In our latest View From the Top, we sat down with David Spindler, co-founder and CFO of Immersive Gamebox (and former co-founder of Tough Mudder).
What is Immersive Gamebox?
We call it interactive cinema. It’s a business built around giving people interactive, team-based, immersive experiences based on popular IP (games). A typical consumer will come to one of our US or UK locations with a group of friends and spend an hour playing a digital adventure.
The experience is built around teamwork and collaboration in a game box. A game box is an interactive smart room where all the walls are touch screens with projection mapping. There are motion capture cameras in the ceiling that can track your movement. It allows you to control a game without needing a headset, like with VR. It tracks natural movements based on social gameplay, so your progress in the game will always be based on how you do as a team. You get an individual score as well because bragging rights can be fun. But your overall progress in the game is built around how you do together.
The boxes started rolling out in 2019 in London and have since expanded to play centers, malls, and movie theaters. They are now in about 20 US markets, including Dallas, San Jose, Denver, Salt Lake City, and New York City, with a target of 100 locations in the next two years.
Tech and Retail Collide.
We view ourselves as a tech-enabled media company using our IP to connect groups of people looking for social experiences. There’s the retail aspect to our business (the physical locations), but the real differentiation is the software development side, which helps games be created and the store run efficiently. Our stores can be run with one or two employees and operate as a distributed network so we can manage them remotely. We can understand what’s working and optimize to that based on algorithms that monitor the performance of groups in the game boxes.
Where did the idea come from?
Back in 2018, my co-founder Will Dean (also co-founder of Tough Mudder) and I saw through our angel investing and advisory work an increase in location-based entertainment – things like escape rooms and immersive theater. We spent six months looking at anything and everything in the space. We concluded that there were some cool group experiences in immersive theater and escape rooms and the start of location-based Virtual Reality. VR, in some ways, is more scalable from a software perspective, but it tends to be high capex, high opex, and most importantly, requires a helmet so you can’t hang out with your friends; less social than what we created. We thought if we created something built around sociability and not focused on hardcore gamers, we’d have an exciting business. We set out to do that, and five or six years later, here we are.
From Tough Mudder to Digital Immersion?
Playing off the success of Tough Mudder, we wanted the next business to be something different. Just enough to keep it interesting but not so far away that you have a ‘second album’ problem where you feel the need to do something completely different from what you did the first time. There are a lot of similarities in this business to Tough Mudder – you’re selling tickets to consumers, you’re creating engaging content, you have to work with IP holders and other groups, and you have a group-based experience. Obviously, it’s not the middle of a field, and, from a brand perspective, IGB is a bit more mass market than Tough Mudder was, but on balance, it’s more similarities than differences.
How have you managed your rapid growth?
That’s the hardest thing about running a business – you want to grow quickly but not too quickly. The crucial tools for us were to set up systems and processes that would scale with us. One of the reasons working with Allan and the team at Rooney Law was so good is that when we were first coming to the US, we were a much smaller company, and we needed advice on setting up a corporation and all that goes with it. As we grew, we needed higher-level help with deals based in the US, and we got the full-service support we needed.
Beyond a legal perspective, you should ask yourself if your business plan is right for today. But understand how it may change for tomorrow and be aware of what it will take to retool that process over time.
Capital is critical for business success.
It’s clearly a tough market and has been for the past 18 months. It’s starting to improve a little bit. After the boom years of 2020-21, tech valuations have started to come back down to earth. That has some benefits because it means, to some extent, investors are focusing on business fundamentals rather than who’s got the flashiest pitch deck showing how they can spend $300 million. But access to capital is a critical success factor for most businesses, and when investors are sitting on their hands, it means you must be that much more careful with how you manage your business.
We’ve always believed in building a profitable business and balancing fast growth with profitability. If we seek to raise more money, showing that it’s going toward genuine growth, not cash burn, and that we won’t move forward if the price isn’t right are good bargaining chips in any negotiation.
Advice for founders.
Finding a good set of mentors – people you can trust to talk about issues – is super helpful. Build a peer group of those with similar experiences. The hardest person to manage is yourself; having other people’s perspectives will help enormously. You must make the time because if you don’t, a year or two down the line, you’ll be in the same skill set, which may have been pretty good at the start, but you fundamentally haven’t grown. Spend the time. It’s worth it.
Will and I spent significant time in the US when we built Tough Mudder. We learned quickly not to be too scared about everything. Everyone knows America is litigious, and it’s easy to let that be paralyzing. Two things you should keep in mind: first, it’s litigious for everyone, but most companies don’t get sued all the time, so don’t let that get in the way of moving forward.
Second, get good advice. Where Allan and the team at Rooney Law were uniquely helpful is they said, look, here’s what you need to think about; here’s what you don’t really need to worry about. Put processes or systems in place, and you’ll be okay. And their ability to help state-by-state, particularly regarding employment law, was super helpful.
What’s next for IGB?
We will continue our expansion across the US and internationally, which means three things for us – opening more of our own stores in the US and the UK, building upon our franchise model globally, and signing more content partnerships with great content creators. That’s our flywheel. Having the best content means that you can thrive, which means you can get even more great content, which means you build more stores. It’s a simple business in some ways, and we will keep that flywheel spinning.
Rooney Law is an international corporate law firm based in New York, London, and San Francisco, with an affiliation in Hong Kong. Our lawyers represent a wide range of clients around the world, including established multinational public corporations, emerging start-up enterprises, investment funds, financial institutions, governments, educational institutions, and nonprofit entities. No matter the client size or industry, our firm applies a flexible, business-focused, and entrepreneurial approach to providing sophisticated legal services and solutions seamlessly across jurisdictions.
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