A miserable New England day had avid cyclist Eric Janszen dreaming of better indoor riding. Together with co-founder Eric Malafeew, he launched VirZOOM which now has 40,000 lifetime users on its virtual reality platform with great engagement. Fascinating conversation about a virtual game becoming a sport.
Highlights:
VirZOOM Gets Grant from Major VR Player for a Joint Development Project
Sal Daher Introduces Eric Janszen, Co-Founder of VirZOOM
VirZOOM Meets the Challenge of Helping People Enjoy Exercise
Technical Co-Founder Eric Malafeew Worked on Big Hits at Harmonix Music
VirZOOM Tech Lets Users to Do Cool Things Without Getting Motion Sickness
Broke Out of the Limitations Imposed by Being a Bike-Based Platform
“It sounds like you could actually play Quidditch on this.”
How the Pivot Came About
“Where we're heading is 100% without a bike.”
Making It a Sport Rather than a Game Has Huge Economic Consequences
Sal Speculates on the Possibility of VR Sport Slowing Cognitive Decline
“What gets us up in the morning is all of the reviews that we get from our customers...”
Average VirZOOM Customer Exceeds CDC Recommended Weekly Exercise
The Cost of Getting on VirZOOM Is Modest: $300 for the Quest Headset and $12 per Month
ANGEL INVEST BOSTON IS SPONSORED BY:
Transcript of, “Virtual Sport”
Guest: Eric Janszen
VirZOOM Gets Grant from Major VR Player for a Joint Development Project
Hey, this is Sal Daher of the Angel Invest Boston Podcast.
After I recorded this interview with Eric Janszen, co-founder and CEO of VirZOOM he received some very good news. He asked me to update you with this statement:
“VirZOOM has been awarded a significant grant from a major VR industry player for a stealth joint development project. The funding is non-dilutive, which means no shares are sold in connection with the grant. The grant covers a significant portion of development marketing. The project is underway. To raise additional capital to finance development and operations, VirZOOM has extended its StartEngine crowdfunding campaign from April 30th to July 7th or until the maximum is raised, whichever comes first.”
Best wishes, Eric. So now let’s listen to the interview.
Sal Daher: This podcast is brought to you by Purdue University Entrepreneurship and by Peter Fasse, patent attorney at Fish & Richardson.
Welcome to Angel Invest Boston, conversations of Boston's most interesting angels and founders. Today we have a very interesting founder, Eric Janszen, founder of VirZOOM. Welcome, Eric.
Eric Janszen: Great to be here, Sal.
Sal Daher Introduces Eric Janszen, Co-Founder of VirZOOM
Sal Daher: Eric, is a very avid cyclist and a big believer in virtual reality as a new frontier of fitness. He co-founded VirZOOM. I've seen the company pitch at Walnut and at subsequent meetings and so forth. They've made a lot of headway. Recently, I saw some posts by Eric and I thought, "Oh, geez, I've got to catch up with Eric and see what VirZOOM is up to," because this stuff is becoming really very important. The frontiers are just moving and it's a very exciting area. I wanted to catch up with Eric.
Eric, the reason we connected for this podcast is that I saw that you're doing a crowdfunding campaign. Tell us about it. Where is it, how could people find about it?
Ongoing Crowdfunding Raise on StartEngine
Eric Janszen: Sure. Thanks, Sal. It's what's called a regulation crowdfunding, RegCF campaign. It's running on the StartEngine platform. It's a priced round. The way to find out about all the details of the price and so forth is to go visit the page, but I can tell you that the use of funds is to finance the development of this fourth-generation virtual reality exercise game metaverse sports that I'll be talking about here in this podcast.
Sal Daher: Tremendous. This opportunity, it's not available just to qualified investors or accredited investors, it's available to the general public. Is that correct?
Eric Janszen: Yes, that's correct. If anyone listening is not familiar with regulation CF, it is a set of regulations that was passed under the JOBS Act back in 2010 and has subsequently gone through a number of revisions that allows a company like VirZOOM to raise as much as $5 million in a what is, effectively, a public offering.
Sal Daher: Right, but doesn't have to go through all the paperwork that a normal public offering would entail.
Eric Janszen: I have to say, Sal, it's pretty close.
Sal Daher: [laughs]
Eric Janszen: We just filed to extend our campaign and we had to do a complete audit, full audit of our 2022 financials to qualify to do that.
Sal Daher: That you have audited statements and so forth.
Eric Janszen: By the way, I'm a very active angel investor and I sure wish a lot of the companies that I'd invested in had audited financials because you very often don't know what's inside until you go inside.
Sal Daher: We invite listeners to check out.
Eric Janszen: VirZOOM on StartEngine,
Sal Daher: Check out VirZOOM on StartEngine. It's really fascinating VR. What problem is VirZOOM solving?
Eric Janszen: Well, the concept is that there is a very large and very old customer problem that has to do with motivating people to get the regular exercise they know they need, but don't have the discipline to get or the time, or the money. Those are basically the three problems that people have. They're either can't find something they can get themselves to do regularly or they can't find the money to pay for the thing they do like to do. Most people, 80% of the population according to the CDC, doesn't even get the minimum amount of exercise they need for health.
Sal Daher: Absolutely. How do you solve that problem?
Eric Janszen: Well, the idea is that VR presents the opportunity for an entirely new way of motivating people.
Sal Daher: Virtual Reality, VR.
VirZOOM Meets the Challenge of Helping People Enjoy Exercise
Eric Janszen: Yes, VR, Virtual Reality. The reason is, that all these other in-home fitness solutions you could think of like Peloton, and so forth, in every case, you're staring in a flat screen and you are absorbing content effectively through a window, so you're looking in through a window and you're projecting yourself into the action. It can be quite effective. Peloton's a very good product. What VR can do is actually put you in a different world so that you are reacting to the world and the world is reacting to you in a way that you are transported and you don't have really the option of not moving because you have to react just like you do in the real world.
Sal Daher: I have tried an early version of your VR equipment on an exercise bicycle and I can tell you it was quite effective in making me feel like I was flying or was doing this or that. It really takes you out of the boring situation of being in an exercise machine.
Eric Janszen: The concept is to create sports-like activities in virtual worlds. Because it's virtual reality and not real reality, you can do things in virtual reality that you can't do in the real world so you are referring to your experience flying under your own power. As you'll explain to the listeners what you're actually doing, you have a headset on and your avatar in one of our more fantastical exercise games we call them, and by the way, our patent has the same name, VR exercise games, is that you're moving your avatar by pedaling a bike and so that propels your avatar forward. The faster you pedal, the faster your avatar goes.
In that particular game that you're describing, you are actually embodying a Pegasus. You hit a button and that gives you lift, so you're flying through the air at whatever speed you're controlling by pedaling. The real magic happens, and this is where the patents come in, and why it's so immersive and so effective as exercise, is you can also turn and dive and move around through the air like you could in the real world. That's considered to be the ultimate no-no in designing anything in virtual reality is this idea of moving forward and turning because it's supposed to make you sick.
Technical Co-Founder Eric Malafeew Worked on Big Hits at Harmonix Music
My co-founder is a very interesting guy named Eric Malafeew, who, before he joined me, was at Harmonix Music Systems as their chief architect on some small titles you might have heard of like Guitar Hero, Rock Band, and Dance Central. He was responsible for all the underlying engineering that really made those scalable. By scalable, I mean, Rock Band was shipping a hundred thousand units a week at some points.
That's part of the skill set, but even before that, he was working out of Virginia Tech and then MIT, where he got his mechanical engineering degrees. He was working on flight simulators and robotics. These gave him a very particular kind of background for solving this, how do you move people through the world in VR without making them sick? He approached it like a mechanical engineer would, which nobody else in the VR industry is, both a game developer with VR experience and mechanical engineering experience.
VirZOOM Tech Lets Users to Do Cool Things Without Getting Motion Sickness
He just said, "Sure, I can figure out a way to do that," and he did. He developed a novel technology that allows us to move you through the world. Without getting too much into the detail of it, it takes advantage of an aspect of the way our brains work when we're doing something like riding a bicycle or a motorcycle where if you've ever taken courses in how to ride a motorcycle, they teach you, "Well, look into your turn because that's where you're going. That's how our brains are wired."
We effectively coordinate your virtual gaze and virtual head and body in a way so you're causing yourself to turn by where you look. Your brain goes, "Oh, this makes perfect sense. I'm moving forward because I'm causing that to happen with my pedaling, and I'm turning in a way that's completely natural to me from my experience in the real world." That's why it doesn't make you sick.
No one has been able to compete with it yet. NordicTrack tried to get around our patent and failed and had to take their product off the market because it was making people sick. So far, it's been very defensible as a tech and extremely effective based on the feedback that we've gotten from our now more than 40,000 customers over the years.
Sal Daher: Wow. Wow, it's a lot of headway since we sat down with you a few years ago. Tremendous. That's what I wanted to get into now. Can you give us an idea of where you are in terms of getting your product out?
Eric Janszen: Well, we're currently working on our fourth generation. We call them virtual reality exercise games or metaverse sports because even though our tech is extremely effective at motivating you to exercise, there was a challenge, right? First of all, the VR industry itself is rather small. There's maybe 20 million Oculus Quest headsets shipped, and not even that many in use, right?
Sal Daher: Right. Right, right.
Eric Janszen: They have about 80% market share so they're the biggest player in town. Then you have the number of people who have an exercise bike that they can use as a controller with our games and that market is maybe, let's call it, 5% of the US population. We're just talking about the US. The intersection of those two markets, VR headset owners who have a stationary bike, we would estimate it probably somewhere around 200,000, not very big. Even if we capture 20% of that with our $12 a month subscription-based service, that's a $500,000 MRR business, which isn't terrible, but it's not going to change the world.
Sal Daher: No. No, no.
Eric Janszen: We went back to the drawing board last year and said, "There's got to be a way for us to use, find an application, a way to make this tech work without a bike in standing mode. You're just using the headset and just using the hand controllers. There's a number of VR fitness apps that work that way today. They're not sports because you're not moving through the world. You're standing in place and you're reacting to things that are coming at you.
Broke Out of the Limitations Imposed by Being a Bike-Based Platform
Supernatural is the most, popular of these. It's a beautifully done product. It gives you different kinds of fitness routines and you have a lot of trainers. It got a beautiful scenery and they teleport you from place to place, but you are standing in one place and you are reacting to things. You might be doing, some stepping and so forth, but keep in mind, the headset doesn't have any downward-facing cameras. It doesn't know where your legs are. These are all arm-based exercise apps.
We were thinking, "Boy, there's got to be a way to make this work so that you are using your body to move yourself through the world." It gives you agency, which is one of the other reasons why our tech works so well, is you're in control of your motion through the position of your body. Jason Warburg, my chief product officer, came up with a very clever, very simple idea, simple enough that you-- It's quite surprising no one else has done it before, and that's, "Well, why don't we make your body the joystick?" In other words, your position in the safe area determines your forward speed and your leaning determines your direction. You can step to actually change, what's known as, your reference frame in the VR world so you can go heading off in a different direction.
Well, if you could do that, now you can do sports because all sports entail moving through the world. You think of skiing, downhill skiing, or racing, or if you wanted to get into a battle on a field where you need to pass, move around, chase each other around, you could do that. Eric Malafeew, my CTO, got to work, said, "Okay, there are things that can be adapted from our existing patent, and there are some new stuff we're going to need to patent." We filed new patents, last year on these extended concepts to make this work in a standing mode.
Now, you might be asking, well, the exercise from the bike-based games comes for free as part of your pedaling, so pedaling is your exercise. How are you getting exercise standing in one spot, moving through the world by changing your position, that doesn't sound like exercise. Well, the way it happens is, let's give you an example of a game that has a kind of skiing, downhill skiing theme to it.
Sal Daher: Ah, okay.
Eric Janszen: You're going downhill skiing, and the way the gameplay works within this paradigm of gravity pulling you down a hill, is you tuck to reduce your wind, resistance and you go faster. You're constantly doing that. You're constantly leaning to go around things and you constantly--
Sal Daher: Yes, the leaning into the hill to the edges when you're edging [crosstalk]
Eric Janszen: Slalom, right? When you slalom, you're going back and forth, and then your hands are constantly busy reacting to things that are not things you would actually really encounter, of course, on a real ski slope, but things that you can certainly do in a game. Once again, you're still wrapped up in all this activity as you're going down the hill.
Sal Daher: Standing floor exercises that are like skiing downhill and the kind of things that you do with your legs and your arms and your body to stay on the skis to turn and all that, that's simulated and so that forces you to use your muscles, your large muscles.
Eric Janszen: Yes, so you do squats and you're arms you're hitting, you're punching, you're grabbing, you're throwing, your arms are just busy full-time. That's one example, but there are many others. We have a set of test games that we've put up on a secondary Quest Store called Apps Lab. These test games are bundled together in a single app called MotionLabs. MotionLabs is up there for any one of your listeners to try. If you have a Quest, just go to the store, type in MotionLabs, one word, download it and try it. I'd love to hear your feedback.
One of the other categories of test games is Battle. One of the other ways you can use these controls is you are-- There's some video that I have up on, I think I mentioned that we have a StartEngine campaign running that you can see that gives you an example of what this is like. You're flying around inside this arena. In one case, you're in a Southwestern rocky environment. In another case, you're in a huge wintry mountainscape.
You start off leaning forward, and now you're going about 60 miles an hour flying through this landscape. This is all multiplayer. They’re AI but there's also multiplayer. You're chasing somebody, you're throwing fireballs at them, and they're constantly spinning around and chasing each other around. You're scoring it better if you do the squat, you speed up to about, I don't know, 90 miles an hour, and you're constantly doing the stuff. [crosstalk]
Sal Daher: It sounds like you could actually play Quidditch on this.
“It sounds like you could actually play Quidditch on this.”
Eric Janszen: There are so many ideas about how we can design different kinds of games. We've exposed those, of course, to our existing customer base. They're like-- We have a flood of great ideas of things we do. Well, we've got to start somewhere so we're narrowing things down to one particular application of this. From a business model standpoint, the obvious advantage is we're not now constrained to the small market of the intersection of people with headsets. Now we have the entire market of anybody who has a headset.
How the Pivot Came About
Sal Daher: This pivot to focus on people who own headsets instead of people who own headsets and have bikes and all this stuff. When did this shift occur?
Eric Janszen: We've always been under some pressure to do this because when we first started shipping on the Meta Quest in May of 2019, we were not on the actual store. We distributed to the Quest Store. That's how they got access to the actual application. They had a rule, which is you couldn't have applications that required third-party hardware or Bluetooth so we couldn't sell on the store. As you can imagine, that was a pretty tough row to hoe.
The way we got on the store was by creating a standing mode version of our VZfit app. The way that works is you're standing on, what we call, an extra board, and you're doing floor exercises, and that propels you through the world. It's a little bit of an odd idea, but it got us on the store.
Sal Daher: Quest Store, fill this out for me, for people who are not gamers.
Eric Janszen: Oh, so the Quest Store is like the Apple Store or like the Google Play. It's where the apps are actually distributed.
Sal Daher: Okay. This is an established place for gaming apps.
Eric Janszen: And all other kinds of apps.
Sal Daher: All other kinds of apps, okay.
Eric Janszen: There's productivity apps, and there's cinema. There's all kinds of things that you can download there, games, of course, being a major part of it. We've always had this motivation to try to figure out how to broaden our market. It just takes time to come up with these things.
Anyway, we came up with it. Jason came up with this last August and now we're at the point where we have this fairly well-developed set of test apps and we're narrowing things down to the final game that we're going to put our funding into.
Sal Daher: When someone goes to your site, what is it that they're purchasing? They're purchasing a subscription? They're not purchasing equipment or anything like that anymore. It's not like the old days where there was a bike and there was a headset.
Eric Janszen: Yes. When we first started out, way back in 2016, we shipped at the same time was the very first Oculus Rift and HTC Vive. Back in those days, the early adopters of VR were 95% gamers because only gamers had the big honking PCs with the big graphic cards that you needed to run those systems.
Our thinking was, "Well, they're probably very unlikely to have a stationary bike," from our research and common sense, so we made our own bike. I went to China, cut a deal, and we got these bikes modified to work as controllers for their games.
We sold about $1 million worth of them. Again, we don't really want to be in the hardware business. We want to be in the recurring revenue app business. The next step toward that was when the Oculus Quest came out, we were able to ship VZ Sensor, which is a sensor you put on any bike, which was our nice little bit of hardware, which worked quite well.
Sal Daher: Is the Quest related to the Oculus? Is that the store for apps on Oculus? Is that what Quest is?
Eric Janszen: Quest is the name of the headset. Quest is the model.
Sal Daher: Getting on Quest, meaning?
Eric Janszen: On the Quest store.
Sal Daher: Quest store that has apps for the Quest headset. I'm totally [laughs] out of the loop in this.
Eric Janszen: Meta hasn't really helped you, right? It used to be very simple. There's this company called Facebook, and then there's this other company called Oculus. The Oculus made the Quest. Then it's the Meta Quest. Anyway, you're not the only person who finds this confusing. Anyway, the product is the VR headset and controllers is called the Meta Quest. They also have a pro version. The content is accessed and distributed through the Meta Quest store.
The next step in our history was the pandemic came along.
Sal Daher: Yes.
Eric Janszen: That's when we were thinking, "We really don't want to make our own hardware anyway," and cadence sensors, off-the-shelf cadence sensors have gotten good enough, so we dropped making our own hardware. We went 100% recurring revenue content only. If you want to use it with a bike, you go to Amazon, you buy a sensor for $25 and put it on your bike.
“Where we're heading is 100% without a bike.”
That's essentially what our customers do today. About 30% of them use the product standing mode only with no bike. The other 70% use it with a bike. That's where we're at. Where we're heading is 100% without a bike.
No... just pure recurring-- Oh, let's put it this way, we haven't quite settled on the pricing model for these new sports games yet because the really interesting thing about the way that users interpret and find value in these is that they do seem to think of them as sports or they experience them that way.
What I mean by that is we-- I'll give you an example. One of our multiplayer games is called Tank. You're pedaling a tank around and you're shooting at each other. We have a really, really diehard base of players who just play this religiously every day because they just find it so much fun.
Sal Daher: [laughter]
Eric Janszen: If I'm not out on the road riding my bike because it's a nice weather, that's what I'm doing too. The game has gone fundamentally unchanged for six years. There have been no changes to it. The reason that it doesn't get boring is the same reason that your tennis game doesn't get boring or your squash game. You're meeting so many other players.
Sal Daher: You're playing another person. Human intelligence is at the other end of it.
Making It a Sport Rather than a Game Has Huge Economic Consequences
Eric Janszen: You can also play AI, and they're pretty good too. I'll do that if there's no people around. If you go to show up at a squash court, meet up with your buddy, you play a game, well, the game of squash doesn't change. The court's not a different size. The rackets are the same. What's different is the outcome. That's what gives a sport its replayability. It takes hand-eye coordination, it takes tactics, it takes strategy, all of which you're continuously learning and getting better at.
Include all these different elements of a sport in a VR experience, gives that VR experience all the qualities of a sport, including a very high level of replayability. These people, including myself, go back and play Tank over and over again. The way you experience it is you show up in this place, this virtual arena, and it's like, "Hey, I'm back in my sport." Like when you show up at a tennis court or squash court, it's this familiar--
Sal Daher: You've created a culture around Tank.
Eric Janszen: It's not so much a culture, but if you think about it, if tennis is your game, when you step foot on that court it's home.
Sal Daher: It's an identity. You've created an identity.
Eric Janszen: It's this place when this fun thing is going to happen. You don't know how it's going to turn out, but it's going to take everything you got. It's going to take athleticism and the hand-to-eye coordination. Now, if you think about it from a business model standpoint, that's pretty profound because every other VR exercise app out there is subscription based. To keep people coming back, these aren't sports, the're routines of various kinds-
Sal Daher: Classes.
Eric Janszen: -is you have to be constantly updating them. This is quite expensive. You're adding new routines, new trainers. To keep the variability, keep it varied enough, so you don't get tired of it, there's an overhead, right?
Sal Daher: Right. If you're playing an opponent, that's built-in.
Eric Janszen: Right. It's rules of the game. It's the same equipment. It's the same place. All the qualities of a sport and consistency. Not only do you not need to change it, you should not change it because if you change it, people are going to get angry. It's like, "Wait, that's not how tennis works. Why is my racket so big?" Even tiny changes would upset people. We have to get to leave it alone. Here's a game that once you tune it and get it working, you'll leave it alone. Then people keep playing it and playing it for as long as they enjoy whatever that sport is that you created.
Now, that's a big deal because if you think of how a health club makes money, you're effectively renting the squash court or tennis court to somebody to play, maybe a day pass, season pass, annual subscription, but there's a lot of overhead. There's a facility. There's got to be people there, the staff that are trained, and insurance to pay. All the positive qualities, replayability of a sport, it's a virtual place. There's none of the overhead. Think about it. It's relatively low input cost to create this place that supports, for that particular class of player, the repeatable enjoyability of doing the same thing in a different way every time they go.
Sal Daher: With a physical component. It's not sitting with a game controller in your hand.
Eric Janszen: You're not exercising your thumbs. If that was all there were to it, again, sports is a complex physiological phenomenon because once you get moving your endorphins are going, and that changes the way you experience it. Also importantly, using your entire body in a way that requires hand-to-eye coordination makes the experience totally different than thumb-to-eye coordination. It's just not even close.
Sal Daher: One of the things that we talk about-- You're a young man. Eric graduated from Belmont High School in 1976. I graduated in 1970.
Eric Janszen: Very kind of you to say so, Sal.
Sal Daher: You're a young man.
Eric Janszen: I'm not that much younger but thank you.
Sal Speculates on the Possibility of VR Sport Slowing Cognitive Decline
Sal Daher: Anyway, I graduated rather young, so you would be maybe three years younger than I am. The point here is that as you get older, you start worrying about maintaining your cognitive abilities. Perhaps the best thing to maintain your cognitive abilities is not to play games, but to actually be out in the world, experiencing the world because most of what our brain does, is process images and help us move through the environment. I would not be surprised if virtual reality imitates pretty closely the processing that's required in our brain to move us through space. Has there been any work done to validate this?
Eric Janszen: One of our partners is a company based right here in Brookline, Mass called XR Health. XR Health specializes in applications, primarily for rehabilitation, but other kind of health-related applications as well. They've been involved in research in this area. There's no question that VR can be used to help people recover from all kinds of head injuries, for example.
Sal Daher: That hints, perhaps, that it may be a good way of maintaining people's cognitive function in lieu of walking outside. If for some reason they can't walk outside, the weather is not good, or whatever, they get on their virtual reality equipment and do the movement through space. It triggers all that processing in your brain that keeps the whole thing because the brain is extremely complex. The whole idea of balancing and finding yourself in space, processing the images that are coming in, and all these things, that is the stuff that keeps your brain working, keeps it young, not solving puzzles and all these things. That's very narrow.
Eric Janszen: I'm not aware of it and I'm sure there is research out there in that area. I can tell you, experientially, my brain is getting tired from doing some- 3:00 or 4:00 in the afternoon after being at my desk since 6:00 or 7:00 in the morning. Going for a walk just gets me, for even half an hour, it resets me completely. I get the same benefit from playing a game of Tank. Possibly it has a similar function, but it is very different from playing a video game because, again, it's engaging your entire body.
To talk about Tank for a moment again, here's a game where you're pedaling and leaning, and you're firing a projectile that follows real ballistics physics. That physics was written up by one of our engineers named Hendrick. Not simple stuff, actually, because you could be moving sideways while you're firing at somebody who's moving in another direction, and you have to figure out how to time this projectile to reach them while you're both moving. This is not a simple thing to do. It takes quite a bit of skill.
I mentioned the diehard group that meets pretty much every day around four or five o'clock. I can't play those people. They're too good. Now, I've been playing this thing for four or five years. I consider myself pretty proficient but some of these people are just mind-bogglingly adept at that, among many other skills that you need to learn to get good at winning this game, some of which I never would have thought of until I played with them.
Just these different tactics that would just boggle your mind about how to position yourself and climbing on top of things and jumping off of it, just stuff that just takes an enormous amount of creativity to come up with an experimentation that you can't do in the real world. You can't just fly off a cliff in the real world. That wouldn't work but you can in the VR.
Sal Daher: I was thinking of a question I was going to ask you, but when you said about flying off in the real world in the tank, it makes my question silly. I was just wondering, have you ever had an actual tank operator play your Tank game?
Eric Janszen: Yes, and they enjoy. You have to remember--
Sal Daher: Yes, you got gravity. A tank is a very heavy gravitationally inherent thing.
Eric Janszen: Well, that's part of what makes it satisfying. There's a lot of unconscious things going on here. One of them is you are pedaling under your own power, a 40,000-ton tank, which is very empowering. One of the things that's magical about bikes, Steve Jobs summarizes really well, was it's the closest thing to flying that a human can do. A human on a bicycle is more efficient than any animal on Earth.
Sal Daher: Amazing. A human being, we can track any animal beyond 20 miles. Beyond 20 miles, we will catch and kill that animal. That's human beings we're trained for hunting like that. I imagine on a bicycle, it's five times more efficient.
Eric Janszen: Bicycle is a little machine. It's relatively a simple machine, amplifies our power. Remember, the first time you got on a bike, that's one of the things you experience. The same thing happens here. There's this empowerment that you get that's just there that you don't maybe consciously experience. In getting back to your question about the actual tank commanders playing our Tank, one of the things to understand is that physics in the real world cannot be replicated in the virtual world. You have to invent a new kind of physics.
Sal Daher: I've seen some of these space movies and I say, "Ah, the kinetics is all wrong. People don't behave like that in space."
Eric Janszen: Well, I was mentioning this flying game where you're flying right under your own power. If that actually worked like the real world, you'd be terrified. We have to slow things down, your rate of dissent, and as you get down to the ground, we gently land you, that kind of thing. There's all sorts of tricks we have to play to make it comfortable and not terrifying. Nonetheless, if you're afraid of heights, you're not going to like that game because you will very much have a sense of being hundreds of feet up in the air.
Sal Daher: Eric, is there anything else that you want to say about the company and about how the product works, and so forth? What I thought I would do is do a brief promo for my podcast, invite people to leave reviews and ratings, and so forth, and then the second half, I'd like to get a little bit into your story of discovering entrepreneurship and becoming a founder.
“What gets us up in the morning is all of the reviews that we get from our customers...”
Eric Janszen: We're very excited about building our fourth-generation product, building on eight years of experience, developing these very specialized kinds of apps that get people moving. They're extremely effective at solving the customer problem of motivating people. What gets us up in the morning is all of the reviews that we get from our customers of 500 5-star reviews you can find in the store of people in their 60s, 70s, 80s, saying, "I've never been able to find anything I could do regularly. I just love this. I do it every day."
Sal Daher: 80-year-olds on the Meta Quest store, on the Quest device?
Eric Janszen: Oh, Sal, we do these things called monthly challenges, where our customers compete to cover some ride that we create with a theme like [unintelligible 00:36:57] kind of thing, and you're riding across Japan. The winner of that was somebody who did the entire ride. It was a couple of hundred miles in a day and a half. We were like, "Wow, let's do the math. They had to have been writing an average six hours a day." The woman who won it was 87 years old.
Sal Daher: [laughs] That's incredible. This is really magical stuff because since the beginning of July of '21, I've been on a process of losing weight and keeping weight off. I've been very intense about it. I've always been athletic, but not an athlete, but someone who's been physically active. Since then I've really been making an effort and you discover how hard it is to maintain an exercise routine and how incredibly valuable exercise is for your health. It's impossible to enumerate all the advantages it has in terms of your mood, in terms of your regulation of your metabolism, your blood pressure. We are made to move. If we don't move, we die. You get a blood clot and die.
Eric Janszen: Sitting is the new smoking.
Sal Daher: Is the new smoking. The point is that if you have unlocked the way to get an 87-year-old woman who's spending six hours a day on a bike to win a competition, that's astonishing.
Eric Janszen: Well, again, I've been talking about our new apps. In addition to being aimed at a much larger market of everybody with VR, they're also aimed at a somewhat younger user audience. Our current demographic is 35 to 55 but on the other end of that bell curve, there's a lot of people in their 60s and 70s and older. Our theory about why they like our apps so much is really two things. You can use it at whatever-- A lot of these people were former athletic people. They're just older now. They can still do something they love, but at a pace that is now commensurate with their abilities. They don't have to ride like on a Peloton with somebody yelling at you.
What they're doing is, the way VZfit works, is you're exploring 10 million miles of roads mapped by Google Street View. You just pick any place on earth and you ride around, or you can pick any of thousands of curated rides, hundreds by us and thousands by our customers, and ride any way you want and discover places. Stop and take pictures and post them on Facebook. Show them to your friends. There's a fantastic ride across Russia that I just saw the other day and a somewhat sadder ride. We actually did a fundraising for Ukraine and you're able to ride around Ukraine and see it the way it was before the war.
Sal Daher: So sad, yes, very sad. Let's do this. I just want to invite listeners who are enjoying this adventure, to take a moment, follow us in your podcasting app so that the podcast shows up every week and then you have the option to listen, but also if you are really inspired by the story of VirZOOM and this amazing thing that Eric has created, Eric Janszen and his co-founder have created-- Would you give me his name again, please?
Eric Janszen: Eric Malafeew, M-A-L-A-F-E-E-W.
Sal Daher: Thank you. Anyway, if you're enjoying this, the way you can really help us, you can get us found more easily by the algorithm, by the almighty algorithm, is to leave a review and also a rating on the app where you listen. I know that in the Apple Podcast app, it's really really helpful. We have about 170-something reviews there, and somebody, one or two people leaves a review that week, the podcast that's up that week gets a lot of use. It gets found by people who don't normally see our podcast. Help us out in that way.
Anyway, Eric how did you get into this adventure of creating a new enterprise?
Eric Janszen: Well, the genesis of VirZOOM is an idea that I had when I was pedaling a stationary bike in the basement of Stratus Computer in-- Do you remember Stratus?
Sal Daher: Yes, you used to work at Stratus right?
Eric Janszen: Yes, Stratus Computer I was a product manager there. I'm an average cyclist, but here in New England for a good chunk of the year, it's really not conducive. It's raining. It's snowing. It's cold, and so then I'm stuck indoors as I was that day in the basement fitness center at Stratus Computer, trying to motivate myself to pedal this machine.
Sal Daher: Gosh, that's depressing.
Eric Janszen: I'm thinking, I close my eyes and I imagine, "Well, I guess, someday VR will evolve to the point where I can project the outside world into this space and I'll feel like this boring stationary bike is actually taking me through the real world." Well, that was in, I'm going to date myself here, the early 80s. VR came and went a few times through a couple of hype cycles. It was just too early
Sal Daher: [laughs] That's right.
Eric Janszen: Right, remember? Then I was running my finance and economics website called iTulip. I don't know if we refer it to that, but one of our subscribers said, "Hey-" because I described this idea to them back in 2011. Then 2013 rolled around, and one of my members said, "Have you heard of this thing called Oculus Rift?" I was like, "No, no, not really." I started looking around a bit, and I did a review of it, and I wrote back to the group. We had a forum. Well, I'm skeptical. There's so many technical hurdles that have to be overcome, screen during locomotion discomfort, cost, complexity. I think it's too early, "I'll wait this one out."
Then about three months later Facebook bought them for $2 billion. I said, "Well, maybe I should have taken a closer look." I did, and that's when, serendipitously, I connected with my co-founder Eric Malafeew, who's your mutual friend. He had been messing around with the development kits, for the Rift, it's called DK1 and DK2 and doing some experimentation with it.
Anyway, long story short, I described my idea using a bike as a controller to play games in VR for exercise. We built a prototype in this basement and it worked. We're like, "Well, there's a lot to go between this thing that works. The first thing we tried was flying, because I had an idea that flying in virtuality would be pretty cool, and it was. We knew we were on something, so we immediately got to work on it. That was back in 2014.
He got to work in the prototyping on the IP, and we founded the company in February of 2015. A bunch of friends put in the first 1.8 million of our funds that get the things started in April. Since then I've continued to put more money in, and I continued to be the largest single investor in the company. I'm currently up to about 1.6 million invested.
Sal Daher: Wow. It's really a labor of love. It all came from that basement in Stratus Computer in a gray New England day.
Eric Janszen: Yes. There's been a lot of road covered between the time we started this thing and today. The team is just fantastic. Our customers, I guess, they get us up in the morning. We know we're extremely valuable to them. What we need to do is get more of them to make this business grow. We believe this next-generation tech is what's going to allow us to grow even within the relatively small VR market there is today.
Sal Daher: Wow, fascinating. Eric, I'm really grateful for that explanation. You've gotten me very tempted to try the VIR product. I don't have a virtual reality thing. My tech environment here is very early 2010s, but I'm feeling very tempted now to dabble a little bit of VR. Remembering, flying as a Pegasus with your device at the Walnut meeting.
Eric Janszen: Well, from our most recent surveys, about 25 % of our customers buy an Oculus Quest just to use our product, which is one of the reasons Meta is relatively fond of us is they are looking for apps to drive, obviously, sales of the platform. The other thing that matters to them is once people buy it, they actually continue to use it.
Average VirZOOM Customer Exceeds CDC Recommended Weekly Exercise
The thing that they like the most about us are the session frequency and frequency length. We have an exercise KPI for our app, which is the minimum CDC requirement. 30 minutes of sessions, three days a week is the minimum. We're running about, which is about 75 minutes a week, we're running about, on average, about 95 to 100 hours a week-
Sal Daher: Wow.
Eric Janszen: -for our average customer.
Sal Daher: The minimum is 75 minutes. Would you say that again?
Eric Janszen: The CDC recommended minimum exercise for an adult is 75 minutes.
Sal Daher: 75 minutes, okay. You're running 90 minutes a week because people are so engaged by your device?
Eric Janszen: On average, yes.
Sal Daher: Wow. From someone who's been battling this whole-- I've been in these weight loss classes and all that stuff, and one of the things I talk about is just how hard it is to motivate people to keep exercising and so forth. The fact that you're getting people to go beyond the minimum is a great accomplishment in terms of improving people's health. This is really fascinating. I'm going to end up becoming a Meta customer. I'm not a customer of Meta right now, but this has pushed me over the edge perhaps.
I thank you very much for making time. I hope to launch this podcast in time to help you with your crowdfunding campaign because someone who is as interested in healthy aging as I am-- A young man like you perhaps is not as concerned about aging as I am. [laughs]
Eric Janszen: There you go again.
Sal Daher: I'm going to put this under the podcast tied to healthy aging in my content management system. I'm going to be organizing it. I'm going to have a section for healthy aging, and this is going to go in there because I think it's an excellent prescription. Take two of these and then call me in the morning.
Eric Janszen: Well, the idea is to take exercise and turn it from something you think you should do to something you simply look forward to doing.
Sal Daher: You can't keep from doing, building a habit of doing it. This is so promising.
Eric Janszen: Again, we wanted to create something that is a thing that this group of users would enjoy doing enough that keep doing it the same way. I don't think of cycling as like I should go for a bike ride, as like, I want to go for a bike ride. The benefits I get from it, it's how I meditate. I know I'm going to feel great and the experience itself is fun.
For my wife, Zumba. For my co-founder, Tennis, everyone's got their own thing. Here's another thing. You can do it in VR. You can do it in this pouring rain or 95 degrees out. You can do it completely silently at two in the morning if you're having trouble sleeping without bothering anybody.
The Cost of Getting on VirZOOM Is Modest: $300 for the Quest Headset and $12 per Month
It's extremely convenient. It's also quite cheap. The Quest headset is about $300 and our application is $12 a month. Again, we wanted to make it something that was affordable, as well as convenient and motivating.
Sal Daher: This is really very promising. Thanks a lot, Eric Janszen. Talk about your identity. When you read your LinkedIn profile, avid cyclist, that's your identity right there. You're a cyclist.
Eric Janszen: Yes.
Sal Daher: Above all these other things, a virtual cyclist. Do you have any other thoughts that you want to communicate to this audience of founders and also angel investors?
Eric Janszen: I will say that as a very active angel investor for many years-- I've invested in over 20 companies in my history. Some of them have done very, very well, Some of them have done not so well.
Sal Daher: [laughs]
Eric Janszen: I've learned a great deal from being on the other side of this before I became a founder. One of the things that used to drive me crazy as an investor in startups is startups that were not good at really communicating what they were doing and what was going on and were left like a mushroom to try to figure out what's happening. I'm extremely careful to write very detailed quarterly reports to tell everybody exactly what's going on, and what our problems are, what's working because it's important.
Sal Daher: Eric, that is a song that every angel investor likes to hear, that you report regularly and fully, I guess.
Eric Janszen: Total transparency, you're going to get everything. You're going to get good, the bad, the ugly, but you won't be left wondering what's going on.
Sal Daher: 80% of the time when a founder's not reporting it's bad news. 20% of the time it's actually good news...so busy, they don't have the time to report. When you don't hear, you worry either way. If they're not doing well, reach out to the angels. It's time to help.
Anyway. Well, I thank you very much and I'm just really psyched that I'm going to become a customer of the Quest.
Eric Janszen: I'm great to have you.
Sal Daher: The Quest space because of VirZoom, otherwise I would never be messing around in that area. Thanks a lot, Eric Janszen. This is Angel Invest Boston. I'm Sal Daher. Thanks for listening.
[music]
Sal Daher: I'm glad you were able to join us. Our engineer is Raul Rosa. Our theme was composed by John McKusick. Our graphic design is by Katharine Woodman-Maynard. Our host is coached by Grace Daher.