- Frank Shi and Xuan Buddhavong cofounded Paper Triangles in 2016 to create VR games and experiences.
- Shi and Buddhavong pivoted away from VR in early 2018 to develop Snapchat AR lenses for brands.
- Paper Triangles made nearly $4 million in 2021, designing for brands from Adidas to Spotify.
When Frank Shi and Xuan Buddhavong cofounded the Los Angeles-based studio Paper Triangles in 2016, they originally set out to create immersive virtual reality games and experiences. But despite promising projects like their VR game for “The Conjuring 2”, the pair quickly realized VR presented several unique challenges, including lengthy development times and a relatively small market.
“The challenges quickly became really obvious,” Buddhavong said, adding that VR could be expensive to develop and cumbersome for users to try. “It wasn’t financially viable because there was such a high barrier to entry. The only people willing to pay for [VR] were really big movie studios.”
Shi, however, saw potential for the business on Snapchat. A longtime Snapchat user, Shi suggested Paper Triangles experiment with the platform’s Lens Studio, a set of software tools released in 2017 enabling Snapchat creators to make augmented reality lenses for the app.
With hundreds of millions of Snapchat users, Shi believed the potential upside for Paper Triangles was greater. Developing for AR was also significantly easier. While VR projects averaged three to four months of development time for Shi and his team, AR lenses could be created in as little as three to four weeks.
Paper Triangles pivoted away from developing for VR in early 2018 and focused exclusively on developing Snapchat AR lenses. Two years later, Shi and Buddhavong realized they had made the right decision when Paper Triangles started making six figures in revenue a month.
Now the AR studio earns nearly $4 million in annual revenue from its work with over 100 clients, including Adidas, Apple, Doordash, ESPN, Pepsi, Sephora, Spotify, and T-Mobile. A collaboration with Crocs, in which users could customize and try on a virtual pair of clogs, ultimately resolved one of Paper Triangle’s most successful projects, generating roughly 3 million views.
Insider verified Paper Triangles’ revenue through documentation provided by Shi and Buddhavong.
To reach that revenue milestone, Paper Triangles now retains seven full-time employees and four freelancers who juggle between 30 to 40 AR lens projects a month, with each project usually consisting of one AR lens. The studio typically charges between $10,000 to $30,000 per project. 95% percent of those AR lens projects come by way of Snap, which essentially pitches work to Paper Triangles, while the remaining 5% comes directly from brands and agencies.
“Brands see this as a cool new way to advertise, particularly as companies like Apple keep emphasizing privacy,” Shi said.
Shi and Buddhavong’s next bet? Expanding their AR work to eventually include TikTok.
“We’re in a good place such that we’re able to start exploring again,” Buddhavong said. “We’re trying to look and see what ‘next-generation’ is, what people are trying out. To us, TikTok seems like a very natural progression.”