1. Let’s start from the beginning. Please introduce yourself and tell us what’s unique about your company and what you’re building? And what’s the driving vision behind it?
Hi, I’m Soeren, COO of Wonderland. We are a VC-backed startup founded and registered in Germany. However, we see ourselves as an international company. Our team is made up of people from seven different countries, all working remotely.
What sets us apart is our strong focus on technology. Our company was founded to first solve a technological problem and only then to start following a traditional business plan. In 2018, our founder and CEO, Jonathan Hale, wanted to develop WebVR games. However, he quickly realized that existing frameworks and engines were not well-suited for this purpose due to significant performance issues and poor development workflows.
The performance challenge with 3D web experiences is twofold: Firstly, they need to run smoothly in a web environment, where they are inherently further away from the GPU than native applications. Secondly, they must be accessible across a wide range of devices with browsers, including PCs, mobile phones, and VR headsets. Optimizing performance for these various platforms is crucial, especially for larger 3D web experiences.
In addition to performance issues, Jonathan was frustrated with the development workflows. For example, the Unity WebGL exporter can take easily 15 minutes to build, while Three.js, a code-only framework, lacks a visual editor, making it difficult for interdisciplinary teams to collaborate effectively.
The problems became so frustrating, that Jonathan decided to stop developing WebVR games and create a new game engine that would be both highly performant and efficient to work with.
After writing the first lines of code in 2018, Jonathan secured VC funding in early 2022. I joined shortly after. Together, we build the corporate structure, with a key focus on hiring an exceptionally skilled rendering team. Our efforts paid off with the release of Wonderland Engine 1.0.0 in Q2 2023, a major milestone for our startup.
Now, our focus is gradually shifting toward building the business case. Solving the technological problem was the first half of our journey (which of course will continue indefinitely with ongoing engine improvements); the second half is finding enough people willing to pay for the solution.
2. Building an XR company from the ground up is no easy feat. What were some of the biggest challenges you faced during the early stages, particularly in terms of funding and securing initial investment?
Securing our first investment took around 12 months. Jonathan found pre-seed investors who were drawn to his vision and technical expertise. His deep passion for solving web development challenges convinced them to back us. After the launch of 1.0.0, our focus has shifted to refining the business plan, and our investors’ focus has also transitioned from technology to building the business.
This phase, often referred to as the “valley of death” in the startup world, is particularly challenging. While we’ve proven we have an excellent product that users love, the next step is demonstrating that it can be scaled into a VC-backed business. Our key task now is generating revenue to strengthen the company for the next fundraise.
Soon after launching 1.0.0, we realized that relying solely on enterprise licenses for WebXR developers would not suffice, given the current market size of VR and its sub-market WebXR. After some initial struggles, attending GDC in early 2024 provided the clarity we needed. Conversations on the trade show revealed that developers face significant performance challenges not just in WebXR but across all types of 3D web development, particularly with web applications running on iOS devices and Chromebooks.
At GDC we also learned about the renaissance of web games, with major platforms like YouTube, Discord, LinkedIn, and Telegram launching their own web game platforms. Given that Wonderland Engine is optimized for the high frame rates required for VR, it is also well-suited for any other single display 3D web application, especially for larger scale experiences.
Following GDC, we began pivoting from positioning ourselves as “the development platform for WebXR” to “the fastest engine for 3D web and WebXR development.” We believe this adjustment to the business model will unlock new revenue streams by expanding our target customer base, ultimately making it easier to raise our next investment round.
The key lesson we have learned in this second stage is that while solving a problem with your product is crucial, achieving product-market fit is equally important. Sometimes this fit comes after one or more adjustments to the business model, which can only happen if you are consistently engaged with the market. Therefore, it is essential to talk to as many potential clients as possible to understand their needs, even before your product is fully ready. Otherwise, you risk creating a technologically advanced product that solves a problem but not one urgent enough for people to pay for it.
3. How have you found the right talent to expand and scale your company’s team?
Finding the right technical talent in a highly specialized industry wasn’t as difficult as expected. The more specialized the field, the fewer people possess the required skills, and those individuals often know each other or are easy to connect with. For example, as a student working at the Laureate Forum in Heidelberg, I once spoke with a mathematician who mentioned that only 2-5 people in the world truly understand his work. Similarly, in the niche area of performance optimization for 3D web rendering, experts are few but it is easy for them to connect with each other. Jonathan connected with one of our senior rendering engineers after tweeting about a specific web rendering topic on X. A colleague responded with a comment so specialized that only a handful of people could have made it. The real challenge in hiring this kind of talent is securing the funds to pay them and pitching the company’s vision so compellingly that they are eager to join.
On the business side, the challenges differ significantly. While there are many skilled professionals, finding those who fit both the required skill set and the current stage of your startup is crucial. For example, a senior salesperson with a strong track record in established companies might not be the right fit for an early-stage tech startup. Moreover, early-stage startups often have young, evolving corporate structures, which can be appealing to those who thrive in dynamic environments but may not suit those who prefer established hierarchies and processes.
4. Sales can be a significant challenge in the XR space. What strategies have been most effective for your company in finding new clients and growing your business?
On a high level, when it comes down to sales, the million-dollar question for an early-stage startup is how to allocate limited resources between marketing and sales. If you overemphasize marketing, you might build awareness, but without a process to identify and engage “warm leads,” it will not translate into sales – especially given the long sales cycles typical of B2B software. On the other hand, focusing too much on sales can lead to inefficient cold outreach, targeting people not interested in your product. We aim to split resources evenly between marketing and sales. To ensure a strong focus on both sales and marketing within the company, we recently established a Chief Revenue Officer (CRO) position. The CRO is responsible for integrating these areas to foster communication and prevent silos.
In practice, we have been experimenting with various marketing and sales activities. My current focus lies on strengthening my LinkedIn profile through regular high-quality posts and comments. Crafting strong LinkedIn content takes planning and effort, but the idea is that a robust profile will boost response rates from potential leads.
Another marketing initiative we are working on is setting up our own in-house multiplayer environment – a virtual room similar to Mozilla Hubs. Built on our new multiplayer framework, “Wonderland Clouds,” this room, like all Wonderland Engine experiences, is highly performant and accessible from any device with a browser, whether PC, mobile, or VR headset. We have integrated with different avatar solutions like Ready Player Me and Avaturn and also provide spatial audio. We are offering this space for free to people who want to host developer meetups. With Mozilla Hubs’ sunset, many are searching for new VR metaverse platforms for their gatherings, and we aim to fill that gap with Wonderland Clouds.
5. The XR landscape is constantly shifting. Can you discuss a significant pivot or strategic decision that was crucial for your company’s growth? How did it impact your business trajectory?
Our most significant strategic decision so far has been expanding our product focus to include general 3D web development, which has opened up a new customer segment. One of our enterprise clients that came on board recently, is a development agency that encountered the following problem: they built a 3D product configurator for a client’s website using Unity WebGL, which worked well on PC browsers. However, when the client requested mobile browser compatibility, they quickly discovered that Unity wasn’t suitable for mobile web. The lack of mobile web performance was particularly noticeable with iOS.
This is where we came in. Despite an immediate shared understanding of the technical challenges in web development, the agency initially hesitated to adopt a startup’s product – a common concern in B2B due to the risk of a startup failure. However, by demonstrating our risk mitigation strategies and the agency’s general openness to new technologies, we successfully onboarded them. While they may enable VR support for the configurator in the future, their current focus lies on optimizing it for PC and mobile browsers. We hope this success story will encourage more clients to follow.
We’re also exploring another opportunity: licensing our rendering engine to larger platforms. This option could be valuable for companies developing their own 3D web tools using Three.js as their rendering engine. By replacing Three.js with Wonderland Engine’s rendering, they could achieve a significant performance boost. You can picture it much like swapping out a car’s engine.
6. Looking back, what was a breakthrough moment for your company—something that validated your hard work and signaled you were on the right path?
A highlight was definitely when Apple officially recognized Wonderland Engine as a tool for WebXR development at this year’s WWDC. We also got a lot of good feedback for our port of the native Quest game “Dead Secret Circle” to the web and for the webby award-winning WebVR game “The Escape Artist” that was developed by Paradowski Creative using Wonderland Engine.
7. As a leader, personal growth is as critical as company growth. How has your role evolved over the years, and what have been some personal challenges you’ve overcome along the way?
I began my role as COO at Wonderland, helping with all business-related tasks. In my first year, I had a strong focus on developing our international HR structures and creating an integrated financial statement to be able to closely monitor our runway. While these tasks were very important and fun, I eventually realized the need to shift more of my focus to marketing and sales. Therefore, I gave my HR and finance responsibilities away and now concentrate fully on sales and marketing.
In early-stage startups with limited staff and developing structures, it is crucial to regularly step back and reassess priorities. When the important work is being overshadowed by distractions, it is time to make adjustments. Also, it is easy to feel overwhelmed by the sheer volume of tasks. Implementing a priority-based approach to be able to work target oriented and maintain a healthy stress level are personal challenges I’m actively working on.
8. The future of XR is incredibly promising but also uncertain. How do you stay ahead of the curve, and what trends or technologies do you believe will shape the future of our industry?
Every new VR headset release pushes the industry forward. We are eagerly anticipating Meta’s Quest 3S version, hoping it marks another step towards VR headsets becoming mainstream in the consumer gaming market. Its release could also boost awareness of WebVR, especially as the Quest browser showcases WebVR experiences right on its new tab page. Many of them were developed with Wonderland Engine.
The integration of AI with XR is another crucial development, with XR being the interface of AI. We have seen an increase in requests from companies wanting to develop XR agents linked to large language models, such as a personal assistant avatar capable of natural conversation. We recently developed a prototype XR avatar using Microsoft Azure that provides a service for lip-sync, enhancing its natural speech gestures.
VR training is also advancing rapidly. Personally, I have noticed an increase in non-tech, non-gaming individuals in my social circle experiencing VR for the first time during corporate training sessions. For instance, at a recent birthday party, a friend who is working in the offshore industry mentioned undergoing VR safety training before onsite visits. Although VR headsets have not yet taken over the consumer market, they are quickly becoming a standard feature of employee training in the enterprise sector.
9. Innovation often comes with failure. Can you talk about a time when something didn’t go as planned? What did you learn from that experience, and how did it change your approach?
When we launched our first sales campaign, we experimented with external freelancers, tapping into the increasingly popular sales-as-a-service model. While beneficial for some products and companies, our experience was mixed. We hired great freelancers with proven track records in the XR industry, bringing their own networks of contacts. We hoped to quickly capitalize on these networks, but it did not work out as expected.
The primary reason for this setback was our lack of a clear product-market fit at the time. This experience taught us that until a product has a defined market fit, only individuals with a strong technical understanding can effectively sell it. Without a general product-market fit, each client engagement requires bespoke conversations to identify specific problems and adjust the product accordingly.
We learned that a solid core product strategy and established sales processes are prerequisites before bringing on less technically inclined personnel to accelerate growth. This underscores the adage that founders should personally secure the first 10 sales, ensuring the product resonates with the market before expanding the sales team.
10. Finally, what advice would you give to (fellow) XR entrepreneurs? What are the key factors they should focus on to build a successful company?
Solving a real problem is crucial, but it’s only half the medal – you also need to be able to sell your solution. That is why engaging with as many potential clients as possible early on is essential. This interaction allows you to refine and pivot your product in a timely manner. Always take a step back to prioritize; avoid getting lost in non-essential tasks that don’t contribute to your overall success at the moment. For XR entrepreneurs looking to build experiences, I recommend using WebXR over native XR for greater flexibility and reach 😊
Links
Wonderland Engine Download – https://wonderlandengine.com/downloads
Wonderland Cloud Multiplayer Framework – https://wonderlandengine.com/cloud
The Escape Artist by Paradowski Creative (VR) – https://esc.art
Dead Secret Circle Web (PC, Mobile and VR) – https://dead-secret.wonderland.dev
HeyVR Gaming Site (VR) – https://heyvr.io
