Our spotlight this week focuses on Dan Farr, President and Co-Founder of DAZ 3D. DAZ 3D is an exciting company bringing 3D technology to the masses in the form of easy to use and pocketbook-friendly software and high quality 3D models and accessories. Recently funded by Highway 12 Ventures, University Venture Fund, and Village Ventures, they have positioned themselves well to capitalize on the rapidly growing demand for Web3D.

Silicon Slopes:  How did you get involved with DAZ 3D, and what does the company do?

Dan Farr: As a co-founder of DAZ 3D, my team and I have built a company that is focused on making 3D consumable for a much larger customer base. Typically, the two main reasons that people have not been able to use 3D effectively are that the costs have generally been very prohibitive and the software is very difficult to use. DAZ 3D has focused on removing those barriers by developing DAZ Studio which is available for free download at DAZ3D.com. Although it is a powerful 3D application, it is also designed to be easy to use, making it desirable for professional and first-time artists or general hobbyists.

 DAZ 3D also developed the "Millennium Woman" Victoria and the "Millennium Man" Michael which stand as the central humanoid figures for the DAZ digital universe.

In January 2001, DAZ 3D opened its first e-commerce website with 159 products. We have since built a business by creating 3D digital content offered to the public at affordable price points via an online store, the ArtZone Marketplace with thousands of products to choose from. We offer a full library of 3D content ranging from human figures to cars, to jungle scenes and clothing. We also have a strong offering of 3D software that covers the full range of 3D creation tools at affordable pricing. Our main objective is to bring 3D to the masses while providing obvious strategies for growth in their hobby and artistic careers.

Silicon Slopes:  Can you explain how your business model works? How did you decided on this model?

Dan Farr: DAZ is unique in the fact that our high-quality flagship products, such as DAZ Studio and Victoria, are offered to users free of charge. We feel it is important to empower everyone’s ability to utilize 3D whether you are a seasoned professional or a first-time artist. Of course, with the free availability of the basic software and model package, DAZ users are urged to visit DAZ3D.com and the ArtZone Marketplace to purchase accessories to complete their final package, such as clothing, poses, sets, props, etc. The average price of DAZ 3D accessories is $15.

We also work closely with third-party artists and offer an online publishing program through which these artists can make their own creations available to the DAZ customer base, at a shared income percentage.

One other area that provides additional income for DAZ is the strong affiliate program. This program introduces thousands of new customers to DAZ each month while providing revenue opportunities for our customers. This is very important for the DAZ ecosystem as a majority of the earned affiliate rewards are cashed in for additional content at the DAZ 3D stores.

Silicon Slopes:  Has your model or focus changed since you co-founded the company back in 2000?

Dan Farr:  I would say that the DAZ 3D company model has remained consistent; however our ability to deliver more to our customers has expanded. We have many more market opportunities based on the expanded technologies of the Internet, such as online gaming and social networking, in addition to the technology that we, ourselves, now offer. Our primary focus remains on making 3D more consumable for a broader market.


Silicon Slopes:  Describe for us how 3D technology is being adopted by the masses. Are users of 3D graphics seeing measurable ROI, or is it simply a visual enhancement?

Dan Farr: I think 3D technologies are being widely adopted by the masses due to larger ease of use, more availability of accessible applications and the growing interest in the 3D market. 3D is everywhere! The ROI for a DAZ 3D user is much more significant due to the low cost and time effectiveness of the content and software. The hardest part is already done for you. You, as the artist, just need to be creative.

Silicon Slopes:  What are some lessons you have learned from starting your company? If you could go back, what would you change?

Dan Farr: I feel very fortunate to be surrounded by a team comprised of the most intelligent and talented people I could ever imagine. All of our executives have been influential in helping DAZ 3D grow from a small company to a mid-sized company. If I could go back in time, I would wish to have this team in place sooner to gain their influences at an earlier stage.


Silicon Slopes: What differentiates your 3D products from the competition?

Dan Farr: I think the obvious difference is the lower price-point. But this doesn’t mean that the quality of DAZ products match the price! Also, as mentioned, we are a very community-focused company and our products reflect the needs and suggestions of our users. Our community members, currently over 700,000 registrants of professional artists and hobbyists alike, are our critics and through their feedback, we can tell if a product will be a top-seller within the first 24 hours of availability. I think the attention that we give to our community also differentiates our products to fit specific needs. We have found that our strength is in direct proportion to the strength of our online community of customers and artists. I feel that our future growth is definitely dependant on increasing and improving that relationship with those key groups and leveraging them to reach new customers and artists.


Silicon Slopes:  You were recently funded by an Idaho-based VC, Highway 12 Ventures. Tell us about your funding and what your plans are for it?

Dan Farr: Although DAZ 3D is very unique in the sense that we had a working self-sustaining business model prior to raising money; we feel that we have some of the same upside as a startup company. This is based on the growth of Web3D demand, and we are uniquely positioned to capitalize on that demand. Our funding with Highway 12, University of Utah Venture Fund and Village Ventures has provided us additional capital for staffing and marketing endeavors helping us to jump into the emerging markets with force. It also has provided us with some reserves that we may need at some strategic point

Silicon Slopes:  Any plans to raise more money in the near future?

Dan Farr:  Currently, we are operating on a funded plan but have been seriously considering some strategic opportunities that could use some additional funding. Although we have not sought additional funding, we have been approached by several firms who have recognized our unique positioning in this space and we are considering opening a new round. Much of our consideration with this is potential for a new partner(s) to help us move quicker in the land grab of 3D avatars for virtual worlds and digital content creation and distribution.


Silicon Slopes:  What kind of future opportunities do you see in the social networking and virtual world’s markets for your products?

Dan Farr:  At the recent Game Developers Conference in San Francisco, we announced the MogBox, a collaboration with Mogware (Pleasant Grove, Utah) to utilize their automation toolset technology used by leading game developers for moving DAZ 3D content directly into 3D software or games. MogBox is designed as a time-saving and cost-effective solution for the large tasks of 3D content creation and reformatting. So, a user can load their 3D content into DAZ Studio, customize it if they so choose and then simply select “Export to Multiverse” or whatever target they wish, and they’ll be done! What comes out the other end is as close to the high-resolution, high-quality content they sent across - as that specific target environment will allow.

We really see this as paving the way for a model base, such as Victoria, to become a universal avatar that can easily transfer between multiple virtual worlds.

Silicon Slopes:  Can you describe your company’s projected growth in terms of customers? Revenue? Employees?

Dan Farr: We project growth between 50 to 100% year to year over the next couple of years driven by our expansion into new Web3D initiatives. We are hoping that those are modest projections knowing that the opportunities in that space are very large.

Silicon Slopes:  Finally, what are some advantages of doing business in Utah?

Dan Farr: For me personally, I think the biggest advantage is the feeling of community that Utah offers. This is where my roots are - and that is the case for many of our employees as well. Although we do have a competitive hiring environment, I feel that costs for highly qualified individuals are much less than in other similar communities. Utah offers a great lifestyle that is very attractive – and helpful for recruiting out of state employees. The employees that we have relocated have been very happy here and would likely remain in the area if ever their employment with DAZ did not continue. Utah is truly a great state.