Escape rooms became extremely popular in Budapest, Hungary around 2012. It seemed like a good idea to bring this fantastic idea to the US, I always wanted to build something that can grow organically and can expand globally. My partners and I opened up the first two PanIQ Rooms from our own savings. It’s very hard to do marketing with empty pockets, this is why Groupon was pretty much our only marketing channel at the beginning.
When we started the business in 2014, nobody knew why do we want to lock people in a room for 60 minutes and ask money from them. The actual game didn't even have a name. We didn't know what search terms should we use and how to optimize our campaigns. Nowadays a lot more people know about escape rooms, therefore google adwords became our primary marketing platform. It's very easy to measure the ROI there, we can easily track conversions through our booking system. We also run ads on instagram and invite influencers occasionally.
One of our units hosts more than a 100 teams (which is about 500 people) monthly is doing very well. Our best performing venue made a 9 month return on investment.
Thanks to word of mouth, PanIQ Room quickly became a must-do attraction in both LA and San Francisco, we were probably the first European style escape rooms on the market. We quickly realized that the amount of cash generated by our corporate owned stores will not cover our further plans, therefore we started franchising to attract more capital. We also received a seed funding round from Hiventures (a Hungarian based VC fund).
How do you attract customers?
Most of our rooms are family friendly and we try to communicate it intensively, that you don’t have to be a genius to have fun at PanIQ Room. Anyone who likes to hang out at the Movie Theater is our target audience, we have hosted many marriage proposals, birthday parties, family reunions and homecomings, our game masters have even shared their most memorable stories on our company blog.
Where did you meet your founding team?
The core management team have been close friends and I also involved my brother and sister in the company. Since we’re a small company, most of our employees are real all-around players. We can’t afford having people with very specific knowledge, building and operating an escape room requires people, who has a complex knowledge and are excellent in multiple fields of their broad profession.
What motivated you to start your own business?
After graduating from University, I started an advisory (business consulting) firm and, with the involvement of local investors, built Hungary’s premier family entertainment facility. It was a huge challenge to run an entertainment business in the middle of the financial crisis, I had to learn how to run a business cost-efficiently and how to make the right investment decisions. My parents have never been entrepreneurs, - in fact - my father was scared about me not choosing the traditional and safe 9 to 5 life strategy.
What is stopping you from being 3x the size you are now?
The lack of capital has always limited our growth potential. Our first escape room venue was a $100,000 investment, while now we’re building units from $1M+ dollars. Choosing the right business strategy and being well-capitalized is more important long term, than building the best escape rooms in the world. I hope at the end of the day, it will turn out that - instead of getting rich from one day to the other - we made the right decisions by reinvesting every profit into the business.
What apps could your business not run without?
Trello and Slack are essential in our daily communication. We are also very proud of our custom back-end, reservation and kiosk hint system, our units couldn’t be supervised and operated without these tools.
Would you ever sell the company?
Next year is very important for PanIQ Room, we will open a lot of new stores (with 3rd generation escape rooms), including our flagship store on the Las Vegas Strip. Hopefully we can also close a successful new round of funding, which will allow us to open some MEGA sized corporate owned stores. Franchising is still an immanent part of our growth, but having a flagship units in major markets also seems like a reasonable business decision.
Would you ever sell the company?
Our ultimate goal is to sell the company one day, we’ve had a hell-of-a-ride so far, so after a couple of years I do think that I deserve a bigger pay-check and a little holiday.