When one thinks of Virtual Reality, it long seemed like a science project or a sci-fi film that could never be achieved. However, the technology has evolved so much that today, virtual reality is indeed a reality and people are so easily entering into virtual experience.
Featured as the Cover Story of this issue of The Enterprise World’s selection of Top 5 AR/VR Solution Providers In 2022 is Paracosma, a virtual reality company dedicated to making better realities through Art, Science and Experience.
In this interview with Ken Ehrhart Founder and CEO, let us find out more about the company.
Tell us about the company.
Paracosma is an Augmented and Virtual Reality (AR/VR) Solutions Provider headquartered in San Francisco, USA, with sales and technology offices in Tokyo, Japan and a development center in Kathmandu, Nepal. With over one hundred employees, we are able to provide our clients with a one-stop-shop for all things 3D. Paracosma offers custom AR and VR application development, as well as providing complete development teams to clients on a long-term basis.
We create entire virtual worlds and produce live virtual events. We offer 3D model creation, including high-volume production of photo-realistic models. Paracosma also creates synthetic images generated from simulated 3D environments to train deep-learning AI systems. In addition, we have a 360-degree video production team and 360 video distribution platform that is offered as a white-label service.
What were the initial challenges you faced?
In 2016, when Paracosma was founded, consumer VR just launched with the release of the Oculus Rift and HTC Vive VR headsets. It was a year later that Apple released ARKit and Google released ARCore to enable mobile AR experiences. All these AR/VR technologies were very new. Our challenge was to learn the technologies and platforms and what was possible and how to create AR/VR as fast as possible.
We needed to ramp our expertise, capability and capacity faster than the clients that were looking to us to know more than them and to guide their projects to completion. As a result, we really had a culture and practice of growing faster than the general market. To this day, we continue that focus on integrating the latest technologies and techniques and innovating through our own R&D to maintain relevance in a fast-evolving sector.
Which was that point that triggered the growth of the company?
The key inflection point for Paracosma came with our success in meeting the needs and exceeding the expectations of our clients. As a result, the percentage of our revenues that came from repeat clients continually increased year after year. As we formed long-term partnerships with our clients, we generated ongoing demand. As fast as we could hire and train engineers and artist, we could deploy their expertise working for existing clients. This enabled us to invest in growing our team without the fear that we would get out ahead of the general market.
Today we see another key inflection point in our markets. With clients’ adoption of remote work practices, there is no longer a significant distinction between in-house direct employees and external team members. This means our expert engineers and artists can now integrate directly into clients’ production teams. It is the clients’ roadmap, project management, task assignments, with our developers and artists supplementing and extending the clients’ direct employees.
Simply put, in the past, companies outsourced AR/VR projects to us, now they insource our experts on a long-term basis. This creates long-term visibility for us on demand, so we can again ramp our recruiting, training and deployment as fast as our clients want to grow. With more and more outstanding AR/VR companies being funded, we provide them with the opportunity to grow more quickly and to a greater level of quality of delivery.
What is the reason behind your company’s long-standing success?
We are focused entirely on facilitating our clients’ success. We are not trying to compete with them in their markets. They are the domain experts. They know healthcare, manufacturing, oil & gas, education, hospitality; they know standards, training and assessment requirements. We are focused on increasing their AR/VR technology and execution expertise, capability and capacity to compete and win against their competitors.
They also own their IP and innovations. We are a, usually invisible, behind-the-scenes partner that jump starts their time to market, product delivery, and revenue growth. As corporations, venture capitalists and private equity firms invest in more and more companies in this sector, there is an ongoing shortage of domestic, direct employee candidates. We solve that issue by bringing a global talent base to bear on meeting that demand.
What are the products/services the company focuses on? How are your services different from those in the market?
There are a lot of agencies and studios that have a few in-house AR or VR developers and maybe a designer and 3D generalist artist. But, Paracosma has the scale to bring specialization to bear. That allows us to raise quality standards higher and deliver a better end product. For example, on our art team, we have modelling artists, texture artists, shaders, lighters, riggers, animators, etc. Within modelling we have hard-surface modelers, organic modelers, sculpturers, fur experts, etc. As a consequence, we are able to produce very high volumes of photorealistic 3D models.
These models are literally being used to replace studio photography with rendered images of 3D models. Similarly, there are specialists across our development team. This allows us to raise the bar on both quality and efficiency. Furthermore, when we supplement clients’ in-house developers and artists, we do not have to provide a single general-purpose consultant, rather they can combine our specialist on an as-needed basis. So, they always have the talents they need supporting their project requirements.
How do your services help companies to leverage new technologies to benefit business?
Because of Paracosma’s large bench of talent, we not only have the ability to leverage specialization and deep expertise in multiple areas, as each new technology is introduced, innovation becomes available, or platform or tool is announced, we have the ability to assign engineers to immediately start learning how to implement those innovations to make our clients’ projects more successful.
We do not narrowly focus on select platforms or just marketing our own tools, we learn and adopt whatever is best for our clients. Though, in many cases, we ourselves are innovating as we invent techniques to realize our clients’ vision. Paracosma is regularly recognized as one of the most innovative AR/VR companies because we are continually seeking to push the boundaries to deliver best outcomes.
How do you help companies increase business scalability and sustainability?
Scalability is really a function of availability of people (developers and artists) and expertise. That is fundamentally what Paracosma is providing as a business. Sustainability, for a business, for our clients, is about efficiency and value as well as long-term consistency and reliability. Paracosma is regularly recognized as one of the most trustworthy and most reliable AR/VR solutions providers. We like to say we deliver US innovation, Japanese customer service and Nepalese value.
How do you decide to take the company a step further in terms of your products/services?
Most of what we have been discussing was in reference to developers and artist, their individual skills and talents. And, for most of what we do, it is the manual, direct contributions that those individuals and teams make that determine the quality of the output. Right now, manual modelling is producing the highest-quality 3D models.
But, as a business, Paracosma is pushing this a step further. We are seeking to harness technical innovation and tools to increase the efficiency of our developers and artists. In the case of developers, we are creating software development kits (SDKs) and code repositories to regularize and implement best practices across our teams.
For artists we similarly have model and material libraries that can be used to accelerate the creation of 3D models. Beyond that, we are investing heavily in R&D to disrupt our artists by implementing automated model creation based on advanced machine learning techniques. AI (artificial intelligence) is, in fact, becoming a bigger part of our business.
One of our product areas is producing bulk (hundreds of thousands of) synthetic images to train deep learning systems. So, we are now expanding a team of Data Scientists alongside our teams of AR/VR Developers and 3D Artists.
What do you think are the responsibilities of an entrepreneur?
As a venture capitalist since 2000, who has been active in founding and cofounding many ventures, I have thought a lot about this question. Everyone brings their own experience to entrepreneurship. In some cases, there are Founders with the talents of a CTO (chief technology officer). They made a new invention that becomes the basis for a company or an entire sector. Sometimes, the Founder is a business expert. They see a market opportunity or customer need that is not currently being fulfilled.
Those are the catalysts for starting a company. But, from there, those entrepreneurs need to manage all the other aspects of the business, from hiring, to product development, production, marketing, sales, operations, support; with usually a huge focus on fund raising along the way.
Once their company is off the ground, the founding entrepreneur can bring on other leaders to scale and improve efficiency. Yet, it is usually the Founder’s vision and passion, the things that drove them to start the company in the first place that is most difficult to replace. And, it is that vision and passion that gets the company through hard times, and that inspires employees to join and give their best efforts. Their role is really to sell their vision, to employees, to clients and to investors.
Can you please brief us about your professional experience?
My entire career has been focused on advancing technology. Initially, in a family business. From 1996 to 2000, in analysing technology trends for (public stock) investors, as the Director of Research for a Forbes-backed investment newsletter. Then, as mentioned, as a VC since 2000. As a VC, I have invested in over two dozen companies, where my role was to help them launch and scale.
Since 2010, I have been exclusively focused on helping globally-leading enterprise SAAS (software as a service) companies enter the Japanese market. Paracosma is really a culmination of that experience. Not only had I gained the experience to start a company, but had the vision to found Paracosma. Paracosma was founded based on the understanding that we are not just seeing the evolution of AR and VR, but witnessing a much more fundamental shift from 2D to 3D computing.
Just as we transitioned from text-based message boards to the world wide web; from analogue audio to digital video; from PCs to mobile devices; from on-premise to cloud software; we are now transitioning from 2D to 3D technology. This is enabling not just AR/VR but also self-driving cars, additive manufacturing (3D printing), deep-fake videos and, as we have seen, studio photography replacement, synthetic images, and virtual movie production.
What are the key achievements of your entrepreneurial journey?
As a cofounder of Concur Japan, Marketo Japan, Demandware Japan and others, I was able to replicate the earlier success my VC firm, SunBridge, had in cofounding salesforce.com Japan. This was financially rewarding and provided me with the resources to self-fund Paracosma through its initial development. But, beyond that, it provided the opportunity to work first hand with the Founders and CEOs of some of the best global SAAS companies.
I was able to see what it takes to be successful delivering world-class solutions to enterprise clients and the demands faced to meet enterprise requirements. I also certainly benefited from working with dozens of smaller companies as well. I have seen companies both succeed and fail for almost every reason possible. And, that experience is invaluable in launching and leading Paracosma. Now, having Paracosma recognized as one of the “Top 5 AR/VR Solution Providers” is really a high point of my journey as well.
How do you look after your employees? What makes your team unique?
One of the chief lessons of the Pandemic is that employees are what makes a company special and enables it to succeed. Companies do not succeed because of the design of their office or their headquarters’ location. Companies succeed because of the hard work and dedication of their employees. And, because of the collaborative teamwork those employees are able to deliver.
We were lucky to be an AR/VR company during the Pandemic because we were able to meet and collaborate virtually. We created virtual offices, a virtual auditorium for company town-hall meetings, venues for movie festivals and other live events. And, this really taught us to experience our own AR/VR technology and what role it could play across remote teams. We had to pioneer virtual movie production because we could not produce 360 movies on location.
On a whole, a unique feature of our team is that it was founded, recruited and scaled to focus on AR/VR and 3D. We live and breathe 3D. We are not a legacy web design firm, nor a legacy mobile app company. Each of our employees is expert and specialized in AR/VR development and 3D art. That is where we succeed as a team and a business.
What would be your advice to the budding entrepreneurs?
Follow your passion, not a market opportunity. Markets change, companies pivot, hype fades. Don’t start a company because you see an opportunity. Start your company because you feel it is your destiny. If you truly feel that you need to start your company and cannot pass up that chance, then you will have the passion to survive the inevitable hardships and challenges you will face.
If you pursue an opportunity and that opportunity shifts or fades you are liable to give up the pursuit. If you feel you cannot live without creating music, painting, writing, or founding a company, then your stakeholders will feel that passion and dedication. They will recognize that you will make the efforts and sacrifices to succeed, because that is part of who you are and what you believe.