The Problem With Doing It All At Once

Will Outsized Ambition Ultimately Doom Magic Leap?

This week’s news that CastAR — the Augmented Reality hardware startup that raised $15 Million from Andy Rubin’s Playground Ventures — is closing its doors made me think of Magic Leap.

Both companies have, to date, focused on creating an entirely new approach to computing centered around a new class of hardware (glasses). Both companies also invested significant time and resources into building games and other content — a full-on software ecosystem — to run on their new hardware.

In other words, CastAR and Magic Leap both set out to make a giant leap from the touchscreen computing model of today to the immersive, head-mounted display computing model of tomorrow, without taking too many intermediary steps. Unlike Apple’s approach to AR or Samsung’s VR play, both of which lean on the smartphones consumers already use to make immersive computing adoption a little less painful, CastAR and Magic Leap set out to build brand new hardware, software, ecosystems, consumer behaviors, and (presumably) brand awareness and loyalty from the ground up.

Now CastAR is reportedly packing it in. So what about Magic Leap?

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Magic Leap Patent Drawing

A week or so ago, a website I’m not familiar with ran a post announcing that Magic Leap is “not that far away” from disrupting the computing industry at long last. The article included an embedded YouTube video of Magic Leap CEO Rony Abovitz giving a speech at a conference called eMerge Americas; actually, the article largely quoted and paraphrased from said speech.

The video of the speech was shot in 360 immersive video and posted to the “Nick Quay Real Estate Group” YouTube channel. As of my writing this, it has 2,890 views and 15 ratings: 12 thumbs up, three thumbs down. That’s not so many views.

Both the web article and the description of the video include this text, attributed to Abovitz:

Magic Leap is not Virtual Reality or Augmented Reality.
 Magic Leap is “Spacial Ambiance, using digital light fields to create a personal computer that is ambient, always around you, always understanding, what you see, it sees, what you hear, it hears, and is always contextually aware.”

The term “Spacial Ambiance” appears in both places. Magic Leap, apparently, has not only invented a new class of immersive computing (again, their word), but also a new way to spell, “spatial.”

I led with all of that not (just) to be a snarky blogger, but because it’s all kind of stunningly noteworthy given last month’s reports that Magic Leap could be closing in on a Series D round of funding. A round that insiders believe will put the company’s valuation at $8 Billion. This company may soon be worth eight billion dollars, and they’re making up words and being covered on some real estate guy’s YouTube channel?

Magic Leap says they’re working not only on a consumer product, but also on scaling manufacturing to ship “millions” of devices. They say 2017 will be a big year. They say their initial product will be “affordable” like a “premium” consumer tech device. A few reports have translated that to somewhere between $1,500 and $2,000 at retail.

History says a $1,500 Augmented Reality headset from a new brand will be a total failure with consumers. Consumers don’t drop $1,500 to try a new way of computing. Consumers don’t drop $1,500 on a debut product from a company they’ve never heard of. Consumers don’t buy into a new class of computing by the millions.

History says what consumers will do is watch Magic Leap’s video demos for free on YouTube, and then check out the new class of AR-enhanced apps soon to be hitting the phones those consumers already know and use and love. Consumers didn’t buy Gear VR headsets by the millions, but will try out the ones that come free with their next Samsung phone, and maybe even pay for a few apps as a result.

Apple seems to be taking a similar tack with AR, starting with iOS apps and potentially building towards the Augmented Reality glasses everybody is convinced engineers are toiling over in Cupertino. AR/VR is a long play, and history says the smart money will leverage existing brand loyalty, install bases, and developer ecosystems to shepherd the transition to immersive computing over time.

Then again, nobody’s invested $15 Million — let alone a billon dollars — in my startup, so what do I know about history and smart money?

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I’m really curious about Magic Leap. The company has raised in excess of $1.4 Billion — at a $4.5 Billion valuation — from some big time investors led by Alibaba, with that rumored D-round looming. They’ve demoed their technology to a bunch of celebrities and a very small handful of journalists. They also released a YouTube video that was routinely mocked by other journalists for showing fake tech.

Stephen Spielberg and NBA star Andre Iguodala were blown away by their demos. Backchannel’s Jesi Hemple was also impressed. Beyonce, on the other hand, was not. One the other other hand, this one person I know whose name I can’t tell you was impressed. And s/he didn’t even get the A-list celebrity demo.

So most people who’ve seen the demos have been impressed. But even in demo-land there have been issues. The company’s patent filings detail a hardware system that includes glasses that connect to a pair of belt-mounted packs that handle computing and battery power. The Information reported last December that the then-current prototype hardware was bulkier than those patent filings detailed. The Information, along with Business Insider, have been somewhat skeptical about Magic Leap’s progress.

I, too, am skeptical. It’d be pretty cool of Magic Leap to disrupt the whole goddamned world by unveiling a product that changes the way people think about computing, in one fell swoop. But they may wind up exposed as fraudulent hucksters and run out of the virtual town, Theranos-style.

The more likely outcome lies somewhere in between the two extremes. Magic Leap will likely launch a consumer offering late this, or perhaps next, year. The device will probably do some super cool things, fall short of expectations set by those rigged demo videos, and gain some traction amongst enthusiastic early adopters.

Available content will be important to the device’s success, but more important will be Magic Leap’s efforts to nurture adoption across industries. $1,500 is a huge outlay for an individual consumer, but not that much for an enterprise tech company, industrial giant, or medical conglomerate looking to invest in next-generation training methods. Since Magic Leap doesn’t appear to be interested in “trickling up” from iPhone apps to proprietary hardware, trickling down from enterprise adoption to eventual consumer adoption may well be their only path to sustainability.

But who knows? Maybe the secret play is to make a huge splash and then slice the company up and sell the core tech to the highest bidder. Maybe Alibaba’s prepared to keep writing checks to sustain Magic Leap over the long haul until spacial computing takes hold of the mainstream. Or maybe the initial launch will reveal a coordinated attack of hardware, software, and studio/developer ecosystem the likes of which our world has never seen, and within mere months everybody will have bought into Magic Leap.

I only hope that, unlike CastAR, Magic Leap lasts long enough to bring their vision to market. And maybe just knock our socks off in the process.

Originally published at on June 28, 2017.