Why You Should Care About Virtual Reality
If you told me in 2005 that Apple would become the most valuable company in American history by selling mobile phones, I’d have called you crazy. The truth is, everyone would have called you crazy. No one could have anticipated the speed at which internet-powered phones would become ubiquitous. The smartphone evolved from a novelty gadget to an essential commodity in just a few years. The photo below illustrates this phenomenon perfectly:
While 2005 doesn’t seem long ago, it was a much different time. We were on the brink of a mobile computing revolution. Industry giants like Google, Microsoft, and Apple knew a storm was coming. The only question was “when?”
Two years later, Steve Jobs gave the keynote heard round the world. He revealed the first iPhone — igniting a decade of unprecedented transformation in computing and business. By 2014, four billion people were buying phones every two years. That’s more than double the number of people purchasing computers at any point in history. The smartphone has forever changed the way we use the internet. If you were to ask someone in 2005 what it meant to use the internet, they would tell you about their desktop computer and their favorite sites on the World Wide Web. If you ask a millennial what the internet is like today, they’ll tell you all about their pocket supercomputer.
The meteoric rise of the mobile platform has powered today’s most successful startups. Uber, Airbnb, and DoorDash are some of the best examples. Uber is worth more than every taxi company in the world combined. Airbnb, an on-demand lodging app, is worth more than hotel industry giants like Hyatt and Marriott. DoorDash, a mobile-powered food delivery service, is valued at $600 million. These are only a few examples. Hundreds of startups with similar premises are popping up every week.
So why are companies like Uber, Airbnb, and DoorDash so successful? How can they disrupt multi-billion dollar industries after just a few years of operation? The answer lies in the platform that enables them: the smartphone. Without the proliferation of mobile computing, these businesses could not exist. They rely on the fact that billions of people have access to the internet just by owning a phone.
Features like GPS and push notifications, which enable all our favorite apps, have been around since the smartphone’s inception. So why did it take so long for these disruptive mobile companies to rise to stardom? The answer is what you might expect: because innovating is hard. Adapting to innovative technology requires you to think outside of the box. When the smartphone first became popular, it changed everything. But it also took a while for entrepreneurs to figure out what works in this new age, and what doesn’t. Business ideas that would have been preposterous in 2005 could be genius in 2015. That’s the nature of technology that fundamentally alters how we interact with the world.
I’d like to argue that today, in 2015, we’re experiencing the same calm before the storm that we did in 2005. The difference this time is that virtual reality (VR) is coming. It’s no secret that VR is going to be huge. Facebook recently purchased a VR company called Oculus for $1 billion. They plan to launch their consumer model in Q1 2016. Microsoft has developed its own VR platform dubbed HoloLens. The Microsoft headset projects 3D holograms onto the real world — enabling some remarkable use cases that are shared at the end of this post. Apple hasn’t announced anything yet, but don’t let them fool you. Apple is notoriously secretive when it comes to product development. They hired hardware engineers to work on virtual reality products earlier this year, so they’re certainly up to something.
Many people are skeptical about VR because they perceive it as an expensive novelty — a frivolous way for rich people to spend their money. I hear things like “that’s cool, but it seems more like a toy than a commodity,” or “I can understand how it might be useful, but it’s too expensive for the average consumer.” Yet the same was true for smartphones when they were first introduced. Almost every transformative technology is first written off as a “toy for the rich.” From the light bulb to the personal computer to the smartphone, there are few exceptions to this rule. A PC in the early 90’s cost more than the most expensive Mac does today. The cheapest iPhone in 2007 cost $600, but today you can buy an Android with identical features for $35. Prices always come down when the technology is important enough. The same will happen for VR, and the implications will be incredible. We’re on the cusp of more business, societal and personal transformation.
The big question whenever technology evolves is “what kind of business models will be viable in 10 years that aren’t viable today?” The founders of companies like Uber, Snapchat, and Instagram have answered that question for the mobile age. But who will answer it for the virtual age? The next decade will be fraught with disruption and uncertainty. But one thing’s for sure: a new platform is coming, and another batch of billion-dollar startups are coming with it.
If you want to learn more about what the future holds, check out some of my favorite videos about virtual reality: