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All right, I feel naked without my headphones. Do you want to wear headphones? I get it. I could. You said yes. No. You want to wear headphones? Ben's got some ear muffs for you to put on. Yeah. Welcome to season two, episode two of Acquired, the show about technology, acquisitions and IPOs. I'm Ben Gilbert. I'm David Rosenthal. And we are your hosts. As we mentioned in December, we're moving to a seasons format where we can do multi-episode themes and mini-series across episodes. The season's mini-series is on startup fundraising. So to date, we've exclusively talked about exits on the show. And we've glossed over plenty of fundraising events as part of these stories, but we've never really dug in. How do these rounds come together? What's the process and what do different types of fundraising rounds allow a company to do? So our first episode is about the series seed of one of the most prominent VR companies in the market against gravity, the makers of Rec Room. And we are super, super fortunate to have with us today, the co-founder and CEO of Against Gravity, Nick Fight. Nick is the co-founder and CEO of Against Gravity, as I mentioned. They're the makers of Rec Room, which is the VR social club where you can play active games with people from around the world. Rec Room is available on the HTC Vive, the Oculus Rift and the PlayStation VR. And before that, Nick was a principal program manager at Microsoft working on HoloLens and Forza Motorsport. Yeah. We're excited to have Nick with us. One time, fans and listeners of the show might recognize Rec Room from our Oculus episode. And we are excited to dig in further here. That was back when, well, you weren't raising your round during that time, but it was shortly thereafter. Yeah, I think it was shortly. Yeah, it was. It's pretty exciting. You know, almost like a follow up here. This is great. Our presenting sponsor for this episode is not a sponsor, but another podcast that we love and want to recommend called the Founders podcast. We have seen dozens of tweets that say something like, my favorite podcast is acquired and Founders. So we knew there's a natural fit. We know the host of Founders. Well, David Senra, hi, David. Hey, Ben. Hey, David. Thank you for joining us. Thank you for having me. I like how they group us together. And then they say it's like the best curriculum for Founders and Executives. It really is. We use your show for research a lot. I listened to your episode of the story of Akio Marina before we did our Sony episodes this incredible primer. You know, he's actually a good example of why people listen to Founders and so acquired because all of history's greatest entrepreneurs and investors, they had deep historical knowledge about the work that came before them. So like the founder of Sony, who did he influence? Steve Jobs talked about him over and over again if you do the research to him. But I think this is one of the reasons why people love both of our shows and they're such good compliments is not acquired. We focus on company histories. You tell the histories of the individual people. You're the people version of acquired and where the company version of Founders. Listeners, the other fun thing to note is David will hit a topic from a bunch of different angles. So I just listened to an episode on Edwin Land from a biography that David did. David, it was the third, fourth time you've done Polaroid. I've read five biographies of Edwin Land and I think I've made eight episodes of them because in my opinion, the greatest entrepreneur to ever do it, my favorite entrepreneur personally is Steve Jobs. And if you go back and listen to like a 20 year old Steve Jobs, he's talking about Edwin Land's my hero. So the reason I did that is because I want to find out like I have my heroes. Who were their heroes? And the beauty of this is the people may die, but the ideas never do. And so Edwin Land had passed away way before the apex of Apple, but Steve was still able to use those ideas. And now he's gone and we can use his ideas. And so I think what acquired is doing what the founder trying to do as well is find the best ideas in history and push them down to generations. Make sure they're not lost history. I love that. Well, listeners, go check out the founders podcast after this episode. You can search for it in any podcast player. Lots of companies that David covers that we have yet to dive into here on acquired. So for more indulgence on companies and founders, go check it out. David, you ready to dive in? As always, Ben. All right. So the history and facts, normally we narrate a lot of this section until the company history before people, but Nick, since we've got you here, we'd love to just hear what is against gravity and what do you guys do? Sure. So against gravity makes rec room, which is a virtual reality social club where people from around the world can meet up in thousands of different rooms. And each room is a different experience. There are rooms for sports games, shooters, adventures to go on with your friends, club houses, escape rooms, comedy clubs, and some of these rooms are made by us, but increasingly more and more are made by the community themselves. Cool. And it's my understanding, rec room's pretty popular among people with VR rigs, right? Rec room is a pretty popular VR app across Steam, which is for the Vive, Oculus, and then yeah, PlayStation. It is super fun. I'm actually excited. One of the saddest parts about moving to San Francisco for me is in our new office, we do not have a VR setup. And our apartment is too small being in San Francisco to have a VR setup. So I have missed all the awesome things that you guys ship, seemingly on a weekly basis. But listeners, I know we've talked about it before. If you haven't tried out rec room, go out there and... It's very free. It's price down. It is venture capital subsidized as we are going to talk about now. It's great. It's super fun. Well, David, that's a great transition. So Nick, we're covering your seed round on this episode. Catch us up. How has against gravity been capitalized to date? So early on, we did a convertible note with friends and family and actually quite a few former co-workers as well. We were really fortunate in that a lot of people wanted to participate and get in on that. And we were able to raise almost a million dollars on that convertible note. And that got us quite a good ways. We were able to get set up with equipment, get our development going. And we were actually able to launch the app and support it for a couple months after launch as well. We were also able to make some key hires. And that really got us out into the public and got us some customers. Shortly after that, rec room was doing pretty well in the market and there was definitely a group of people that were really passionate about it. And so we started chatting with institutional investors looking to do a long around to really extend runway and get to a point in time where the VR market was significantly larger. And we had a lot of people participate in that. We had several from Seattle. So we had Vulcan, Maveron and Asikwia. And we had several from outside Seattle. We had first-round, beta works, anirac, the VR fund. And then in that round as well, Sequoia ended up coming in a pretty big way and actually joining our board. Well, first of all, you go even farther back and talk about leaving Microsoft and starting the company, but I remember when you'd raise that initial million dollars and then you built and shipped the product. Like you guys made so much progress on so little money. You got the product shipped and this was in the relatively early days of VR, where it wasn't totally obvious how to build this stuff. I've always been curious, how did you make so much progress with so little resources in just a few months when you started the company? I have amazing co-founders, so while I was out trying to collect checks from friends and family, my co-workers did just amazing work. They were able to pull together from a blank white slate of paper to there's an app that shipped that a good portion of the VR audience was playing. They managed to do that in 90 days. So went from blank slate to product in market in 90 days. One of the phrases that we use a lot at that company is Ready Fire Aim, which really describes our development process. A lot of people would view that as not a good thing, but we really embrace it. I think it encapsulates our thought that it's really hard to aim and hit perfection and it's really hard to hit perfection on the first try. So what we look for is can we just make tiny improvements through each iteration and really our focus is on how can we get the iteration speed up. So from the beginning, what we were really looking for was, as soon as this thing compiles, can we push it out to the public? And then can we get feedback on it? Can we get a sense of what people like and what they don't like and can we address that this afternoon? That was really the way that we approached it and that's the way we've been developing a new feature in the past two years. It's so funny about something specific to REC room for user feedback. You were taking me through the new features on Saturday and people kept coming up to us and you don't have any special thing above your head or anything indicating I'm the founder. But people are just coming up to us and telling us things and asking us questions saying, can I join your party or how do you do this? And a lot of people, just very vocal and very communicative. So I have to imagine from the earliest days, you don't have to work very hard to get user feedback. No, the community has been wonderful in telling us what they want both in REC room and outside of REC room. We have a very active discord that we manage. We have a very active Reddit that we manage. And generally what we're trying to do is when people give us feedback, we're trying to react to it in the tightest timeline possible. So when they ask us for something and we think this could meaningfully change the experience, we try to get it in there as quick as possible and let those users know like, hey, thank you for the feedback. Thank you for the ideas, your ideas in there now. Let's go check it out. Yeah, let us know the next thing we should fix. You and all your co-founders were all at Microsoft together, right? How did the team come together and how long were you thinking about it before you left, what catalyzed you guys to make the jump? So my background at Microsoft, I came to Microsoft right out of college and I spent a couple of years working on a series called Forza Motorsport there, which is a racing game for the Xbox. That was a really awesome experience. I got to see what AAA game development looks like. And then after a couple of those games, I moved to a small incubation team in 2012. And that incubation team ended up growing into the HoloLens team. And that was where I met most of my co-founders. So we had worked at Microsoft on HoloLens for several years. Really, what we were doing was building demos for early prototypes of HoloLens. And then we were also working on some of the apps that shipped with the development kit of HoloLens. And for listeners you don't know, which I imagine is not many of you, but for those who don't. HoloLens is Microsoft's augmented reality headset. Yeah, that's correct. So when you joined in 2012, I mean, years before it shipped, what did it look like then? Because it's pretty sleek sort of self-contained device now. It looks like the Doc Brown helmet from back to the future. It was complete with Zilloyam. Did you have to push a computer around in a shopping cart? Yeah. So there was like this crazy thing that kind of looked like a bear trap that you would wear on your head. And then there were cables coming off the back that went to a cart that someone would literally turn around behind you. That had a bunch of computers on it. I think that was the first time that I saw HoloLens demo. That was my experience. But I mean, it was unlike anything I had ever seen. And honestly, that was an amazing job, building video games for a futuristic holographic computer for four years. That's a dream job. It was a great experience. So we spent time working on that. And shortly after the development kit shipped for HoloLens, it was clear that at least in the near term, HoloLens was going to focus a little bit more on the enterprise application space. There were some really great use cases there. But we weren't really looking for HoloLens in the game space as much. So it was clear that my skillset just wasn't really needed in that space anymore. So I started looking around for what was next. And actually several people who had been in Microsoft and kind of in the game space, I think, ended up doing the same thing. There are a couple other startups that were formed from X HoloLens folks. So after some time, I was really excited about the AR and VR space. But as far as vision for what was next, I don't think I contributed much beyond. There's a tsunami out on the horizon. We should probably learn to surf. It was really my co-founders that came up with a lot of where we've moved now, specifically with the product, with the Rec Room and kind of starting out with that Wii Sports of VR. Oh, yeah, this is an interesting nuance here. So Nick, we've chatted about this. Against gravity is a very opinionated company. You've thought a lot about a lot of things and you do things differently than a lot of other companies. And one big one is you have one product, but your company's name is in no way the same as your product. What was your philosophy behind that? It's actually more common in the game space. I think one of the nice things about it is when you have a different product name than your company name, it gives you a little bit more creative license to play around with what that product is. That product can fail and you don't fail. Your company doesn't fail. And so what we wanted to do was we wanted to start from scratch and we had this idea about how development should work. And that's really against gravity. It's that ready fire aim approach. It's that learned by doing approach. But we wanted to develop a unique identity that we could experiment with a little bit more. And that was kind of the Wii Sports of VR. And was the intention when you started always that Reck Room was going to be, you know, go into the thing or had you thought about this was where you're going to start and we might go in other directions too. Oh, no, we started and we weren't sure if we were going to do. AR or VR or, you know, something else entirely. We were really excited about the possibility of social. We felt like we had been living in the future for a couple of years playing around with HoloLens and it was just so clear to us that there was something really transformative in the way that you could use these technologies to communicate with other people. It was really going to change the way those communications were going to work. Largely how we started in VR was we contacted pretty much everybody who made a headset. And we were like, hey, you know, we're a company. Like you should send us a headset. We don't really know what we're going to build. But and Valve who makes steam, they got back to us that day and got us a headset. Yeah. And you guys launched Reck Room right around the same time that the Vive launched publicly, right? We launched maybe like three or four months after. Okay. I was still at Microsoft when it launched and shortly after the HoloLens dev kit launched, we left and then we're looking around for stuff to do. And something that strikes me, I actually have a hard time describing Reck Room to people sometimes. And I think, so I just finished reading Ready Player One. And it's the best way that I can kind of describe it as like, you know, like the whole book of Ready Player One, like it is a world with many other worlds and you can kind of move around between them. And it's, you kind of have to experience it because it's not like, oh, this is an app that exists in VR that is single purpose. It's like, here's a universe that's been created some, some of it by the company, some of it by a bunch of other people. And you can do a bunch of different things in a bunch of these different worlds. When did that start to be the case instead of we are a single purpose thing? We were really excited about social and we, we saw this enormous opportunity in front of us for what could be done in social and what could be done in so many different segments. I had been pretty, you know, wisely warned by a couple people that, that it's far more common for startups to die of indigestion from too much opportunity than starvation of, of too little. And so it was really my co-founders that I think started along this path of Wii Sports for VR because it was a really great place to start for, for social casual games are a really easy thing to pick up and play, there are a great way to break the ice between strangers, which is pretty important in VR like the social density is lower so you're not as likely to find one of your, you know, top five friends in Reckrim right now. So a lot of times you're playing with, you know, strangers from elsewhere and so you need, you need some common ground to kind of form there. And then it was also a very modular format. It was easy to like drop new things in, pull them out, change them. We always had this idea that we wanted the content in Reckrim to be more than just the content that we authored. But we knew that, that we could build a great base with kind of this concept of Wii Sports and go from there. I think with a lot of ideas, they are both familiar and differentiated and Wii Sports of VR was definitely that. Like you have a strong sense of what that is when you hear it and then when you go and play it because of the controls in VR and the immersion of VR, it felt really different. It felt very differentiated. As Ben said, we could talk for hours about how cool Reckrim is but really you just, you just take our word for it, you got to go try it. But I want to get into your, the seed round because the story here is really cool. So, and I think you guys did a couple of things, a couple really key things differently than a lot of startups do them. And you guys were very almost prescriptive in the amount that you wanted to raise and the terms you wanted to raise it on, which is not the normal advice that people get. If you Google or talk to folks about how to go raise your seed round, it's like, well, I think we need about this much money but you're the VCs, you tell us how much we need. That wasn't the approach you guys took. How did you think about it? So, I think that Ready Fire Aim approach also applied to our fundraising process. And so, I think a lot of what we were doing was learning by doing. While we were raising on our convertible note, we were out chatting with a lot of institutional investors. And honestly, a lot of those early conversations didn't go well and we learned, we got better and better at making progress, talking about what it was we wanted to do. And we started getting more interest. We had been raising on this convertible note for a while and we started getting interest from larger funds and the convertible note just wasn't really working for them. It wasn't set up to accept some of these loggestions. And a lot of listeners are probably familiar with this. But when you're in super early stage startups and seed rounds, you could raise traditional equity, which has happened to record when you start getting to bigger rounds, you kind of need to do. So you can also raise smaller amounts with convertible notes, which is debt that converts into equity and a nice feature of them is that you can continually add people to it on the same terms as others. You don't need to have a close of the round. So you guys kept going on the convertible note. Yeah. So we were doing a convertible note and as you said, we were doing it in kind of a rolling fashion. I mean, over six months, we were collecting one check at the time. Yeah, as we started moving into more institutional investors, we started needing to have some different terms. So Asequia was one of the first people that believed in us and really took a big dive. And that was who we figured out. Like, hey, these are the terms. We're going to raise about this much. And we're going to go out with this evaluation. And we basically took those numbers down to the valley. And we were like, this is what we're doing. Did you want to end or did you want to end? Which is so great. And it worked. It, yeah, surprisingly. So you guys, you, there were comments. I mean, before we were doing this, it was weird. And so you, you raised $4 million right in that round. And you had your evaluation and what it was. And you went down there and told everybody what it was going to be, right? Yeah. Yeah. Nick, one question, too, for listeners, when you say one check at a time and you were going around and circling capital, what are those checks? Like, sizes look like. At the friends and family stage, I mean, it was largely around 25K. There were some that were higher than that. But yeah, generally it was 25K. That was that million dollar. I hesitate to call it around, but million dollars of convertible notes. Yes, that's correct. What today would be your preceded round? So the other nontraditional thing that you did with your fundraising is you guys didn't have a, well, you had a deck and then you trashed the deck. Right? Well, so as I mentioned, we were talking with institutional investors early in those conversations weren't going great. And I think largely it was because we were much better at building products than we were at building power points. And imagine that, investors, fun power points, they should be funding products. And so after 90 days, there was a product in market and what we would do is just say, hey, we don't have a deck. Don't come by the office. Not giving you a demo, just go down the app. It's free. And there's always people on there to play with you and let us know what you think. I would occasionally hop in. We had a room in the app that I actually had a pull down projector that had my deck on it. You had a fundraising room in the app. That's awesome. Yeah. And so occasionally I would go in there and show people that. I always got chuckles. And I think it actually helped people move beyond like, oh, this is more than a game. There are applications for this, well beyond gaming. But it was a great filter for us for investment partners because it told us if they wanted to share with us, one, they had spent time in the app. They knew what was going on in there. They had VR headsets. They had probably played some other stuff as well. And so they had a better sense of the market. We weren't going in there and educating them on like, here are the VR headsets. Like, we're on this one, I think it just kind of upped the level of knowledge for the people we were talking to generally. Qualification is something that is so important. And I just think this was brilliant. Finding a way to pre-qualify anyone you would talk to if you're just like, no, I'm not sending you a deck. You have to know the landscape, have access to a headset, be willing to try my app. If somebody makes it through that funnel, they're probably going to be pretty interested. And oftentimes they would have really great suggestions for us. I mean, even if they weren't investing, if they spent an hour in the app, they could tell us like, hey, this thing was broken or I didn't like this or I didn't understand that. And that was helpful feedback early on. I would much rather get the feedback on my product than on my deck. So it's worth pausing here for a minute just to like, Nick, I know we've said a lot of nice things about you on the show already. But like 90 days and you guys had a product in market, I don't care how good it is, it was good enough for investors to go and experience or people to go and experience you had users. Especially in VR where it involves three modeling and all this rendering stuff and it's on a new technology stack where there's not a ton of familiar developers. I mean, that's kind of mind blowing. I would say it was all our team was really cohesive and unified from the start and they're very, very talented. I can take literally no credit for it because I was during that period of time I was out unsuccessfully showing our deck. So it was really, it was really, you know, my co-founders and our early hires that were hustling. It takes a lot of bravery to like put out a product that doesn't look the way that you want and doesn't operate the way that you want and only has 10% of the features that you want. But I think, you know, my co-founders were really brave in deciding like, hey, the right way to build this product roadmap is to get this out in front of people and see what they do with it. It's interesting from a philosophical perspective because I'm a believer in that too of get it out, get user feedback, iterate quickly on that ship often and I think that's the mantra and that's the drum people beat these days. I think that's a lot easier in emerging markets where you don't have user expectations set and where users are preconditioned to not be harsh. Oh, absolutely. I think there's, you guys were pretty fortunate there to be in a situation like that where, you know, there's many other industries where if you were to launch a mobile productivity tool or like a Strava competitor or something like that where the feature set is well understood it's like there's so many things that are table stakes that you would just get laughed off the face of the earth before you could even, you know, really show what your product was. I mean, we always talk about tech themes before we're ready on this show, but this is a really good one, right? Like, it's almost, it's kind of like if there's not yet a product in market that has product market fit like Strava or, you know, whatever in whatever category, you can get away with it. But once there is, you can no longer get away with it. I think one of the nice things about being in an emerging market or even being in the trow of disillusionment is like it really is a gift for product development because user acquisition is free. Competition is functionally, you know, quite low. Quality expectations are very, very low. And so it really, you can build a product in a much more iterative fashion. And honestly, the market is a little bit more efficient, I would say. Like if no one's playing your VR app right now, it's probably not very good. If no one's playing your mobile game right now, like there could be a whole host of problems. It could be because you were, you know, not spending the problem out on marketing or you were marketing to the wrong group or you had the wrong color on your icons pile or maybe it's because the app store gods like didn't smile on you that day. You know, it's such a noisy market and in many ways it's very, there are a lot of irrational actors in it and that can be, that can distort the market in a way that can give you bad signal about your product. So okay, so back to the fundraising. You had investors that were willing to meet you in record so you'd qualified them. After that, you do your first meeting with them, you have your first conversation, they try the products. What was the cadence of interactions after that? It really ranged. It could be months. It could be hours. I think if people were really interested, it was fast. It was like I would get another call as I was ubering away from, you know, their headquarters or something. And then there were a lot of other ones where it was like, all right, hey, well, we'll stay in touch. I think one of the things that I learned and I try and pass this advice on is let's keep in touch is probably no. Anything other than yes is probably no. A hard no is pretty rare actually in the investment space. People want to keep their options open and maybe that entrepreneur will surprise you in a couple months. But yeah, I think it's easy to hear those things and think, oh, I'm on the right path with 20 firms, right? And realistically, you're not. It was clear to us who was interested because they would really hustle to get us to the next stage in the next meeting very quickly. And what was like the, even for you guys at a very successful seed round, what was the conversion rate through that funnel from like, do that first in, you know, first solid, good interaction or, you know, high fidelity interaction to, yes, I'm actually interested versus the, yeah, let's stay in touch. So there were generally like three stages. So the first was they had, most firms had someone who was kind of qualifying, was doing the kind of first check on you. Like oftentimes that would be like a principal or an associate or something like that. If you get through that one, then generally you're chatting with one partner. And then if you get through that, then you're chatting with like the full partnership. There's the, the Monday meeting that you're going to. I would say our, our clearance rate was, you know, we were getting through maybe half to a third of the principles associates, then maybe like 20% of the partners. And then by the time we got to the partnership meeting, generally those, those went well. But I mean, that's a huge drop off that it was, it was pretty, there was a bunch of people that were just like, VR, no, you're doing anything that sounds like games, no, again, we got better at telling the story of what we wanted to do. We were kind of like, you know, really we have aims beyond games, but we think this is a great place to start and we think there's a lot to be learned here. But it was, it was a little, it was a little too much for, for some people. There's a well, a trot and path of, hey, here's our wedge and then we're going to expand into this big vision. And by doing this wedge, you'll put us in a good strategic place to achieve this big vision. But there's definitely the potential to not connect those dots enough where you could say, like, oh, we're going to do Wii Sports, then we'll be everything in VR. Like, then we'll be this whole world where anybody can interact socially doing anything. And it's like, you, you need to self select into being a believer, I think, to, to help cross that chasm. I think also while this was happening, like, the story was one being improved verbally. And then it was also being improved, like by my co-founders, literally day over day. So we would, we would meet in Rack Room and then they would see more evidence that, you know, known this is expanding over time. And actually, there's quite a few things that people, like even in the early days, we were seeing people use it for virtual meetings. They would hop into one of the rooms and like use it. We had a whiteboard in one of the rooms. And people would like use it for virtual whiteboarding sessions, which is awesome because it's public, right? Yeah. So people, this would be the equivalent of just like walking into a Starbucks and having a business meeting. Yeah. I mean, in the early days it was public. Now you can have your own private rooms and private instances and everything. But in the early days, yeah, people were using it for all manner of things that we never, we never expected. People were given talks in there and like, it was, it was pretty wild, yeah. That's awesome. Because you were interacting with people on the investor side, like, what impressed you? How were you qualifying them thinking about who you ultimately ended up wanting to work with? I would say the thing that was impressing me the most was, you know, we were like living and breathing VR. We were in there all the time. Occasionally we would run into investors where they were just drop shipping in. They spent five to ten minutes listening to my spiel. And then they would have something, they would have some new perspective that I had never thought of. They would be like, have you thought of this? And it would totally open up this new path that I had never considered from being, you know, six inches away from it. And it was those sort of insights that were really impressive where they were, you know, they had spent so much time with so many other companies that they could, they could just see these fast lanes. And I think those were the things that impressed me the most. Are there any of those that you implemented that you can think of? Some of the early ones from Sequoia were really focused around how can you help enable more of the creativity that you see in the community. We were seeing a lot of creativity early on and they were pretty excited about like, all right, well, how do you close the loop on this? How do you get them creating? How do other people know what they've created? How are you ranking, discovering all of this stuff? And I think it went from us thinking about it as like, oh, well, this is an emergent property of the app to, oh, well, maybe this is, this is really the retweet, the thing that we should be building around. Yeah. So I think there were a lot of very influential discussions that we had early on and just about how to approach these things kind of things. You know, you guys have been, you just launched the ability for people to create their own sort of large scale objects and worlds for a long time. You guys were the only people that could really have a large amount of sort of world creation for other people to interact within. I mean, how long have a journey has that been and can you talk about like today a little bit what does it look like for users to be able to have their own creativity inside the room? Yeah. So we started by building out a series of our own rooms and each of those rooms has, you know, an environment and it has a series of objects with behaviors and logic in them. A couple of months ago, we started experimenting with what we called the sandbox machine, which means you could go to any room that we'd built and you could spawn any object out of the sandbox machine. So if you wanted to play tag with the bow and arrows on the disc golf course, like you could set that up, but it was all very temporal. Like it didn't really last, didn't really stick around. So recently we've allowed people to like name these rooms, save them, add logic and you know, the ability for these objects to respawn in certain spots, set room limits, set who can edit things. And we've also really beefed up something we call the maker pen and that's basically a creation tool that lets you draw any object that we don't already have. So if you need a snowman, you can draw a snowman. If you want to draw a car, you can draw a car. If you want to draw a giant castle, you can do that like all with the maker pen. And so the combination of those tools really unlocked a lot of creativity and that's currently what we're looking at now is like, how do we keep enabling people to do more of what they want to do? So as you're getting towards the end of the process, you've met lots of folks and people are coming in and then you meet Sequoia towards the end and they get excited. They call you back right away instead of the old glater. How did the process wrap up with them and what were the key milestones to do that? I met them towards the end of my process and actually when I was talking to other people about Sequoia, everyone just had these amazingly positive things to say they have a tremendous reputation. And so I was kind of nervous and intimidated to go in there and talk. And they were amazing. They were so friendly and humble and engaged and really knowledgeable about the product and the space. And so after those meetings, I was sold. I really wanted to work with them. And so as soon as we heard back, it was like, all right, great. This is happening. Let's do this. How long did it take from your first interactions with them to being finished? To them saying they wanted to work with you guys? It was pretty fast. I think we did maybe two weeks at the most, maybe less. I think we did one call and then I flew down there and then I flew back to Seattle and I think very shortly after getting off the plane, I left my bag in the car and then flew back to the next meeting. Did you actually leave your bag in the car? Yeah. I think it was literally the next day for another one. In that, raising around this, what does diligence look like? What did in those two weeks, what company information did Sequoia need from you? You maybe, you personally, what kind of research was done? I think we were generally very open with them. They wanted some data around analytics. What do user behaviors look like here? What do your cohorts look like? We were providing that kind of data. But honestly, there was very little data to go on for them. The product had not been out in the market for a very long period of time and the company itself was very, very young. I think most of the evidence was in the product already. It was just like, wow, this had been built pretty quickly. This team seems pretty scrappy. We were not spending very much money. I think it was clear that we had some levels of capital efficiency going on. You go from being a scrappy startup, you launched a product in 90 days, it was clear it was something was starting to work. Now you have a lot more millions in your bank account. Did anything change in the company? Did it impact your philosophy about shipping quickly? How did you think about then deploying those resources? We tried to change it as little as possible. We were like, look, this formula is working. This round has bought us its time. We can keep doing this formula for a longer period of time. In terms of what changed, it was very, very, very little. Were they on board with that? Yeah. I think this was part of our pitch when we were going out and talking about what we were doing. Most companies have the chart that's up and to the right. We were like, look, this is going to take a while. We're in the preseason of VR. We don't think the regular season's even starting for another two years. Here's what we want to do. Forget about the playoffs. Yeah, I think in a lot of ways you'll get the investors that you ask for. If you're honest about what your strategy is when you're fundraising, people will self-select. I just want to highlight that. That is such a good point. Tom talked about that. Tom Alberg on the Amazon IPO about how Jeff Bezos, that's one of his favorite sayings. You get the investors you ask for and living it myself and then too. It is so true. The best thing you can do for the long-term health of your business and relationship with your partners is be clear about what you are and ask for what you want. I think a lot of people freak out to about this notion of delayed gratification that there's some dirty secret. For example, VR headsets may not ship as many as we're all hoping and praying that will happen. This is thinking a few years ago. Having a sober head about that and being like, yeah, we think there's a chance of that. Here's our plan. If and when that happens, in fact, even if it does do gangbusters, we recognize the price points are really high. Right now, it's connected to these big gigantic, tethered computers that people basically need to have gaming rigs. Being super upfront and just recognizing, hey, we're going to be incredibly well positioned when the wave does hit. I think that not only creates a great relationship between the investor and the entrepreneur, but it also lets you sleep easy at night because you've made the right promise to the world and to yourself and to your team that we're well equipped to handle this, but we're super realistic about the way that it's going to go. Yeah, keep in mind, we had started working on HoloLens in 2012 and it took four years for us to get the dev kit out the door. We were very early. When was Acculus founded in 2012? No, I think afterwards. I had been working on HoloLens for a while and then the Oculus Kickstarter happened. Wow. Wow. Yeah, HoloLens was in development for quite a long time because it had been worked on before I got there. It was actually a total side right here. We'll get back to the story, but it came out of a connect, right? Yeah, actually, most of the people... Alex Kippman's next thing, right? He's really... Alex is really a kind mind. That guy is really, really smart. I think he just thinks about consumers like Hardware in a very different way than anyone else. I'm anxious to see what he's got cooking with Windows MR. Yeah. Okay. A big thing that changed when you raised the round is you had an official board now and Sequoia was on it. What was that like going from all you guys? You were focused on raising money. The rest of your team was focused on building and shipping the product and iterating, but now you have a board in your real company and you have to manage investors. How's that transition been? Again, I think we were trying to keep as much of what was working working. For us, very little of the actual product development changed. We still try and get updates out to Rackroom every two weeks. We want meaningful updates that go out every two weeks that it's not just a bug fix update. It's like real features that users would notice and care about. I would say what the board has provided is when you're in that really tight iteration loop, you can occasionally get caught up in the details and the board is there to remind you, like, are we making progress towards this long-term multi-year vision that we've laid out? Are there any things that we are ignoring now and are investing in? I think when you raise money largely what you're doing is you're getting permission to work on a higher value longer term problem. I think the board is there to make sure that progress is being made towards that. That's such a good framing because you do. You just get so caught up in the minutia. You're thinking about what are we doing in the next two weeks and what are we doing in the two weeks after that? The pitch deck or a lack thereof that you made six months ago is just not at the forefront of your mind. Yeah. I think it's a great formula for creating longer-term goals and holding yourself accountable towards those. I'm reminded, of course, again, of Bezos and Amazon's whole thing. I really, the more I think about this, I think, is a key part of their competitive advantage is that they're willing to invest over five to seven-year timeframes and work and iterate towards a project that might not bear economic returns for that period of time. Really, that is a lot about what raising money as a startup, especially in a new market, like you guys is about. Yeah, for sure. You mentioned that you basically went with this. We want to raise $4 million at this valuation. How did you guys come to four? Was it a thing you wanted to accomplish and it was going to take $4 million to get you there or a certain amount of time that you wanted to operate? How did you figure it out? We had built a bunch of financial projections that kind of showed, okay, with these different hiring ramps, here's about how much money we're spending. I think really what we were looking for was we felt like there was going to be this inflection point in the market for VR and we felt like it was going to come once we saw a headset, which is kind of like an all-in-one. So no cables, no PC, kind of the capabilities of the vibe or the Oculus, so six degrees of freedom tracking. We felt like this was a couple of years out, but we wanted to be building towards that and have the right product for when that hit the market. So a lot of our plans were built around that. It was like, all right, how far can we stretch to make it towards that? I think we're still probably like 12 to 18 months out from that headset, but for us, we were really looking towards like, all right, how can we further our goal so that we have the right product when that inflection point comes? You don't have to answer this, but who do you think it's going to be? One that I've seen that's closest right now is the Oculus Santa Cruz, so they've shown it, I believe, at their last Oculus Connect and it's a six degrees of freedom. It's not tethered to a PC or anything. It doesn't have any external cameras. It looks amazing. There's no release date announced yet, so I think that's what we're anxiously waiting for. We're keeping an eye out for when Oculus has more to share on that. But we're really excited for anything that has that kind of shape to it. I think there's just so much complexity in the VR space right now. It's not easy to set up. It's not in every person's product yet, but I think once you can take it out of the box and it just works, and you don't need to check and see if it's compatible with your computer, I think that's a big game changer. All right, Nick. One question that we had is basically, did you consider alternate fundraising scenarios? What if you had raised less? What would against gravity be today? If the round came together differently? One of the things that we did decide pretty early on after that 90 days was we had a product and we didn't have much money and we decided to release that product for free. So it was not generating any revenue. Which else we should note, that wasn't a super obvious decision. I mean, if this were the mobile app store, of course, you'd release it for free, but many VR experiences were paid at that point in time. Most were paid, and actually that was part of our acquisition strategy was we thought, we thought most of your content was single player, pretty expensive and relatively short in terms of how much time you could spend in there. And we were like, the record certainly has its flaws, but you could spend as much time as you want, because the content is really other people. And we're going to make it free, and that's going to be the way that we get a to hold in the market. So that was our thinking upfront. I think if we had not raised funding, we would be focusing on, I would say, running known frameworks of monetization inside of RecRum. So we wouldn't be focusing on longer term problems where learning is really, it's unclear what the best practices are. I think because we've raised money, we're able to focus on things like, how do you focus on abuse prevention in VR? How do you focus on moderation tools? What is an open-ended problem? It will be an open-ended problem for years to come. I think if you look at any social app on any platform, it's a huge portion of their investment. And we're able to focus on that in a very big way. And that makes a big difference. I think we're also able to focus on things like user-generated content, how do you enable people to express themselves and their ideas and make those things come to life and share them with other people? We're able to focus on those problems which aren't revenue-generating because we have breathing room with the round. I think if we didn't, we would be making and selling hats. They're much less interesting features and they're much less open-ended. On that, I don't really remember, that's you. In some ways, the world you guys were coming from with Forza in some ways, Microsoft's think about HoloLens, I could imagine it would have been easier attempting to be like, yep, we're going to box this software and sell it for 60 bucks a pop. Did that ever cost your mind? Or was part of this vision from the get-go? I mean, no, this is going to be free. This is going to be social. We're going to do this differently. We definitely had conversations early on about, should we make this 1999? What does it look like if it's 1999? I think we were really inspired by the development of something like Minecraft. I think Minecraft really grew up in public and it earned its complexity by interacting with its community. It didn't come out day one and say, here's everything you can do with mine. It slowly got more and more complex over time as people learned the systems. As its community taught, other community members, the systems, Minecraft doesn't have many tutorials. It's because there's millions of tutorials you can find online from other players teaching each other. I think what we believed was in order to get that kind of development cycle going in an early market with very few people, it had to be free and putting it behind a paywall was just going to make that flywheel spin slower. It was a risk, but it was a calculated risk. In order to build the product that we wanted, in order to get the feedback that we wanted, in order to build the community that we wanted, it has to be free. The point about the fact that other people are the content and you guys don't have to engage in level building at a frantic pace in order to stay one step ahead of the community so that they'll have something to do. You don't have to put out new DLC every week. We still do though. I know what I was saying was making it. We've got a new one. It's a new pirate quest coming soon. You can swash buckle with a couple of your friends. It's going to be great. We really enjoy it, but we're also, we love seeing the creativity of the community. They come up with so many ideas that we would have never even thought of. It's really, I guess it's an internet theme. It's a thing that you couldn't really do without everybody being connected to each other all the time. It's like if you were playing Gold and I on N64 alone, there's one exact experience that you can have every time. There are many times you go through it. Things going to be exactly the same every time. But in a world like Rec Room or let's say on a platform like Facebook, every time I load up the news feed or every time I go to the same level or world in Rec Room, it's going to be a unique experience because there's all this different content. You can keep going through the same trotted ground over and over and over again and have different unique experiences that have longer engagement cycles and higher retention than you would otherwise. There's also this amazing ability for expression. I think there are so many people that have these amazing ideas and a lot of times the tech tool set is just outside of their reach. I think if you look at things like Unity or Blender, they've opened up creativity for a lot of folks, but it's still not everyone. Not everyone can create 3D content. Not everyone can build a game. What we're aiming for with Rec Room is literally anyone can come in and build something meaningful that expresses their personality. You were telling us before we started about the Frozen Castle. Somebody built a replica of the castle from Frozen, including costumes from the movie that you can stick onto your avatar. Amazing. We've seen amazing stuff like that. We've seen comedy clubs. We've seen two Rec Room users who met in Rec Room, decided to get married in the real world and they actually had their wedding reception in Rec Room. They invited like 40 of their closest VR friends. They made a VR bouquet for the bride. They made a wedding cake. They actually had a ceremony with vows, exchange and everything. Everybody wore their fanciest avatar clothing. Yeah. It was amazing to see. That was never something that we would have expected at the start. I think those emergent activities are the things that really inspire us to keep adding yourself. It's so funny when Facebook was just starting, when I was in college, I had a good friend, still a very good friend, that I met at a summer program I did during college and he went to school in Boston and my wife Jenny and I went to school in New Jersey. Next year, Jenny was studying abroad with one of her friends from Princeton in Paris and my buddy was Facebook friends with Jenny. This was all of his still like colleges only and he posted on Jenny's wall, saw a picture Jenny had posted of her roommate in Paris and said something like, hey, thanks in advance, Jenny, I know you don't know me very well for introducing me to your blonde friend. Then they got married a couple years later. That was like for me that moment of like, man, this platform is like, and this has already happened in record, that's so cool. Yeah. I think one of the other things that really got us excited about record, because I mean, the internet has ushered in several social platforms. There was something just so different about social in VR. If you look at social on the web, it's actually largely asynchronous. It's largely text based or photo based. With VR, it's all real time and you get these subtle cues like people's headsill, you see their hand gestures. It really feels like you are in the same room with somebody who maybe is on the other side of the world. We've heard from several people that they have some fear about social interactions in the real world, but having the ability to practice in VR almost helps them reduce their social anxiety. There's tons of people in the world who I think their well-being is not being satiated by the social software that's out there. I think in many ways we're more connected to more people now, but I think in many ways people feel more alone due to some social software. I think what we want with the record is really to foster some sense of well-being. We really want this to be a place that you enjoy spending time and you look back a month from now and you think that was really time well spent. I'm really happy that I went in there and spent two hours hanging out with people. Do you get the reference there that you just made? No. Literally Mark Zuckerberg's words this last week was we want time on Facebook to be time well spent. I didn't know that. No, I mean we have always focused on that. I think often we regret the time that we spend on Twitter or Instagram or something like that. But I think very rarely do we regret the time that we spend with our friends at a restaurant. That's what we're trying to build in VR. We're trying to build that feeling where it's like this is real social interaction. It's not a facsimile of it. It's like we're really here together. Look, I know we've do it on, you know, on Reck Room this whole episode, but like that is what it felt like this weekend. We were hanging out and time was flying and you know, it wasn't because the specific activity we were doing was cool. It's because like we were sort of just hanging out together and of course doing those quests was also cool. I mean, any time you're hanging out together and you have, you know, both narrows and swords and paintball guns. Not a bad time. Probably going to be time well spent. That's true. Alright, so before we move on to tech themes officially for the episode, Nick, I just wanted to sort of get your take on the VR market today versus, you know, what a lot of probably overly inflated expectations were a year or two ago. And also how has the dominant platform that people are using sort of shifted from your expectations or has it matched? Sure. So I think right now there are probably around four to perhaps five million high end VR headsets. These are things that give you kind of the facsimile of like hand motion and you kind of get the sense of walking. They're often referred to as six doff headsets or six degrees of freedom headsets. Yeah, I think depending on which marketing report you read, it might have been, you know, hey everybody in there, brother has three Oculus in their home. I think there were some very optimistic reports out there. But I think including somebody like Goldman Sachs and like, you know, yeah, yeah. Well, I mean, I think they just published a new one like earlier this week that where I think they're predicting, you know, 30 to 60 million by 2020. I think the tricky thing is like these things grow exponentially. They don't grow linearly. So so when you miss it feels painful in the early year years, for us specifically, we were like, man, this is just going to take 10 years. Like it's just going to take a long time before this is, this is a mainstream thing. We're in the, we're in the pdf phase of mobile phones like the iPhone moment hasn't happened yet. The blackberry moment probably hasn't happened yet. So I think we're still waiting for those moments, but we can see them on the horizon. And I think there are so much that you can learn as a software developer now, right? There is a critical mass of users that go in there every day and they're very vocal about what they want to do and what they expect the software to do and you can be learning from that right now. So that's really where we focus. As far as where the dominant platform is versus my expectations, I think the one that's really run away with it that surprised a lot of people including myself is PlayStation VR is currently the highest selling of those high end headsets. I think the reason is it's the cheapest and it's the easiest. There's something very simple about it. Like if I have a PlayStation VR and I just take it out of the box, it's going to plug into my PlayStation and it's going to work. And I think that simplicity is missing in other segments of the market. Right now people are working on it, but I think it's shown that consumers are reacting to the ease of use, they're reacting to the lower price point. I think it bodes well for anyone who's betting big on, hey, we can make this easier and cheaper. More people are going to do it. I think there's another camp in VR that's like, it needs to be way more immersive with more pixels, a wider field of view, haptic bodysuits. Ready player one sooner rather than later. I look forward to all of those things like I would rec room will happily take advantage of each and every one of those, but I don't know that those are the barriers to another 10 million, 50 million people experiencing this. Tech themes? Tech themes. Let's do it. I finally arrived. Nick, you had mentioned that these things happen exponentially and not linearly. And I think I'm stealing David's theme here from our notes, but technology waves and the difficulty to predict them. The fact that they grow exponentially, it looks like until an inflection point, it's just not going to be a thing. And then suddenly, all of a sudden, it's going insane. And this is the new technology paradigm that everybody is using. And of course, we have those sort of Gartner hype cycle where you get this overinflated expectations and then the crash, but there actually is real long term value building. But if we look back at computing paradigms from the PC to the internet to mobile, the things we talked about on the show, the sort of trillion dollar waves, it's still unclear what the next trillion dollar wave is going to be. And there have been like three things that I could have sworn by that it's just not that obvious until you're actually in that vertical screaming pace going skyward that that is indeed the thing. And that's the wave that you're on. And the three things to get specific were machine learning, cryptocurrency and VR. Like each of them for moments of time and some currently now feel like that there's no doubt in my mind it's the next internet or the next mobile and we just don't know yet. It's hard. I think for me, don't even get let Nick react. But I would take the other side of that coin though too, which is like, if you're actually going to build something meaningful in these waves that are coming, you need stamina. You know more than anything else, right? And like, I mean, when was Coinbase founded? Like 2012, 2013. I saw it in South by in 2013. Yeah. So probably 2012. And we're now in 2018. And it's like a pretty established company then. Like it was, yeah. Yeah. And it just takes, you know, that's why I think you're fundraising journey is so interesting, right? Like because that potential is there and it is growing exponentially. And that means it's going to grow very slowly for a long period of time. And you guys need the stamina to go through that. Yeah. I think the way we look at it and I kind of mentioned this earlier is being able to build product in that trow is also like it can be really helpful. You know, your competition is limited. Your user acquisition is very low. And you really can have a direct voice to customers. Which you can't have at a different scale. I think we went into this one with eyes wide open that it was like, look, this is just going to take a long time. And if you're not looking for something that's going to take, you know, 10 years, like this might not be the market for you. There are plenty of markets where you don't need to wait that long. They have different dynamics and they have different challenges. But I think this one, yeah, stamina matters more than others. That brings up my next tech theme, which is I hadn't written it down till, you know, you brought it up on the show. But you get the investors you asked for. Like, it's just, you know, we talked about it earlier. I'll just underscore it again. Like, you need to be very thoughtful about what your company trajectory is going to look like. What you want it to look like. What reality is probably going to dictate it's going to look like and then find the right folks to be investors and partners along the way that kind of share that same vision in the world. Because you can have a lot of conflict if you don't. I got one more before we'll ask Nick if he has any, but mine's really domain depth of founders. I think that Nick, the fact that you and your founders, your fellow co-founders got a product out in three months that was something you were willing to show investors and could have users actually using in a new paradigm. Like, unless you had been experimenting with this stuff for the last several years and some of the only people on the earth that understood how this paradigm could actually work. I don't think you would have that incredible speed to market. You can disagree with me on that, but I think some of the best companies are formed when somebody takes a deep dive on something and thinks deeply about it for a while and tries all the angles. And then it becomes a thing and they start a business in that area. I think any startup is really about learning. I think you're really trying to optimize for who can learn the fastest and who can compound what they're learning fastest. And if your knowledge is growing in a compounding rate, then like a small advantage at the beginning can make a meaningful difference. But that's still how we go into work every day now with Reckrim is like, what can we learn today? What don't we know? What assumptions do we have that are, you know, we haven't tested or this other data point from some other product is proving incorrect? Like, I think that's the way that you have to approach things in these early markets. There's so much learning. There's so much that we take for granted now in the mobile space or like the web space where people are just like, yeah, this is just how you do it. This is just how you lay out a website and put a hamburger button there. Yeah, this is just how you run an ad campaign. But like somebody had to go through all the pain of that, of figuring that out the first time. My gosh, it's like when Alfred was talking about the user acquisition through the advertisements and TSA. It's like, now that's a regular thing and we think if that is an ad unit, someone had to like try and pioneer and figure out if that was cost effective. Yeah. Or even like in mobile, like how many years did it take before like free to play, like became mature and like people realized that that was, you know, how mobile was games were going to work, you know, probably arguably to the detriment of, you know, humanity. But, but yeah, it takes a long time to figure these things out. I mean, there were so many, there were so many assumptions that we made early that were that were wrong. I'm much happier that we like course corrected a little bit every week than we had a massive course correction two years later. And I think that would have happened if we, you know, had, had developed a rec room in secret for two years and then tried to launch it in its perfect form. We would have just built the wrong thing. Yeah, that's actually, I'm going to sneak another one in here. I'm so glad this came up on our, our first ever, you know, fundraising episode on acquired. Like, this is like such a classic mistake that I've seen so many founders make and then investors make it two time and time again. You get sucked into this like, oh, we're going to go build something in the lab. We're going to go cook in the lab to joke about Dr. Dre, you know, I guess he can do it. But, but it doesn't work. It just doesn't work because you're not getting exactly your point, Nick. Like, in an early stage startup, especially in a new market, your lifeblood is your user feedback. And, and when you're in the lab, you're not getting that. I can say that I don't know if it never works. I can just say it would not have worked for us. Like our original idea, you know, there was much of it that that was correct, but there was much of it that would have let us down the wrong paths. And so I think that market interaction is what, what course corrected us over time. I think we were, we were humbled a little bit here and a little bit there. Carvettes? Carvettes. I mean, I, oh, wait, actually, did you have any tech things that you want to, no, I think you guys, I think you guys nailed it. Nice job. Thanks. What's, what's your grade for this episode? No. Yeah. Yeah. Yeah. I think we'll skip that part. Yeah. Most like said, it just doesn't fit this far. We're learning. We're learning. We're making changes. We're learning. That's right. Our car vets are not like supposed to be about the episodes, but this is just like the last book that I finished and I, we already mentioned it. But like, if you haven't read Ready Player One and you think this episode is in the ball park of interesting, you should totally go read it. It is like super, you could, you can blow through it pretty quick, it's super, super readable. It's really fun. It's pression. Like, I think that a lot, it's written in 2011 or 2012 and a lot of the things that people are talking about today with not only VR, but, you know, the direction the world is going from a political perspective and from like a global warming. Like, there's just a lot of things that people are talking about that are major issues of our day that were sort of themes of the book five, six years ago. And I think the movies coming out in like a month or so. Yeah, I can't, I think it's coming out in March. Yeah. I can't decide if I actually want to see it or not. Oh, I can't wait to see it. Did you see Ender's game? I don't know. I just gave a little problematic, but yeah. Anyway, really, really cool book and I'm actually very curious, Nick. Do you like to like in Rec Room to a Ready Player One like world or do you like in intentionally stay away from stuff like that? There are a number of sort of canonical novels in the VR space. I think that's one. And the Snow Crash is another one. We don't normally reference them, but I think it would be hard for you to find any VR entrepreneur that hasn't been influenced by those books. I mean, I've read it. I loved it. And I think it's definitely influenced some of our thinking as Snow Crash. So I think there's plenty of people that are inspired by the ideas in that book. My car about is appropriate for today. It was recommended to me by Nick. And it's another Neil Stevenson book. And it's another Neil Stevenson book. That's right. So the book Seven Eaves. It's such a good book. Such a good book. Well, okay. So here's the thing about this book. Everybody should read this book. It is like, I don't even know, like the whole construct is just like the setup is something that really makes you think. Really, really makes you think. And it's very cool. But I have to say, like, it is a hard book. It is quote unquote hard sci-fi. And it means hard in every sense of the word. Like, it is not a short book. Not short. Extremely technical. Long 20, 30 page passages about like the technical aspects of surviving in outer space when humanity is reduced to like a couple hundred people, which isn't really giving anything away in the book. Anyway, very, very worthwhile read. Recommended me to me by Nick. So thank you. Nick and President Obama. Oh, and President Obama. And President Obama. And I have no idea how the guy found the time. But I love Seven Eaves. It's a great book. It's like three great books. Yeah. And one. Actually, I think it would have been better if it had been a trilogy instead of one book. But I can see why you wanted to get it all out on the one. Speaking of stamina, that book does David Hector award stamina. I can assure you Hollywood will make the movie a trilogy. I mean, they might have to do a trilogy just for the first part of the book. I would love to watch a movie of that. I would actually be really interesting. Yeah. All right. And I'm going to go with the video game. I'm going to go with Zelda Breath of the Wild. Wow. Nice. It's been out for a while. I recently got a switch and recently finished it. And I bought the switch for that game. I had just heard from so many people that it was amazing. And actually, the reason I wanted to list it as a carve out was, I think you often hear this phrase that like, there's only two strategies in business. Bundling and unbundling. I think it's been used like quite a lot. And I think in many ways, it's very, very accurate. But I think it reduces what you are bundling to a commodity. And I think if you look in the video space and you look at Hulu and Netflix, a lot of what they're doing is, you know, bundling and unbundling the same sets of content, I basically bought a $400 video game. I bought the switch for Zelda. And I think it goes to show that there are some content that transcends that bundling and unbundling strategy where people will do, you know, borderline irrational things to go and find this content. And I think bundling and unbundling, it's really like taking advantage of an arbitrage opportunity. But I think as more people go after that, the arbitrage opportunities disappear. And so you're going to see the value of this tentpole content really being more and more important for distribution platforms. And I was reminded of that after playing that game. It is magnificent. It is amazing. I'm considering doing the same thing by a switch for it. It was absolutely worth it. So I think during the launch period of the switch, Breath of the Wild was, I think the first in history game that had effectively a 100% attach rate to the console, meaning that I mean, I'm sure there were a few people who didn't, but just basically 99.999% of people who bought a switch during the launch window also bought Breath of the Wild. Well, the last time that I can remember anything like that was I do remember hearing that the original halo had had had there were at times where there had been more copies of halo sold than Xboxes. And I had heard that it was similar with the switch was there were more copies of Zelda sold than then switches at certain points. I actually got Zelda before I got the switch. Like, Nick is the reason for this. It was really depressing for like a week. I could just stare at the game. Oh, that's the worst. It's like when your phone case comes before your new phone. Okay. So what, you know, we're extended carve out section here listeners feel free to, you know, jump off if you want. Go write us a review. I'm stealing Ben's line. But okay. So, so what's your take on the switch in general and also do you primarily play in TV mode or hand held mode? I, when I first saw an announce I was like this is ridiculous. Like I don't know why anybody would want to do this. This looks really weird. When I first saw ads for it, I did not think it was going to be successful. But I am really like I'm really falling in love with it as a console. It's really great. I spend about 50% of it in handheld and then 50% docked to the screen. It's amazing if you find yourself on a plane a lot as well. Like if you're traveling a lot. If you're fundraising. It's a great device. Yeah, I think if you think about like the Clayton Christians and innovators dilemma where you know, occasionally people will go past what is needed for consumers. I think there's definitely some of that going on in the gaming space. I think we've, we might have gone past what what consumers need in the CPU GPU. I think what really people are looking for is meaningful experience is not necessarily more and more realistic graphics. And I think Nintendo has capitalized on that in a in a good way. It's not as powerful as the PS4. It's not as powerful as the Xbox. But it's, you know, it's it provides a very different value proposition. Well, I got to get one. There we go. I mean, I got Apple music at one point just to listen to Taylor Swift. So it seems like I need to get the switch just to play this game. Well, on that note, Nick, where can our listeners find you on the internet? Oh, man. I have a, I have a pretty limited presence outside of VR. So I'm in Recrum at Nick. And that's it. That's the only way. You're blowing your cover right now. No, no, that's it. That's the only way you can get to Nick. If you really want to talk to Nick, then that's the filter. Yeah, there you go. That's the filter. As far as calls to action for us, we would love a review on iTunes. I even wrote calls to action in the script. I don't think I was supposed to say that. We have a Slack acquired.fm where I think we hit 1150. We're talking about all this stuff. And sometimes we're dropping hints as to who the next episode will be on. So join us for some little foreshadowing. All right. Thanks, everyone. Thanks, Nick. Thanks for having me.