Meet the former intern on The Sims who raised $33 million for her 3D furniture platform

This former The Sims game intern started a real-life 3D design company that's raised over $33 million in venture capital
This former The Sims game intern started a real-life 3D design company that's raised over $33 million in venture capital

Finding the right piece of furniture for any space can be difficult. Being able to virtually see how that sofa you've been eyeing will look in your home before you purchase it, or whether that lamp will fit perfectly in the corner next to your bed would make things so much easier. Thanks to Shanna Tellerman, the CEO of 3D furniture platform Modsy, you can do just that.

Tellerman had the idea for the platform, which she created in 2015, after her own struggle finding furniture.

"I started Modsy from a very much personal experience," the 36-year-old tells CNBC Make It. "I moved into a home with my now-husband and we went through the process of trying to pick out furniture and design the home. I think like many people, I thought it was going to be really fun and before we knew it, we ended up with 10,000 tabs open, 14 store trips, a Pinterest board and no decisions."

Tellerman says she realized that the missing piece was the ability to visualize how the furniture would look in her space.

Modsy CEO Shanna Tellerman
Photo courtesy of Shanna Tellerman/Modsy

Having spent time as a production intern for The Sims 2 video game in 2004, she knew that a 3D platform would be the key to solving this problem.

"Definitely this idea of virtual environments and virtual room-building was very much planted in my head as early as that internship on The Sims," she says.

Modsy allows consumers to virtually design using 3D models of their space (based on photos) and of shoppable furniture from more than 100 brands. To date, her platform has caught the attention of high-profile investors like Comcast Ventures and Norwest Venture Partners and has secured a total of $33.75 million in funding.

Tellerman says she feels "very lucky" to be one the few women CEOs who have received venture capital. Only 3 percent of venture funding was raised by women CEOs between 2011 and 2013, according to a recent study.

"I honestly can't tell you all of the secrets because I think some of it is timing and luck in the business model that you walk in with and the people you end up meeting," she says.

In addition to crediting her Sims internship as inspiration for her platform, Tellerman says her love of art, design and technology developed in college. As an undergraduate student studying fine arts and multi-media production at Carnegie Mellon, she enrolled in a virtual reality class that shaped her thinking.

"It just blew my mind — this intersection of graphics and arts and science and math — and I knew from that point on that was the career trajectory for me," she says.

Photo courtesy of Shanna Tellerman/Modsy

Continuing her education at Carnegie Mellon as an entertainment technology graduate student, Tellerman started working on a platform that allowed developers to create and share 3D games online. After graduation, she turned the platform into a company called Sim Ops Studios. However, her quick transition from student to CEO posed several challenges.

"The Sims 2 was really my only professional experience," she says. "I went straight from graduate school to starting my first company, which was an amazing adventure and also a really hard way to learn how to be a boss."

As a recent graduate, Tellerman says she felt more like her employees' peer and struggled with the idea of being their boss versus their friend. She says she also faced trouble setting clear goals, evaluating performance reviews and deciding the proper compensation an employee should get.

"All of those were things I kind of had to figure out as I went," she explains.

After running Sim Ops Studios for five years, the business was acquired by 3D software company Autodesk in 2010. Tellerman worked with Autodesk for two years as a product line manager before she got the entrepreneurial itch to leave the company and start another business. However, an email about an opportunity to join Google Ventures changed her track.

"Google Ventures reached out, completely out of the blue," she says. "When I responded to that email I was kind of like, 'I don't know if I really want to go into venture.'"

Photo courtesy of Shanna Tellerman/Modsy

Going against her initial instincts, Tellerman took the meeting with Google and realized that sitting on the investment side of the table could actually help her become a better businesswoman.

"I learned a lot while I was in venture that has influenced how I've been as a CEO and entrepreneur starting Modsy," she says. "The number one thing I learned was that the process is so difficult. There are so many entrepreneurs that come in and pitch investors, and as an investor, there are really so few that you're going to choose to invest in."

One of the biggest mistakes she said she's seen business owners make is not being able to prove to investors that the idea is scalable.

"That means it should be able to have a billion-dollar-plus outcome," she explains. "So when you can paint that picture for an investor, your odds go up."

Keeping this knowledge in mind, Tellerman left Google Ventures in 2015 to focus on launching and scaling her idea for the 3D furniture platform. She came up with the name after playing around with the words "mod" and "modern" and eventually throwing Modsy out there during a brainstorming session with her mother.

"I told her I was thinking of this name, and she was like 'modern and easy, the modern and easy way to design your home.' And I was like, 'done,'" she says.

Photo courtesy of Shanna Tellerman/Modsy

But even with prior experience as an entrepreneur, Tellerman still faced challenges properly growing and scaling Modsy.

In addition to hiring mistakes and early errors around company messaging, the CEO says one big misstep was around pricing services. In the beginning, Tellerman and her team offered one set price for Modsy customers. However, after realizing that not everyone was using the platform in the same manner, she split the pricing into two tiers. Now, consumers have the option to pay $69 for using the platform to design and layout their space on their own and $199 for one-on-one advice from a Modsy style advisor.

Now, with proper pricing and clear messaging in place, not only did Modsy close its $23 million Series B in December, but the company has also secured partnerships with retailers like Crate and Barrel, West Elm and media outlets like NBCUniversal Cable Entertainment. Last year, her company appeared in Bravo's home makeover television series "Cyrus vs. Cyrus," which is an interior design show starring Miley Cyrus's mother and sister, Tish and Brandy Cyrus.

"I feel lucky that [my experiences] kind of all came together," Telsays of her success. "My first business really set me up for understanding 3D graphics and startups. The Sims really set me up to understand consumers and really simple interfaces and then the very complex technology behind the scenes that powers it. And then, my venture experience really gave me the understanding of the venture capital world."

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Disclosure: CNBC's parent company NBCUniversal is owned by Comcast. Comcast is an investor in Modsy.