Sandbox VR founder Steve Zhao almost lost everything. Now his company is a global industry leader, with a Hollywood who's who of investors billing his virtual reality experience as the future of entertainment. We ask Zhao how he found the conviction to continue in his darkest hour
How do you know when to keep going and when to give up? It is a question nearly every startup founder has had to ask themselves—not to mention long-distance runners, struggling artists and even serial monogamists. When it comes to business, nobody knows the fraught, awake-at-midnight, should-I-stay-or-should-I go worry better than Steve Zhao. He is the founder of Sandbox VR, a multi-million dollar startup with A-list investors that nearly didn’t happen.
“Back in 2017, when we had no investors and very few customers and absolutely nothing left in the bank, a lot of people thought I should give up,” says Zhao with a laugh. “And to make matters worse, there had been a total mind-shift around virtual reality: from being the darling of 2016, it was a total outcast. The signs were not good.”
Zhao had launched the business a year earlier with a big bet and a small bet. The small bet was that Sandbox VR would be a platform for gaming and grow over time into a games developer. The big bet—which seemed unlikely at the outset—was to build the biggest, most immersive VR set in history, to be used at Sandbox VR gaming centres.
When the small bet failed for a number of reasons—number one being that at-home VR never really took off—Zhao agonised over whether to try and implement the big one. He knew his game was good, as it was in the top 20 percent of games purchased, but the market just wasn’t big enough, and his investors weren’t interested in funding another round.
“Not many people bought hardware,” he explains in his hybrid California-Hong Kong accent. “And people who had the hardware then didn’t use it—it just collected dust. It made it very hard for all games developers, and we lost all our money. It was in early 2017 when I turned to the company and said, ‘It’s time for the big bet.”
Zhao spoke to his engineer and asked him to help them create the most immersive VR experience imaginable, one that would be used outside the home in specialist experience centres, where customers can have a full-body experience, along with motion tracking sensors and moveable platforms. This required a lot of space and a shift of thinking.
“I was committed to the cause and so was my team,” he says. “But the investors were very discouraged, and they looked at what we were trying to build—an original platform, with an in-store experience and only six people in the company—and said, ‘no thanks’. Nobody invested. Fortunately, after working for 10 years, I had saved up a pretty good nest egg. I took all that and put it into Sandbox, because at least then I could say I’d done my best. But it was a pretty big underdog story—six people in Hong Kong building a project nobody was interested in.”
See also: Meet The Gamers Who Turned A Failed School Project Into A Multimillion-Dollar E-Sports Empire