The following interview is a conversation we had with Hans Elstner, CEO & Founder of Rooom, on our podcast Category Visionaries. You can view the full episode here: $25 Million Raised to Power the Future of Enterprise Metaverse
Brett
Hey, everyone, and welcome back to category visionaries. Today we’re speaking with Hans Elstner, CEO and Founder of Rooom, an enterprise metaverse platform that’s raised over 25 million in funding. Hans, welcome to the show.
Hans Elstner
Yes, thank you for having me.
Brett
Not a problem. Super excited for our conversation. Let’s jump right in. What are you building today?
Hans Elstner
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.
Brett
Take us back to the early days, 2016. When you founded the company, you were early. This is before Facebook, or, you know, 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?
Hans Elstner
In fact, I had the idea for Rooom in 2013, and I just worked and developed the software for three years. And then I just founded a company and 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 Juliet, Packard and satellite, 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. And so I started searching for a 3d solution that is web based and easy to use for all the marketers and trainers and so on. And I struggled and I had no chance to find the right solution.
Hans Elstner
So I thought, okay, Hans, it’s your turn here to do that.
Brett
What did the first, let’s say, six months look like for you?
Hans Elstner
It was convincing everyone, it was convincing my family, it was convincing my friends and coworkers and so on. So everyone was asking, 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 to an explanation of the idea that works much better for the people. And for sure, I had not that much sleep. So I developed and worked and drafted and painted and all the stuff, but it was very, very engaging. I had a lot of fun.
Brett
At what point did you land that first paying customer? After launching, it took a lot of time.
Hans Elstner
So as I said, it was 2013 when I had an idea. Founded a company in 2016, development. So maybe it’s typical german behavior with german engineering. So we developed 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.
Brett
How did you land that first customer? What was that like? It’s always hard getting that first paying customer across the line.
Hans Elstner
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 this is a good idea. Are we able to? And just where a startup. So will that startup be there in six months? And so on. So it was convincing and negotiating a lot. But it was a big deal. So it was six digits deal. It was huge for us.
Brett
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?
Hans Elstner
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 the 3d technology really helped them to introduce that to their customers globally. And so after they got the point why it is that useful, they really loved the product.
Brett
How do you think about your ICP today? Who is that target Persona that you’re trying to reach and really sell to?
Hans Elstner
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. Over the time it developed a lot more to different verticals. So now they use Rooom also for training for onboardings, for virtual events. So we had a huge boost for virtual events also. So there are different ICP and different Personas? Yeah, 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, and the customer and our customers typically a bit more than small and medium business and also bigger customers with more than 200 employees.
Brett
Is that hard, trying to market and communicate with the different Personas like that? Like I’d imagine going after it sounds like l and D, or learning and development would be one bucket. And then maybe marketers like, is it the same message for those two different groups?
Hans Elstner
No, it is not. And that was also the trap 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, a return on investments to address the needs of these verticals. And now it’s easier, but it took years.
Brett
Well, that’s exactly what we built our service to do.
Brett
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 today’s episode.
Brett
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, and how did you know which direction to really double down on and focus?
Hans Elstner
So, yeah, possibly it’s knowing. Sometimes it’s about guessing. But if you had to close a look to the market size and also to the number of incoming leads and the potential deal sizes, that helped a lot. So we are 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.
Brett
What about your market category? Is it an enterprise metaverse platform? Is it a virtual experience platform? Or what is the market category?
Hans Elstner
Today I would say it’s an enterprise metaverse platform. Typically, enterprises that use our system, it’s mostly B2B, but they typically use it also B2B, two c in the end. But that’s the main focus. But the next steps we are 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.
Brett
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?
Hans Elstner
You should 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 right 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 this 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 are focusing a lot more on some of the european countries and the us markets and that’s much easier.
Brett
How would you describe your general marketing philosophy and approach?
Hans Elstner
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 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.
Hans Elstner
In e-commerce, for example, it reduces the return rates and that’s very much our focus on storytelling and convincing them and being a thought leader.
Brett
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?
Hans Elstner
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 keynote. And yeah, you can see these peaks in the number of visitors on the website and also in the new leads we generate.
Brett
So you mentioned there, you know, trying to convince people, talk to 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, 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?
Hans Elstner
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. And 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 for sure, 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.
Hans Elstner
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.
Brett
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?
Hans Elstner
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 apple 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 the 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 invest cases and 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.
Hans Elstner
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 the use cases.
Brett
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 been like and what did you learn about fundraising?
Hans Elstner
I’m pretty sure that you heard that often it was not that easy. Yeah, once or twice possibly. Yeah, it was. So in the 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 have to prove 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 especially with that problems in economics during the ukrainian war when it started for example, and all the VC’s were, let’s say careful.
Hans Elstner
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.
Brett
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?
Hans Elstner
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 not to focus on end customers. It should not be a b two c business. It should be always a B2B business because companies are more willing to spend money for their technologies.
Brett
Final question for you, let’s zoom out three to five years into the future. What’s the big picture vision here?
Hans Elstner
Samsung 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 really love the term. So to be honest, that is somehow the vision 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 platform. And yes, that is what I would love to achieve.
Brett
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 follow along with your journey, where should they go?
Hans Elstner
Yeah, it would be great to visit our website. It’s rooom.com, Rooom with three O. And I have to say that everyone remembers that we are writing Rooom with three o 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 Z. It’s three dimensional. And that’s why we do have three o. So write Rooom with three o.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.
Brett
Amazing. Hans, thanks so much and look forward to catching up over gluvine sometime in the future.
Hans Elstner
Oh, yes, we do it.
Brett
All right, cheers then.
Brett
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