1Mby1M Virtual Accelerator AI Investor Forum: Felix Hartmann, Hartmann Capital (Part 3)

Sramana Mitra: I have a different question, but we’ll go on to your next case study in just a moment because what you’re describing is so interesting. I did one of the first online fashion companies—real fashion, regular fashion—back in 1999.

The question that’s swirling in my mind is: you have so many users and so much activity. It must be segmented though, right? Is it the fashionistas who are on there, or is it more the geeks who like t-shirts and fashion?

Felix Hartman: This is not the place for fashionistas. I think the high volume just comes from kids, honestly. It’s really the broad Generation Alpha and younger Gen Z crowd. And when I say Gen Z, I mean the younger segment—because some Gen Zs are in their twenties now, so they’re not as young as they once were.

A lot of the volume, for example, comes from platforms like Snapchat. We’re talking about 16 to 21-year-olds who might pay $2 to dress their avatar, because they use those avatars in their Bitmojis. When you reply to something, there’s a little sticker on top with your avatar.

If I see a cool-looking leather jacket that costs $2—well, that’s not much. A coffee costs more than that these days. So I think, why not? Double-click Apple Pay and it’s done. Even I might be the target audience in that sense.

And then you have someone younger, say on Roblox. This is anecdotal, but one of our LPs—limited partners who invest in our venture fund—told us their kids were spending $200 a weekend on Roblox.

That’s a lot of money. First, you have to have that kind of money. But these are the audiences. They said their kids would meet up with other kids and sit in a circle playing Roblox on their phones—the same way we used to use Skype. That’s their digital town square.

So for some, it might be $2. For others, it’s $200. It’s highly variable and elastic. Interestingly, a lot of the content is free.

To build on that—and this transitions smoothly into our investment thesis—we’ve backed a lot of game studios. Most of them have realized they’re better off going free-to-play rather than selling premium titles. In the past, you’d charge $20 to access a game. Now, anyone can play for free. The goal is to attract as many users and eyeballs as possible.

Monetization happens on the backend—whether that’s through cosmetics, subscriptions, or consumables.

Sramana Mitra: In-app purchases.

Felix Hartman: Exactly. And not even pay-to-win—where you have to spend money just to win or feel good. It’s more about loving the ecosystem. If you’re invested in it, you want to stand out within it.

Maybe your avatar looks different because you’ve spent a lot of time there and you care about how you appear. Or maybe you earn extra points for progression. Things like that.

This segment is part 3 in the series : 1Mby1M Virtual Accelerator AI Investor Forum: Felix Hartmann, Hartmann Capital
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