Zero Latency co-founder Tim Ruse on how he turned a “hobby” into a $12 million virtual reality business, and the unexpected pressures of success
Wednesday, June 14, 2017/
Passionate gamer and entrepreneur Tim Ruse set out with co-founders Kyel Smith and Scott Vandonkelaar to build the “ultimate virtual reality experience” in 2013. With the VR industry only just finding its footing, the three launched Zero Latency, an experience-focused free-roaming multiplayer VR video game business where players shoot virtual zombies in a survival scenario.
Today the business boasts annual revenue of more than $12 million, and its three employees have grown into a team of more than 50. Zero Latency’s first mover advantage has placed it in a strong position in the “maturing” VR industry, with a target of having 100 systems up and running locally and internationally by 2020.
Ruse spoke to SmartCompany about how he and his co-founders turned a “hobby” into a full-time business and how there’s “always another mountain to climb”.
Myself and my two co-founders started building Zero Latency in 2013, and we incorporated the company in 2014.
We’re a bunch of really passionate gamers, and the idea for the business came from my now chief technology officer Scott — combining motion tracking technology with the new release Oculus headset.
We knew that VR was quite isolating. It’s expensive to set up at home, and it needed a dedicated platform for developers to build content on.
So we thought: “What would we build if we could build the ultimate VR experience?”
We did it because we’re passionate about it. We were excited to be building something new and interesting, a massive opportunity to create something that’s never been done before.
All our skillsets worked together really well, and from the beginning, we approached it very much like a job. We all had set roles, and we all had timelines.
It’s always tricky to start something new and create something from scratch. I never thought it was risky — the risk was more in not doing it.
I worked as a project manager at a web and mobile apps business and in banking for a while, but I always had the vision to run Zero Latency full-time. In the beginning, we kept it very organic but stayed pragmatic on delivering on our vision.
It was probably in mid-2014 we realised the business could be a real thing, and then it was about how we build that bridge from a hobby into a full-time business.
It turns out that bridge is made of money.
We were lucky enough to secure committed and passionate investors early on who even approached us first. We also did a crowdfund back in 2014 where we pre-sold tickets to raise money to help us set up.
We raised $32,000, and it was the hardest money I’ve ever earned, but it helped us out in three different ways. Firstly, it gave us something to focus on. Secondly, it got our awareness up and gave us something to hang our hat on. And finally, it proved there were people out there who wanted our product and were willing to give us money on the back of a concept.
After we raised that money we realised we needed more cash to deliver what we wanted to, as we had very high expectations. The first round we raised $1 million, and then we raised $1.5 and $7 million in the next two rounds.
After we raised I found it difficult to get out of the startup mentality and start spending our money wisely. We were building a business from just three guys into a company of over 50 people.
Growing a company that has direction, leadership, and core beliefs was a challenge, and it takes time and money. It’s weird when the person you hired starts hiring people.
Companies are always evolving and learning, but we’ve done a solid job in what we set out to do. We have eight systems up and running with goals of 24 by the end of the year, and we’ve got some interesting deals under wraps.
Even when you’re successful in growing a company there’s always more stuff you can do. You have to change as the market changes.
The VR industry is maturing. When we started no-one else was doing it, and then in mid-2015 the first competitor popped up, and now everyone’s trying to do it.
With the newer market entrants, I see a bunch of assumptions being made about business models, which are then put into the wild to just see what works. Our core model now is the same as when we started — it’s just how we structure the business that’s different.
As someone who’s in charge of the business, one of the big things that was in the back of my mind was: what happens if it all doesn’t go well?
Now it’s going well, there’s a different pressure. We’ve gone from basically zero to a company pumping out a complex product, and the pressure put on the business is pretty profound.
It’s the pressure of success. Early on you think it all gets better when you raise more, but there’s always challenges that come with their own set of problems to solve.
This pressure is not something I would have predicted. There’s always another mountain to climb.
Looking forward, we want to be pushing more of our own flagship sites, but one of the biggest challenges with this is staying focused. Once you start to gain various levels of success, more and more ideas are pitched at you, some of which might be right for you, and some not.
As you start to grow, you start to look into different things as you don’t want to let opportunities slip and end up like Kodak. At the same time, you don’t want to be the company that tries to do everything.
There are so many opportunities in VR, we could be pivoting every week.
We’ve got four people working in the US already so we’ve begun looking internationally. We offer our systems internationally as a Software-as-a-Service model, as we believe it’s the best way to get our platform out there whilst continuing to publish exceptional content for that platform.
We’re targeting 100 systems, either our own or our partners, in the next three years, but that’s the more “cold-blooded” commercial goal. We’re committed to pushing our core philosophy and developing the most immersive experience we can with the tech available.
There’s so much change happening in the market and it’s only just scratching the surface of what’s possible. It’s going to be an exciting couple of years.
For other entrepreneurs, my advice is to go in eyes wide open and know what you’re getting yourself into. Make sure you’re passionate about what you’re doing because it’s hard work.
Starting a business is not the easy road, and people who start a business are almost compelled to do it. Entrepreneurism is a compulsive behaviour.
Also, make sure you have an excellent team and cultivate a strong relationship with them. It’s important to get a fantastic core team behind you because without them, you’re not going to go anywhere.