Inside Modulate’s Enterprise Strategy: How They Won Call of Duty and 4x’d Revenue by Listening to Customer ‘Confusion’

Technical founders often dismiss customer “confusion” as a communication problem. But what if that confusion is actually the market trying to tell you something? In a recent episode of Category Visionaries, Modulate CEO Mike Pappas revealed how misreading this signal nearly cost them their biggest market opportunity.

The Original Vision vs. Market Reality

Modulate began with a clear technical vision: real-time voice-changing technology for gaming platforms. The founding team, with deep expertise in physics and machine learning from MIT, was confident in their solution. But during sales conversations, something interesting kept happening.

“Some of the studios would come and say, ‘hey, that’s really cool, but can you moderate the audio too, if you’re listening to it anyway, that’s what we would really like,'” Mike recalls. His initial response was telling: “I, being a technologist, would say, ‘hey, that’s a totally different product. You’ve clearly misunderstood what I’m presenting. You let me explain it more clearly so you stop asking silly questions.'”

The Breakthrough Moment

The turning point came when the team finally recognized a pattern in this “confusion.” As Mike puts it, “Our first customers found us and banged down the door and made us understand that this was a thing that they deeply needed.” The market wasn’t confused – it was trying to redirect them toward a bigger opportunity.

This realization led to the development of ToxMod, their voice moderation product. The solution addressed a critical problem for gaming platforms: “When you have an online platform, typically games is what we work with most. You have lots of people chatting with each other all the time, and most of those conversations are fine… But sometimes those conversations take a dark turn.”

Scaling Through Enterprise Partnerships

The pivot to voice moderation opened doors to major enterprise partnerships. “Over last year, we more than forexed in our annual recurring revenue,” Mike shares, including a significant deal with Call of Duty. But the road to enterprise success required more than just a product pivot.

Modulate developed a distinct approach to enterprise partnerships. “First and foremost, we want to tell the truth,” Mike emphasizes. “We see ourselves not just as a vendor to a platform. We really want to be a partner.” This sometimes means turning down business that isn’t a perfect fit, but it builds stronger, more sustainable relationships.

The Regulatory Advantage

The team discovered another crucial enterprise need: help navigating complex regulatory landscapes. While giants like “Facebook or Roblox have the resources to read thousands and thousands of pages of regulations,” most gaming companies lack these resources. This insight shaped their enterprise go-to-market strategy, positioning them as strategic advisors rather than just technology vendors.

Lessons for Technical Founders

The key lesson from Modulate’s journey? “Listen to the customers when they tell you what they want,” Mike advises. “When you’re getting that consistent message, even if it’s just as it seemed to me, a message of them being confused about what you’re building – pause. Stop trying to hammer in your vision and really go back to saying where is the customer coming from.”

For technical founders, this might feel counterintuitive. The instinct is often to better explain your vision rather than question it. But Modulate’s story suggests that sometimes the best market opportunity isn’t the one you initially envisioned – it’s the one your customers keep trying to tell you about.

The success of this approach is clear in their growth and enterprise partnerships. By transforming customer “confusion” into product direction, Modulate didn’t just find product-market fit – they discovered an entirely new category in voice safety that they now lead.