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And I do think in the next five years, you're going to get a laptop and a phone and a headset, whether it's for training purposes, whether it's for collaboration, that headset is now going to be an integral tool to how you do your job.


But what is reality as the No.


Like man? He gestured at the tall banks of buildings that loomed around Central Park with their countless windows glowing like the key fires of a city of CRO Magnon people.


All his dream, all his illusion. I am your vision as you are my.


This is the opening paragraph of the 19 30 short story Pygmalion spectacles written by sci fi author Stanley Weinbaum, One bomb's tale features a pair of goggles that let the wearer experience a fictional world through holographic smell, taste and touch. This story was the first comprehensive description of a technology that transports the user to a new artificial and virtual reality. Over the years, this concept will become commonplace in sci fi stories and over the following century it would become a reality.


Today, VR headsets, goggles, glasses and contact lenses are all coming to market, they all might not be ready for prime time, but in the case of virtual reality, it's here and it's ready. One technologies to tell pioneering virtual reality and helping it become mainstream is Derek Belch, CEO and co-founder of Stryver. In the past, Derek lived for football. He was a student of the game that played at Stanford one day while roaming the grounds of campus.


He discovered virtual reality and a professor that had been studying it there for decades.


Derek was hooked and became intrigued about the idea about how virtual reality could be used to improve athlete's performance. This curiosity turned into a business venture, and one of Derek's mentors from Stanford provided a small initial investment to help him get started. A new company was born called Stryver. Stryver was born of the mindset that a virtual world could not only improve an athlete's ability, but also provide valuable insights through data. Today, Stryver works with more than 20 NFL and NBA franchises, but the platform has extended beyond professional sports, and now private sector clients like Walmart are beginning to reap the benefits of immersive learning.


Immersive learning is way more than content that's just put inside a headset, it provides realistic, high impact experiences that train workers in a way that some simulations just can't do. Derek joins me on today's show and details his tough decision to leave football behind and embark on a grander mission. You'll learn how Stryver is setting the standard when it comes to immersive learning, how it's creating a new category and allowing employees to train and learn by doing rather than watching. Immersive learning is the future of work.


And it's here now hidden in plain sight.


This season of Hidden in Plain Sight is brought to you exclusively by our friends at Splunk. The Data to Everything platform Splunk helps organizations worldwide turn data into doing its time for data to be more than a record of what happened.


It's time to make things happen, learn more its function or by clicking the link in our show notes.


Derek, welcome to the show. Thanks for having me. Much appreciated. I'm excited to talk to you. There's a lot that we could dive into, but I think before we start, I would love to just hear who are you and what do you do? Please tell our listeners. Sure.


So my name is Derek Belch. I'm the founder and CEO of Stryver. We are almost six years old. We were founded in January of twenty fifteen. I'm sure we'll get into more detail here in a minute. But to keep it simple, we use virtual reality for employee training. We started in sports and then eventually made our way over to the Enterprise. Today we are the leading startup in a very, very new and fast growing space, powering immersive, learning virtual reality across many companies in the Fortune.


One thousand very cool. And when it comes to immersive learning, because you kind of unpack that a little bit for some listeners, that might not be as familiar with it.


Sure. So this is still a relatively new term. We are we are trying to do our best to establish the rules, norms, diction as it relates to everything or so. So we define immersive learning as an experiential training methodology that combines the sense of presence of virtual reality with advanced learning theory, data science and spatial design. Now, while that is the technical definition that we're trying to get out into the world consistently, colloquially, bottom line, when people put virtual reality headsets on their faces, they treat the virtual world like they treat real life as far as how they think, what they do, etc.




So immersive learning is immersing you in a learning by doing experience and hoping that the learning outcome will be better than what you would otherwise do on a PowerPoint, a video, a lecture, et cetera, for sure.


And I think in these socially distance times, it's something that is much, much needed. And arguably even past these times, it's something that we've kind of been craving.


But we didn't know we were missing it. So what was the first. Aha moment where you discovered, OK, this is not just a need, but it's something that we need to get out quickly. And there are enterprises and customers that are like ravenous for this.


Yeah. So I honestly, I think this goes back to to our sports days. So so when I when I founded the company in twenty fifteen, I was coming off of two years as a coach, football coach at Stanford University, and my master's thesis was to come up with a way to train football players using virtual reality. While I showed the academic project, which was little more than a demo, it was certainly wasn't a piece of software that could scale.


I showed that to probably outside of the players on the team, half a dozen to a dozen NFL general managers, other coaches, etc. that came through Stanford's office over the course of the year and the the jaw dropping reaction that each of them had to what they saw in that headset where they're standing in a football office in Palo Alto and they feel like they are on the practice field. I mean, I will never forget to this day and beyond how some of these coaches and players reacted the first time they saw this.


Well, flash forward to twenty, sixteen, mid twenty sixteen, 18 months into our journey at Strieber. And I get a phone call from Walmart and they said, hey, we've seen what you've done in sports. We love for you to come down and show us what we can do for employee training. So I go down there pretty much on a whim. And Chad, to directly answer your question, a roundabout way of getting there, the aha moment was when these Walmart executives put on the headset and go through football plays and they're laughing, they're having fun.


They're like, oh, my God, this is amazing. Here are the fifty ways we could do this here at Walmart. And I just start peppering them with questions. How do you train people? Where do you train them? Why do you train them? What are your pain points? You walk me through this, right? And I'm sitting there just taking notes voraciously, just me and eight other people and on the Walmart side. And I'm like thinking to myself, oh, my God, this is identical to what happens in sports.


The only difference being the actual content that's going to show up in the headset, a football player versus a Wal-Mart store. So that was my moment. I mean, I pretty much decided right then and there that we were going to pivot the company to be much more of an enterprise play. And then here we are in twenty twenty. You already said this, that we're in the middle of a global pandemic, remote work, all of these different things that are that are in.


Influencing why virtual reality may actually accelerate even further in the enterprise, which is super, super exciting, really exciting and congratulations on getting in there and so early, I think that's the fascinating part for me, is I want to know how do you settle on that as a master thesis? Obviously, it's a market that's growing. Was it ready? Player one was it a little bit of from conversations? Was there a mentor involved or is just this like a combination of everything?


How did that unfold? Yeah.


So for my for my advisor on the thesis, Jeremy Bailenson, who is a professor at Stanford, runs the virtual reality lab there. He's been there for almost 20 years. That was ready player one for him, because that was his life. He was he was a or he is a professor at Stanford. This is what he teaches for a living. This has been his area of academic interest for 30 years, going back to his UC Santa Barbara days.


And so when he and I when I was coaching at Stanford, by the way, fully dead set on being a football coach and but I had to do a master's thesis. And so I wanted to pick something that I thought would be interesting. Well, Jeremy and I were sitting and talking about what I could do, and I was like, OK, is there any chance to do something that actually would apply to what I'm doing on the sports side, the coaching?


And Jeremy is like, well, remember when you were an undergrad? And you would ask me, hey, could VR be good for training athletes? And I was like, yeah, but maybe one day and this is ten years ago or ten years before. Excuse me. He's like, this is 2014 when we're talking about this is what I think the technology will be ready to go in like a matter of months based on Facebook, buying Oculus and all these other things.


Right. And so we just thought about put our heads together and said, what about trying to come up with a way to train football players using VR? And I said, yeah, sure sounds cool. So that I mean, that's literally how this thing started as a fun and obviously academic academically sound project, something that I was doing while I was coaching football that maybe could help the team get better. The head coach of Stanford, David Shaw, was all yours.


Obviously, I had an academic requirement fulfilled, but also he's like, yeah, this could help our team proven great. I'm all for it. So so that that is how it started, literally. And then, you know, nine, ten months later, David Shaw literally sits me down and is like, hey, if I were you, I'd get the heck out of here and go start a company.


I mean, I think I'm I'm sick. I'm the one of the only people to get fired with a non severance check for thirty thousand dollars because David Shaw asked if he could invest in the company and he really didn't really fire me to get out of here. I'd love to love to give you a check if if you'd be willing to take my money. So that's it. That's the that's the genesis.


You're so cool. And it's a great reminder about the power of Stanford and the place we're in in the valley that has that type of mindset. Right. That is always scanning the horizon, looking for opportunities for students and professors to collaborate. I'm so excited that that exists in the world. When you were coaching and you had your heart set on becoming a coach, how did you go about letting that go or putting that to the side? I imagine you're a very driven guy.


How did you go about transitioning into this role of a new type of coaching as the CEO? Stryver Yeah, it's a great question. So, you know, prior to coaching football, I did my MBA, USC, I worked in consulting. Before that, I was fairly entrepreneurial minded. Consulting taught me a lot and was good as a first job out of school. But but it wasn't for me. I just kind of knew that pretty quickly.


It wasn't for me over the long haul. So ironically, we actually do a fair bit of consulting right now with Strieber for our customers, which we can talk about later. But but I did in prior to business school and then in business school, I was pretty entrepreneurial minded. And so I really when I when I was going through business school, I was thinking to myself, what am I going to do after school? I don't know if I really want to go back to a big company.


Do I have an idea to start my own business? Well, then I have this thought that if I don't see coaching before I turned 30, I'm going to regret it forever. So, yeah, when I went back, as you said, Chad, when I went back to Stanford to coach, I was planning on putting everything I had into being a coach at a very minimum to decide whether or not I wanted to do it for the rest of my life after my my two years there that I was signing up for.


I really liked coaching. I there were a lot of things I really liked about it. There were also enough things the. I didn't like about it, that gave me pause as it related to thinking about it. This is something that I wanted to do for the rest of my life. Well, when David sat me down and had to get the heck out of your conversation, I mean, he was giving me his advice. But he also said, but if you want to stay, I got a job waiting for you next year.


So so I had to I had to do some soul searching and I had to think through everything. And I think what what gave me comfort in leaving coaching, at least for now, I mean, David also was very clear. Head coaching football is not going anywhere. But but your your window here of opportunity for this this start up may go somewhere. But so I think I think what gave me comfort was there are enough things about coaching that I was like and I don't really like that.


So I'm not it's not like this is the only profession for me on planet Earth as much as I really like it. But really, it was OK, let's look at this opportunity right now with what's with this startup. It is a it's entrepreneurial check. It's technology check. It's sports first and foremost. This is pre Wal-Mart. Right. Check it's David Shaw offering to give me give me a check for thirty thousand dollars to get off the ground.


And if something happens to go wrong, I'm back. I have the Stanford Network as my my safety net. Right. So so there were just a lot a lot of stars that aligned. And when I kind of talked through this with my wife, my parents, it was like, if not now, then when am I ever going to start my own company? So that that was it. I mean, honestly, other than the daunting nature of going out and doing your own thing, it was a relatively easy decision to to, at a minimum, put coaching on pause.


Maybe, maybe I walk. Maybe it's for good based on how my life plays out. So to go and do that. So that was it was the perfect storm of all those things coming together.


I love that. Derrick, how do you think about the total addressable market? And I'm just curious to know, how did you think about the total addressable market for this at the beginning of your journey with the company to where we're at now? Right. Because the market for VR is it's large, but some some might consider it small. But if we look at the market for education, it's absolutely massive in the trillions. So how are you thinking about that and how is it evolved over time?


Yeah, so so one of the first lessons of entrepreneurship that I didn't pay close enough attention to in business school, but but did once it was time for real was Stryver.


We were moving so fast in twenty fifteen with sports teams that I wasn't really thinking about market size. But then as the football season was kicking off and therefore this is in September, and therefore the window of being able to sell to more football teams closed for six months until the season ends and they look at new products. We started doing some mental math. We're like, oh OK. So we got this many teams this year. There are, what, one hundred and twenty college teams that can maybe afford this.


There are thirty two NFL teams. Obviously there's some other sports. But pretty quickly you do the math and you realize I'm just making numbers up. Like if every team paid us one hundred thousand dollars and we got half the the professional teams and some of the college teams on planet Earth, you do the math and pretty quickly you realize that's only like, what, eight to ten million dollar revenue business? Not to put that because it's really hard to get there, but it's certainly not a billion dollar opportunity by any means.


So along with the AHA moment of Walmart and all of in twenty sixteen and all of the similarities of sports versus enterprise from, you know, from a training perspective, the other Aha moment was we decided to pilot Walmart in one of their learning academies. Well they had two hundred learning academies at the time.


They have like two hundred, they have two hundred and twelve now it's not the size of many nations.


Oh yeah.


OK, so yeah. So, so here we go. Two hundred learning academies and then four thousand five hundred stores in the United States.


And they made it very clear from the first meeting, if this works in the academies, we would want it in every store. So I'm just doing the mental math. I'm like the price of this pilot and I'm like, oh my God, these guys could pay us more than every sports team on planet Earth combined. And they are only one of thousands of companies on planet Earth, definitely low and behold. That's kind of how it has worked out with Wal-Mart.


But I mean, so there you go. Right. There's your market size story in a nutshell. And then as we've just kind of had to go through this more with investors and even looking internally, the third party market. Let's take V.R. out of this for a second. This is less drivers, less of a var. Then it is an enterprise software play, so the third party market for corporate training in the United States is 50 billion dollars annually.


And the amount of money that's spent on our technology, when you actually go even more broadly than just the training part of H.R. is two hundred and fifty billion dollars annually. So, I mean, the old the old adage, get one percent of a massive market and boom, it's it's a billion dollars in revenue. I mean, that's that's kind of where we're sitting right now. And so that that is a that is a very real thing. You never want to dominate a market that isn't very big.


You'd rather get a small piece or hopefully a large piece of a market.


That's massive for sure. And I think one of the cool things, too, about Stryver and what you're doing is it's in an established market. But at the same time, too, you're kind of defining this new category. And all the phrases that you mentioned earlier on with immersive learning, it's you're creating it right? Like the language is there, but you're very much like steering the ship. So how are you thinking about kind of leading the industry when it comes to, OK, here's what we provide, here are the benefits of it.


Could you walk us through some examples of here's how this works as opposed to how they were doing it before? Sure, yeah.


I mean, we're definitely a combination of, as you just said, we're definitely a combination of category creation and category disruption. Right. The creation part being the this whole virtual reality thing. Right. Like the world is seeing D-R and crude forms over the last several decades, but they've never seen this cheaper, lighter, faster era of VR that we live in right now. So certainly category creating as it relates to putting headsets on faces instead of watching videos, looking at PowerPoint, sitting in lectures, et cetera, for that immersive learning experience category disruption and answering your question directly in that we are taking a fairly old, obviously very large, very archaic in many ways category of learning in the enterprise where folks give lectures, have them read, and right now they watch videos, they look at PowerPoint.


E-learning is kind of a bit of a misnomer because it's it's just consuming the same information electronically versus in a binder or a book. So how much more effective is it really? It's not just do it from anywhere in theory with an Internet connection. So that is really the value proposition here is. All right, let's look at all the current and older ways that you train people. Again, the videos, the PowerPoint, the lectures, all that, the videos.


And everyone in this room would agree that these are somewhat ineffective in many ways. Yes, we would. So now this headset, when you put it on your face and you go through learning impressively, you go through learning like a pilot uses the flight simulator again, learning by doing it is X percent more effective. We can cut our training time by Y percent. That will lead to Z from our standpoint. So it's a pretty simple exercise to walk people through.


And what helps us is a lot of the learning professionals, H.R. professionals, executives that we talked to, they've all been through their own training and they don't like it. How fast can I click through this? I am. I still am I still awake while I'm while I'm watching this video? Right. So VR is a a very obvious improvement in that. But that makes our job pretty easy from a sales perspective.


And so much of that training to you know, it feels like kind of this compliance. You're you're static, you're moving through it. There are a lot of different ways that these trainings can be gamed or where people can kind of zone out, not really pay attention, whereas this forces some movement, some interactivity. Could you tell us a little bit more about the differences? You've got sport teams using it. So how active is this? And walk us through, like maybe some examples of your favorite trainings that you've seen.




So on the one hand, yes, you're absolutely correct. When you're when you're immersed in VR, not only can you look around anywhere you want in front of you, behind you, left, right, etc., but also in some of the simulations, you can actually move your body with a controller, you can pick things up, you can walk around, etc. So in that way, the learning is is much more active. Right. So from a cognitive neuroscience perspective, it's just way more effective.


I mean, sometimes it's ten plus X more effective just based on what study you read. Then passively watching a video, looking at a PowerPoint, et cetera, our formula has been to its driver to date and it's starting to change and evolve has been more of the three, three 60 video based training versus the CG training. And with examples being like an active shooter training at Wal-Mart, a store robbery with Verizon, Black Friday training with Wal-Mart was one of my favorite, favorite things we did with them.


We've done certain safety things for FedEx and the list goes on. So essentially with 360 video, we're basically dropping up to like a live action, real life scenario that you would be in the real world and the end user takes it very, very seriously. And they're learning way more than they would have again if it was more of a passive experience. Now, the downside of 360 video is you don't actually move, right? So you can rotate, but you don't walk in the scene.


You don't pick things up, say so. To do that, you would need more like a six degree of freedom experience with object manipulation and more CG based on the challenge with those is really twofold, at least today. And this will improve over time. Number one, they tend to still look for video games and therefore people can tune out sometimes. And so they're not your brain isn't as engaged. And then the second is they're not as scalable.


And what I mean by that is you got to think about these corporations we're working with, right? Like Wal-Mart stores, FedEx warehouses, BMW factories, Verizon stores, they don't have a ton of space to just have people run around in VR. Right. So it's really hard to scale a six degree of freedom experience where you're walking across a room or you're picking something up because you're not going to have six people in a room bumping into each other necessarily.


So so that's certainly the future of where this is going as we see the workplace continue to evolve and companies to change manage their way for making more space for these things. But as of today, most of our training has been three 60 video based, which allows people to just kind of stay in one spot, rotate. You can even sit down if you want, and you can have a lot of people doing it in one space at the same time.


Very cool. And when it comes to the data that you're collecting during these trainings, how does that work and how is the data that you're collecting during these richer than some of the old alternatives that folks were using?


Yeah, so so most of the data that we're collecting today now there are the basics, right? Like who's using what they get right or wrong on answers, how long were they in there, etc.? But most of the that serves a purpose for sure. But you can also get that with like e-learning. Did they get the question right or wrong? So most of the deeper analytics that we're collecting are related to intent attention. So where is this person looking in the scene?


So they may have gotten questions three. Correct. But they never actually looked in the direction of the thing that they needed to see to answer question three. Therefore, did I guess right or is this question hard enough? Right. So sure. So we've been we've been providing attention trends to our customers to say, hey, you told us you want everyone to look over there at this point, the training. Well, guess what? Only like 30 percent of your workforce is doing that.


So either we're not training on it correctly or we got a bigger problem now that that's what they're that's what they're going to do in the real world. And we need to figure out how we're going to how we're going to improve that or what we need to do as a result.


So most of our deeper analytics focus is on attention. From there, you can kind of combine attention with time spent, with the experience with the reaction, time with questions and answers to calculate what we call like an engagement score, which is which is super, super interesting as it relates to an engaged learners, a better learner. So let's tell you how engage your employees are and then eventually the Holy Grail. Back to our discussion from minute ago will be when you have like these really high end six degree of freedom simulations and people are walking and they're building things with their hands.


And now you're kind of putting all this together to where if you don't do it right in VR, then you're not going to do it right in the real world. And we can tell that to a customer. And therefore, we either don't hire this person, we don't put them out on the floor to do the job and everything in between. So that's something that we're really excited about down the road.


And you recently just acquired a analytics company, so walk us through that acquisition. Was that your first and tell us about it and how are you doing that integration?


We had actually done a couple actual hires over the last couple of years, just companies going out of business and we kind of picked up the pieces. This was our first real acquisition of Observer Analytics, and they're they're relatively small team. So we not only did we acquire the people, but also the code base and some things that they had been working on and so far so good. I mean, we haven't we've been slowly integrating the code because we kind of needed them to just come in and work on some existing initiatives and get them up to speed quicker.


And now we're starting to see, OK, what what of what these guys built previously would apply to what we're doing. So we're starting to work on that this upcoming quarter, but so far, so good. The folks that we hired one one actually came in and was supposed to do a certain role. And then we put them in another role, kind of in a pinch as a product manager for our data data product. And he has just been crushing it from day one with little actual experience for the role, which is super cool to see.


I love those kind of diamond in the rough hires. The engineers that we brought on board have integrated in nicely and we've probably move faster in four or five months than we moved in the previous two years in this area, which is super exciting. And obviously that's something that you want to happen when you make an acquisition.


So over these years of building, the company would have been some of the hardest moments for you, or have there been any dark nights of the soul, whether it's professionally or personally? You know, there's there's always struggles going on.


Are there any moments where you feel like, OK, I want other CEOs, I want other leaders to notice dark moments of the soul, that their real sense of that may have many that many places with that?


I mean, we probably could spend all day talking about challenges for sure. I would say overall, just overall, over the last five years, I do travel a lot from the sports teams originally to the customers. I'm married. I've got a five year old and a two year old, and I make sure to be very present when I'm home. But my first year, I probably spent two hundred days on the road, then one hundred and fifty and then one hundred and probably like eighty five last year.


Obviously right now is no one's traveling. So their mom and mom and kids are very appreciative of me being around more. So that's very challenging personally. Just being on face time with your kids is no fun at all. My wife, it's easier on me and my wife but. But the kids, it's just it's just it's tough so that that is not fun at all. But we know that hopefully it's temporary over over the long haul, professionally and honestly.


There isn't one thing. I mean, startup life is a daily roller coaster, literally daily, sometimes hourly of highs and lows.


Right. We certainly have had our fair share of success over the last several years. I mean, it's been up into the right it's been a rocket ship. I constantly reminding our employees that this is not normal. What we have experienced, some of the deals we've closed, the the rapid growth, especially to start with fortune one in the enterprise like this is just not normal. So everyone appreciate it and and don't take it for granted. Right. So that so that that has been awesome.


I would say one of the just four other entrepreneurs as well. I'd say one of the things that that does kind of constantly torment me is pricing. And I think it's one of those things like, all right, if everyone's buying your product, are we to are priced too low? If no one's buying our product, is our price too high as is the price the reason? No one's buying it? OK, we're selling great. Are we leaving money on the table or are we charging too much?


And we could have more customers. I mean, it's just this it's this constant inner battle. Right. And of course, all your customers are going to try to negotiate. So you never really know where they stand with what they're willing to pay. It's a constant, constant back and forth. And that's something that that I have come to accept. We will probably never get perfect. Yeah, and interviewing executives, especially sales leaders, you know, over the years, like all of them that have a lot of experience, say the same thing like, hey, Derek, I've I've told every one of my founders we're going to screw up the first six to ten deals here.


And I'm pricing wise. So just don't don't don't get too high or too low on anything that we that we do from a pricing perspective for like two years. And lo and behold, that that's kind of how it how it's played out. So that's so interesting. And it's really, really, I think, important point, because it's one of those things. I think as a founder, you don't want to have a new enterprise feel like, oh, we're not getting a good deal or, you know, the price is too high.


And to hear that you're struggling with that is super, super reassuring. So when you are struggling with something like that and you're going about putting together a solution or a new path forward, are you leaning on your board? Are there any go to investors that you're bouncing ideas off of? Is it peers? How do you go about kind of triangulating a solution? We're pretty lucky.


We have an awesome board that is relatively hands off and that they're not looking over our shoulder all the time. So they let us run our business. They trust us to run our business. Obviously, we've had a track record of success. So that that always helps to have that credibility, but I'd say the big things, the big challenge we're working through, that we do go to them and we don't we don't save it for a board meeting once a quarter necessarily.


I'll just pick up the phone call or say, hey, I want to I want to give all of your time on Thursday. I walk you through something. So I do use the board. Now, the challenge with the board is, is they're not in the data, the business, nor do they want to be or need to be. So sometimes some of these challenges are just are just too deep for even the board. So I'm very fortunate.


We have a very strong executive team, not the most experienced team, and that we've all done eight startups with exits before, but super smart, super motivated people, really just good people. And one of the things that we have really focused on here is especially during this time, like there's a time to move fast and break things for sure. But let's also not let's also not be afraid of being deliberate and being thoughtful and working through things and challenges and coming at it from multiple different perspectives.


And if something takes us six hours, that could have taken us six minutes. But but it leads us to a better outcome that we're all aligned on. Cool. It's all good. Right. So so we so that's something that that we take very seriously on the leadership team. And then lastly, I also have an executive coach and he also works with our leadership team and even some of our kind of like middle and senior managers as well. And he's been an outstanding sounding board for me over the last couple of years and in many areas and less of like here's what I think you should do for as far as the decision and more coaching me and the leadership team through the discussion process and the decision making process.


And here's a little tip for people to, I'd say, nine times out of ten when I bring a problem to him or when we bring a problem to him, the first thing he says or asks us is what's the outcome you're looking for? And half the time, we can't even answer that question. So we have to like, yeah, yeah. So we have to say, oh, yeah, like, what are we looking for here.


What like what what are we trying to achieve even for a meeting. Right. Like a on off site. So what are we trying to achieve over the next six hours. And just that, that simple question and that's that ten minutes of getting the bullets on the board. It's just like it's so stupid, simple. But often it does help put decisionmaking into context for sure. Yeah.


And that perspective from people that have some distance and that are just not in the day to day can be valuable. So when it comes to the market as a whole, are there any developments?


Is there anything out there that you think is going to become normal over the next couple of years? Is there anything that you think is like an open secret? What is getting you excited about the future of virtual reality?


I think there are two macro economic things happening that that make me very excited.


And then there's a few like reality checks to which we can get to a second. So everything that's happening in the world right now with covid and remote work and all this stuff, collaboration and all that, and people moving places and working from home, and it's just really good for for our business and our industry, because folks that are been looking at VR for a while are now saying, OK, I'm done looking, I need to be doing this.


So I'm ready. And they're calling us now. Over the last six months, we've kind of seen like a there has definitely been a pause on from a spending perspective while everyone kind of collects themselves with covid. But that that has changed and things are moving forward very quickly. So macro economically, the tailwinds around how VR can be a solution for all of the current and future problems we're going to face with what's going on, that that's that is just a home run and that has me very excited.


Then the second thing is Facebook, Microsoft, Google, Apple, Lenovo, Hewlett-Packard. I mean, we're not talking a bunch of startups in a garage. You're investing in this in this space. We're talking behemoth enterprise technology companies. And I have certainly had my my fair share over the last five or six years. Maybe going back to your other question, what keeps you up at night? Very, very little. But I certainly have had my fair share of irrational fear of, oh, my God, is the bottom going to fall out of this whole market and are they just going to stop making headset's especially with kind of how we've seen the consumer market be a little slow.


And time and time again, I'm reassured by outsiders, insiders, as well as just my own thinking when that list of names is investing billions of dollars in this space. Like, that's awesome. It's not going anywhere, if only if anything, it's only going to get better. Those are the yeah. So we're like in the bottom of the first inning right now. Right. So those will be those are two things that have me very, very, very excited macro economically as far as like any new innovations or what are we seeing that's a game changer here in 2020.


Nothing crazy from a hardware, software, cetera perspective. I do think we're I do think we're five to 10 years out from augmented reality being like a real, real thing, like like people want it to be minority reports, esq, that's probably a decade or more away on the VR side, certainly Facebook, Microsoft, ET, that they all want us living in headsets all day. And this idea of like the virtual workspace. Personally, I don't see it.


I don't see us hanging out and headsets all day. They've got to turn into a pair of swim goggles from from an ergonomics perspective. And even then, I don't know. So I'm not one who's on the we're going to do everything in life and work in VR train that that's kind of not me. And that has not changed in the last six years since people have been asking me my opinion about these things, which is refreshing because it gets the outcome thing where it was before.


We had many people with what I yeah.


I don't I don't want Minority Report. I'm kind of low tech in my personal life. But but what I do think unequivocally is, OK, how old are you now? Like you're in your 30s. So am I. I'm thirty five. So so when you and I got our first jobs out of school, like they gave us a laptop. Right. And before that it was a desktop computer. So we've gone from you get a desktop computer to you get a laptop, do you get a laptop and a phone.


So you get a laptop and a tablet and a phone or some combination.


And I do think in the next five years you're going to get a laptop and a phone and a headset and that that and whether it's for training purposes, whether it's for collaboration purposes, whatever it is, that headset is now going to be an integral tool to how you do your job. And it won't knowledge workers, task workers, front line everything. And it's not going to be an all day thing, but it is going to be a part of the day thing.


And there are going to be very discrete, specific things you do in that headset. That is a better experience and therefore a better outcome for the business than what you used to do. So that I do fundamentally believe while juxtaposing it with like, come on, guys, let's be realistic. We're not going to spend all day in VR for sure.


Yeah. And yeah, first job at school, I got an M4.


But I mean, this is a different situation, which which brings us to some industry news about so Inderal just one, I think a nine hundred fifty million dollar military contract for some training basically in VR. So this is really exciting. I think as we see DOD kind of start to lead the way here. How do you think about the future? These are different markets. You started in sports, but you quickly got to the enterprise. Are you thinking about working with DOD or any institutions like that as well?


We have been talking to a number of different industries for many years. For the last few years, excuse me. Many would imply we're more than six years old. We're not. So, yeah, we get we get phone calls from everybody, large enterprises, health care, DOD, education, et cetera. DOD is definitely something that I want to be doing more of in the coming years. But you also got to focus as you look at the as you look at the challenges we have on our plate and enterprise.


I said this at the beginning of the segment. For us, it's less about virtual reality and more about enterprise software. And that means that means data, data and security. That means GDP and KPA and and troubleshooting and all this other tech support. Right. And all and the reports in the portals that all this stuff that is just is so much bigger than than putting the headset on. We are so proud of how how far ahead we are of everybody else relative to enterprise requirements and being able to do this at scale within an enterprise.


And we've got twenty two thousand head sets out in the field. We've trained over a million people. I don't think anyone's even one one one hundredth of the way as far along as we are in the space. I'm saying that objectively, not arrogantly, so that we take that very seriously and we want to double down on that lead in the enterprise. And while DOD has a bunch of lost abuse cases, for example, DOD has a bunch of awesome use cases and certainly is a massive market as well.


Getting Fed certified is, what, two to three years? We have to just weigh that against all of the other. That we have to do, and so while we have dipped our toe in the water on the front, going all in on DOD is something that we just we need to take some time to think through exactly how we do it.


Wise words. And you mentioned reality checks earlier. What type of reality checks do you think the are coming in the industry or that more people need to be aware of what we've already mentioned, a few in this in this conversation.


So, again, I don't think we're going to hang out all day in headsets. That is not something people want to do, definitely with the current form factor. And even as it goes goes onward, this idea of what we just talked about, enterprise security requirements, DOD requirements, I know the nine hundred and fifty million dollar contract sounds big, but the devil's in the details, right. And so is that a is that like a bridge? Is there a bridge from a grant to that that takes place over 10 years.


Is that company said Ramp certify. We saw Microsoft with the big holo lens deal several years ago with the Army. And then we read recently that the Army's actually giving them giving the devices back because they don't work out in the middle of Afghanistan. No duh.


An Internet connection out there. Right. So, like, there's just like when you start to peel back the layers of of what what it actually takes to pull this off. There's still a long way to go know we're still in the bottom of the first inning. We're just getting started, as you said, and then some of the other reality checks that that we go through with our customers. Again, go back to this word scale and we're constantly talking to customers and they're like, hey, why is your price this and so and so's price is this and it's one third.


And we're like, well, that's because you're just buying a piece of content and you're just buying something fun from that other vendor. Like how many people do you want to put this through? Well, we want to start with like five hundred and then eventually one across the whole company. Oh, cool. So how are you going to do that? Like, how are you going to scale it? How are you going to put on headsets? How are you going to collect data and do the customer support on and on?


How are you going to go? Is that does that company can they do the IT assessment that you require? That's forty eight pages long. It takes nine months and then they start going, oh yeah, you're right. I think we should we need to be working with you. Well yeah we know. So, so I'm not saying that again, to insult these other companies, it's just the reality like this is just what it takes. So we feel that we are very well positioned to to win over the long haul.


And and when I do sales meetings, I literally talk to customers like I'm talking to you because I just want to educate them and inform them. And I make it very clear, hey, if we don't work with you, it's cool. But I don't I don't want you to fail because that's bad for the industry. So here are the eight things that you need to be thinking about. And if that other vendor you're going to work with can't do them, you either need to work with us or not do it at all and wait until you're more ready.


Right. And the industry's more ready.


Awesome. Derek, this has been awesome. Thank you so much for sharing. And if there is anything you would leave our listeners with, I'd love to hear it. We have a lot of folks that are excited about VR and everything that it's bringing to the table. So if it's a final thought or maybe one of the coolest anecdotes that you've come across lately, we'd love to hear it. The mix yours.


I mean, maybe my reality check a second ago is was a little sobering, bordering on negative, realistic on the positive front, very positive. Here's a here's a reality check. This stuff works. I mean, this is not snake oil. So from a learning and development perspective and from an OK, I get it, VR is cool, but is it really going to be a thing over the long haul? It freakin works. We have done the studies and as of third parties, not us, that have corroborated this, you put someone side by side, twenty minutes in a headset versus for example, an hour in front of the computer, three hours in the lecture, whatever.


Right the old way. And they learn the exact same amount of information, if not more in the headset. So. Our customers are achieving a similar minimum, identical at best, even even greater of a learning outcome in a fraction of the time powerful. So there you go. I mean, like that that is the pitch in a nutshell. And it's pretty it's pretty easy from there.


I love it. Derek, thanks so much for your time and everyone listening. We'll see you next on. Paul. I'm Sophia Bush, and you've been listening to Hidden in Plain Sight from Mission Dog. This podcast is sponsored by our friends at Splunk, the Data to Everything platform. In today's data driven world, every company, big or small newworld, is sitting on terabytes of unused, untapped and unknown data. Splunk helps turn all that data into action.


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