Baobab studios is a production company focused on VR animation through the creation of “compelling stories, believable characters, immersive worlds, beautiful art, and high-quality animation.” Since its founding in 2015, Baobab has raised $31M in 2 rounds.  While video entertainment is an obvious use case for VR platforms, with industry observers predicting that 79M people would seek out VR video entertainment by 2025,  Baobab’s strategy and execution is differentiated in several ways:
- Instead of creating long form content, Baobab focuses on high-quality immersive short stories. This cuts the iteration cycle for finding the “killer app” or “killer content style” by orders of magnitude.
- Baobab creates stories that put the user at the center of the experience. In a recent film called “Invasion!” the viewer quickly discovers that he/she is in a first-person experience as a rabbit. 
- Unlike traditional films, VR content directors have no control over where a viewer is looking. To guide the viewer towards the most important areas of the story, Baobab director Eric Darnell scatters user-tested visual and audio queues to guide the user experience. “For example, during [a] moment in a film when a bunny sniffs at the viewer, the bunny suddenly looks to the right, which leads the viewer to look in the same direction.” 
- Baobab has already developed numerous relationships and partnerships with device manufacturers like Samsung Gear VR, Oculus, PlayStation VR, Google Daydream, and HTC Vive. 
- Hollywood hotshot celebrities Elizabeth Banks (the Spiderman series, Pitch Perfect) and John Legend (10 Grammy awards) have participated in voice acting roles for Baobab productions. Additionally, Legend has signed on to be executive producer for an entire series called “Rainbow Crow.” 
Fundamentally, Baobab creates value by generating animated content from start to finish that is viewable on VR headsets such as Gear VR, Oculus, and HTC Vive. Baobab films are unique because they allow the user to interact visually with the environment and even eventually alter the story based on their decisions. 
Additionally, Baobab’s creative team is uniquely talented with employees that have formerly produced Oscar-nominated shorts, and directed multimillion dollar box office movies such as “Madagascar” and “Antz.”  When the craze of a new and shiny platform wears off, Baobab is confident that its creative story-centered content will have a lasting effect on consumers.
Video 1: Teaser Trailer for “Invasion!” which was selected to the 2016 Tribeca Film Festival
Baobab captures value in several ways, not too different from traditional film creators:
- Like most studios, Baobab owns the IP on its characters and storylines. Therefore, it can monetize on the IP that it holds, just as Disney does, by selling products, merchandise, Broadway shows, etc…
- Baobab can also use contracts that specify licensing agreements, royalty agreements, or revenue share agreements to capture value from its IP. Roth Kirshenbaum whose founders produced movies like Alice in Wonderland and Snow White and the Huntsman are currently working out an agreement to create a non-VR feature-length film based on Baobab characters and storylines. 
- Lastly, Baobab can capture value via syndication – negotiations with cable television, Netflix, or others for access to film rights for specific time periods after the content has hit box offices.
Global platforms like Youtube and Hulu are already facing external pressures to accommodate VR content. Further, Baobab already has content showing in Hulu’s VR section. The company has done all this in less than 2 years and a small team of less than 30 people.
With a short-film strategy, Baobab has an opportunity to iterate and fail fast. The company should continue experimenting with different themes, character personas, and even production processes (e.g. – waterfall vs. lean). Additionally, Baobab should leverage the voice artist portfolio it has already established to bring on other familiar faces. Creating a solid production company brand name is rare. Disney is one of only few which have done it successfully (do you ever go to a movie because Fox produced it? probably not). Lastly, given the ability to visually interact with VR films, Baobab should keep an open mind when it comes to developing partnerships with additional hardware firms that could bring an immersive experience to the next level (e.g. – AxonVR).
 HBS Case: Making Virtual Reality Real, N9-617-013, Feng Zhu, Jan 2017