This article was originally posted on the Tech North website.
We interview Clemens Wangerin, managing director of virtual reality tech business Starship, on their product concept, how they pitch to investors, and how they’re tackling the challenges of growing quickly in a fast-moving sector.
Starship is a digital media, entertainment and technology company based in Liverpool.
The virtual reality specialist, which now has a headcount of almost 50, was formed by a team with decades of experience in the industry, many of whom had worked in the publisher-owned studios that previously formed the heart of the city’s digital scene.
As they were featured in this year’s Tech Nation 2016 report, we thought we’d find out a bit more about how they got started, challenges they face, and what’s next for the company.
So we spoke to managing director Clemens Wangerin, and here’s what he had to say.
Clemens Wangerin, managing director at Starship
What’s your elevator pitch to investors?
vTime is the fastest growing social virtual reality network in the world with active users in over 150 countries.
It’s a free app you download from the VR app store on your mobile. Your phone is then plugged into a headset called an HMD (Head Mounted Display) like the Samsung Gear VR or Google Cardboard. It’s a whole new use-case for mobile phones, and one that the mobile phone industry and consumers are getting increasingly excited about.
In conjunction with the HMD, your phone basically creates a 3D world that surrounds you and that you immerse yourself in. The 3D effects of the visuals and the head tracking means you can look behind you and around you in the virtual world, just like you would in the real world.
vTime is a communications platform at its core, allowing you to find yourself in a virtual reality world where you are represented by an avatar you have customised. You invite other people into your session, or join other people’s session, with everyone represented in avatar form. The surroundings of your session, what we call Destinations, can be changed at any point by the host from one of our increasing number of pre-sets: from a national park in North America, to the Antarctic, around a nighttime campfire, to a tropical beach, to outer space … ultimately anywhere you can think of.
Some of the user stories we hear from people using the app, which is currently particularly popular in the States, is that they find it a very powerful way of socialising, especially when they live far away from other people in their social circle. It makes them feel like they’re somewhere else, and importantly it makes them feel like they’re there with someone else. This creates a sensation in people spending time in vTime that we have come to refer to as ‘social presence’
vTime Terrasse De L’Amour
What are Starship’s roots?
2013 was the year Starship really took shape as a company. We’ve all known each other or worked in the same companies for many years. Collectively we have been working in the tech industry for 20-25 years, with Martin Kenwright, our founder even a bit longer than that.
Martin previously had two companies in the tech space and sold his last one to Sony in a trade sale in 2007. After five years he decided he wanted to come back and still be at the front, driving the bus rather than just being an arm’s length investor or sitting on a board as a non-exec. He’s an incredibly passionate, shrewd and creative entrepreneur.
Starship is a different company by design. Martin wanted it to be about creation of original ideas, and the IP(intellectual property) that comes with that, taking each idea as far as we can and validating the market.
vTime is the latest idea that we’ve brought to the market. Our team is currently growing and we are actively recruiting – we are always looking for talented people, particularly those enamoured with virtual reality and augmented reality. Recruitment for companies everywhere in the UK is a real challenge – virtual reality is hopefully giving us an added extra edge when it comes to attracting the best people.
vTime: The Orbital
Were your initial challenges different to many start-ups?
Our challenge was the massive acceleration of growth when we started up because we had funding in place. With a high-net-worth individual funding and driving it, you can start executing from day one, but you don’t leave perhaps as much time for the planning because you want to get on with things and start seizing opportunities.
We went from four people to 24 in 12 weeks. We had the first demos within three months. The first title was out and was heavily featured by Apple on the app store around the world not even a year later – that’s a very short time. From literally nothing to award-winning studio and debut title launched with the support of Apple in 15 months.
The biggest challenges were growing the team, finding the right equipment and tools the team needed, finding office space all the while maintaining a high level of productivity throughout to allow a speedy release of a tangible end-product that generated revenue.
Why did you choose Liverpool for your HQ?
One of the things that sets Liverpool apart is the level of skills expertise and experience in the sector, which is above average compared to the rest of the UK. The fact that all the people we wanted to work with where already here therefore helped.
This goes back to the early ’90s, when Psygnosis was acquired by Sony in preparation for the introduction of the original PlayStation. In the early ’00s there were three or four big studios in Liverpool that were owned by big publishers. But the publishers closed down their development operations due to changing market conditions and ultimately consolidated.
The younger staff in the studios were more likely to migrate for jobs, but by this point the industry had matured and many had partners with their own careers, or kids in the schools, so the majority stayed and many formed new companies.
In the last five years in particular, around a dozen companies have established themselves that are now probably turning over a few million pounds a year. They’ve been able to do that because they are headed by experienced professionals in their field with a very skilled work force.
It felt natural for us to stay in Liverpool. We would’ve struggled to scale up as quickly as we did in the early days as we could rely on a network of people we knew to manage the initial growth spurt.
What’s Liverpool’s digital scene like?
My experience is that it’s almost a microcosm of what is happening worldwide in the sector. People know each other, it feels small, although based on value it’s large and worth over $100bn a year. It feels quite communal, there is a lot of openness and open channels of communication.
We’re in the Baltic Triangle, a part of the city that’s become home to many companies in our sector, which is gathering some attention nationwide. You bump into people you know here all the time. It is less isolated but there’s also space to get on with running your business without feeling like you’re in each other’s pockets.
We use local companies for additional work as much as we can. Our web development and graphic design is done by Liverpool companies Kitsune and Smiling Wolf respectively. We haven’t had to look elsewhere for qualified and skilled suppliers, and that has probably also improved in the last five years.
Do Liverpool’s digital companies collaborate and learn from each other?
I think so yes; there is also a genuine treasure trove of information and opportunities to collaborate online of course, so for digital companies that’s almost as good as doing it in person. Liverpool has the KIN2KIN network for example, which is great for exactly that.
There is also a bunch of grassroots events. Some of our tech guys from Starship organise virtual reality meet ups with people from other companies for example. That’s probably where some of the collaboration happens. I’ve also seen collaboration by other companies with bids for public sector funding for the industry for example.
What challenges do you face now?
It’s recruitment. With organic growth, it’s not an issue but we’re in a sector where if we do have a break-out hit, and we want to be able to add people more quickly, we’re not sure whether we’ll be able to handle that. I think that’s the same across the UK.
Recruitment is something that takes up more and more of our time; we’re looking for good fits to existing teams and finding people with potential who are at the start of their careers and who we can develop. We engage with the universities locally in Liverpool and with some further afield like Newcastle to find graduate talent.
We have had global hits emanating from Liverpool; when we had publisher-owned companies there were PlayStation titles like Wipeout, Motorstorm or Formula One selling millions of copies each year, and there is no reason why the city can’t produce hits like that again on a regular basis.
Is it difficult to innovate alongside the day to day running of Starship?
We are heavily R&D driven and that goes hand in hand with innovation. There is not a rule book on that, you have to establish a lot of these things yourself and create a culture to go along with it.
For example, our app vTime, doesn’t need any input device to control it – no mouse, tapping or swiping – you simply gaze at the menu options to activate them and that took us quite a while to figure out. Day to day becomes about solving that kind of problem. We don’t know anything else.
What are your thoughts on the Tech Nation 2016 report findings?
It’s great to have the report in our hands, something tangible in one place that gives us a real yardstick of where the sector is at right now. For me, it will be almost more compelling to see what this report will look like in five years’ time, knowing how much will happen in the tech industry during that period.
What’s the best thing about the digital scene in the North?
It’s very diverse, and due to the geographical and regional diversity, it brings out a real interesting mix of end products.
When you see what’s happening in the digital sector, it’s interesting to know that not just one player dominates and it’s spread in pockets across the country.
Being originally from Germany I’m always reminded that people don’t just recall Berlin when talking about my home country; they mention Hamburg or Frankfurt or Munich and many other cities. There is the potential for that sort of decentralisation to manifest itself in the North; clusters in many of the cities are starting to show signs of strength in that regard.
What key things would improve the North’s digital economy?
Good links to London and across the North are of course important. I hope Liverpool will be connected to the HS2 link for example. Being in digital means we serve a global marketplace so internet speeds could always be a bit faster and we’re throwing our support behind more local internet exchanges.
What will ultimately help everyone is more successes originating in the North, which will generate more wealth and more successful exits, with money reinvested by people who have been successful in the sector. It creates a virtuous circle.
What’s next for Starship?
We are focusing primarily on vTime for the remainder of this year. We are looking forward to having it available to anyone with a virtual reality headset by Christmas 2016. We have a lot on our plate and we are having lot of interesting conversations on the back of vTime so we’re looking forward to bringing some of those to fruition.
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