Interview – Simon Newstead, CEO of Frenzoo

Back in May, we covered Frenzoo, a fashion-centric world with a lot of promise. Since that time, Frenzoo has continue to grow and has received further funding to continue its development.

CEO Simon Newstead is an expatriate Australian based in Hong Kong, and I took the opportunity to get some insight into Frenzoo‘s progress and future plans. He also discusses the role of Robin Harper and Anshe Chung, integration with services like Facebook and quite a bit more.

The take-home message for me is Frenzoo‘s focus on content creation, placing it amongst a handful of other players dedicated to that space. Fashion’s about creativity, so it’ll be interesting to see what growth trajectory Frenzoo takes. Read on for the interview:

Lowell: Can you give a brief biography of your career pre-Frenzoo?

Simon: Sure, before jumping into the online world with Frenzoo, I worked in Internet networking with Juniper Networks, the upstart competitor to Cisco.

There I was leading the Emerging Technologies team for Asia. That was a great job, dealing with customers in Korea and Japan through to emerging countries like India and Vietnam. Learning how and how not-to introduce new solutions to market, winning over early adopters, feeding requirements back to development teams – a lot of fun.

Before that I was in Melbourne with Juniper where I worked with Telstra to help design their 2nd generation broadband infrastructure (their DSL network). That was a great job for a young engineer, although I recall a lot of late nights living in their labs 🙂

Lowell: How would you describe Frenzoo’s progress over the past 12 months?

Simon: Great! After a slow start we’re starting to find our groove – a fledgling online world and 3d chat & creation community is up and running. Still early days but revenue starting to come in and growth picking up.

When we started our beta a year ago we had nothing – no users and a website with virtually no functionality: I remember an early tester making a comment “I love my avatar so much… but ummm what can I do with it?” It was a rude awakening, but all the early feedback helped us learn and adapt quickly – I really do subscribe to the “Fail Fast” startup school of thinking.

Since then we have learned a lot on what makes people them invest time and money and what they want out of Frenzoo. We’ve added and iterated our product countless times based on all the customer feedback: a big part of our culture – we gather a lot of user feedback, run regular usability tests, analyze usage data etc.

A turning point was introducing User generated content via our own web creation tool as well as 3ds modeling and collada import function. This has been great – the creative folks just love to design new things. When the world around you changes so much there is always inspiration for something new. People who love to mod sims love our environment – in fact some of our top content creators today are huge The Sims modders and creators.

Six months ago, the only things in the shop were made by Frenzoo, with limited choice. Now all the content on the marketplace is coming from the community and there are many thousands of diverse creator items to shop from and growing each day.

Lowell: What’s the company’s funding situation at present?

Simon: Earlier in the year we secured a solid round of funding from ASI – the Skype co-founders and other important angel investors. That takes us a long way to realizing our vision – by the time we consider the next phase of funding we should have completed the core development and started to ramp up audience and monetization.

Lowell: Virtual goods commerce is currently the core of your revenue model – can you explain a little how both you and designers can make money?

Simon: Sure. We run a dual currency system – we have silver and gold coins. Silver coins are the earned currency (being active on the site), gold coins are bought currency. When an item is purchased by a user using Gold coins, the creator of that item gains the Gold Coins (Frenzoo takes a small commission). Gold Coins can be sold for real money on 3rd party sites like First Meta Exchange and Anshe X. Those sites also allow transfer to and from other virtual currencies such as Linden dollars and IMVU credits.

Lowell: How many staff does Frenzoo have and are they still all based in Hong Kong?

Simon: We have a team of 10 folks – 7 engineers and 3 designers. Apart from that it’s myself, and Ceci, our marketing lead. We’re based in Hong Kong and we also have a couple of fantastic remote interns in the US who do a fantastic job helping with the community management.

We’re also lucky to have three very helpful strategic advisors – Robin Harper (ex Linden Labs) and Anshe Chung – Ailin Graef and Guntram Graef have really helped with giving us guidance and the insights from their considerable experience.

Lowell: What’s the geographic breakdown of your userbase at present?

Simon: Most members are coming from the US, however we have a healthy international mix from Europe and Asia. Australia is in the mix, a few percent of our base. We have localization to over 10 languages, including Japanese, Spanish, Chinese, Portuguese, German, Russian, Dutch etc It’s one of the many advantages of being purely browser based – it’s easy to add this. Right from the start we wanted to make this a global offering, not just English only.

Lowell: What percentage of the designers are making significant money?

Simon: We’re just getting going, no millionaires I’m aware of yet 🙂

The majority of our creators are doing it for enjoyment – it’s a lot of fun dreaming up new designs, meeting people, entering contests, being creative.

For those folks when they earn a few bucks in the process that’s just a bonus. However we’re now starting to see the first few professional operations coming onto the site with the aim to make money. Anshe Chung Studios is one example, it’s also easy for them to publish their created items to both Frenzoo and other platforms like IMVU. We’re also looking forward to introducing 3D scenes so, for example, creators of Second Life environments and props can explore our platform.

Lowell: What mistakes that competitors have made are you hoping to avoid?

Simon: I have a lot of respect for the other avatar communities out there, I’m a big fan of Second Life in particular for their creative and open content environment. One thing we are striving to do is make our user interface really simple to use, and also make creation fun and accessible to everyone – in fact most of our active active members have created their own items.

As we are web online world compared with most others who are client based, we have our own unique set of challenges and opportunities. For example cross browser differences and testing is a hassle (don’t get me started on IE6!), but on other hand web based means we support Mac and PC as well as being able to quickly mash up and integrate – e.g. post pics to Facebook etc.

Lowell: Speaking of Facebook, do you have any plans for integration with other web applications like that?

Simon: We’d like to do more web integration next year for sure. Once we have built out most of our core platform we plan to swing back and look at off site integration and add what makes sense, be it Facebook app or other platforms and techniques. Whether that app might be avatar chat or creation or a mix is still something we have to think about.

Mobile is something also we considered when we settled on our 3D rendering engine – in fact Unity3d which we use is one of the leading engines for iPhone 3D games today. It’s an interesting future possibility for us and technically feasible.

Lowell: Who do you see as Frenzoo’s main competitors?

Simon: In terms of web 3D community with UGC marketplace and creation tools we are first to market, to my knowledge. Actually even in client solutions, I haven’t seen similar to our accessible fashion design tool.

Actually most of our energy is built on listening to our users and improving our service. Whilst we monitor and learn lessons from other virtual worlds (e.g. Second Life and IMVU who have built up successful economies), we’re mainly focussed on our users and improving for them.

Lowell: Do you have an estimated date for Frenzoo coming out of beta?

Simon: Not for some time yet…

Beta really is a mark that we are in constant iteration and improvement, it’s a label that encourages us to always be listening and improving. Of course, we’re running a virtual economy today and security and robustness are important but we like the idea of being in beta mode and responsive – it’s a cultural attribute.

Lowell: What’s the roadmap for Frenzoo over the coming year?

Simon: Now UGC is kicked off, our next big move is “social”. The first step is 3D chat, which we just launched 2 months ago. It’s pretty sparse now but we will be building it out. As part of the social drive we’ll be introducing 3D scenes, which will be the biggest upgrade to the site since launch. This will let people be creative and social a lot more than today where the avatar is in 3D but the scene is just in static 2D. A 3D online world in Frenzoo has been one of the top requests from our community.

Our goal within the next few months is to have a fun user created environments – dance parties people can hang out and virtual chat in, maybe beaches for moonlight walks, glamorous catwalk shows, and hopefully lots of ridiculously pimped out apartments 🙂

We’ll also continue to build out the creative tools and then start to do more mashups and integrations on the web to help people share their experiences easier.

Lowell: Can you shed light on the core Frenzoo user?

Simon: Sure. Our age ranges from 13 all the way to 30 and beyond. Several of our most active members are in their 30s, 40s and older. Our average age today is hovering around 18-20 years old, and we skew very heavily towards female. One of our goals over coming months is to also make Frenzoo interesting and engaging for us guys.

Lowell: As an expat Aussie, what’s your take on the virtual worlds industry here?

Simon: Well, I’m a big fan of some of the virtual world personalities who live in Australia – folks such as metaverse bloggers Tateru, Anstia and yourself, Steve Cropper who runs the Life On-Line show etc Also it’s nice to see some virtual world developers in Australia such as VSide/Exit Reality…and in general some great tech projects such as Google Wave out of Sydney. I’m always rooting for more Aussies to make it on the global stage 🙂