Derek Belch: Immersed in Virtual Reality [Entire Talk]

Thanks, Tina. All right, thanks for having me, everybody. First thing from me. So I am very, very candid, very open. I will answer any question that you ask to the best of my ability. I do have a personal pet peeve among young people of having their faces in computer screens and cell phones. I was in your shoes once, and I did that during class and didn't learn as much. So if you could please pay attention and be respectful, I would really appreciate that. So thanks for the great introduction. I'll kind of elaborate a little bit more on what Tina said about my background as we get going here. The first thing I want to do is give a very, very brief background and information. This is us. This is Striver. Some of you may have read this article last year when you were following Stanford football. But first, before we talk about anything related to the business that I'm running right now, I want to talk about virtual reality at large and just kind of educate you guys really quickly. So who has heard of virtual reality? You are living under a rock if you have not in the Bay Area. Okay, good. So the first thing, there's virtual reality and there's augmented reality. So for the purpose of this conversation, we're going to talk about VR, but really quickly. I just want to educate you guys. How many people have been to the Stanford Virtual Human Interaction Lab here on campus? Jeremy Bailenson. Okay. Not as many as I would have thought. So if you haven't, please go. Jeremy's one of the best in the world. He is one of the main reasons why Mark Zuckerberg bought Oculus for $2 billion a couple years ago. I believe Zuckerberg was in his lab a week or two before that purchase. And Jeremy basically helped convince Mark that this stuff literally could take over the world. He's a fascinating guy. He's really, really good at what he does. His lab is phenomenal. So please go check that out if you haven't already. So VR versus ar. The main differences are in virtual reality. In theory, you have complete immersion. So when you have a virtual reality headset on, if it's doing its job, you should feel completely present in another place. So if I'm standing in the room right now and I'm in a virtual version of the room, I should literally be able to walk around as if I'm right there. If I'm in a virtual Madison Square Garden or a virtual Egyptian pyramid landscape area, I should be able to walk exactly scale for scale to where I am, and I should feel completely immersed. Bad virtual reality does not achieve this. So there's a lot of really, really bad stuff out there with this industry kind of taking fire. But good VR allows you to achieve complete presence in the environment that you think that you're supposed to be in. Our brains because this stuff is so new. As humans have not caught up to the fact that we have a headset on, something in the back of your brain still thinks that it's real. When it's done right, people completely zone out. Those of you that have been in the lab, have you done the pit? Raise your hand. Okay, so only a couple. When you're standing in Jeremy's lab and he has you stand right here and he says, take a step forward and you do. And then he removes a hole in the room and creates a pit in front of you, people literally start sweating and their heart rate goes up. Now you're thinking right now that that's impossible. It really can't be that real. I'm standing in the room. I know that if I do this, I'm just going to do that in the real world. What is it, two out of three? One out of three adult males will not step off the plank into the virtual pit. Literally all they have to do is this. And then the virtual world, when they do that, they're going to drop and they're going to make you feel like you dropped. You're going to feel like you hit the floor. People freak out. Some very prominent NFL players that you guys watch on Sundays have been in Jeremy's lab. They would not step off the plank and all it required was this. These guys are 6, 4, 250 pounds, and they were like little kids. It's very, very real. Augmented reality is when we're taking some sort of heads up display, whether it be glasses, whether it be a helmet, and we're showing some sort of stimuli on the screen. So one of the really, really cool use cases for augmented reality in several years, it's not complete immersion. Maybe I'm walking through a factory floor and as I'm walking down the hall, I have stimuli popping up saying, that's too hot, don't touch that. This is a button that does this. This does this. So you're going through some type of training, safety training, where you're having stimuli introduced while you still feel like you're in the real world. Are we all on the same page? Makes sense. There's a couple key terms that I want you guys to understand as it pertains to VR. So the first is tracking. So imagine you're playing Pac man, you're holding the remote control, you push the remote control forward. The computer is tracking which way you push the remote control. And that's how it's being told what to do. So in Pacman, if I push this way, Pac man is going to move that way. The second is rendering. So once I move the controller, the computer has to re render the scene so many thousands of times per millisecond, so there's no lag to really trick your brain like you're there and it re renders it for where you're going to go next. So in Pac Man, I move the thing forward, he eats one little ball right, move it left, he eats a ball this way. The computer is rendering that scene really, really fast. So hopefully when you're in a virtual environment, your brain is tricked into thinking you're there. And then the last one is display. If all of these things are not done correctly and display is obviously displaying the information to the user, if these things are not done correctly, particularly the last two, it won't work. So for display, if I walk closer to Tina and she doesn't look bigger to me in the real world or the virtual world, because that's what happens in the real world. It's just, you're going to tune out. It's not going to work. So when this is not done properly, A, it makes people really nauseous. People have bad experiences and then they're done. They don't want to look at VR ever again. B, from a cognitive standpoint, it just really doesn't work. So we'll talk about why that's important as it relates to Striver here in a few minutes. Last couple things here. One of the really cool things that we have done at Stryver is we have solved a real world problem. Football players never have enough practice time on the field. Athletes in general never have enough practice time. They always could get more. Mental reps at the highest level are very, very important. So can a virtual simulation give you more work? Right, so we've taken a real world problem and we've used technology to solve that problem. We think so, but this is really important. Virtual reality is really not that new. But based on where the hardware is today, based on how good it is, based on how cheap it is relative to where it was years ago in Jeremy's lab, probably eight years ago, the helmet that they're using that today costs 500 bucks, costs $50,000. That's how fast we've come from a hardware standpoint. And A computing processing standpoint. But historically these have been the areas where VR has been used. So in medicine, can I be a doctor? Can I get virtual surgery? Can I get more reps? As far as getting my surgical technique in phobias, can I cure your fear of public speaking by putting you in front of a virtual room with a lot of people like you guys are right now staring at me, Maybe my heart rate goes up in the virtual world. That makes me more calm when I'm in the real world. They're doing this stuff in the lab. It does work. And then lastly, the military has been using VR for years. Granted, the graphics haven't been very good, but. But imagine I'm going through a virtual Iraq. I'm getting the experience of what it's like to clear a room. I'm getting the experience of what it's like to interact with somebody of a different race, culture, gender. And I'm going through those simulations over and over. So when I'm in the real world, hopefully I perform to the best of my ability based on my training. So this stuff has been happening. One of the things that really frustrates me about the industry right now, given that I'm doing it every day, I'm kind of the anti VR VR CEO. I don't think virtual reality headsets are going to take over the world. I think it would be really, really sad if your generation would rather put something on their face and be antisocial in the real world versus actually talk to somebody. It's bad enough doing this all the time. Now we're going to put headsets and we're going to completely lose our sense of who we are. So I don't think that's going to happen. I hope to God it doesn't. I look for real world use cases to where VR and AR can actually be used and be effective. There are a lot of them. There are also a lot of ideas that are really, really bad. Now I'm not saying these are bad ideas, but the reason why we have to be a little critical of this industry and at least have some cautious optimism as to where it can go is because when we watch a movie, for example, the director tells us where to look. They move the camera, they make a sound. We always know where to look based on what the director is telling us. That's been a filmmaking principle for 100 years. In VR, if it's a 360 degree scene and I'm looking over here, but the director wants me to look over there, he or she just lost, Right? So how can you make a movie a really, really good virtual experience as opposed to the traditional 2D model? Not saying that it's not possible. It's just a long way away from people actually figuring it out. Video games. So gaming is going to be the thing that drives VR, at least in the interim in the short term. One of the things that people are really underestimating both with movies and video games is, trust me, that headset is going to get very uncomfortable after about 15 minutes. Gamers and some of you probably know what I'm talking about. In this room, you play your games for hours and hours at a time. The gamers have told the headset manufacturers, we have no interest in wearing the headset for four hours. That's just a fact. Now, some will, their eyes may be burning, they may get headaches, who knows? But it's a really, really different way to experience gaming. Now. It's cool. Don't get me wrong, it's really, really cool. I just like to be cautiously optimistic. Another thing to think about with games is, with the exception of a first person shooter game, if I'm trying to play a sports game and I need to literally run across the room in VR because that's what happens in the real world, that's probably not possible in my living room. So when you think about maybe playing Madden in virtual reality, what's the one position that really would be the only one that applies? Probably the quarterback. Right? Because you're going to stand there, you're going to fake throw it, you're not going to be a linebacker and go tackle your mom in virtual reality. It's just not going to happen. These are the things that we have to be thinking about going forward. The news and the media just wants to write VR, VR, VR, VR. There's a lot of investment money going into it, probably rightfully so in a lot of areas. But I think we really need to stop and think for a little bit about what makes sense, what doesn't, what's good, what's bad, and what people are actually going to do in the long run. Then mobile and fan experience, those things make a lot of sense. But again, one of the big pushes right now in the sports world, and we get calls all the time, hey, we really want to stream this live event in VR, this game. Do you guys do that? We say no, we don't call so and so. And we're probably never going to do it because we don't really believe in it. We believe in maybe the Micro bursts where I'm watching my big screen TV in the real world. I throw on the headset for two minutes to see what it's like courtside, but then I go back to the real world, experience the TV talking to my friend, talking to my wife, you know, whatever. So this is just something that we have to actually consider going forward as to how will this stuff actually be used. And it'll be really interesting to see how it plays out. So that said, what is striver? We are going to just smack you guys in the face with it. Kevin Hogan. It's like he's playing a video game out there, Sam.

And in fact, maybe that's because he.

Has been, no doubt. Reece, I want you to picture this with me. It's about three minutes long, sitting in your tiny office with another guy and you're doing the usual thing, working on cut ups, envisioning the long road ahead. As an assistant coach. When you come up with an idea, it's a pretty good idea. And pretty soon your head coach is telling you you're gonna have to quit your job and do this full time because your idea is gonna change the game. Welcome to Stanford University, where football meets soccer. Silicon Valley, the epicenter of technology. Here, with the use of a head mounted display, players and coaches are immersed in a new virtual reality, a computer generated simulation of a 3D environment.

When I first put those glasses on and I first saw what it looked like, my mind started racing, which was, okay, this could work. Now could it work? This could be phenomenal.

They turn around and we tell them to look behind them and they do this and they say, you know, holy blank right, insert expletive here.

As a Stanford grad assistant in 2014, Driver co founder and CEO Derek Belch introduced the software to coaches and quarterbacks as an alternative to film study and reps on the practice field.

If you were at Stanford practice, you would see our 360 degree camera somewhere relatively close to the player whose vantage point we want. And we would capture a certain number of plays. So start looking around, like all the way.

Oh, my gosh. Okay, so this is 360.

360. You don't know this right now, but we are looking at what you're looking at on the screen.

Oh, cool.

So from a coaching standpoint, look right now, look left. We're seeing exactly how your head's moving. So I want you to turn over your right shoulder. Okay, here we go. You are going to hear the play call in the huddle and I want you to take your drop, I want you to actually play the position. So here you go. Just simulate your footwork in your throw. Find the open guy. Wrong. Okay, so here we go. You read. Keep your eyes to the left. Blitzer just crushed you. There you go. That's better.

This is a great way to train your mind without affecting your body. When it's my turn to come in there I can go execute, because as far as my brain is concerned, I've seen this before, I practiced this before, and I know what to do.

Let's go.

Blitz pickup.

Okay, so something like this with the safety wide over here on the right side, we want to kill it in case they bring something to the weak side. Beginning of the week, when we're preparing for a certain opponent, we'll film their most popular blitzes, their top coverages, fronts, things that we need to kind of look for. And then throughout the week, we'll put the headset on and kind of go through all our checks a few minutes every day. It allows us to make decisions faster, more confidently, and play fast. Maryland had a specific blitz where they would bring the Sam and the safety off the edge. Just by seeing it over and over again, it cut off the time that it takes to process it and get to your run check.

Kevin and the quarterbacks didn't start using it till the end of the year because it wasn't ready once he started using it. And he thought, okay, this is something think I would like to use. And his performance does that. He's telling me of specific plays in the game where what he saw in VR showed up in the game.

Hogan's performance in the last three games of the 2014 season saw his completion percentage jump from 64 to 76. And with the trend continuing this season.

At Stanford, Hogan over the middle, throws to the end zone. Touchdown.

Virtual reality training is growing in popularity.

This is one of those game changers. This is going from black and white to color. If you don't have it, it's not just taking advantage. You're now at a disadvantage.

A handful of NFL teams are already using this, including the Dallas Cowboys and some of the college programs. David Shaw is good friends with Dabo Sweeney. He spent about 5, 15 minutes before our interview raving to me about the difference this has already made for his football team. And Reese, if people are skeptical as to whether or not VR is really the next big thing. Mark Zuckerberg recently purchased Oculus, the company that makes those headsets from a 22 year old guy for $2 billion. That's with a B, Reese.

Wow. All right. So she was a little off on her timeline because it happened the year before, but that's okay. So that was one of the, probably one of the, you know, we were on 60 Minutes last year. We were on ESPN last year, we were on CBS Sports. We were everywhere in the mainstream media. That was probably one of the coolest things to have that, you know, watched by millions of people on Saturday mornings and more importantly, millions of college football coaches that are wondering, why don't I have this? So that's kind of us in a nutshell. And the purpose of today is not really to talk about what we're doing as far as the coolness factor. It's more to talk about the business. And we're going to get there. We're going to give you guys, I'm going to give you guys a lot of details, hopefully answer a lot of your questions. But first I want to show you what it is. So I need a volunteer to come on up and we'll get this fired up. Somebody who presumably knows something about where to look. Come on down. All right, you go ahead. Any of you who have always wanted to go on the practice field at Stanford, now's your chance. This may be the only way you get to do it. Put that on. Okay, so we won't do a ton here. We'll just kind of quickly give you an idea of what we're doing. Okay, there's a little blue dot in the middle of the screen. You see that? Move your head up. Videos. I have the remote. Go to training on the right. Go to blitz pickup offense. Sorry, sorry. Go back. Offense. Blitz pickup, number one. Okay, so what's your name? Mason. Alright, so I'm going to turn this down. So Mason right now is experiencing Stanford football in 360. So the first thing before Mason, before we play this. So I want to note one thing. Sam Ponder in the story, got it wrong. This is not a 3D video game simulation. This is real video. The reason why we went the real video route two years ago when nobody else knew what this was and there were a few kind of goofy video game simulators out there, is because Jeremy, in his lab at Stanford, has proven through research that the human gait is so important for a virtual simulation. So if I'm a quarterback and I'm trying to make a decision of a receiver running a post, a defensive end going there, a linebacker going there, a safety going there, if that stuff doesn't time up and doesn't look and feel Real like it does in the real world, My brain's going to completely tune out. So if we're trying to train a quarterback or a linebacker or a safety how to get mentally better on the field, it's got to look real. So the video game thing for us was not going to happen. It's real video. So here you go, Mason. Here you go. So this is a rep, ok? Sound the exact call that should be there. You got stuff behind you, so don't go too far so you can take a drop and look around. Boom. So this is a simulation, right? This is a pre snap blitz pickup rep. Let me show you this one. This is for Christian McCaffrey for blitz pickup. You guys all know who he is probably. So notice how he looks pretty tall to your right. Right? So we always want to simulate from the viewpoint of the player. So if Mason's Christian, get down in an athletic stance, hands on knees. Now look to your right. Now it looks a little more normal, right? So this is a view for Christian, a blitz pickup view for Christian and the running backs to learn what their responsibility is against this particular blitz. Christian is going to see himself fill here. And the point of this is for him to do it your careful, you got someone in front of you there. The point of this is for the running back to do exactly what Mason just did, to go in a room, put on some headphones, zone out and get down in their stance and basically go through the mental and the first couple steps of the physical work of what they would do. Some of you athletes in the room, you know, when you get to this level and beyond, it's not physical anymore, it's mental, right? So how can we give you guys more mental reps, guys and girls? How can we give the athlete more mental reps to actually have them perform better on the field? Last one, go to seven on seven on the left. Go to number two. Then we'll back you up to number one. Look down over your right shoulder. Look down over your right shoulder. There you go. Now you're in the huddle. Listen to the play call. So this is the clip from espn. Let's see if you can find the open receiver. See if you're paying attention. Turn back around. Now take a step to your left. You got a podium right here. Now keep your eyes forward when the ball snapped and find the open guy. Sack. God, you messed up just like Sam. All right, so look, we're going to run it again. Look there. Blitzer wide open. Look to the left. There you go. Okay. So go ahead and take it off, give him a hand. All right? All right. So as far as our product is concerned, one of the reasons why we were so successful last year was the scenario that just happened. We could see what he was seeing in the screen, in the headset in real time. So when he had his eyes here, I knew right away that he was looking in the wrong spot. So when he tilts his head back this way, we know that he got it right. And this works for linebackers, this works for safeties, this works for obviously quarterbacks, baseball players, whatever we're doing. The fact that we can mirror the display now takes this from a training tool which where I'm going to go in there to get reps an infinite number of times and build that myelin sheath around my brain and get better mentally. And now it turns into a coaching tool where Tina can sit here and watch how I interact in the virtual scene in the real world. Because I promise you, the player is going to look at the field in here exactly like they would in the real world. Hands down. I know somebody sitting in the middle of the room. He was a Stanford football player once. Owen. That's probably right. Right. So this is what we're doing. This is what we're doing from a product standpoint. Now for the purpose of this class and the purpose of entrepreneurship and to teach you guys some things about business, I'm going to give you the background. So this is it. This is the only slide left in the whole presentation and we're going to walk through as much of this as we can. So the first thing that I want to do is talk about how this thing started because I think it's really, really important. I was sitting in your guys shoes. What am I? I'm 30 years old. So I graduated in 2007, 2008 from Stanford. I co termed played football, red shirt was here for five years. When I came back as a graduate assistant, I got my master's in media studies and I got it was with an emphasis in virtual reality. I actually was in this class. So I was sitting at my desk during the football season. Needed one unit to get me up to the minimum number and at 10pm I would watch these lectures and then I would write in like you have to for the one unit requirement. I love it. I never missed a class by the way, but I was virtually there. So that was my experience. How I got back to Stanford. I did do my MBA at usc. One of the things that I always like to communicate to young people like yourself is when I was your age. So how many freshmen in the room? Sophomores, juniors, seniors. So those hands. It wasn't until I was a senior that I actually started thinking about the real world. And it probably wasn't even until I was a fifth year senior. So I was interviewing for consulting jobs, banking jobs, etc. I didn't even know what consulting was until I was a fifth year senior because I hadn't even thought twice about it. So one of the things that I really, really encourage you guys, everybody to do is this place is really, really special. And when I was at usc, all I would do is brag about how special Stanford was. And I would always say I didn't take advantage of it enough as an undergrad. So the position that you were in, you have to soak up this place for everything it's worth. People like me coming back and talking to you and being very candid, this happens all the time. So take advantage of it because you're probably sitting next to somebody right now that has a really, really cool idea and you can do something post graduation that you're passionate about. Because being in a job you don't like is absolutely miserable. I think anyone would attest to that. So I came back to Stanford. I came back to be a football coach. I did an mba. I was kind of thinking, you know what? I did business. I liked it. I can see myself doing a lot of things, but if I don't see coaching by the time I'm 30, I'm going to regret it forever. So I came back. I was on the path to be a coach, just like you saw in that story. My master's thesis was this. And Coach Shaw sat me down in December of 2014 and he said, get out of here. Go start a company. You're about a year ahead of everybody else. You're not the typical coach. You just got your fourth degree, you're smart. Get out of here. So Coach Shaw is our only investor to date. He gave us about. I can't tell you exactly what he gave us, but by the time we put his money together, me putting in $5,000 of my own money, Jeremy putting in $5,000 of his own money, a couple others, we raised $50,000. And the goal was to just sell the one team last year. So on January 2nd of 2015, we opened for business. You know, met with lawyers, tried to come up with a company name, did all of the bells and whistles of the paperwork, and the goal was, can we sell this to one team? It was me full time. Some of you who have been Stanford fans for a long time may remember the name Trent Edwards. He was a quarterback here, played for the Buffalo Bills for several years. He was one of my best friends. He jumped on to kind of lend credibility to what we were doing from a quarterback player standpoint. Jeremy is part of our company more in a visionary role because he's a tenured professor here, so we kind of just can tap into his brain whenever we need to. And then we had a grad student that was kind of helping us out part time. Building software kind of helped us get this thing off the ground. So really it was like 2.7 people when you added up. And then by the time we needed a little more help. My best friend from childhood was at Wharton at the time. He worked for the FBI for many years and he came on as our COO living in Philadelphia. So really we're like 3.4 people trying to actually get this thing off the ground, trying to sell to one team in 2015. And to me, the 50,000 was enough to travel around the country and not feel the panic of like, oh my God, we're burning through cash. Right? Which we were. But it's okay because we were working towards a goal. So five of the first six college teams I met with in March signed up on the spot. And then two weeks later, the Dallas Cowboys signed up. So we went from not knowing what the hell we were doing trying to just sell to one team to over a half a million dollars in revenue, just like that. And since this is a public facing video, I'm not going to go into the nitty gritty of what each team pays, because teams might be able to watch this. By and large, it's the same. But I will tell you that between April 1 and September 1, we went from figuring out how to service six teams and not knowing what the heck we were doing to having six NFL teams and 10 colleges by the time the season started. Then in the fall, we did a virtual hockey goalie simulator for Madison Square Garden where when you actually get down to the stance, you're literally stopping pucks against real New York Rangers hockey players. Then we did a big project for Visa and the New England Patriots. So now we were starting to figure out different revenue streams of how to actually make money in addition to the training. When all was said and done, we did over $3 million in revenue last year in our first year with no funding. And I'm sure the professors in the room can tell you that is about a.01% chance for companies that pretty much have nothing and haven't raised a dime in their first year. As far as where we're sitting today, I'll get to that. But every team that we have is on a two year contract. So we're in a pretty good place to continue to grow this thing organically. And we'll kind of talk about that as we go. So deeper dive. One of the big things that I wanted to talk about today was the art of bootstrapping. So one of the common misconceptions among the entire Stanford football team who's still bitter at me for leaving and not coaching anymore, is that I'm rich. We did 3 million in revenue last year. We went from 4 to 29 people basically overnight from June to August 5th or so. When college camps started, we had to figure out how to actually service all these teams that I was just out on the road signing up over and over and over again. So we grew really, really fast. You have to pay people. My salary last year was $40,000. Okay, we'll just put that on the table. This is an entrepreneurship class. If you want to start something, you have to be prepared to sacrifice. And we have people right now at our company that this is an equity play for them and they are literally just making enough money to pay the bills. These are people that have Harvard MBAs, Stanford MBAs, people that walked away from $250,000 jobs just so they could be involved in something that they are really, really passionate about and that they believe in. So that's something that I really, really, really want to emphasize. One of the tendencies in Silicon Valley is the first question you ask somebody is how much money do you raise? I'll read Inc. Magazine and Forbes and Fortune and all these things when I'm flying all the time. And I just read something recently about the 30 under 30. No company that was mentioned, did they talk about revenue? All it was was how much they've raised. Well, that doesn't mean anything. That doesn't mean you're rich. It doesn't mean you have a business that can succeed. Raising money is great. Don't get me wrong. Congratulations. If you do, it means a lot, especially if you do it from a really reputable brand. But the bottom line is that it's about bringing in dollars as a business. I think today with the Snapchats and the Instagrams and even Uber to a certain extent, they're obviously bringing in a ton of cash. They burn more than they bring in. Basically everyone at this school that's young. And then people that want to go out and get rich, they forget that businesses aren't all about users. They're about actually dollar in, dollar out. So one of the things that we've done really well so far is we bootstrapped. Our office for the last nine months has been a townhouse in Menlo Park. It is literally the size of this. The living room on any given day has 12 people crammed into it. There's three sitting on the stairs. It is not sexy. As a matter of fact, when people come meet with us, I apologize in advance. And when they get there, they usually say, no, no, we love this. This shows us that you're humble. This shows us that you're hungry. It's something that actually we've turned into a positive. So one of the things that I've been kind of hammering our people about from day one is, guys, if we don't raise money, if we can do this organically, we're in control. We make our own decisions. Nobody's looking over our shoulders as far as financial flexibility. That really goes a long way. If we want to pay someone a bonus at the end of the year for doing a good job, we. We don't have to worry about somebody harping on us over our shoulder. I'm not saying that that can't happen if you do raise money, but thus far, we've had a lot of financial flexibility and it's been really, really neat. And we're kind of a cool success story in that regard. Now, that said, you need money to run a company. So leading us to number two things, cost money. Travel, legal, hardware, rent paying people, et cetera. Everybody told me from the very beginning, all the way back to when I was in business school and entrepreneurship classes, people always say it's going to take twice as long and it's going to cost twice as much as you think it will. And that could not be more true. We have been in a very fortunate position to do things a lot faster than I think most people would as far as moving really, really, really, really quickly. But by and large, if we think a travel budget for something is going to come out to five grand over the course of a month, it costs ten or more. So as you guys are thinking about how to start a business, trust me, you have to plan for these things. Moving to number three, people cost money. One of the biggest things that's been an eye opener to me is that I am now responsible for 29 paychecks, 28, 29 if you count myself. I have a six month old. I have a wife who she works full time. So this is real. This is not like pie in the sky. You know, let's go start a company and let's get rich. I mean, day in and day out, it costs money. You need to pay the bills. And every single day I deal with people thinking they should be paid more, people wondering what their future is. I mean, it's all human resources, things that come up all the time. And when you're a startup and you're trying to do it organically and bootstrap it, it's tough. I mean, luckily we haven't missed a pay period yet, but trust me, that's real. And when you're owed $100,000, check from an NFL organization or a big brand or something that you know is coming, but it may not be coming until next week and payday is three days before that, it makes you sweat a little bit. So could these things be solved with raising money? Yeah, they could. But for us, we have made the conscious decision as an organization that we don't want to dilute ourselves equity wise. We like the position that we're in, so we're choosing to continue to go this organic route. But this is very, very real. And one of the things that kind of stuck out at me when we started this company last year, I was meeting with an NFL team and I was talking to their video coordinator and we were teaching him how to do what we do on the field and we had to train a member of his staff. And I said, man, I'm really surprised. Like NFL, you guys make all this money. You only have three video guys on the staff. Some of the colleges we meet with have like 19, because all the students want to volunteer, right, and get paid 10 bucks an hour. He's like, you'd be surprised how often a $10 hour employee, a $10 an hour employee, doesn't show up for work on the second week. And I'm like, really? This is the so and so, insert team name here. This is one of the best brands in the world. He goes, doesn't matter. You get what you pay for. So this is a team where people would literally give their left arm to work for them and put that logo on their chest. And they still have people that don't show up when they only pay them an hourly rate. So right now for us, like I said, we've got some really, really smart people, some really experienced people. We live in the Bay Area. You can't afford to pay those people $50,000. So that's something that you really have to think about going forward when you're trying to start a company. As you guys grow, you need cash and you need to be able to compensate people appropriately relative to what they're doing. The next thing, operations are absolutely critical. I cannot emphasize this enough. When you guys go to business school, guys and girls, some of you that may go to business school one day and you fall asleep in an operations class because you think it's boring, trust me, you're doing yourself a disservice. This doesn't necessarily mean factory line operations. Widgets and a fit in Toyota Lean 6 and efficiency and all that. That's not what I'm talking about. That's really, really high level stuff. At my level, at Shriver's level, it's ordering a computer, prepping it, making sure it doesn't have malware on it when you send it out to the Dallas Cowboys. Just little things that add up. Making sure you send the remote and the remote part that are on this machine right now. Because if you forget something, they're going to call you and say, what the heck's going on? And they're going to wonder why they're paying so much money for your service. So all of the little things with operations are absolutely critical. The other thing I'll add to that is it really, really helps to have everybody in the same room at the same time. It's very, very tempting in today's day and age to think, oh, I can do this remotely. We can have someone in New York, we can have someone in Wisconsin, we can have someone in San Diego, we can have, we can Skype, we can put our VR headset on and talk to each other virtually. Trust me, decisions are best made and people are the most efficient when you are in the same room together. One of the major issues that we're having right now is we are 29 people and only 15 of them live in the Bay Area. And 14 of those, or probably six of those 14 that don't live in the Bay Area, are some of our best people. People that I wish could be sitting next to me every day. Not because I want to babysit anybody, because when we're in the same room and we talk out ideas, you're missing someone on the phone, you're trying to play tag, guys and girls are traveling all the time. It's really, really tough. To me, operations is not only figuring out how to efficiently operate your business, but also figuring out how to Just efficiently make decisions. Part of that is being together in the same room. That's very, very important. The next point. Passion is contagious. The number one thing people always tell me after I speak, and I've done a lot in the last year, is they come up and say, man, you're really passionate about this. Clearly. Thank you. It's great to hear. It's just natural for me. But when you're going to pitch, whether you're trying to raise money, whether you're trying to sell something, whether you're trying to convince someone to come on board the company, I'm going to be honest, I convinced someone that was making $300,000 to come make 60. That's a big deal. The passion goes a long way. So if you're not passionate about what you're doing, you're not doing what you should be doing, you're in the long line of work, move on to the next thing. Because this is very, very real. If you're a founder, if you're a co founder, if you're the fourth person in and you're starting to grow the organization from the top down or the bottom up, you have to have passion. Because if you don't show up every day with a smile on your face, I mean, let's be honest, athletes in the room, how many do we have? Training gets pretty monotonous, doesn't it, at times. Game day. And this is. As you're speaking my language, that's why I'm calling out the athletes. But computer scientists writing code is not always fun. But seeing the end result is really, really cool. That's what business is. Me being gone six straight weeks last year when my wife was pregnant with a baby on the way a month out, that wasn't fun. But selling six teams over that time period was awesome. If you don't have passion for what you're doing, then you have to move on. Okay. Friends and family. So of the 29 people that work for us, I have known half of them since college. One is my brother, one is my best friend from childhood, who I've known since I was 5 years old. And one is one of my professors, who's more of a visionary former professor, but he's still involved. So half the people that work for us I'm very, very close with. That is really, really risky. Everybody always says, don't go into business with friends or family because it could blow up in your face. One of the reasons why I made that decision, A, we had to move fast. So last year we literally went from six to 20 professional and college teams in the period of about 30 days. So we had to staff up really quickly. Additionally, we started getting so much media and so much attention that we had to strike while the iron is hot. And we kept getting calls every day, emails, calls. I mean, the Dallas Cowboys coach, he literally called me out of the blue, found my phone number, said, derek, I'd love you to come to Valley Ranch and show this thing to me because I've been dreaming about it for 20 years. So to have that much traction and to want to take advantage of it, it had to be more than just me. So we had to move quickly. One of the advantages that you guys have right now is your best friends in life. Today your peers are going to be Stanford graduates. So the decision that I made was I could go look for people that I don't know. I could go look for people that are probably maybe just as qualified, but I don't know them, I don't trust them. Let's just be honest, I'd rather bring six Stanford people on board. And I'm not saying that Stanford's the be all, end all and that if you want somewhere else, you're not qualified. But I kind of looked at our situation and I said, okay. Some of my best friends are really smart, athletically accomplished, business wise, accomplished. I trust them. They went to Stanford. I know that pedigree. They're my friend. That's the only reason why I wouldn't hire them. To date, it's actually gone pretty well. One of the things that I tell people, I probably tell our company this every six weeks. As long as you're doing your job, there won't be any issues here. The only time friends and family relationships become a problem is when one side has expectations that the other side doesn't meet or when expectations are different. So my brother's working for me right now. I trust him 100% that I'm always going to get everything that he has. If those expectations don't match up, that's when we have problems. So I'm not saying that this is necessarily the right way to go. I may lose three friendships over this. At the end of the day, who knows? But it was something that we had to do for our business to make sure that it could succeed. Another thing that I'll tell you guys too is it's very common to go into business with friends or family because you talk about ideas, you have to be honest from the beginning. One of my friends that I brought on Board. We have type A personalities. Both of us practically cut each other off when we said why we wouldn't work together. We're worried that we're going to butt heads. So as long as you can address that up front and be very, very straightforward with people, it really, really goes a long way. We haven't had any issues yet and I don't think we ever will. The next thing, people need direction. So one of the things that I've learned very quickly is of the 29 people working for us, 1.75 people can actually work without being told what to do. And I'm not insulting anybody in our company by any means. I've told the whole group that and I'm the one. The other people make up 0.75. So one of the things that's really interesting is, is this is a school, this is a culture of self starters. But trust me, when you're running an organization, whether it's 10 or 10,000, if you don't tell people what your expectations are and you don't keep people in the loop on what you want them to do, they'll be sitting there doing this. Because a lot of times, even if someone's really, really good, really, really motivated, really, really smart, they're still going to wonder what you're thinking. They're going to wonder what the vision is for what we're supposed to be doing day in and day out. So giving people direction and clearly communicating often goes a long way. One thing that I've done that I feel has been very effective because I get an email from five people every time I do it is once every six weeks. I try to write a state of striver email to the group and it's way longer than people want to read. I usually do it on a plane, flight takes me two hours. I don't have much else to do when I'm on the plane in that situation, but, but I literally go through everything. Football sales, baseball sales, college football sales, interactives, raising money, status, HR operations. I just write paragraphs for each thing to keep everybody in the loop. And most of the time I get an email back right away from someone that's up at like 11:30 at night and they say, thanks for sending that. I really appreciate that you're so honest and transparent with what's going on. Because I live in Virginia and I don't get to see you guys every day. So this really makes me feel like I'm in the loop. So giving people direction, keeping people informed, really, really goes a long Way the last couple here. So be willing to sprint when in sales mode. So like I said, last year I spent June 23rd to September 5th out of the house. I came home for one day to do that ESPN story. Our baby was due September 22nd. So you can do the math on how pregnant my wife was. She was not happy with that. She said, if you don't make it by the time the baby's born, you don't have a choice in what we name him, among other things. And that was kind of the theme of last year. I traveled a lot and I still do, unfortunately. But if you're not willing to sprint, we have a guy working right now for us. He's 48 years old. He's the oldest person in our company by a landslide. I think he's the only person over 35. With the exception of Jeremy. We don't discriminate by age. Trust me. It just kind of has worked out that way. But he's been through the.com boom.com bust. He's been in startups, he's done really well for himself as far as his fit within those organization. And he's basically told us, guys, I'm just going to tell you something from my experience. Work, life balance right now does not exist. We have to be willing to do whatever it takes to bring in customers right now and to get this thing off the ground and get it going the right way. Because right now VR is a rising tide industry and Striver is one of the best positioned companies out of anybody on the whole planet. We have a real use case for VR. We were the only, I think we were one of the only profitable companies last year in this space. Only one that maybe even charged for a product, to be honest. So we're in a really, really good spot. And if you're not willing to sprint, we wouldn't have 20 teams right now if it wasn't for me being gone for those six weeks last year. It sucked at the time. Being away from home was not fun. I used to hate FaceTime. Now I love it. But it's very, very necessary. And then the last thing here, people, people, people. So every time I've given a talk like this, I always give my wife a shout out. She's an absolute saint. And most of the young people in the room can't appreciate marriage right now. Some of the older people can. But if you don't have that foundation, whether it's a friend, a group of friends, a girlfriend, a boyfriend, a wife, a husband, then the success Just isn't as fun. And one of the really cool things for me so far is we pulled the trigger really fast on some people last year. We have not hired any rotten eggs so far. And out of 29 people, that's tough because odds are that usually you're going to whiff a couple times. And we've gotten, you know, thank the Lord we've gotten really, really lucky because people is what it's all about. And I've met with a lot of big companies that I know are looking at us for acquisition one day, whether it's in a week or two years. And they've all told me, you buy people, ideas are a dime a dozen. Execution is what it's all about. And people execute. So the last two things, what's next for Stryver and what's next for virtual reality? So I already talked about kind of my opinion on the VR space right now, and I'm certainly not downplaying or insulting anybody that's in a business that's unlike Striver, because I think there's going to be some really cool stuff that comes out. This industry, in my opinion, is going to be an all out arms race for the next three to five years and then we're going to kind of see whether or not people actually grab onto this. Some of you may remember Google Glass, that was supposed to be the next big thing, never really went anywhere. 3D TV never really went anywhere. So why do we think bulkier headsets on faces are actually going to be more successful? I don't know. So I think you're going to see a lot of really cool stuff come out in the next 6, 9, 12, 24 months. And then we're gonna see how sticky this stuff actually is. I mentioned before, training doctors, curing phobias, maybe that courtside seat at the game. And the headset does actually look pretty good. In 16 months, I think you're gonna see some neat use cases. We'll see how ready people are to actually grab onto this stuff. Because if it doesn't happen now, I don't think it's ever gonna happen. 15 years ago, 20 years ago, VR was supposed to explode. It never went anywhere. So now is the time. So what's next for Stryver? One of the things that Tina really wanted me to talk about was what are we pursuing? But more importantly, what aren't we pursuing? So our game plan as of now is to absolutely own sports. Sports is a huge market. We're doing training stuff, we're doing fan experience. Stuff, we're doing little projects, we're doing bigger projects. If we own sports, we feel like that's going to take us to where we want to go. Because one of the really, really cool things that's happened in the last year is, is we're one of the only VR companies that's actually in the mainstream press. So when somebody reads an article that we're working with the San Francisco 49ers to train their athletes, they say, hmm, maybe that would help train our employees using virtual reality. Boom, let's call Striver. So we're getting all of these emails and calls because we're in the news and quite frankly, nobody else really is as far as the mainstream press. So for us, we're going to own sports, and then we're going to see where that takes us in all of these other spaces. We did a project for ABC and the Oscars a month ago where we did a Behind the scenes in 360, and we turned it around in 18 hours. And then they showed it to everybody on Facebook and YouTube and people that owned headsets, which there aren't many of them now. But ABC chose us to do that knowing that we had never done anything like that before because they trusted the work that we've done with professional sports organizations. We're a sports company first, but our tagline is immersive performance training. Not immersive athletic training. Not even immersive sports training. Immersive performance training. Because when we decide to go down the path of training Tina to be a better salesperson when she works for Cisco, for example, that's performance. That's not sports, but it's performance. It's helping her perform better in her job. So we've kind of set ourselves up to go down the path to potentially do a lot of other different things. So that takes us to. We got about, what, 10 minutes left for questions. That is my email address. If anybody in this room has anything more they'd like to ask, follow up, get lunch. If you want to work for us. We're looking for engineers who will take next to no money to come over, please email me. And with that, we've got 12 minutes. So I will answer anything that anybody wants. Feel free. Yeah. On any given week, how do you allocate your time? What's your time spent on average? So I would say email is your best friend and your worst enemy. Like today, I spoke at intel this morning, I'm here. That's like six hours where I'm away from my email and I'll probably have 54 unread emails that I have to go through tonight. And unfortunately, these aren't things that I'm just like cc'd on. This is like, Derek, what about this? Hey, Striver, we'd like you to do this. You have to respond fast. So I probably spend half my day on email. Unfortunately, writing proposals is something that's really big. I have a master's in journalism. I'm really, really sensitive to bad writing. So all the proposals go through me, which that is not a good sustainable strategy long term. But that's something that we're going to do for now until other people show that they can make it perfect every single time. And then right now I'm our head of sales too. Last year, of the 23 teams that we worked with, I sold to 22 of them. And that is not sustainable long term. But the fact of the matter is I'm the best salesperson at the company. So, you know, over the next three weeks, I'm going to be in a different city every day, meeting with teams and just, you know, trying to get, trying to get more teams in the door. Yeah. Can you tell me a little bit about your approach towards. I feel like American football happens to be a combination of where there's like a lot of static time. Great question. Versus, like fluid for some playing basketball. Sure. So one of the, one of the reasons why VR works for football is because I start in a static spot. I read, I react and I go right. So it's perfect for football. Now there are some positions where they move pre snap and you know, it is what it is on those plays. If I'm a quarterback, you know, I'm kind of in one spot nine out of 10 times. So it's perfect. Another reason why football is so good is because it's really physically demanding. So can I get that virtual rep and not get injured or injure myself more if I'm rehabbing or something? So for football, it's perfect. Baseball, you know, I'm in one spot, I'm trying to recognize a pitch right now. The clarity just isn't there. It has a little ways to go, but that's the next best use case. Maybe better than football when it's ready to go. Beyond that, soccer, the field's huge. You move around too much. Hockey, my grandpa played in the NHL, but I never really appreciated how fast hockey moved until we got on the ice for the first time and tried to shoot something from a static decision making standpoint. It never happens. Maybe the goalie. So basketball, we have an NBA team, but they're kind of in experimental mode while they try to figure it out. So one of the biggest challenges in those sports, and even football, where it's tailor made, is convincing coaches to change. So, like right now, you saw the clip. You guys all saw how we do it at Stanford. I mean, I hate that this is on the national media because it just shows the competition what we do. But when you put the camera, like right there on the field, I mean, you have to convince a coach that's been doing it for 35 years, hey, let's change. Let's bring this new apparatus onto the field. Let's change your practice schedule a little bit. That's not easy. I mean, that's a herculean task. So not only are the movement sports really challenging from a visual standpoint, but from a conceptual standpoint, getting them to buy in is really, really tough. You spoke about soaking in everything at Stanford, especially for the undergrads here. I was wondering what sorts of things you did when you were here, maybe at your mba, that are paying off now that you're running. So I played too many video games here as an undergrad. Played too much golf. Online poker was legal back then. That was really stupid. And I played football, so I put a lot of time into that too. Honestly, I kind of figured it out pretty late in the game. So when I did my master's in journalism, I took an entrepreneurship class. It was called. What was it called? Digital journalism. I forget. But anyway, it was the first time I even heard what entrepreneur was. And that kind of turned me on to. There were some MBA students in the class, so I was just starting to pick their brain, have lunch with them, ask questions, hey, what'd you do in your work life? And then when I went back to business school, the biggest thing that I did honestly was pay attention in class. I know that sounds kind of lame, and the teachers are probably happy that I'm saying that, but doing the reading, there's a reason that you're doing reading. And one of the things that I noticed when I was in the work world was when you can sit around a room of eight people and you can talk about that random study that you read that applies to why this sales tactic might work. They all look at you like, wow, where'd you come up with that? And, like, I probably got a C on that test when I was supposed to know that, right? But it comes up later, and you look like the smartest person in the room. So aside from actually kind of taking school a little more seriously in my graduate life, just being out there, like right now, you guys are all required to be here because it's your class. I'm sure there's 10 more of these that will happen in the next week. Where, when I was an undergrad, Bill Gates came and spoke. Just reading about what these people think, going to talks like this and coming up with taking that one little thing away that you want, it really goes a long way. So, Derek, what motivates you?

There are lots of pieces of this. There's the technology, there's football, there's money. What drives you every single day?

Well, first and foremost, we live in an 800 square foot apartment that has no air conditioning. So we need to make enough money to get out of there. That's number one family first. So I, like when I was in, when I was in before business school and I was working, consulting and quite miserable, I had no passion for what I was doing. And I always thought I wanted to start my own thing, and I'm doing it right. So the biggest thing has been not losing, right? And actually making this successful. Whether I make $100,000 or $100 million off this thing, I don't care. We've got people in our company that have told me it's not about money, it's about winning. And that's awesome. To have the motivation to not fail, to me, goes a really long way. And for me personally, when Coach Shaw sat me down and basically told me, you need to do this, I even said, can I still stay on the staff? What if something goes wrong? He's like, well, yeah, you can. But I would put everything I have into that. So I talked to my wife, talked to my parents, and it was kind of like, hey, I've always wanted to do my own thing. Sports are involved. I'm passionate about sports. And this is tailor made, right? I mean, this is ready to roll. Why not? I mean, that was kind of the thing that kicked the whole thing off. And then now that we're so deep in it, truthfully, it's the 29 people that work for us, and I don't want to let them down. And we've talked a lot in our company about, should we move so and so here? Should we move so and so here. Operationally, this person isn't really getting it done. You know, people have gotten pissed at me. Like, that person's got to go. They're screwing up too much. I don't want to fire anybody. I mean, that person needs a paycheck. They're a human being. So that's been the biggest motivator so far, is to not fail for myself and everybody that's working for us. Yeah. Could you do tennis? Could we do tennis? We're working on something. Yeah. I was wondering if there's a woman's sport that you could. Both men and women. Sure. Yeah. Problem is a lot of tennis programs just don't have a lot of money and this stuff's really expensive right now. So as the cost comes down, then it's something we're looking at. Volleyball. Volleyball's tough. Yeah. Let's talk afterward. It's. Yeah. Which skills did you learn on the field that have been the most valuable to you in your business? So. Good question. Twofold. When I was an undergrad, it took me three years of being a backup, a backup kicker, which is the loneliest job in all of sports and the most boring position in the history of sports. It took me three years to finally see the field. So that, you know, as far as persistence, what motivates you? Kind of seeing that carrot out there. I mean, I waited a long time and Tina didn't mention this, but when we upset USC when we were 42 point underdogs in 2007, that kind of the game that kind of kicked off Stanford football. I kicked the game winning extra point in that game. So that was like a really, really gratifying culmination to my five years at Stanford. I also went 0 for 4 in a game five weeks later and we lost. But we're remembering the positives. So for one, persistence. Right. And I think one of the things that I did a really, really good job of when I was not playing was looking at the guy above me, that I was his backup, and looking at everything that he did that I didn't want to do. The way he acted on the field, the way he worked hard or didn't work hard, kind of just learning from observation versus learning from experience. And then when I coached, which isn't playing but being on the field, coaching, same thing. Truthfully, the biggest thing that frustrated me about coaching was why are we here until midnight when we literally could be here until 8pm so just the lack of operational efficiency. And this isn't just coaching, this happens everywhere. But in coaching, if you're not there till one in the morning, you're doing something wrong. That's the culture. And to me that is just so backward. It's about productivity, not activity. So one of the things that I've really tried to instill, despite the fact that I'm working 18 hour days all the time because there's so much to do is I'm telling all of our people, get it done and do your thing. We're going to have to grind at times and put work first over a lot of things. But you know, it's all about efficiency. I don't care if you leave at 3:30 in the afternoon, as long as you have done what you needed to get done. What role is your wife playing in your company and in your personal life at this point? So I've tried to. I don't have a personal assistant. I've been told that I should get one just to take all the travel and email off my plate. I'm trying to hire her to do that, but she's pretty good at her own job, so she doesn't want to do that, truthfully, just support. She's not involved in our company at all. As a matter of fact, we've had a couple wives at our company that have wanted to start like a striver wives group and she just does not get into that stuff. She doesn't want, oh, I'm the CEO's wife, she doesn't want to do that. So mainly it's just support. It's her not. She has never once said to me, like, do you really have to go on that trip? Because she just gets it. She knows that this is part of the deal. Right now she works full time. Yeah. She works at a tech startup called Medallia in Palo Alto. She's the executive assistant to the cto. One more. Yep. One more. Yeah, I do. Do you know any related to social aspect? Like maybe phobia or social interaction could be educational? Yeah. So that's an area that people really think where VR could work. So in education, Right. I'm sitting in London and now I can be in a classroom in Palo Alto. Right. Somebody could. There could be a camera right here and there could be 10 million people looking through that headset as if they're right here. One of the other things we're doing is we're trying to teach about geography to a bunch of sixth graders. They're kind of tuning out. They don't care. Here, throw on this headset and be right at the base of an Egyptian pyramid. That's something that could take off. I am not very big on social VR. Like where I have a headset on, Tina has a headset on. I'm looking at an avatar of her. I just like the real world, so that's just not my thing. But someone's going to make a lot of money off that. Because with your guys generation, you're going to grab onto that stuff for sure. What was that? There's a few out there. Yeah. I don't know the names, but there's a few out there.

I'm sure you'll agree this was totally inspiring. Please join me in thanking Derek.