How James Thornton co-founded Tafi and expanded the metaverse
I was born and raised in Salt Lake City. I attended the University of Utah for my undergrad and moved to the Chicago area after graduation to assume the role of president of the consumer products group for a company called Apogee Enterprises, Inc., which makes technologically-treated glass products that protect treasures like the Mona Lisa.
While in Chicago, I developed an after-market group, and then a consumer electronics group that partnered with companies like Sony and Samsung to make the non-reflective screens for all of their flat-screen TVs. I also completed my master’s degree at the University of Notre Dame, so I spent a huge part of my adult in Chicago—In fact, I still have family there and I miss the city.
I worked in Chicago until about 15 years ago when I was recruited by a private equity fund to come back to Utah and run a company called Cricut, a do-it-yourself scrapbooking space. For six years I was the CEO of Cricut and helped the company grow from zero dollars in revenue to around $1 billion dollars retail.
After Bank of America bought Cricut, I joined some boards and got involved in angel investing. That’s when I came across Daz 3D—a friend of mine knew the business, and I was eager to join the board of directors after discussions with the management team.
Joining Daz 3D
Daz 3D was originally founded by Dan Farr, who now runs the Fan X Salt Lake Pop Culture & Comic Convention, who was not an artist but had experience working in 3D in the medical space, and by Christopher Creek, who is an artist.
With the combination of Chris’s art skills and Dan’s business and sales background, the pair came together to form Daz 3D. Daz 3D began as a 3D software platform, and then as a content marketplace—a very similar concept to iStock or Shutterstock. Essentially, Daz 3D is a business where we give away the software for free, and then we have a direct-to-consumer marketplace where hundreds of the top 3D artists in the world use our tools and technology to produce 3D content for things like still images, book covers, animation, and short films.
This is the technology that really makes Daz 3D kind of an OG player in the 3D space. Consumers weren’t quite ready for it, but Dan and Chris still went ahead and built the business with the help of investors.
Our lead investor at Daz 3D was Benchmark Capital and in the first board meeting, there were concerns over Daz 3D’s liquidity. Benchmark decided it wanted to put more money into the business, but with fresh leadership. So during my first board meeting, I went from board member to CEO, and I’ve been here for a decade now.
When I was appointed CEO, Daz 3D had about 70 employees, but it was not a profitable business. At the time, we had offices in both Salt Lake City and Tel Aviv, Israel. To make the business profitable, we shut down our Tel Aviv operations, and when we made those changes, we shrunk to around 30 employees. Today, we’re at about 80 employees, with as many as 50 new requisitions out for new hires, so I think we’ll end the year somewhere in the 120-130 employee range.
In addition to the above, we currently have over 500 artists who produce content for the Daz 3D marketplace or through other partnerships, and they’re spread out all over the world. Many of them, even though they’re not full-time employees, make their full living working with us.
We also have hundreds of thousands of monthly active users, and our software product still averages 10,000 downloads a day. We’re pushing somewhere in the 4 million range for total downloads—this is where 3D artists can come to sell their work if they want— or we have a very prolific gallery with tens of millions of art pieces on display.
We also have forums and a community where artists can interact with fellow artists. Exactly what we’re doing is creating this space for 3D art creators, and we’re doing it on an international scale. For the Daz 3D direct-to-consumer business, a little more than 50 percent of that revenue is international. The US is the largest, but the strongest international markets include Japan, the U.K., Germany, France, and Italy—a lot of Western Europe.
It’s incredible to see how far we have come.
Founding Tafi and moving into the NFT space
Daz 3D was founded in 2000 but a few years back, we formed a second brand, Tafi. Tafi is a brand that’s taking all the cool technology, the millions and millions of digital content that we produced through the Daz 3D platform, and bringing it to broader, more mainstream markets. The best way to look at it is as one company— two brands with Daz 3D being our direct-to-consumer brand, and Tafi being our B2B brand.
I built Tafi with the help of Matt Wilburn, the co-founder and president of Tafi and Daz 3D. Matt is responsible for marketing, analytics, and many areas of operations for the company, including Daz 3D NFT, and our B2C, and B2B initiatives.
Daz 3D and Tafi’s HQ is located in Salt Lake City, but we have a small office in Seattle and we have a larger office in our legal entity in Vancouver, Canada, with employees there. We also have a sprinkling of other full-time employees from Atlanta to London to San Francisco—pretty much all over the world.
When we first formed the brand Tafi, we partnered with Samsung. In fact, most of the really cool content in their AR emoji system is produced by our company.
After forming Tafi, some of my colleagues and I went to MIT for a couple of months to study blockchain and get involved with NFTs, and that’s been a major driver of our business now. We’ll likely double the size of our business in 2022, and a huge portion of that growth will be in the NFT space.
Most of the NFTs are called PFPs or profile pic art, and most of that is compiled in 2D. So for example, if you look at some of the largest collections like CryptoPunks or the Bored Ape Yacht Club, their NFTs are selling for $400K—that’s the cheapest one you can buy right now and that’s in 2D.
What makes us unique given our history in 3D, is we bring this unique utility where the NFT art is in 3D, but then it’s totally interoperable. Think of it as a passport to the metaverse. The content we create and the utility we bring to other collections that aren’t our proprietary collections, they’re all Web3, metaverse-focused, and giving people the opportunity to create a virtual identity around the NFTs they’re purchasing, and bring those into other design platforms, games, or social media platforms.
In early 2022, Daz 3D teamed up with Warner Bros. Consumer Products, DC, and Palm NFT Studios to create the world’s largest NFT collection, Bat Cowl. Inspired by DC’s Legendary Superhero Batman, Bat Cowl is a collection of 200,000 uniquely 3D-rendered Batman cowl NFTs.
The Bat Cowl Collection is more than just collectibles; NFT holders can expect exclusive NFT drops and upgrades as well as access to a private DC Universe fan forum featuring behind-the-scenes content, select fan events, physical collectibles, merchandise, and more.
The collection was announced on March 29th and, starting on April 26th, owners of DC FanDome NFTs will have exclusive access to the Bat Cowl pre-sale. You can read more about Daz 3D’s role as the 3D artists and creators behind the collection here.
Supporting independent artists
If you think about struggling artists, the most famous one was BEEPLE (Mike Winkelmann), who was kind of a struggling artist who got into the NFT space early, and through a Christie’s Auction, sold his first piece of NFT art for $69 million, and by the way, he used our product, Daz 3D Studio, to model the initial concepts around that art.
There are a lot of independent, individual artists who are making a lot of money in this space, even in the general 3D content creation space. We have artists who produce for our marketplace who earn hundreds of thousands a year in income, so one of the things we take a lot of pride in is our ability to build that independent artist community and help lead them into new areas where they’re able to monetize their work.
We launch about 20 new products a day on our direct-to-consumer site for that 3D kind of SG community that we serve through our Daz 3D marketplace, and then we have a pipeline of several projects. At the moment, we probably have about eight or nine big NFT-related projects coming out as well as some pretty awesome brand collaborations with the top cosmetic company in the world.
We are a creator-first company, and one of our creators, Mario V, designed a spectacular collection of 7,777 hyper-real, unique aliens, called Cronos-7 Visitors, using our Daz 3D Studio software. We are collaborating with Mario to release this collection on Crypto.com NFT. This is a guy who has been an artist his whole life. He started painting and moved into digital art creation, and now he’s about to launch a significant collection on a major crypto brand platform.
Finding great people who make it all possible
At the end of the day, when people ask me what I’ve learned over the course of my career as a co-founder and CEO, I say that it all starts with people. I’m pretty active in different organizations and I do make myself available to new entrepreneurs and new CEOs. Right now, what’s such a constraint, especially in Utah, is that it’s really hard to find talented people. Despite that, your success comes down to frankly, surrounding yourself with people who you know are more talented than you in many ways.
Take my business partner Matt for example—I’ve known him since he was a teenager and he’s worked for me at several companies. When you know you’ve got trusted colleagues like that, who not only carry their fair share of the water, but more than their fair share, that’s really important.
Right now, especially how tight the market is, I spend probably 75 percent of my time on recruiting and talent development, and 25 percent of my time actually in the operations of the business and managing the board and our investor syndicate. It’s such a critical piece and the sooner founders can establish people as the most important part of their business beyond product and even profitability in some cases, the more successful I believe they’ll be.
I think a big part of that is making yourself available. You have to be able to network. We are active sponsors and are actively involved in the local communities where we have offices. We attend events and put a lot of focus on engaging with people.
The most successful recruiting is word-of-mouth, it’s about who you know. Our greatest success in recruiting talent is having our current talent, our A players, bring additional talent into the company. Keep your employees, especially the best contributors happy, and they’ll bring that talent to you.