Alexander Heller makes it sound almost easy to run a company. The co-founder of Dubai-based HyperSpace, a digital theme park operator, believes it is vital to avoid stress as he strives to bring joy through his business.
But he is also candid that the start-up journey is all-consuming. He jokes that as an entrepreneur, he is in the business of saying no to everything: “If someone says, ‘Let's go for dinner’, No. ‘Are you going to come for this holiday?’ No. ‘Do you want to do this?’ No. You just say no as default, because you're focusing on this one thing.”
For Mr Heller and co-founders Rama Allen and Desi Gonzalez, growing the company they started in late 2020 when the world was still reeling from the impact of Covid-19, has demanded innovation, time, effort and lots of money.
Having worked in the arts market, Mr Heller had the idea in September 2019 to create a tech-driven, immersive entertainment destination, to link retail developers and futuristic entertainment amid a sort of “retail apocalypse”. After creating a dummy model based on his hypothesis, he approached mall developers and found huge appetite and willingness to fund from a local investor.
“I realised that we had a real business here because we were holding about $15 million of paper, and said, 'Let's go build this.'”
HyperSpace now operates two venues, the 40,000 square-foot Aya Universe in Dubai’s Wafi Mall, which opened in December 2022, and the House of Hype at Riyadh Boulevard, launched in November last year.
“When we opened Aya, we had much more liability than I think anyone would have liked us to have,” Mr Heller says. “But it hit on day one, and thank God it did. This company probably wouldn't exist if it hadn't hit on day one.”
Being “perfectionists” meant that the team took their time opening Aya, an experiential entertainment space which has 12 zones, redesigning the entire product three times.
“All of our investors would have liked us to move faster,” he says. But it took time because “you have one shot to get this right. I'm a big believer that you spend every dollar once. You should never spend on the same square footage twice”.
The effort paid off, with the company beating its projections for Aya by almost 300 per cent in the first year and selling 480,000 tickets in its first nine months of operation. “So, we went from 'this is a cool idea' to full profitability in nine months, and then, obviously, we moved right out of profitability, building new parks, expanding,” he says.
At present, 98 per cent of Aya’s customers come to Wafi Mall specifically to visit the destination, and it has increased the unique visitors to the shopping mall by roughly 16 per cent.
“This is a very price insensitive market. We've continually increased our ticket price, which has only increased our visitation. But I think that's just consumers here [and] we're still not a very expensive product,” Mr Heller says.
The company's marketing has primarily been online, with 57 per cent of its customers learning about the product through someone else's social media. “So, at zero customer acquisition cost, I would say we're kind of a one of one in that category … We're definitely a destination.”
HyperSpace's second attraction, House of Hype in Riyadh, opened after the company raised $55 million in a funding round in October as a mixture of equity and debt financing led by New York-based venture capital fund Galaxy Interactive, with the participation of Saudi entertainment initiative Riyadh Season, Sega Ventures and Apis Venture Partners.
The immersive entertainment park combines physical experiences with virtual reality, content creation, physical video games and technology elements. The company also started Parx Platform, a centralised digital platform linking all their destinations, at Riyadh Boulevard Park last year.
Gulf nations, particularly Saudi Arabia and the UAE, are investing heavily in diversifying their economies to boost non-oil growth, with tourism and entertainment among target sectors. As part of its Vision 2030 plan, Saudi Arabia aims to increase household spending on recreation to 6 per cent by 2030, from 2.9 per cent.
The General Entertainment Authority has pledged to invest up to $64 billion by 2028 to develop the domestic entertainment sector. Last week, the authority also said it had increased its financial support for small and medium enterprises in the sector to up to 100 million Saudi riyals ($26.6 million), after having provided about 70 million riyals in financing and guarantees since the initiative was launched in 2022.
Overall, HyperSpace has received $75 million in funding so far. It plans to open another 100,000 square-foot House of Hype in Dubai Mall this year, with high expectations for footfall, considering the traffic to the mall, Mr Heller says.
“We love Dubai. We think that Dubai is a market that just can take more and more. Now, obviously we're not trying to cannibalise our existing business, but there's other categories of entertainment that we can build into [such as] kids' location-based space and the more culturally driven edutainment space,” he says.
“I would say if we were to make another big move in the UAE, it would definitely be in Dubai, and we have ideas that we're exploring. And in Saudi [Arabia], there's a continued demand for what we do and, positioned correctly, that's also something that we're working on.”
Future expansions include to the US, with an announcement expected shortly. It is also looking at developed markets in Asia for Aya and House of Hype, and exploring franchise partnerships for international growth.
“Hyperspace is a speed that's faster than the speed of light, which, when we named the company at the beginning, seemed like the speed that we wanted to move at. I think it's very important that we had the word space in the name, because we deal with a lot of physical space.”
Since the company operates in a sector that has an “extremely high barrier to entry”, building the business requires stacking “an enormous amount of capital” and exploring different financing formats.
“We focus on making money, we focus on profitability, we focus on driving the maximum amount of revenue into our business,” Mr Heller says. “And for a long time, we were in a very unsexy space and, compared to other venture-backed businesses, it's very niche and very fringe, and so we've had to rely significantly on developing business to fund our business.”
“And we're fortunate to have some great venture capital investors that believed in us. But the majority has been us driving business into our business, just creating revenue.”
Ultimately, success is not just in an entrepreneur’s hands, according to Mr Heller.
“Luck is a massive piece of it, especially at the beginning … So many different things can happen that can change the business so dramatically, and that can come down to who you work with, who you hire, the market conditions, if you do this deal versus that deal,” he says. “At the beginning, you're just like a lump of clay, and it can just be pulled and stretched in so many different directions.”
Mr Heller is a big fan of his product. “This is the coolest thing in the world. I think we created the most fun place that you can go. So, I want to bring that to as many people as possible, and I want to build as many brands around that as possible,” he says.
Q&A with Alexander Heller, chief executive and co-founder of HyperSpace
Who are your role models?
I rely on a few individuals that are involved in my business, from an investor board perspective, that I would say are very much role models to me [and] dear friends, people that I rely on in so many capacities in building the business.
If you could start all over again, is there anything that you would do differently?
I [would] have appreciated the speed of product market fit on Aya, and probably doubled down on building that experience specifically, and made the hard decisions around the multi-brand play at the time, and said: ‘Let's maybe put this on the shelf for a year and come back to this quickly. But we have a hot potato here. Let's push this.’
What are the key things that you learnt while setting up this company?
Starting a business is always about the people that you work with. The job of a chief executive is putting together the smartest people you can find and getting out of their way and just letting them do their thing. There were times at the beginning where I wanted to have my hands in so many things, and then I realised: ‘Why do you do this when you have the best professionals sitting here to do this? They are the experts.’ That's something I've learnt, and I've made mistakes in that regard.
What is your advice to other entrepreneurs?
Fearlessness and forward propulsion are key. There will be many decisions that an entrepreneur makes that will seem like the biggest decision at the time, that will [turn out to] be a 'nothing' decision. And there will be so many decisions that an entrepreneur makes that seem like a 'nothing' decision, that end up being the biggest decision. So you just keep on moving forward. The reality is, for the first five, six, seven years of a business, you're just surviving. Even if you're making a lot of money, you're still spending a lot of money, you're still plotting your next path. You just have to have this belief. And truthfully, you just can't really get worked up or stressed.
What is your vision for the company?
As I look towards the future, I just want to continue to build businesses within HyperSpace that make as much money as possible, because you are beholden to no one if you're able to drive the revenue yourself, and you're not relying on raising capital, and you can dream really, really big. Now we're starting to taste that, and that's very exciting. So, as we grow the business, I don't really think about anything other than how do we make the most amount of money every single year, because I think that's ultimately what propels you forward.
