Introduction
Timmu Tõke is the co-founder and the CEO of Ready Player Me (link to the Dealroom profile).
Ready Player Me is a cross-game avatar platform for the metaverse and more than 4,000 companies use their avatars in their products.
They recently announced their series B of 56 million dollars led by a16z with participation from some iconic names like Roblox co-founder David Baszucki, King Games co-founders Sebastian Knutsson and Riccardo Zacconi, and Twitch cofounder - Justin Kan among many others.
Before building Ready Player Me the young team spent many years building avatar tech for enterprise customers like Tencent, HTC, Vodafone, Wargaming, H&M, and Huawei.
During this episode, we discuss about grit and persistence, why you should Play to win, and the importance of knowing your strengths.
Please enjoy this excellent conversation with Timmu Tõke - co-founder and CEO of Ready Player Me.
Links to your favorite streaming platform
Spotify: https://open.spotify.com/episode/3a33PHHPvxoeScnVuSNOKe?si=DI02xDu-TNemHZ4p3U4i5A
Apple: https://podcasts.apple.com/nl/podcast/venture-europe/id1572789098?l=en&i=1000581129361
Other interviews with founders and investors operating in web3
Michel Traore - CEO of AnotherBlock Disrupting the music industry (link to blogpost)
Kyle Samani - Partner at Multicoin Capital (link to blogpost)
Transcript
SUMMARY KEYWORDS
metaverse, building, virtual worlds, avatar, big, people, game, years, grinding, worlds, world, real, obvious, different worlds, product market fit, vr, work, moved, founders, crypto
[00:04:52] Calin: Let's jump into in a metaverse. I know that you're eager to talk about that. So what is the Metaverse and how did we get here?
[00:05:00] Timmu: The Metaverse is a network of connected virtual worlds, 3D worlds that people visit to play games. To hang out together, to learn, educate themselves, do different things together in a 3D virtual world. That is the metaverse for us. And what's important in the Metaverse or for the metaverse to really exist is that the different virtual worlds and games and experiences need to be connected.
They need to be interoperable. You need to be able to travel between worlds seamlessly. It should. It should feel like using the internet browsing through different pages. And people spend a lot of time in the metaverse today through games.
That's 3 billion people that play games. 13 to 15 year olds spend more time, hanging out with their friends in virtual worlds to date than in real life. Maybe that's becoming a normal thing. So it's in one sense it's already here and people already spend a ton of time in the metaverse or in virtual worlds.
But on the other sites, all those worlds are kinda closed ecosystems. They're not interlinked. They're not connected. Doesn't feel like we have the metaverse. It feels like we have a few games. And for the metaverse to really happen, those needs words need to be connected. And that's why we are building what we are building with ReadyPleayerMe.
[00:06:17] Calin: Just to break that down, you would say if you go into Roblox, you can be and sit in Roblox. With some of the assets that you have there, but then if you go into another game, then you can be in that game. But there's no way actually to connect between all this virtual world.
[00:06:31] Timmu: Yeah, exactly.
In each world, you start your virtual world journey from scratch, create a new account, create a new out, buy new stuff. There's no connections between them and that's how the world works today.
[00:06:45] Calin: You hear the word or the term metaverse everywhere. Everyone is using it. Facebook just changed their name to the meta company. What do people often get wrong about the metaverse?
[00:06:55] Timmu: There's like a few things depending on what angle you, you look at. Look at this from, for us, the metaverse needs to be a connected, like it's a network of thousands of different virtual worlds.
It's not one game, one platform, one app. Now everybody says they are the metaverse, meta says thy are the metaverse. Nobody can be the internet. Like internet is like a collection of all those places essentially. And the metaverse, will be the same . So I think there's no individual platform that can ever be the Metaverse with a big.
I think the other thing is especially because of Meta, people think Metaverse is VR, it's not VR. VR and AR are different ways to experience virtual worlds and are going to make the metaverse even more compelling, fun and engaging, but they don't need to exist for the metaverse to exist.
Kids, spend a lot of time in Roblox playing together through a phone, through a desktop that's already here today. People spend a crazy amount of time in virtual worlds. I grew up, I played the games, and I'm 29, so this has been true for a long time.
The difference? What's changed is that the typical hardcore gamer world is changing into a more social one. So like people don't go to the games to play a specific story and be like hardcore gamers. They go there because they want to hang out with their friends, the metaverse is the kind of, the next generation of social media.
And also crypto, web3. It's also usually connected with the metaverse and it needs to exist for the metaverse. It depends on the angle you want to take at this, but, we don't think the metaverse is like a separate thing from web3 in that sense.
And web3 can be the technology or set of technologies that provide ownership in the metaverse. And it definitely comes with the philosophy of building a more open and connected virtual worlds, which is important for the Metaverse. So it plays a huge role, but it's not the metaverse, and you don't have to have a crypto game for it to be a part.
[00:10:22] Calin: And you started like very early, like in 2014.
So just for some context. In 2014, Apple launched Apple Watch. Apple bought also Beats. Facebook bought WhatsApp, but also they bought Oculus. So what was actually the insight that you had nine years ago that this is going to be a thing and for you to start actually ready player? Me?
[00:10:45] Timmu: Yeah. So for background first, I grew up playing a lot of games Runscape to be specific.
So it's obvious that virtual worlds are interesting. My first kind of hustle was selling Runscape Gold to other kids in school. So I was always interested in their whole kind of space because of that. And then, before 2014, 3D printing really became a big thing. And then I bought some printers, started printing stuff, messing around with 3D printing, figuring out if we could build something around that.
Then 3D printing, led to 3D scanning. So we had started scanning objects, stuff like that. Then we started scanning people. So we had some background in all the 3D stuff. When Oculus was acquired by Facebook, one of the events you mentioned, we realised that VR is probably going to be a thing.
VR is going to be social because Facebook bought it. And in VR the way you speak with another person, you connect with another person is through an Avatar. And creating an avatar that resembles yourself and not just a cartoon was not possible back then, and it's still hard.
And that was like when we started, it was like, okay, Oculus is gonna be a thing and avatars a big feature. We have some background in scanning. Let's try to make scanning possible first, and then make scanning easy for people and then just kinda make it easy for anyone in the world to create an avatar of themselves.
We started from hardware, building a scanner with hundred cameras, like a big studio. Then making that studio into a smaller kind of photobooth shape kind of thing. We had this photo booths in airports and museums and stuff like that.
Then made that into a software only solution using the database we collected. So we took all the faces we collected and used a deep learning solution. So we used the face database to build the selfie to avatar conversion tech and build that into an SDK and started selling that to big game developers mostly.
So we worked with Tencent and Huawei and HCC and Verizon and many others. So it's just games for telcos and H&M. And what ended up happening is that we started selling the sdk, which is converted to out from a selfie to an avatar in different styles.
And what the companies needed was the entire system around that. So like the body types, hair, all this stuff around that you need to build the entire avatar system. So we ended up custom building that and we ended up custom building like dozens of different avatar systems over four years. And then eventually, dropped that position and built ReadyPlayerMe.
And we were in a perfect position to do that because we had built, many different avatar systems for many different years for different game engines, and we really understood what developers need and when we launched ReadyPlayerMe then it like really took off.
[00:13:37] Calin: Love it. You guys built a true moat, right? After having so many real faces transformed to an avatar with the hardware solution.
Do you remember the day that you went to Casper or other co-founders and said Hey, let's just go and let's just scan all this faces because we need some avatars?
[00:13:58] Timmu: Yeah, we have four co-founders. Casper, I know since I was like, I don't know, 11 or 12 we did a band together with Casper when we were growing up. We met when we were kids. And the other, one of the other co-founders, CTO, from the same city with me we know for also a long time. And then the fourth one I met in university, it was like a natural evolution of things.
So it was like messing around with different stuff, 3D printing to scanning things to let's build a scanner. I don't remember the day when we like figured out we should do that. But it was just like, okay, like what else can we do? What else can we do that is valuable, could be valuable, that is cool to build.
And, we were kids, right? 20, I guess 21 maybe.
Kids from nowhere that knew nothing about nothing.
That's what I always say. So it was a lot of learning, in the way. But it was many iterations and then staying focused on on solving the kind of general problem.
[00:14:58] Calin: Got it. And was there at any point a revelation like, Shit, I think we're onto something, or the opposite? Did you have any moment where you doubted that this might. Not work out actually.
[00:15:09] Timmu: Yeah. There were like a few moments that we were like, okay, this is like happening.
And most of the first ones were like, not actually happening . It's like the young founder that like completely overestimates their product market fit and gets a few press articles and you're like, Oh my God. This is amazing, but it's actually not. So anyways, we had some false starts for sure.
I think the moment where it like became more real was when we started building those kind of enterprise avatar systems and licensing the tech and custom building these stuff around that. It wasn't a scalable business, but it was cash positive for growing. We had a lot of big customers.
And that was like the first moment where it was like, okay, like we actually built a business that is a business and then it wasn't scaling fast enough.
So we decided to drop that business and build ReadyPlayerMe. And when we launched ReadyPlayerMe, then it was like quite obvious from the very beginning that this is like going places, It was like people were hitting us up everywhere.
We had a very strong pull from developers. And then it was like also like after having built this for a long time, you're like, Oh my God, are we overestimating this? Are we, is that real? Is it like real product market fit? Like it sure feels like this.
Then it was a period of like just trying to figure out if how legit that is and if it scale and all that stuff. But yeah, with ReadyPlayerMe, it was very all of the typical kind of signs of strong product market fit.
But after six years of building out there, so we really knew what we were doing when we built the first version of ReadyPlayMe.
And that's the real note. We became experts in something that now is obviously very valuable over the years of doing that when it wasn't obvious that it will be valuable. So I'm not sure if it's a good strategy I would recommend to a friend grinding for six years and waiting for the market to, get there.
[00:17:03] Calin: What was the tinkering that you continued to do with a product, with a company when you are thinking that you have product market fit, but actually you hadn't and what kept you going for six years? What was like the motivation for you and the team?
[00:17:18] Timmu: Yeah, like we built the new product every year basically.
So like from the hardware days to then, when we first built a software solution that took 20 photos, tried to scan a person, make a realistic avatar. Then we built like this kind of deep learning solution from one photo. Then we built some consumer apps ourselves to learn and understand what people want.
In avatars, we built chat roulette with avatars. It was just like trying to be better trying to become, trying to just be better every year, every month, whatever.
And what kept us going? For us avatars are like such an important part of the whole like virtual world's experience and Metaverse experience.
I can't remember how many times I was like, oh, 2018. Watch out guys. This is gonna be the year of the avatar ,but it wasn’t. It wasn't 19, either 2021. You could see coming, it was closer every year, like we were closer with the product and the market was closer.
Everything was moving in the right direction. Like we initially made a bet on VR, which obviously didn't happen as fast as people expected. So that was a kinda disappointing, but then we found another target and we realized how this could be used in many other places.
We were pretty persistent. I think we were quite determined. That could be good or bad, it could be bad because you can just keep on doing something that has no absolutely no hope. And there's very hard to say in there, sixth month or the fourth year , if if there's a real hope or not.
[00:18:55] Calin: So for the entrepreneurs listening right now, if I'll have to come like from a third position and try to understand like, why were you successful in the end is because you were maybe attacking a market that is big enough, but it was also like the adoption rate maybe was not there yet?
[00:19:21] Timmu: Yes. We were so certain that this is like going to happen and so it was like obvious for us to just keep trying, keep building and it was like we, we did deals with big companies.
It was exciting to build all those things. Like it was fun too. And we got got a bunch of acquisition offers over the years. So avatar tech itself was obviously valuable, but it wasn't obvious in how to build something that can, be a 10 or a hundred billion company and we were not ready as founders as well. Like we needed to learn a lot. But we kept on going and now we have a chance to build something big
[00:20:01] Calin: What is Ready Players me role in the future?
[00:20:07] Timmu: So our goal is to breakdown virtual walls to build a more connected virtual world. And we do that by building a cross game out platform that anyone can use to travel with their avatar across many different virtual.
The metaverse, as we discussed, is not a single app. It's a network of thousands of worlds, So it makes sense for you to have an avatar that travels across worlds becomes your digital identity that kind of carries your digital assets, NFTs and so forth around the different worlds.
An avatar is just naturally the center of your metaverse experience. And it makes sense that it's persistent across worlds. And that's the first thing we're focused on, building that.
We work with different games and more than 4,000 companies now that use our avatars. So that's what we do. And our goal is to be the default way you use your avatar across many different worlds.
That's what we want to be as with ReadyPlayerMe. And there's a lot of other things we can do to break down virtual worlds.
[00:21:17] Calin: You just recently raised from a16z, how does it feel to get the validation and get investment from one of the founders of the first web browsers?
How does it feel after working at it for nine years? Pivoting so many times?
[00:21:34] Timmu: Yeah, it feels awesome, it's all the theory of just keep on going and just learn every day, just like work hard, all this thing. Like be like given enough time. All these years, it's like, just keep on going.
Be determined, do your best. So it's it is very awesome to, to be here, but also we understand that now the real work starts. Now we have the opportunity to build something now it's only us that can be the blocker, , and obviously there's the market.
There's things we don't control but It's time to build, and it feels great. a16z has always been for me personally, the top fund I wanted to work with. It was amazing to make the deal happen, but also once you get to the place where you start being closer to, actually being able to do that deal, like you know , So it's definitely. Definitely great. But yeah you feel that when it's happening.
[00:23:22] Calin: In closing, you just told me that you had some sashimi yesterday and you couldn't actually sleep that well during the night, so thank you very much for doing this. I was wondering like, how do you deal with bad days? I remember actually you saying just get some coffee and let's go, because I would assume that you do have some bad days as well as a well.
[00:23:42] Timmu: I don't know, like you just deal with it. Sometimes you just need to take a little bit of time to think and read. I think reading is, for me, it's like a great way to reorder my mind. I think that's what I do when I'm like, completely lost or slammed or overwhelmed. You get used to it like you're overwhelmed all the time.
There's so much stuff going on all the time. Sometimes this stuff is bad. Sometimes it's good. For me personally it's much easier to manage the bad things, honestly. Like this is just okay, it's a problem. Like I'll figure out what to do. We'll just do our best and to solve that problem, versus like when things are going and you're raising funding and you're closing big deals and like you're doing things that.
Are just super exciting and that's actually also hard, that's also stressful in that sense. And like I personally haven't fully figured out how to manage that part. There's two, two parts. There's like the downsides and upsides, but there it's all very overwhelming and and intense.
But I think if you're doing this for the right reasons, then that's exactly what you've signed up for. That ends up in enjoyment and in pain as well. But yeah it's a marathon, so it's necessary to Pace yourself. And when you're very excited about things, then it's very hard to pace yourself because it's the only thing you wanna do all the time.
Actually one thing that really changed the game for me, and was a big contributor, was stoicism. I read Marcus Aurelius Meditations like five years ago. Maybe six years ago, I can't remember. And since then I've read all the stoic writings, books, stuff that is out there.
And, that's what I strive towards. But nowhere close to being a real stoic. But I think this is a good mindset for an entrepreneur, just dealing with things, doing your best, focusing your efforts and doing your best work. Yeah. So I think like those things help.
Meditation helps for sure. Working out helps. Eating healthy helps, so you can do things like that to generally be more resilient. But Yeah, there's no cure. It's gonna be hard. It's gonna be intense and it's gonna be overwhelming , But I think that's awesome.
[00:25:45] Calin: a marathon pace yourself.
I like that. And what is the best and worst advice you have received?
[00:25:50] Timmu: Like the worst advice is like the,
“be careful, those are big companies. You can't compete with them. Be careful, take it easy.”
All this stuff is like, Not good advice, . And that's that's a lot of it in smaller countries in the European ecosystem, people don't think big, they don't play to win, they're like almost like playing to not die. That is not good. That is not good advice.
[00:27:30] Calin: most impactful advice you have received?
[00:27:32] Timmu: So one of the things is, Which is very obvious, but like you need to really understand what your strengths are and your team's strengths are. And like we were like trying to go against our strengths for a while. We were like, Okay, we're gonna build this like deep tech company.
We're gonna build deep learning algos to create avatars, which we have done. We are gonna compete with the best people in the world and the biggest companies in the world. I am not a scientist , so it's not gonna happen. , it's like there's no way , like if the CEO or like the founders are not like the top scientists of the world in the space and then it's just not gonna happen.
Like it's gonna be. People that get paid one or two, $5 million a year, they're doing science that are like dedicated their lives on this. And like big companies are like, do that or in research and like just, there's no way to compete with them. We were like going in the wrong path for a while with that.
And we had like most of the team was data scientists. But when we realized what we were really good at Building a product, building something that is easy to use, building great developer tools, building like end to end solution. Working with developers like that's like what we do well.
And that was like one of the points where we started moving away from the kind of enterprise licensing, SDK licensing. And we moved towards like building a full product for developers which then became ReadyPlayerMe, or that's where we decided to, that's where we ended up deciding to build.
And it was a very specific meeting. I remember when I spoke with one of our advisors and it was like, making it very obvious. So that's one of the, one of the ones I can remember now.
[00:29:19] Calin: So know thy self! And if Timmu from 10 years ago would listen to this episode, what would you tell him?
[00:29:25] Timmu: I don't know. Just keep going man. Just fucking keep going. It's gonna be fine. just keep grinding. Grinding is not smart unless you learn from it too.
And like you actually, improve with your operations. You just need to put in the work. And it depends on your background. If you come from a Top city, go to a top university, get top network right away. Like you need to grind less, but you need to grind before to get to those places in the first place, but like you can get plugged into into a network and into into the world in a better spot in that sense. But if you start from 0 you learn all those things yourself, then it just takes a lot of grinding.