Founder Profile: Jacob Hanchar of Digital Dream Labs

 

Summary

American STEM education is notoriously lacking. In a leading international education study, the United States was ranked 38th out of 71 countries in math proficiency among 15 year olds. Over 40% of American scientists feel that the American K-12 STEM education system is below average.

Digital Dream Labs is an ed tech company that wants to offer a comprehensive suite of STEAM (science, technology, engineering, art, math) video games for kids. We recently sat down with founder Jacob Hanchar to discuss his vision for the ed tech space and what investors should know about Digital Dream Labs.


Kingscrowd
Can you give us a brief elevator pitch for your company?
Jacob

Digital Dream Labs is the leading provider of hands on STEAM education. With a combination of video gaming, artistry, and robotics knowledge, we provide a refreshing way for students to engage in scientific topics and learning in general.

We have been profitable since 2017, have generated more revenue than we have raised, and will hit eight figures in revenue in 2021 and may even do so in 2020. We have accomplished all of this with just local and crowdfunding, no formal venture capital involved.

Kingscrowd
What is a revenue share deal?
Jacob

This is a relatively new type of financing opportunity for companies. Rather than getting a traditional loan from banks or formal lenders, we are approaching accredited investors to invest in the revenue of our company. Think of it like a bond. There is a certain amount of interest that you are guaranteed — in this case 12% — and your return can be even greater if we pay back the loan faster. Our current revenue sharing deal is with a network called HoneyComb, and we are guaranteeing a return of 1.8x money back in this offering.

Kingscrowd
What inspired you to take the leap and build this company?
Jacob

I have been wanting to do something myself for the longest time and not stand in anyone’s shadow. Though this road is pretty tough, I like the fact that I can turn and look at something and say to myself, “I built that.” From inception, Digital Dream Labs combined two loves I have — my love of learning and my love of business.

Kingscrowd
What past experiences prepared you to start, build, and lead your company?
Jacob

I have several experiences in my life that have prepared me to run this business — but out of all of them my Ph.D. studies at the University of California, Los Angeles, was the best. Unlike most graduate courses in the sciences, our department focused on taking inventions or discoveries to market. The idea is that we are not doing research for the sake of research, we are conducting studies to improve people’s lives and to do that we need to take our findings to the market. This engrained a discipline in me that every resource, no matter how small, must be appreciated and that every action inside of a company is to reach a customer. So many companies fail because research and development runs amok.

Kingscrowd
What is your vision for the future of the industry you are operating in?
Jacob

Right now it is the Wild West for both ed tech and robotics, with no clear multi-billion dollar player in the space. While there are silly valuations and investments being made and thrown around, there is no single company that has stood up and made a statement that they are the thought leader. It is my goal, in the not too distant future, to be able to have enough market share and revenue to make this statement. I imagine that we will see serious consolidation, which is already occurring, and then the emergence of a few strong players. And the rest of the smaller startups that formed when the excitement started back in 2012 will fall away.

Kingscrowd
Who is on your team and how did you come together?
Jacob

I like to think of the classic action/adventure montage when the lead character goes and recruits his friends from the old days to go on one more mission. The people I’ve pulled together are all from my past experiences in Pittsburgh, whether socially or as a colleague in a similar space. Since we are primarily technology, I’ll list just a few of our people who make the magic happen at our company. This is by no means a complete list, but it will give you an idea of the type of talent we have here inside our amazing culture. 

Grant Olson, Chief Roboticist – Total guru for all things tech related. Came from WebKite. As CEO Eric Silver will attest, Olson is the best programmer he ever met.

Thomas Schubert, Chief Product Engineer – Amazing hardware expert. Started his own company in Australia, had a good exit. Worked for the acquiring company then moved to us once he fulfilled his obligations in the contract. 

An Nguyen – Character Artist – So good that she could start her own animation studio, period. 

Bryan Gardiner, Chief Software Engineer – Fantastic all around game designer and programmer, Carnegie Mellon University (CMU) grad, and the engineer behind Turtle Mail and many of our game releases. 

Swapnil Mengade, Lead programmer – One of the most dangerous programmers out there. Recent CMU grad. He can pick up any programming language and in a week be better than the person who taught it to him. 

Brett Dietch Chief Cloud Architect – I ‘stole’ him from Mattel, enough said.

Kingscrowd
Do you have any competition, if so, how do you differentiate?
Jacob

The closest competitors would be Osmo (now part of Byju’s) or companies like Littlebits and Sphero (they merged). Our products are more personable and have a depth of emotion and feeling that these companies lack. We also have a level of excitement and engagement with our games that is hard to replicate. Speaking about replication, really the biggest issue we have is people not innovating, but rather shamelessly knocking off our products. This has been happening since we entered the market eight years ago and will continue to be an issue. While we have universal patent, copyright, and trademark protections and rights that we will enforce, we stay ahead of these unimaginative individuals by always innovating and providing value to our customers.

Kingscrowd
What does your business model look like?
Jacob

I would say the closest analogy would be similar to an Xbox or Nintendo. You buy our product or platform, and then you can purchase upgrades, software, or accessories to enhance your experience. In a sentence, hardware with a SAAS backend.

Kingscrowd
What brought you to equity crowdfunding and how do you intend to use the money you raise this round to scale the business?
Jacob

I like the idea of democracy and that everyday people can have access to an investment vehicle that only a privileged few could afford to enrich themselves. A dream I have is that we become a tech company that was built ‘by and for the people’.

Kingscrowd
What do you want potential investors to know about you and/or your company?
Jacob

I have ‘skin in the game’ and we have ‘adults on board’. I’m an investor too. You would be amazed that most companies can’t even make this simple statement. I also want our investors to know that my vanity and ego will not overrule common sense and good business practices. 

There is a joke I like to tell. A guy finds a lamp, rubs it, and out comes a genie in a puff of smoke. The genie says I can grant you one of two wishes, “You can have infinite wisdom or you can have limitless wealth.” Reflecting, the man says, “I’ll take the wisdom.” “Wisdom is yours,” says the genie, disappearing in another puff. The smoke is barely clear before the man thinks, “I should have taken the money.” 

I mention this because being right and being rich can be mutually exclusive and I don’t think we talk about it enough in business. We rely too much upon a fantastic vision of a genius, but this so-called genius is willing to sacrifice an entire company to prove a point.

Kingscrowd
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? have you set any future goals for the company?
Jacob

Ideally, I’d like to go public. Of course, should that not happen, I see no issue with being acquired by a competitor — though it would be great to think eventually we become people’s exit strategies because they want us to buy them!


We at KingsCrowd are excited to see where Jacob and his team take the company. Digital Dream Labs is currently raising on Honeycomb Credit.


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About: Olivia Strobl

Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.

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