The 4 business models for your VR career
Hey friends, and welcome back to the Alex means VR podcast. In today's episode, I want to talk about the four different business models that VR creators can use to make money because that's what we need to do during these times, right? We need to find a way to sustain ourselves. And if we can all make a bit of money, doing what we love in this industry, it will continue to make the industry grow. And it will also keep us tied to the industry whilst we ride out these particularly rocky times.
So we're going to be diving into the four business models. And to be fair, these business models are just four business models, full stop, regardless of what industry you're in. But I'm going to obviously give you some examples for how you can tailor it to the fact that you're in VR.
Read on for the full transcription or listen to the podcast episode here
So let's get into it the four business models that you can apply to your career or your business as a VR creator. So this, roughly speaking is broken down into:
the artists way.
These are the four business models and there is overlap between the four of them. So let's start with number 1. So service based is exactly what it sounds like. This is where you exchange your services as a virtual reality creator for money. So the business model behind this, is essentially you are selling your time as a service. So whether that be that you're reaching out to clients to do virtual tours or 360 videos, or game engine design or whatever it is, you have a skill and someone pays you for that skill. So service base, the most classic, it's by far the biggest, and the easiest way to make money as a VR creator. Now, of course, you need to pick the kind of client you want to go after. And you want to pay attention of how much time you're spending and working out what day rate to charge or what project for you to charge to make sure that you are making enough money for the amount of time you're putting in. But service base, pretty much the easiest way to get started is pretty much the way that the world works. I would say anyway, like the majority of creatives, this is how they make their money service base work.
The second business model is product based. So this is where essentially the thought behind it is, that you can make money while you sleep. Which sounds absolutely delightful, doesn't it? So in this scenario, maybe this is more like you are creating a blanket kind of VR experience that multiple clients could buy. So an example of this might be unconscious bias training. If you could record an amazing 360 series about unconscious bias training that was generic enough that it would appeal to a large group of corporates or a large group of companies, or maybe it's hazard awareness training. And, you know, general like office safety, that you can create the experience once and then just keep licensing out and you can charge a pretty good fee for that. And now the caveat to that business model, which is, by far, the best probably (well probably depends on what kind of person you are and what kind of work you want to do) but for me, that seems like the holy grail of a business because again, you create it once. It might take you ages to get a product that actually works and that people actually want and there's huge amount of market research and investing upfront of your own money and time to actually make the project. And then obviously, once you roll it out, you have to offer things like support and you have to think about the rollout and how clients will integrate it into their companies. But theoretically, once you've got all that in place, you essentially can make money while you sleep because you've got this one product that people will then just keep paying you for and it just that's it right. But the other side of that is, you could also create a piece of hardware or software.
Next is the artists way; this is if you want to just purely make your money from doing your own projects. And the truth is right now as a VR creator, it's going to be pretty hard for you to just make money from doing just the projects that you would like to do. So the best shot that you have of actually being able to do that, is finding pockets of money from funding bids and grants. In the UK, we have a particularly strong body of organisations that do fund this kind of work, whether it's Arts Council England, and as you know, my recent project has been funded by the British Film Institute network. So you've got creative England, you've got innovate UK, you've got lots of different pots of money. Innovate UK are a bit more enterprise focused than than creative focused, but there's lots of little pots of money. You're not going to get rich, you're not going to have loads of money, and you won't have mass amounts
to spend on your personal projects, but that is a really good option if you just want to be paid enough money to get by and make your own projects.
This is particularly good if you are a bit of an all rounder, and you can make your own projects. A a couple of other grants to mention are all of the kaleidoscope grants. They are phenomenal. René Pinnell is doing a lot of amazing work at Kaleidoscope to kind of really beef up their grant support, and they've really stepped up during the coronavirus crisis to help and support VR creators, so they've got grants at the moment for all sorts of different genres but including, Best Documentary project or female VR creators, black VR creators, there's lots and lots of different kinds of grants available. Again, small pockets of money. But if you're the kind of creator that just kind of you live humbly and you just want enough money to get by, just make your art - that could absolutely be something to explore.
Another one in the UK is creative xR, they're a little bit more, like you need a team that is reputable. And you need to be partnered with a decent kind of LB, like a museum or something like that. They're a little bit, to be honest, they're a little bit kind of aloof and out of reach for most creators - just to be my personal opinion on it.
And that's jus because their angle is going after the more artsy based stuff that gets distributed out and it already has a direct distribution plan to an arts organisation like a cultural setting. So definitely if you're more of a beginning creator, or you're just interested on working on your own stuff, Kaleidoscope grants, 100%.
Oh, actually just to quickly finish the thought on the artists way and the artists kind of route. Of course then once you've built your project, the ideal situation would be that the project you've built is kind of a product. So a bit like what we talked about in the product base stuff. Essentially, if you build a great prototype, then the idea can be that you start essentially licensing that out. Whether that be you put it on the Oculus and stream stores to start making money that way or you licensed to LB's and VR arcades to start making money, whatever it might be. But that would be amazing, wouldn't it? That would be ideal, if you had been funded to make this project. And then you could go on to distribute that project. But as I've talked about it, in other episodes of this podcast, at the moment it's very, very god damn difficult to make a living wage off of your original projects that aren't enterprise focused. So obviously the product base stuff I was talking more about is more enterprise base, whereas this is obviously your own creative project. And for that, you're trying to go direct to the consumer. So this in an ideal world and when VR is a bit more mainstream, and we have more headsets out in the world, out in other people's homes, as soon as we have more of an audience base, to go for this could be a really good route. You know, going the artists way.
Get funded to make a piece but then turning that piece into a profitable product. And just like Disney would. The way Disney would fund a movie, and then off the back of that movie, they would then sell that movie as a product. And they would have lots of different things. And lots of different revenue streams coming off of that intellectual property, which kind of nicely segues into the last which is the personal branding.
Personal branding is more of the route that I am taking. And this is for a number of reasons, is essentially a long game. I don't think- unless you've got enough support to be able to support yourself for a couple of years to do this first, the personal branding route is instead of building up a product that you sell as in a piece of software or hardware or an experience or a bit of creative intellectual property instead what you do, is you make yourself the product. For example the Alex Rühl action figure coming soon. Maybe that makes me sound like a narcissist but I would buy an action figure of myself. I imagine like a pop figure anyway. Okay, I'm going off track.
So the idea being that essentially you put out all of your advice, your best advice, your best experience, you put out your journey online, in the hopes that people will want to kind of be your online friends, like they will want to follow you. They will want to follow your journey. They will be interested in what you
you're doing and what you have to say.
The thing with personal brands that people don't get, is that they think personal brands is like one kid travelling the world and posting photos of ridiculously blue water all the time and doing crazy shit and it's like no.
The way I think of a personal brand is, I just want you to know about me. Alex Rühl and the way I'm going to do that is by giving you so much value. And that's the point. Give, don't take. Give, give everything and don't expect anything in return.
That's the key. This is a theory that Gary Vee talks about all the time with personal branding. It's that idea of people think it's like oh, you give a little bit and then like you take, you ask your audience for stuff. No, like the idea is you give give, give, give, just keep giving. And then one day you might have an ask. Like, maybe one day, I will say to you "guys, hey, you know, Bad News has been in pipeline for about two years now, and it's taken a pandemic and several, iterations of the script later, but you followed me on this journey. And now I really, really, really need you to download it and see it , so it was worth all about time."
You know, I will probably make that ask in a year or two. But the key is not having expectations for it. If you decided then not to watch it, absolutely fine, there's absolutely no pressure, but the idea of the personal brand route being that you build the product in yourself, you are the product because you are the one with the audience, right? And, the way that becomes a business model kind of harks back to the episode I did a few days ago about the online influence model, which is that in an ideal world, when you would then have multiple revenue streams off the back of your profile.
Maybe you would have the Alex Rühl action figure coming 2021, and have T shirts, or you might have online courses or ebooks and lots of different things. But you would kind of use that. Or maybe brands would want to reach out to you, to do work with you, or your sponsor, or that kind of thing. Like for the stuff that you're doing. But the key is that you're giving to your audience. I think it's really important to note that because people can think things like being a personal brand means you can be a celebrity, that's very wrong. It's like, no, no, no, essentially, the way I think of it is - you just become the world's teacher.
Anyway these are the four kinds of business models. Interestingly, they are kind of in order of ease, because I think something like a personal brand which is something all of my friends have gone down the route o which is putting out lots of content online; sharing your journey; building up that kind of I guess brand equity in yourself takes YEARS. It doesn't even give you loads of money to throw and all the time in the world, it takes years and years and years of doing it. It's not just an overnight thing.
Whereas service base, you could literally send an email today and tomorrow you could be on a shoot. That's how quick you can get moving on the on the service based stuff.
Product based product for enterprise is super poignant right now, because brands want these enterprises. Companies want this.
The artists way again, we're in a time where it's not practical right now for you to be making 100% of your income as a VR creator, doing kind of more passion projects. So getting those grants, being scrappy living humbly in order to one day be able to turn your creative piece into a product and then the last one personal brand.
Building up that brand equity in yourself your name.
I want to do a whole other episode about company names and why I've chosen to kind of step away slightly from cats are not peas as the brand that I talk about because although cats are not peas is my company, and it's the vehicle in which I do all of my work through, what I've realised is actually one day, there might be a time that I don't want to
hide. I don't want to work in VR, maybe there's a day where I want to take a couple of years off and go talk about I don't know - elite skateboarding or something. If I've tied myself to my company, then all of a sudden that becomes a bit more of a difficult pivot to make whereas if I'm just me, I'm just unapologetically Alex, there's a higher chance that it's going to be easier for me, the person to decide to step away and do elite skateboarding because you know, of course, why wouldn't that be the thing. That's for another episode.
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