Digital Twins, Real Impact: How Palatial’s Pivot Is Fueling the Robotic Future

Fireside Product Management

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We’re back with a Startup Spotlight episode on the Fireside PM podcast. It’s not every day you get to speak with someone who’s straddled the worlds of architecture, gaming, AI, and robotics—and managed to turn those disparate threads into a startup tackling one of the most important problems in our robotic future.

Steven Ren, the co-founder and CEO of Palatial, joined me from Lower Manhattan to share the winding journey of his company—from Cornell’s architecture school to optimizing simulations for robot training at scale. We went deep on the technology, market evolution, and product insights he’s picked up along the way—and there are dozens of takeaways here for early and mid-career PMs, especially those building infrastructure, devtools, or working in AI-adjacent spaces.

From Watercolors to Headsets: The Early Seeds

Steven didn’t grow up dreaming of building tools for humanoid robot training. He actually wanted to be an architect—and studied architecture at Cornell. His turning point came in a multidisciplinary studio class led by Don Greenberg, a legend in computer graphics.

“He was always trying to get architects to work together with the CS people… and that really opened my eyes to what immersive tech and real-time rendering could do for communicating spaces.”

This interdisciplinary exposure planted the idea that real-time, explorable 3D environments could fundamentally improve how people visualize, design, and collaborate around spaces—both physical and digital.

He got a taste of this while at Tesla, working on Giga factory expansion. The rapid pace of construction caused costly design coordination issues, and Steven built a prototype that stitched disparate CAD formats into a fly-through simulation using Unreal Engine.

“I put together a pipeline that optimized and converted all the CAD designs into an Unreal Engine level—basically a big game—so they could fly around and see how everything fit together.”

It helped prevent expensive errors and even became a tool for internal storytelling. That experience solidified his conviction: digital twins weren’t just cool—they were valuable. He knew he wanted to build a company that scaled that capability.

Pivot 1: From Architecture to Optimization

The initial Palatial concept was ambitious: a cloud platform where architects could upload CAD files and get back interactive, game-like visualizations that clients could explore in the browser.

Sounds great—until you realize how unpredictable CAD file structures can be.

“Every software is different, and everyone uses the software differently. You have to make foundational translations between how engineers organize a scene and how game engines expect it.”

Instead of a tidy black box, they were faced with a combinatorial nightmare of input variability. Worse, customers didn’t want a finished result—they wanted control over how their designs were rendered and experienced.

So they pivoted. The new insight: the universal pain point was optimization. Making the scenes look and perform well across platforms.

Enter: Palatial as a plugin for Unreal Engine. The new tool became something like “CCleaner for your 3D scene,” scanning for inefficiencies and letting users apply best-practice fixes with a few clicks. Lighting, texture mapping, model merging—all simplified and standardized.

“Even if you don’t understand what’s going on, the idea is that you can arrive at a much more optimized project… and sometimes better-looking too.”

If you’re a PM shipping developer tools or plugins, take note: this pivot exemplifies how deep user testing can uncover the narrow wedge feature that wins adoption—before expanding.

The Aha Moment: Simulations, Not Showcases

Despite the optimization plugin gaining traction, Steven and the team began to spot a different kind of demand: robotics companies were building millions of virtual environments for training and testing.

“You need like hundreds of thousands of environments to teach the robot all the different variations of the world it could come across.”

Today, many of those teams manually build 3D scenes—or worse, ask ML engineers to fumble their way through creative tasks. It’s expensive, inconsistent, and distracts from core innovation. Steven saw a gap Palatial was well-suited to fill.

So they pivoted again.

Now, Palatial is focused on powering massive-scale, high-fidelity simulation environments—starting with objects and scenes that train robots to physically manipulate the real world.

PM Takeaway #1: Don’t Fear the Pivot—Engineer for It

Most PMs are taught to avoid scope creep, but what Palatial did is different. They bet on a market’s inevitable evolution (robotics), built a wedge feature (optimization), and used that to find the real platform opportunity (simulation infrastructure).

Steven put it plainly:

“It’s been a winding journey. We thought we’d serve architects, then realized robot developers had the same need—but at far greater scale.”

This is a playbook for product leaders:

* Find a general pain point across verticals (in Palatial’s case: messy 3D pipelines)

* Build a useful component (e.g., optimization plugin)

* Watch for the industry that experiences that pain at 10x scale (robotics vs. architecture)

PM Takeaway #2: Build for Openness, Not Lock-In

Another strategic decision: rather than offering a fully walled-off end-to-end platform, Palatial focused on modularity.

“We’re going to offer this as an API so teams can build generation into their existing pipeline… and just use that piece.”

In a world where AI stacks are increasingly bespoke, trying to own everything can backfire. By being composable, Palatial makes itself easier to adopt—especially for developers already invested in internal tooling.

Whether you’re in devtools, AI, or infra, this is a good reminder: great platforms start by being great plugins.

PM Takeaway #3: Product-Market Fit Might Be a Who, Not a What

Palatial didn’t change their core tech—they changed the user.

Same backend pipeline. Same rendering engine. But by shifting from architects (low frequency, high customization) to robotics engineers (high frequency, high fidelity), they unlocked a recurring, sticky use case.

“We realized this isn’t about showcasing a single building. It’s about training robots through thousands of virtual environments—and those environments need to look and behave like the real world.”

This kind of vertical shift is especially relevant in today’s AI world, where many companies sit atop general capabilities. The biggest opportunities often come from narrowing the audience, not the scope.

PM Takeaway #4: Speed is the New Moat

In one of my favorite moments, I asked Steven how he thinks about competitive defensibility.

His answer:

“There’s no such thing as a technological moat anymore. The moat is speed—having a nimble team that can iterate fast and adapt.”

We’ve heard echoes of this across the startup world, but it hits especially hard in AI and frontier tech. If you’re leading a PM team, ask yourself: are you shipping faster than your competitors can copy you?

And if not, why not?

PM Takeaway #5: Accuracy Will Be the Differentiator in the Robot Era

One thing Steven emphasized again and again was realism. In order for simulation-trained robots to be effective, their environments must behave like the real world. That means physical properties, lighting conditions, and object metadata all matter.

“There’s no point in generating data if it doesn’t match reality. You can generate as much crappy data as you want—it’s like oversweetened candy. You don’t want it.”

In other words: in the age of synthetic data and generative tools, quality—not just quantity—will win.

As a PM, that might mean:

* Prioritizing fidelity over speed when the stakes are high

* Partnering with domain experts to tune your models

* Making room for manual curation and validation—even if it slows you down

PM Takeaway #6: Be Willing to Outgrow Your Initial Market

Steven was candid about the limits of their original architecture play:

“It was kind of a one-and-done thing. There’s a bigger market where you need many environments, all the time.”

This highlights something I often tell coaching clients: your first ICP (ideal customer profile) is often just a foothold. Pay attention when your usage data, pricing power, or support requests point to higher-value customers in adjacent markets.

Where Palatial Is Headed

Today, Palatial is in the middle of rolling out their MVP for simulation-ready 3D asset generation. These aren’t just pretty models—they contain metadata about mass, bounce, physics, and more, making them usable for training and validation.

They’re also building the tooling to generate full environments from those assets and optimize them for scale.

Eventually, Steven sees a future where the robots themselves are capturing and syncing environments in real-time:

“Eventually this will be onboard the robots. As they walk around, they’ll translate what they see into a digital twin—and train on that in the background.”

That vision is a long way off. But Palatial is betting that when we get there, infrastructure like theirs will be indispensable.

Final Thoughts

If you’re an early or mid-career PM, a few questions to reflect on:

* What new verticals are quietly developing the same problems my team is already solving?

* Is there a simpler, standalone piece of my product that could become a wedge?

* Am I over-investing in platform scope vs. developer modularity?

* Is my team fast enough to stay ahead in a post-moat world?

If you want to stay close to the frontlines of robotics infrastructure—or you just want to learn from a founder iterating in public—follow Steven Ren and check out palatialxr.com.

And if your own company is navigating complex product strategy decisions or early-stage growth hurdles, I offer one-on-one coaching at tomleungcoaching.com, and product consulting and startup advisory services at paloaltofoundry.com.

OK, enough pontificating. Back to work, team.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit firesidepm.substack.com

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