Welcome to another episode of Category Visionaries — the show that explores GTM stories from tech's most innovative B2B founders. In today's episode, we're speaking with Hans Elstner, CEO & Founder of Rooom, an enterprise metaverse platform that's raised over $25 Million in funding.
Here are the most interesting points from our conversation:
- Early Challenges: Hans started Rooom in 2016, spending three years developing the software before launching. Convincing stakeholders and refining the product were significant early hurdles.
- First Major Client: Securing the first big customer involved numerous visits and extensive persuasion, ultimately landing a six-figure deal that validated Rooom’s value proposition.
- Expanding Vertical Focus: Initially targeting marketing, Rooom now serves multiple verticals including training, onboarding, and virtual events, adapting to the needs of various departments within larger enterprises.
- Go-To-Market Strategy: After initially attempting to enter multiple global markets simultaneously, Rooom refocused on select European countries and the US, finding this approach more manageable and effective.
- Product-Led Growth: Rooom emphasizes a product-led growth strategy, ensuring their 3D technology is user-friendly and addresses clear ROI metrics for customers, complemented by thought leadership and storytelling.
- Pandemic Impact: The pandemic accelerated the adoption of virtual events and 3D solutions, significantly boosting Rooom’s growth and reducing the need for extensive educational efforts about the technology.
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[MUSIC] >> Welcome to Category Visionaries, the show dedicated to exploring exciting visions for the future from the founders or in the front lines building it. In each episode, we'll speak with a visionary founder who's building a new category or reimagining an existing one. We'll learn about the problem they solve, how their technology works, and unpack their vision for the future. I'm your host, Brett Stapper, CEO of Frontlines Media. Now, let's dive right into today's episode. [MUSIC] >> Hey everyone and welcome back to Category Visionaries. Today, we're speaking with Hans Elsner, CEO and founder of Room, an enterprise metaverse platform that's raised over 25 million in funding. Hans, welcome to the show. >> Yes. >> Thank you for having me. >> Not a problem, super excited for our conversation. Let's jump right in. What are you building today? >> What we are building is the global leader for managed web-based 3D solutions. It's just the content management for creating very easily 3D augmented and virtual reality content. >> Take us back to the early days, 2016, when you founded the company. You were early, this is before Facebook, or this is back when Facebook was called Facebook before they were meta. Talk to us about those early days, 2016. What were those conversations like and why did you decide to start the company in the first place? >> Yes. In fact, I had the idea for Room in 2013, and I just worked and developed the software for three years, and then I just founded the company. It was very early, no one ever had an idea of what I'm just doing there, and it was just because I was a consultant for a lot of different companies such as the Hewlett-Packard and Software, for example, and I worked for them and I thought again and again, what the hell could they do if they use 3D visualization on their website, just to clarify much more about their products, train their employees and so on. I started searching for a 3D solution that is web-based and easy to use for all the marketeers and trainers and so on. It has struggled and I had no chance to find the right solution. So I thought, "Okay, Hans, it's your turn, you have to do that." What did the first, let's say, six months look like for you? It was convincing everyone. It was convincing my family, it was convincing my friends and co-workers and so on, so everyone was asking, "Ah, 3D in the web, do you think that it's a good idea?" So it was more about that, but it helped a lot developing the idea and getting through an explanation of the idea that works much better for the people, and for sure, I had not that much sleep. I developed and worked and trusted and painted and all the stuff, but it was very, very, very engaging and I had a lot of fun. At what point did you win that first paying customer after launching? It took a lot of time, so as I said, I was 2013 when I had an idea of the company in 2016, development, so maybe it's typical German behavior, with German engineering, so we developed up until 2018 and then I started pitching on startup awards and stuff like that just to get access to investors and so I met our very first customer. It was a big one and it was amazing to see how they liked the idea and how much it helped them. How did you land that first customer? What was that like? It's always hard getting that first paying customer across the line. I had to visit them maybe 20 times again and again and not convincing. Also, the founder of the company, convincing everyone also in that company. Why does a good idea? Are we able to and just where is startup? So will that startup be there in six months and so on? So it was convincing, convincing and negotiating a lot, but it was a big deal. So it was six digits deal. It was huge for us. What do you think they saw in you? Why were they willing to give you a chance and take a risk on a startup that was new, didn't have a track record? What were they seeing in you? So innovators in the end, so they really liked that very innovative approach. So they had the problem, let's call it problem, that they can't invite all their clients to their facility, to their plans because it's not that easy. They are located in Germany, they have customers all over the planet and also their customers would love to have trust to see how they produce and to 3D technology really help them to introduce that to their customers globally. And so after they got the point by this that you school, they really loved the product. How do you think about your ICP today? Who is that target persona that you're trying to reach and really sell to? So in the very beginning, we thought that we're just the marketing startup and we focused a lot on marketing stuff because it's really useful to use 3D visualizations for marketing for e-commerce. And all the time it developed a lot more to different verticals. So now they use room also for training, for onboarding, for virtual events. So we had a huge boost for virtual events also. So there are different ICP and different personas. But for sure, it's the markets here. It's also the one who's responsible for trainings in the company and it's also the event management department typically in the customer and our customers typically a bit more than small and medium business and also bigger customers with more than 200 employees. Is that hard trying to market and communicate with the different personas like that? Like I would imagine going after it sounds like L&D or learning and development would be one bucket and then maybe marketers like, is it the same message for those two different groups? No, it is not. And that was also the track that caught us again and again. So after figuring out that there are so many different personas and use cases for our product, we lost a little bit in, oh, we can do this and that and let's customize this feature and so on. And we struggled and learned that over the years that we had to focus on maybe let's say three or four verticals that we also need a clear communication on the return on investments to address the needs of these verticals. And now it's easier, but it took years. This show is brought to you by Frontlines Media, a podcast production studio that helps B2B founders launch, manage and grow their own podcast. Now, if you're a founder, you may be thinking, I don't have time to host a podcast. I've got a company to build. Well, that's exactly what we built our service to do. You show up and host and we handle literally everything else. To set up a call to discuss launching your own podcast, visit frontlines.io/podcast. Now back to today's episode. How did you narrow that down? Whenever I've had founders on for interviews and they talk about a similar problem, they just say it's so hard. When you have technology that can do anything or essentially endless options, narrowing it down and saying, we're going to focus on these few is scary because you're really making a bet. How did you navigate that? How did you know which direction to really double down on and focus? So yeah, possibly it's knowing sometimes it's about guessing, but if you had to closely look to the market size and also to the number of incoming leads and the potential deal sizes, that helped a lot. So we're using HubSpot, it's a CRM system that's pretty helpful. And with using more and more data and analytics, it was clear on which type of customers we had to focus on. What about your market category? Is it an enterprise metaverse platform? Is it a virtual experience platform or what is the market category? So today I would say it's an enterprise metaverse platform. So it's typically enterprises that use our system. It's mostly B2B, but they typically use it also B2B2C in the end, but that's the main focus. But the next steps we're doing, and we will release that new version of our platform in June, will be more self-service, more platform ecosystem, more creative economy. So we're opening these features for a wide variety of people out there in the end, in self-service features. And what have you learned, would you say, about go to market? If we reflect on your go to market journey so far, what's like the number one lesson that you've learned? You shouldn't try to get access to 20 or 30 countries at the same time. So let's try that, for example. We had the idea to do that with partners globally, addressing the wide agencies, and typically agencies do have access to the bigger customers globally. And we thought, yeah, it could be a very good idea to win more and more partners. And then they will do these sales stuff for us. But in the end, it's about culture, it's about different languages. So it was in the end, not that easy. And now we're focusing a lot more on some of the European countries and the US markets. And that's much easier. How would you describe your general marketing philosophy and approach? In the end, it is a lot product-led growth we focus on. So we're focusing on a product that is easy enough to use, easy enough to integrate, and that speaks for itself in the end. Even it is deep tech in the background, but the user should not recognize that much. It should be very easy. We're focusing on telling the people that stuff. And in addition to that, it's a lot of thought leadership. So I'm holding a lot of keynotes, speaking out there, and it's still convincing people that 3D technology is the right stuff. So it's telling a lot about the technology and the possibilities. But that's pretty helpful. And a lot of people say, wow, really, that solves my problem in e-commerce, for example, if you choose history on rates, and that's very much our focus on storytelling and convincing them and being a thought leader. This show is brought to you by the Global Talent Co., a marketing leader's best friend in these times of budget cuts and efficient growth. We help marketing leaders find, hire, vet, and manage amazing marketing talent for 50 to 70 percent less than their US and European counterparts. To book a free consultation, visit globaltalent.co. How do you measure the impact of thought leadership? I'm all about thought leadership. I deeply believe in the power of it, but it's hard to measure the impact. And it takes a lot of time if you're doing it in an authentic and real way. How do you think about measuring that impact? So, possibly, you can measure that a little bit with how much you are in articles, in newspapers, and press, in the media, and so on. So, somehow, it's how often they name you. But we can also measure a lot more with HubSpot, how much more leads we generate after being in media, after being named, after holding a Q-Note. And, yeah, you can't see the speed in the number of visitors on the website and also in the new leads we generate. So, you mentioned there trying to convince people. Talked us about the difference in trying to convince people before. I'm guessing that was a big moment in the industry when Facebook changed their name to meta. I really said they were going to double down on the metaverse. What was it like trying to convince people before that? And then what was it like trying to convince people now after that? Probably there was a moment earlier when the pandemic crisis started, and that changed for us almost everything. Because people now, they were in need of solutions for their events. And so, we had so many events in our platform. And so, people were more likely to use virtual spaces, do trade fairs in virtual environments. And that was already really helpful that changed a lot. Before that, we had to explain so much. It was that much education and with the pandemic and more virtual events that was already a change. And of course, we were after Mark Zuckerberg saying 90-something times metaverse that it was a huge hype. But what happened was that people reached out to us and said, "Hey, Hans, could you just tell us something with metaverse and NFT please?" And it was not that real useful focus of the people. It was more of being part of the hype. And also, it was Facebook and meta that gave us a very hard time after their numbers were not as the investors expected. So, the year after meta rolled back a little bit of that very focus on VR, that was much harder in fact. That's super interesting. That makes sense. What about the high level kind of state of the enterprise metaverse? Let's zoom out here. How would you summarize the state of the market today? It's still developing and it's still a bit education. But because of the pandemic and virtual events and because of meta, everyone has heard about the metaverse. And that's really helpful to have a term or let's call it spatial, as Apple is doing it now. But everyone has more or less an idea of that technology behind that. And that's pretty helpful. And it's much easier than it was five or eight years ago. And they are searching for real return on a best case than especially because of the world economics at these days. They are focusing a lot on how useful it is. And that's also, it's not that easy, but it's also helpful because you can now address exactly what they are searching for, the problems they tried to solve. And so it's easier. It's a shorter sales cycle. And they tend also to sign contracts with a longer term now because they have a better idea of the technology and use cases. Let's talk a little bit about fundraising. So as I mentioned there in the intro, you've raised over 25 million to date. What's that journey Ben like? And what did you learn about fundraising? I'm pretty sure that you heard that often. It was not that easy. Once or twice, probably. So in the very, very early stage, I thought it is hard, but it was easy. It is much harder to get money when you are not that early stage startup. For sure, it's talking about more money in the end. But you had to groove a lot more. Are there enough customers? Is that growing? How is it working? It's not still selling an idea. It's selling a business that is working. And so it's getting harder and harder. And especially with that problems in economics during the Ukrainian war when it started, for example, and all the VCs were, let's say, careful. So it was not that easy. And it was a lot about working hard, believing a lot in what you're doing and handling all this stuff, even if there is not that much money left. But yes, in the end, we did it, but it needs a strong reality distortion field, I would say. What about advice for other founders? So if there's a founder listening in who wants to go out and build a company that's not a competitor, but they're in the enterprise metaverse world, what advice would you have for them based on everything that you've learned? Yeah, from my perspective, they should focus a lot on web based solutions. So there are game engines out there, and they are nice for building games. But what really matters is web based solutions. They are easier to deliver. It works on every hardware. It is not consuming that much energy, and it's easier to integrate. And if we think of what types of software are out there, it's all about software as a service. It's typically cloud based. So that should be the main focus to have a real scalability in the end. And the other advice I would give is lots to focus on end customers. It should not be a B2C business. It should be always a B2B business, because companies are more willing to spend money for their technologies. Final question for you. Let's zoom out three to five years into the future. What's the big picture vision here? Something said about us after they heard me pitching, they said, "Oh, Hans, just sum it up with that you are the wordpress for the metaverse." And I can really love that term. So to be honest, that is some whole division, to become the wordpress for 3D for the metaverse, that everyone knows that everyone is using, that is easy to use, but people can create stuff on the basis of that all in one block form. And yes, that is what I would love to achieve. Amazing. I love it. All right, Hans, we are up on time. And I know it's late there in Germany, so we'll let you get some sleep here. Really appreciate you coming on. This has been a lot of fun. I really enjoyed it. I know it's going to be a hit with our audience. For anyone listening in that want to fall along with your journey, where should they go? Yeah, it would be great to visit our website. It's room.comroomwith3o. And I have to say that everyone remembers that we are writing room with 3o for a reason, because we would like to underline that the world has not only two dimensions, X and Y. It's three dimensions, X, Y and set its three dimensions. And that's why we do have 3o. So write roomwith3o.com visit the website. We do have a blog, a lot more information on the website. And for sure, I would like to see you on LinkedIn, follow me on LinkedIn, a lot of tech updates and stuff that is going on here. Amazing. Pods. Thanks so much. And look forward to catching up over Google and sometime in the future. Oh, yes. We do really love it. All right, cheers, man. This episode of Category Visionaries is brought to you by Frontlines Media, Silicon Valley's leading podcast production studio. If you're a B2B founder looking for help launching and growing your own podcast, visit frontlines.io/podcast. And for the latest episodes, search for category visionaries on your podcast platform of choice. Thanks for listening and we'll catch you on the next episode. (upbeat music) (upbeat music)
