: Is it, then, primarily user generated content? Or is there PGC content as well created by studios?

Ayden: I think at this very early stage, PGC and UGC are not that much differentiated in many ways. It’s not like Netflix and Youtube, where before they were launched, there were already tons of high quality movies. In VR, if you look at the high-end and professional content versus the UGC, you don’t see that much of a difference yet, because it’s a new medium and no one knows how to tell the story. The methodology has not been established, which is the reason why there’s a huge opportunity to create the standard. VeeR wants to embrace both UGC and PGC. Our belief is that, there’s going to be this new wave of content creation, significantly different from the traditional media. On VeeR, there’re PGC, such as Warner Brothers, LinkedIn, the World Bank and Bill & Melinda Gates Foundation. We have media companies such as Euronews, Russian Today, Huffington Post, and bloggers such as 360 Blogger, Extreme Sports Lovers, etc. So it’s really a mix of both.

Our belief is that, VR is something that everyone can create with 360 cameras, which is much cheaper than before. We believe that this concept of enabling and powering everyone to create quality VR content is the key to make this industry move forward. The users and average consumers are the largest groups of people who want to record. We believe that VR content is not hard to create: it only requires moving the cameras and doing more preparations. VR is, to some extent, easier to control and record.

Adam: Let’s talk a little bit more about what’s popular on the platform today. As you mentioned, it’s PGC, UGC and all different types of contents right now. Have you guys ever specialized? Or did you keep it very open for everyone?

Ayden: VeeR is positioning itself in the distribution platform business so we aren’t leading content creation by ourselves. Watching people playing MineCraft in VR is a very unique experience. We don’t want to limit the format of the content on our platform because we believe that only certain categories of VR content are being created now and we just don’t know what will be created in the future. We highly rely on data and use algorithms to power the recommendation system which makes sure that quality content gets exposures over time. The data itself tells us what’s trendy and we use it to optimize our operation. Recently for example, we found that the VeeR’s most popular categories include extreme sports, horror movies, animation, gaming etc.

Adam: Let’s move to the product solution you created. It seems that you are creating a lot of tools for content creators, allowing them to create better content by looking at data to understand what to improve. Some of these tools are also very useful for users as well.

Ayden: That’s right. Over time, VeeR has built a product chain that covers the entire lifecycle of VR content. After a user captures raw 360 video footage, this content can be revised and enhanced by VeeR Editor. It is currently the number one 360 Video and Photo Editor in the App Store, and it supports both IOS and Android. They can also use the 360 Video and Photo Editor to create 360 slide shows, and we will keep adding new features to this editor in the next few months. The next step in this lifecycle is content sharing and consuming. Once the content is shared on VeeR, the user can share it to Facebook, Twitter, Weibo, and WeChat. Friends can view it directly on their social feed or inside the VeeR app.

In addition to facilitating VR content-creation, VeeR goes the extra mile by curating videos for our audience using our recommended content algorithms. We want our audience to spend less of their free time choosing preferred content and more time watching it.

(Source: VeeR VR)

Adam: Can you tell us more about your business model?

Ayden: I think we’re still in the very early days in VR, where most companies are still trying to create their products. For VeeR, we are creating value for both content creators and viewers, and can monetize both sides. At the moment, we are not placing too much of a priority on monetizing our service. But in the future the business model will be similar to Youtube’s and Instagram’s, which would involve offering ads or paid VR content.

There’s also a huge potential for businesses to use VR. For example, for real estate developers, restaurants, gyms and other local businesses owners, VR is an attractive new medium to showcase their space, and VeeR is a free, accessible tool for them to do that. Imagine the business opportunities if people could visit these places in virtual reality. Businesses are willing to pay for that and in that cycle, there’s also opportunity for closed loop market place because there are a lot of professionals on our platform who provide VR making services. So we want to connect those businesses looking forVR creation services with the pros who provide the service to make the transactions happen.

Adam: That’s really interesting. For the VR market place, for the 2B opportunity, are you monetizing by a taking a cut of the transaction? Are content creators being found and paid directly or is this more of a subscription based service where businesses pay to have access to community of VR content creators?

Ayden: We are not charging any commission at this point. We make the connection directly for free. The point is to educate the market first. As we begin to facilitate a larger volume of connections, we can then begin to figure out our business model. We will most likely charge businesses rather than content creators.

Adam: I remember there was this 360 video that you guys did with LinkdedIn where the point was to examine what an office looks like and learn more about the company, right? Can you tell us more about that? It’s very interesting.

Ayden: I think it’s a perfect example of how enterprises and businesses are using VR. If you look at that campaign, LinkedIn made about 20 VR videos for some large customers, like Didi, JD, Tesla etc. They used VeeR to distribute the videos so that people can actually experience what it would be like to work at one of those companies. In fact, when they recruit on college campuses, these companies use cardboard headsets with our QR code to show the students what it’s like to work in their offices.

But the application of VR is not limited to large-scale business campaigns. People can create VR videos of their weddings and birthdays to have a record of memorable events. It can be used for education purposes, to better teach the complicated concepts. There are a lot of agencies right now using VR to innovate the way in which they market to their clients. This is only one of so many other examples.

(Source: Linkedin.com)

Adam: I really like that example. I think good content about China tech is obviously important, which is why we are doing it. But if Harbinger could provide something more visual, more video-based, or even more VR-based. That will be super helpful for the audience overseas. So we could look into that too.

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VeeR beyond China

Adam: Now we have a better understanding of VeeR, VR, what your product is; the areas in which you create value. I also noticed that, even though you guys are based in China, VeeR VR is a global company and hires folks with global backgrounds. You are also addressing a global market of audiences and creators. Can you tell me a little bit more about how you are able to do that? And how do you tend to be successful by going global from the get-go?

Ayden: This is a topic that I myself am very interested in because over the past few years, as an investor, I see this trend of Chinese companies getting more global. In the PC and web area, we don’t see that many successful companies in the global arena. But in mobile, we can see more and more Chinese companies are becoming industry leaders. Some examples include Cheetah Mobile, APUS, and Toutiao, which acquired Musical.ly last year to get more footprint in the global market. Tencent, Alibaba and Baidu are getting much more aggressive as well. Historically, this was not the case until the 3-5 years ago since the competition has gotten fiercer in the Internet space. The market in China is getting much more penetration and entrepreneurs are getting more aggressive in the overseas market. Especially when they hear successful stories about companies overseas.

From my own experience, I think there are a few advantages for a Chinese company to do this: on the talent side, there are a great number of high quality universities, especially in Beijing and a huge number of high quality talents not only locally but also more returnees who have experience working overseas. For example, in our company, we have talents who have international background and worked for Twitter, Uber and LinkedIn. Secondly, I think in general, companies here execute and plan things a little bit more aggressively. I think it’s partly because of the culture. It’s also because the tech industry here is generally more competitive than Silicon Valley. Take group buying, for example Groupon. There were thousands of companies in China when Meituan started and the winner of the competition will have to beat thousands of other companies in order to take the market. However, Groupon probably faced fewer competitors when it first launched in the US. The competition between of the Chinese Internet startups makes the winner more aggressive and competitive on a global scale.

That’s kind of how it works here at VeeR. If you see how fast we execute and hire, you will notice that it’s much faster here than other places in Silicon Valley, partly because the capital efficiency is higher. In Silicon Valley, it’s very expensive to hire high quality talents. You have to maybe beat Google and Facebook. But in China there are a huge number of talents who want to join startups and that’s one of the advantages we have here. Thirdly, I think you can notice the growing access of global capital in China because more companies like, Didi and Toutiao, which are ten billion or hundred billion dollar companies are coming out to attract global capital from the US, Europe and other parts of Asia to flow into China. The investors see a faster return from their investments and a higher ROI, which makes it easier for Chinese entrepreneurs to attract capital. The velocity and scale of money in China is better than the ones in Silicon Valley. I think these three points: talent, competitiveness and access to capital are making this environment more favorable to Chinese entrepreneurs.

Adam: This is one of the points you mentioned around talent and around more people coming back. I’m at your office now and earlier we were getting lunch. I noticed there’re a lot of returnees. A lot of Chinese folks went to the US to study and came back. So how do you attract them? What is your emphasis on culture? How are you able to attract this high priced global talent?

Ayden: Our company does have a very strong record on hiring. In the very early stage, we had 5 or 6 engineers who are previously either tech partners or CTO at startups. We have some of the best engineers from Sina, FreeWheel, Uber and LinkedIn. Our head of product used to be head of one product at Uber. All of our designers are very international, who are from top universities and previously worked at Microsoft and AutoDesk. Especially, 80% of our operation and marketing team are returnees. We also have foreigners and we are trying to build a very diverse and international culture here. Almost everyone speaks quality English. I’m from Berkeley and there are 5 or 6 people from Berkeley. We also have people from Stanford, CMU, UIUC, etc. It’s really an international and top talent culture that we want to build. It is indeed this unique mission of what we want to achieve that attracts these talents. We want to build this global platform to become as influential in the next 3 to 5 years as Youtube and Instagram… Baidu, Tencent and Alibaba are super successful in China but we want to build a product that influences markets beyond just China. We want to build a product that people all around the world use to consume VR. I think our unique mission is kind of historical, many other companies will likely follow suit. This mission in and of itself attracts a lot of talent. It’s very challenging but it’s going to be very meaningful.

Adam: One last question for you Ayden. Given your global aspiration, can you tell us a little bit more about your global strategy and what we can expect from VeeR in the next 6 to 12 months?

Ayden: At this point, the VR market is taking off. But we are definitely not seeing the explosion in the next 6 months. There’s still work to be done from the supply side. Therefore, our focus has been predominantly on working with content creators. In just a few years there will be millions of VR creators globally, who use 360 cameras building CG and virtual immersive experiences for either their own hobbies as a consumer or for their businesses. These are the people that we want to serve the best.

From the product point of view, we built VeeR Editor, which is a simple mobile tool they can use to edit content, and we are going to build out more support for interactive content, photos and narrative audio. We provide all types of tools they need to create the best content. VeeR is also building a monetization layer on top of that sometime next year to enable creators to directly sell these experience to the world.

On the operation and marketing side, we are launching a lot of new content that educate creators and average consumers on how to make VR content. We want them to know how easy it is to create VR and enable people and businesses to create a virtual experience of their own. As I mentioned, we also want to build this market place to close the loop of people who provide VR related service to people who need it. Operation, marketing and product are all centralized around best serving the content creators. Creators are the most important users for us. We believe that once the market takes off, as long as we have the most creators and the best brand-awareness, we will be in really good position.

Adam: Thanks Ayden! I’ve gota much better sense of what you guys will be up to in the near future. But just out of curiosity, where do you guys want to end up?

Ayden: That’a very good question. If you look at the history of the Internet, there’s huge new media platform coming out every five to ten years from Youtube for the web videos to Instagram for the mobile media. VeeR is trying to obtain the new opportunities for the VR and probably in the future, AR space for immersive media. From the view point of how it changes people’s lives, we want to do kind of what Google did for people to change the way they search and what Facebook did to change how people socialize. VeeR wants to become a platform that actually changes how people experience because VR can really bring you presence. So, in 3 to 5 years, we will see people wear goggles comfortably enjoying live NBA games feeling as if they are sitting in the front row or jumping onto the stage of their favorite rock star during a live performance. VeeR wants to become the entrance for all those types of experience and also enable everyone to create experience very easily and share it to the cloud. So that, in that sense, it’s kind of like a human’s memory cloud. I call it the market place for experience. I think that’s going to be very very exciting.

Adam: Thanks for that! It seems that you guys are well on your way. Congratulations on your successful start and good luck with your future endeavors !

Ayden: Thank you so much! Great to be with you here!