Interview with Andrew Darrow
The genius who spread KidZania and The Void around the world
Stefan Zwanzger: Andrew...
Andrew Darrow: You're gonna ask me how one can become successful.
Stefan Zwanzger: How do you know that? But, you know, we're going to start with it. Let me really ask you. 2007, you came to Kidzania. And it was a Mexican family, a small Mexican family enterprise, right?
Andrew Darrow: It was a burgeoning business. It was a business just about to grow. And it just needed a little help to grow. It was a great product in the first place and a brilliant concept, a great team behind it. But what it just needed was to have the right fit around the world. So it had to have a great fit in people who could run the business, who could grow the business. It had to have the right fit of product and experience ultimately for consumers as well. And I just helped shepherd those processes.
Stefan Zwanzger: How do you find these partners all over the world? I mean, when you start as a local business and then you want to spread out your vision... I mean, how do you get there?
Andrew Darrow: All [about] networking. And it sounds so cliché because everybody talks about networking all the time, but it really is networking. It's a matter of finding people who see the world in the same way that you do, have the same philosophy about business, the same philosophy or the same vision about the product that you're working with. And I've been in the entertainment business for a long time, and that applies to any kind of property that I worked in, in entertainment [it] was [about] finding people who got it, who believed in it, who were excited about it. And from there that's just the spark to other conversations. So generally those people know other people in within their network and that might be in the same country or it might be in a neighboring country or could be on the other side of the world. And if that shared philosophy is there and that shared passion for the content is there, that network continues to grow.
Stefan Zwanzger: So you were not born into a multi-million dollar net worth family that had it very easy from the start?
Andrew Darrow: I come from very humble means (laughs).
Stefan Zwanzger: Come from humble means. So you really built this network yourself?
Andrew Darrow: Yeah.
Stefan Zwanzger: Okay. But you're talking-- when you talk about network, we talk about people from foreign countries who are ready to invest 30 or 40 million dollars into a Kidzania brand. I mean, that requires some convincing. So how do you approach these people? You just sit down with them for a wine or for a coffee or for water and tell them about the story.
Andrew Darrow: It's about creating good fit. Really good fit is the key. Finding-- Again, in whatever environment we're in, it could be sitting here, it could be sitting in a coffee shop, it could be sitting in a hotel lobby finding people who you can look in the eye, you can talk to and have an honest dialogue about what the opportunity is about, what the product is about, feeling that passion and enthusiasm. And sometimes it's a meeting that takes 15 minutes. Sometimes it's a meeting that takes 2 hours, sometimes it's 20 meetings that take six months.
Stefan Zwanzger: You close $30 million deals in 15 minutes?
Andrew Darrow: We closed-- actually signed contracts in six days on one of our deals. Yeah. So that's from the start of a discussion to the actual signing.
Stefan Zwanzger: One question as just because I know you're also a lawyer, I'm always getting confused myself between licensing deals and franchise agreements, which one is actually Kidzania? What's the difference between a licensing agreement and a franchise deal?
Andrew Darrow: So they're similar in their financial structure and that you're essentially paying a royalty to somebody who's granting you a set of rights with the licensing agreement. It's basically just a handoff of those rights and the ability to go use them in a franchise. You're providing a lot more skill and experience and training and background and the intellectual property as well. So it's a bigger, bigger bundle of rights, but it's also more control that's dictated by the franchise or to the franchisee. The licensing [is about] a lot more freedom on the part of a party utilizing rights to be able to just go ahead and exploit them.
Stefan Zwanzger: So Casino was [the] franchise?
Andrew Darrow: Correct.
Stefan Zwanzger: Okay.
Andrew Darrow: And that was important for Kidzania in terms of maintaining the quality of the operation, the integrity of the operation, the quality of service, continuing to evolve a concept and create new pieces of content and bring those into the container environment. So rather than just hand off a set of IP, it was great to be able to to continue to ensure the success of the business by supporting all of those locations.
Stefan Zwanzger: Is that you have 40 locations now, by the time you left, [I] suppose, 40 locations?
Andrew Darrow: There are deals in place for about 40 locations. As of today, I think there are 26 locations open around the world.
Stefan Zwanzger: Okay, now you've OST the Void. The Void has only three branches, right? Today.
Andrew Darrow: Four.
Stefan Zwanzger: Four branches.
Andrew Darrow: Well for soon to be four. Yeah.
Stefan Zwanzger: So you're again in a very early stage, you know, of a scalable, great location based on the business model. I've seen the prototype, one of the prototypes and I think the third, third installation in Dubai, it's the Jumeirah Beach residence was fantastic. It was really good. I was really impressed. It was really immersive and a really strong attraction.
Andrew Darrow: That's what I love about the concept. People overuse the word immersive.
Stefan Zwanzger: All the time.
Andrew Darrow: Way too often. And in location based entertainment I've fallen in love twice in the last ten years and once was with Kidzania, which is about as immersive as can possibly be. And again, with the Void, which is truly immersive. This is not just about a visual concept. This is about putting you physically inside a story, inside a movie, inside a game, inside a book, and sensing and feeling and touching and experiencing 360 degrees an entertainment environment.
Stefan Zwanzger: Did the Void find you? Did you find the Void?
Andrew Darrow: They found me.
Stefan Zwanzger: They found you. So, and you're doing the same thing with them again now as with Kidzania.The same as with Kidzania, right?
Andrew Darrow: No. We will go much faster than we ever did with Kidzania.
Stefan Zwanzger: Much faster?
Andrew Darrow: Yeah.
Stefan Zwanzger: It's also a low capital investment, right?
Andrew Darrow: Yeah. Yeah. Well, Kidzania was tens of millions of dollars to build. The Void you can develop from under $1,000,000. And it takes up a lot less space and has many fewer requirements associated with it. So yeah, the ability to roll it out and to scale it will be much easier. And it's critical at this point in the life of this brand to grow very very quickly. It's a land grab business right now. And we're going to be at the forefront of it. And we already have a number of pretty significant rollout deals and content deals in place.
Stefan Zwanzger: So people are knocking on your door already, right?
Andrew Darrow: Yeah. Yeah. It's a combination of being reactive and proactive. You know, there's a lot of income-- input of excitement from the industry, but it's also a matter of going out and again, finding the right partners to work with, finding great fits the people who can operate it, and people who get the experience.
Stefan Zwanzger: You're also a philosopher and you have studied political philosophy in the past before your law degree. [A] question. [A] Personal question. How long do you think will this virtual reality hype last?
Andrew Darrow: I don't think it's hype. I think it's an evolution for entertainment experiences. And there are two ways that virtual reality can work. At least currently, it's either a band-aid today that you put on top of an existing experience. And so you take a roller coaster ride and you put on a helmet and you have a different, different visual. I think that will burn out very quickly. I don't think people are really interested in having band-aid opportunities, but it's the opportunity to really engage in a 360 degree experience that I don't think will go away. It will be-- [will] continue. And the Void are such polar opposites because containment is all about this physical world and actually doing and touching in this real environment.
Stefan Zwanzger: Right.
Andrew Darrow: But I think people also long for the opportunity to go to places that they could never experience, the kinds of places that they dreamed of, the kinds of places that were almost magical to be in. And we can create those kinds of worlds in the Void as well. I don't think it has to be any one or the other. It needs to be the right blend of those in the entertainment world.
Stefan Zwanzger: Andrew, thank you so much for your time and I appreciate the time you took for the interview.
Andrew Darrow: Thank you.
Stefan Zwanzger: Thank you.