Venture Capital

Ideas are a dime a dozen...

There is a point to this blog post, but I really don’t get to it until towards the end. I have to set up the story first : ) And yeah, it is a long post, so sue me.

When I was young and first introduced to science fiction, it set my imagination on fire and I developed a voracious appetite for reading. Even today, there are few things I enjoy as much as curling up somewhere quiet and reading a book. I’ll read just about anything I can get my hands on, but I particularly enjoy science fiction, especially classic stuff that no one reads any more. Of course the plot lines and the stories themselves were fun and engaging, but what really captivated me was the wondrous sense of what the future could hold. I used to spend hours imagining what it would be like exploring new worlds, traversing through space in a ship, transferring my intelligence into a computer, gaining cybernetics that offered superhuman abilities, teleporting from one place to another, and so much more.


TV shows and movies contributed to this as well…Star Trek, Star Wars, Logan’s Run, Buck Rogers, Bladerunner, Dune, This Island Earth, Silent Running, 2001: A Space Odyssey, Battlestar Galactica, Brainstorm, The Forbidden Planet, Outland, and of course, TRON.

As I grew a bit older, my imaginary adventures matured and I started contemplating how the cool things in the future could be made, how they could be done. What was first wonder, excitement, and anticipation, became an impatient restlessness. I didn’t want to wait…if no one else was going to do it, maybe I needed to be the one to figure this stuff out and make it happen. Still though, I was fairly young and the practical realities of life needed to be dealt with…high school, some college, a job, etc. At some point after working a couple of years (with only one year of college) as a detective for the Army and Air Force Exchange Service (AAFES), I decided that I wanted to make more money and do something that I loved, so I opened up a comic book store with a very good friend of mine.

This was a pretty amazing time as I could not only indulge myself with a huge range of comics in many genres, both mainstream and the edgier independents, but we also did a fair bit with role-playing games, anime, and collectibles. I already had a good bit of a background with RPGs, but my new exposure to anime here was pretty mind opening. It made a lot of western cartoons look like crass junk, and the sophistication of some of the stories rivaled classic literature. Unfortunately though, the industry decided to kill off Superman right as we were nearing the first anniversary of the store, and our business tanked.

This is where things get interesting though. Towards the end here, I met a guy that was a specialist in virtual reality (VR) and he was trying to get a startup off the ground. We featured some of his tech in the store which was awesome, but as we were closing the business, he offered me a job. Holy cow! A job making games for a virtual reality company. I jumped on it. My adventure here, and what happened later is a tale for another day, but getting back to the point of this post, I was suddenly immersed in a real-cutting edge company that was literally trying to invent the future. I discovered Neuromancer and other works by William Gibson. Mind blown.

All of this together made me realize that I wanted to be a technologist, an entrepreneur, and dare I say it, a visionary. Everything suddenly seemed possible and doable. I could find like-minded people, I could write a business plan, I could find investors, and I could build somethingthat no one else had tried or thought of.  Ideas were easy, I had lots of them (and I still do today, tons of em), but something compelling, ambitious, and visionary was the hard part. I could do it though…I had a taste of it with this VR company. As young as I was (early 20s) and without a college education, I was still smart and savvy enough to keep up with people 10 and 15 years more experienced than I was, and still bring innovative and creative thoughts and concepts to the table.

In 1995 I relocated to Raleigh North Carolina (at the time, this was emerging as the “East Coast Silicon Valley) to strike out on my own. We were going to build the world’s first real-time 3D massively multi-user online role-playing game. I was excited, eager, and my passion for it was through the roof (even now, I’m still the same about technology and startups).

I really felt like I was becoming the visionary I so desperately wanted to be when I was a kid. Some people I met got really excited. I was called a pioneer of internet gaming, a technological wunderkind, a genius (I’m smart, but I wouldn’t go that far), and much more. On the other hand, I met tons of people that said things like “PCs can’t do real-time 3D”, “people will never play (or pay) for games on the internet”, “3D virtual worlds are useless and just a fad”, “people won’t be able to understand what an avatar is”, “you are too young to start a company” [Note: no joke. This was in the mid-90’s and I was in my mid 20s.]. The list goes on. The more “practical” types were concerned that I was too “visionary” and had my heads in the cloud about what was possible to do technically and what was conceivable in terms of industry trends and business/revenue models. For the first time in my life, I was exposed to the notion that visionary was a bad word. You can’t be a successful entrepreneur and be a visionary at the same time.

I built a team, brought in some investors, and was in the middle of negotiating an international publishing deal as well as a venture deal, when things blew up. I learned a very hard lesson about people, personalities, and the absolute critical nature of picking the right team. I was shattered and devastated when it all went to hell, but that didn’t stop me from trying again. And again. And again. It is in my blood. I’m pretty sure I’ll be launching another startup when I’m 97. Screw you if you think fundable entrepreneurs can’t be older than 25. You know, after this first horrible experience as a tech startup founder, when I was working on the next company to start, two of my friends actually staged an intervention. My girlfriend threatened to break up with me if I persisted in the ridiculous notion of starting another company, and both she and one of my best friends at the time strongly suggested I get counseling from a therapist. That was a fun conversation.

I had proven then, and a couple of times since, that it is indeed possible to be a visionary, and at the same time be capable of building a team, a product, a company, and getting something to market. Sure, sometimes I am a little early to the show in terms of emerging technologies (virtual reality, mmorpgs, augmented reality, and much more), but that is part of being a visionary and a pioneer, isn’t it?

Even so, at some point somewhere, I betrayed my own ideals and self-confidence, shunning and going out of my way to avoid being labeled a visionary. Sure, when it did happen, I was secretly pleased and happy, but I knew that the label could be a scarlet letter or a brand. In “conventional” wisdom, a so-called visionary or “idea guy” needed some dour grey beard MBA or accountant to be the “adult supervision” or, preferably, the CEO. I couldn’t have it both ways and be able to bring the idea to life in the way that it should be, and at the same time do the other things necessary to fund the company and grow it.

These days (now that my beard has some grey in it) I hear other things from people like “what if someone else does it first?”, “ideas are a dime a dozen”, “that technology is just a fad, people will never use it”, or “that concept is too big, why don’t you just build an app”, and my personal favorite “why don’t you just get a normal job?”.

I’ve been thinking recently about what on one hand feels like a total lack of innovation, creativity, and real vision in the tech industry, or the same in politics (the state of our space program is a national shame in my opinion), while at the same time a sense that there are some glimmers of hope…augmented reality, virtual reality, the internet of things, computer vision, drones, self-driving cars, 3D printing, and so forth. I want to embrace the label of visionary again and go do something amazing, but there are so few people these days willing to take the risk either with their time, or with their investment capital.

This past weekend I was considering all of this and thinking about the difference between a good idea (a dime a dozen, remember) and a real vision, or rather, what makes someone a visionary? I believe that being a visionary isn’t about having a good idea, or even a great idea. Anyone can come up with those. A visionary, in my mind, is someone that not only has a good idea, but also has the ability to see the bigger picture. How do all the puzzle pieces fit together, how to define the roadmap to get there, and the process of how to make it a reality. It has to be realistic and doable.

The idea isn’t enough. A visionary sees beyond that and grasps not only the implications of what can be done but also how it should be done. This is the difference between an idea and a vision. Ideas are easy, vision is hard. The hardest though, is turning vision into reality. That takes an extraordinary amount of sheer force of will, the right team, and funding.

Don’t settle for just an idea. Don’t let people tell you it can’t be done. If you are going to throw your life, your blood, and your soul into a risky endeavor like a startup, make it a good one. Do something worthwhile and big. Why settle for flying kites when you can aim for the moon?

Even as I write that though, I feel like I should balance it with this thought…keep your head in the clouds, but keep your feet on the ground. Having a glorious destination is nice, but if you don’t plan well (and logically) on how to get there, one step at a time, you fail at being a visionary, you are just a dreamer.

Now, go do something awesome.

PS Do me a favor and leave a comment or share this if this post means anything to you or hopefully inspires you to go do something. On the other hand, you could just leave a note if you think I'm a nutcase. Either way, the feedback is appreciated.

Venture Capital and Augmented Reality

Yesterday, Marshall Kilpatrick asked, in, “Why aren’t VCs backing Augmented Reality?” He made some interesting observations and I would like to add to those here, with my own comments and thoughts.

First, I’m going to comment a bit on the early stage of the industry and then we get to have some fun and take a look at some of the typical responses I have encountered in my own efforts talking to venture capitalists. Keep in mind that I haven’t done a formal “roadshow”, and I have not engaged in a comprehensive “call everyone you can find” campaign either.

The augmented reality industry is in its infancy, and it is going to need the support, resources, and infrastructure of venture capital to grow into a mature, world-changing industry. I feel like most technology venture capitalists still haven’t heard about augmented reality (you would think that these guys would be watching industry news, twitter, and blogs like hawks looking for new opportunities, wouldn’t you?), or they have already formed an opinion based on stuff that is a year or more old, or that they simply don’t understand the tecnology and the potential of AR. Ok, no problem. We can fix that.

If you are a venture capitalist and are reading this, Please please please, email me or any one else that is active and vocal in this sector and start asking questions. Even if you aren’t interested in AR now, or think that we are all lunatics, call us anyway. I promise you that in a few years you will be kicking yourself if you don’t start learning about this now. Being informed will help you make good investment decisions later on.

Most ventures in the AR space are also extremely young and are either still at the “friends and family” stage, or getting into the “angel” stage. This means, we are too early for VCs. However, startups should be establishing contacts and relationships with VCs NOW, not later, and they should be investing some time to get them up to speed and educated on the technology and the industry. Oh, one quick note…I went back and reread the venturebeat article that broke the story about Layar getting funded. It doesnt say they were funded by venture capitalists, it says “overrun by investors, with 35 offers to date.” That means it is likely mostly angel investors or investor groups and maybe one or more venture capitalists. I suspect, given the amount listed, and that there was still some room, it is primarily angel funding.

Expect to see more announcements of various AR startups clearing the $1M mark (mostly angel sources) and probably one of us will nail a $5M+ deal by June.

I have left Total Immersion (1999) and Metaio (2003) mostly out of the conversation because they have been around for a long time, and certainly aren’t startups. They are established, have been making revenues for a long time, and are generally not focused on the consumer market (although it appears that Metaio is shifting their focus here). It wouldn’t surprise me to learn that one or both has received venture funding in the past, and I expect that they will in the future, but the point of this blog post is the AR startups and the activities (or lack thereof) from the venture capital community.

Anyway, AR tech still has a lot of missing pieces and a few problems that have yet to be solved, but I think these should be characterized as excellent opportunities for a new startup in the sector. And sure, there is plenty of risk, but again, this is an opportunity. I’d venture to say that nearly every AR startup that manages to actually do or build something is going to be a prime acquisition candidate fairly soon once the really big companies start making their move (Microsoft, Google, etc.).

The industry might still be too early for venture capitalists to get into, but the industry is primed to explode any time. I firmly believe that we are getting very close to the same place the internet was right before the explosive growth the world wide web experienced. The startups today in the AR space have the potential to be the next Apple, Microsoft, Google, Yahoo, AOL, EBay, Amazon, etc.

You know what would be really useful, is having a group of ambitious and forward looking venture capitalists allocating high risk funds and seeding smart startups with a couple hundred k as matching funds for whatever they can raise from angels. Even $100k or $200k would go a long way, and any ecent entrepreneur can leverage the promise of matching funds to excite the angel community and get some traction. Hell, why isn’t there any stimulus money allocated for seeding technology companies anyway? How many jobs did cash for clunkers create? Think about a $3B injection into high-tech startups… Look at what we did with the Internet. Techpreneurs know how to create a lot of jobs, fast, and high paying ones to boot. Not only that, but we can innovate faster and better than the large corporations that are slow and heavy with bureaucracy. You want better methods to get into space? More efficient and clean transportation? Alternative energy sources? Ways to completely revolutionize media, education, medicine, training, and entertainment? Support the high-tech startup community.

Anyway, I didn’t mean to get off track there. I’m just annoyed at seeing a lot of ideas go up in smoke because of the lack of resources to get anywhere. Back to augmented reality…

The world is changing, and augmented reality has the inherent potential to have an effect on nearly every aspect of our daily lives and the way we communicate with each other, consume media and content, and understand the world around us. Some people think this is all still a dream or wishful thinking, but I’m telling you, the puzzle pieces are there, the various tidbits of different technologies are out there, and we just need to bring it all together. We can do this, and we can do it now.

Don’t give up the fight if you are a startup struggling to get to the next milestone or in desperation for a little funding. Your time is coming and you will be part of a revolution in technology, media, and culture. Hang in there. The tidal wave is coming and you are all getting positioned to ride it. Sure there are going to be a few thousand companies doing something or other with or in AR in five or ten years, but for those of us doing it now, we are the pioneers. Many researchers, scientists, and innovators have gone before us and laid the groundwork, or created the base technologies, and now it is our job to take the baton and run the next leg of the race, which is commercializing the technology and making it useful, practical and pretty damn awesome. The future is ours to make, but we can’t do it alone. The VC community needs to step up and help us with funding, as well as provide other intangibles (experience, insight, etc.) and help us grow a whole new industry.

So, let’s do this. Yes, we are “too early” for them in many regards, but we are also “just right” in other areas that they are beginning to wake up to. Focus on angel funding, but be building those VC relationships and contacts now. Help them understand the potential of the technology and the business models that are likely the ways we are going to monetize this. Cultivate now, reap later.

Good luck.

While some of my comments next may seem critical, they absolutely are and meant to be. However, this is not representative of the whole VC sector. There are a lot of stellar and fantastic venture capitalists out there, that not only bring resources to a company, but also a lot of insight, wisdom, experience, and relationships.

And now, for your amusement and edification:

The top 12 things I’ve heard from VCs when pitching augmented reality in 2008 and 2009.

1) “I’m sorry, we don’t do games”

You would be amazed at how many times I have heard this. The second you say “3D”, “Social”, or “virtual” anything, you get pigeonholed as a game, and no one does games anymore. This even happened to me once after I explicitely stated we were focused on technology and building a platform, not content or specific applications.

2) “You are too early for us”

This is to be expected. The usual method is: your money, your friends and family’s money, angel money, and then venture funding. In the AR sector right now, with very few exceptions (like Total Immersion and Metaio) everyone is generally very young as a company, and only experiencing any real market traction within the last six to nine months (or less). However, the thing that just kills me, are VCs that have “seed stage” or “early stage” plastered all over their website, or that like to brag about deals in the past where some young valley entrepreneurs had an idea on a napkin and they funded them on the spot. Every last one of these that I have talked to have effectively said they are only doing “first round” deals, and only if another VC is leading the round building a syndicate. Seriously guys, put that on your website so I don’t waste time calling you.

3) “Keep us posted”

Anyone who has been through the VC process will tell you that these guys are loathe to say no. They don’t want to say no and miss out on a huge opportunity later. Entrepreneurs want a quick and decisive yes or no. We don’t have the time or energy to jump through hoops to amuse you (I’ve met a few people that enjoyed playing the role of a VC without any real intention of investing), and the longer you string us along, the harder it is for us to build a company. If you aren’t interested, tell me right off, and then tell me why. Then give me the chance to come back later and revisit the opportunity with you. But don’t give me a lukewarm “maybe, keep us posted” answer. That is useless to both of us.


4) “We are definitely interested in this area, please keep us in mind after you find a lead VC”


Uh, ok. You are interested in the opportunity, but not really, at least unless someone else is interested in it already. Tell me why we should come back and invite you to the party? Thats usually how I feel about this answer, however there are exceptions. Some institutional funds simply do not lead funding deals, and the reasons are legitimate and vary. In some cases, especially with smaller funds, they don’t have the domain expertise or enough staffing to conduct comprehensive due diligence on your startup, or the new industry. This is especially difficult in the case of augmented reality where the industry is barely newborn and there are no benchmarks, metrics, or other data to look at to evaluate a deal, opportunity, or even the industry itself. Any VC putting money in right now has got to have a clear understanding of at least similar sectors (mobile, virtual, social, etc.) and have a forward looking ambition to give birth to an industry (making zillions in the process).


5) “What if Google does it first?” (or some other large company)

I really, really, really hate this question. If Google was going to do it, they would have done so already. Since they haven’t, it is a good opportunity for us, because you can bet that at some point they will do it, and gobble up anyone and everything that is competitive or can add to their overall market strategy. I should also point out that Google is not an AR company, just like it isn’t a concrete company. If it wanted to, sure, it could dominate both. Seriously, think about how much money Google could make if it made a move in the concrete industry. I bet they would make a fortune on construction in China alone.

6) “I haven’t read the business plan you sent me, can you just tell me over the phone?”

I’ve heard it all. Too busy, lots of deals, overbooked with meetings, calling from the golf course, ADD, etc. etc. So let me get this straight. You are making decisions worth millions of dollars, with other people’s money, and you don’t have time to read a business plan or sit in a meeting for longer than 15 minutes. If a startup is just making widgets that are already made by someone else and easily recognizable, this is not a problem. However, with a new technology and a new industry, this is really hard to explain to people in the span of a few minutes. I’ve seen people “get it” in five minutes after seeing a youtube video or two, and others take a good hour before the proverbial light bulb goes off. So much about augmented reality is new and there arent many good frames of reference or context for it. I had one guy argue with me for a good half an hour that AR absolutely could NOT be done without expensive and large laser projecters installed everywhere.

So, note to startups. Invest some money into getting a short 45 second video made that visually explains your elevator pitch, what makes you different, what your target market is, and a conceptual piece showing it all working. That’s about all you are going to get before you are expected to condense a 30 page business plan into ten minutes on the phone.

7) “We would love for you to fly out here and present to us”

Ok, so startups generally are starving for cash, and VCs (who have all the money) want you to fly out to their offices on your dime for the pitch. Ok, fine, I’ll take the risk on this IF I’ve got a clear indication that the VC is really interested, and there is a better than even chance of walking away with a term sheet. However in the past, I’ve been naieve and got suckered. What is even worse, is when you get there, the meeting starts late, not everyone that was supposed to be there is there, then you are rushed through your presentation, you don’t get to finish, they ask some inane questions that show they really have no clue what you are talking about (and no, they still haven’t read the business plan), and then its time to go, we will call you, keep in touch. Oh, also, you are too early for us to do a deal and we only do deals with local startups.

The last time this happened to me, it was at one of the larger VC funds on the west coast and I totally felt violated and robbed after the fact. The whole experience left a very bad taste in my mouth.

This is almost as bad as angel groups charging entrepreneurs money for the opportunity to pitch them. Yeah. No kidding. See what Jason Calacanis has to say about THAT. I agree with him by the way.

8) “How is this different from Second Life?”

Yeah. I’ve heard that more than once. Without getting into a long rant about how Second Life is so “1996”, still, or that it is not innovative, a game, or the greatest thing to happen on the Internet (with all due respect for advancing the cause of virtual worlds), this one really gets my panties in a bunch. I can’t even begin to explain where this question comes from, other than mentioning that the next statement I usually get is “we don’t do games”.

9) “We only invest in companies that are local to our offices”

This is why the US is lagging other countries in innovation and technical advancement. Welcome to the global economy guys. You are missing out on phenemonal deals in other regions all over the US in nearly every major population center. People still look at me funny when I tell them I am in Raleigh. If you haven’t heard of the Research Triangle Park in North Carolina, you are missing out. IBM, Red Hat, Epic, Glaxo-Wellcome, Red Storm/Ubisoft, Cisco, Duke, NC State, UNC, Wake Forest, SAS, the list goes on and on. You know there are almost FORTY game developers and publishers here? Or that Cary (SE Raleigh) used to have the highest concentration of PhDs per capita in the United States? With some aggressive venture capital movement, RTP could easily become another silicon valley (cheaper, and with prettier trees to boot). Of course, there are other cities with the right ingredients that just need venture infrastructure to kickstart it. There are hundreds of thousands of jobs that could be created in short order if we shifted capital from pooling in the west coast tar pits to other areas.

Anyway, investing locally is a nice idea, but if you feel like a startup has to be so close to a VC for the convenience of monitoring and watching over their shoulders, do you really want to invest in them?

10) “Why can’t you just hire some college students and fund development for yourself? Its easy building a company with under $50k”

Welcome to the “Gen-Y, create a widget in the basement generation”. I don’t care how little money it took to build the first versions of,, or facebook. Good for them. Sure, you can make an iphone app or some other widget on a shoestring and start making money in no time, but if thats the case, why are those guys taking down massive venture deals? What about the other opportunities to build real technology, infrastructure, or innovation of immense value? How many things that could have solved big problems or created a better standard of living for the world have been lost because of lack of resources?

Also, I’m broke. I’ve invested insane amounts of time, energy, and limited resources. I don’t have a trust fund, I haven’t cashed out on an IPO, and no one has given me any stimulus money. Not all entrepreneurs have gobs of cash in the bank to work for free for a year and pay a staff either. Also, you just can’t build some things with under $50k.

11) “How are you going to convert websites into augmented reality?”

Well, we aren’t. If anyone tells you they are, then tell them to have a nice day and move on. The whole point to AR is that is is contextual, locative, and relevant…otherwise, its just a graphical gimmick that adds your webcam video to something 3D without adding any real value. Converting websites is the absolute wrong way to think about it. Rather, think about how you can leverage data on websites for the world around you.

12) And my favorite:

“We are only interested in deals that are close to us, for facebook, running on the iphone, with integrated twitter, already generating revenues, previously funded by founders/angels, has offices with at least 10 people, is willing to change your business model to focus on a different market niche, and we want to put in a new CEO to “take the company to the next level”. Oh, and you have to take these terms, its what everyone else is doing right now”

Yeah. This sounds funny, and over exaggerated, but this is more common than you can imagine. Sure, I’m paraphrasing, and I’m combining several experiences into one here, but the basic point of view and thought behind this one is pretty spot on. Ok, maybe I’m crazy and the outlier in terms of the average experience. If thats the case, then I hope you had a good chuckle. If not, then feel free to comment here with some anecdotal experiences of your own (even if you aren’t an AR startup).

What do you think?



Otherwise Rowdy Roddy Piper will beat you up!


Future Vision 2012: Augmented Reality Predictions

Within three years (in time for ISMAR 2012), which is either a very short period of time or an eternity, depending on your point of view, I predict the following:

* 1 Million wearable displays, with transparent lenses, reasonable field of view, integrated accelerometers, and possibly a high-bandwidth short distance wireless connection, sold on the commercial market.

* Market generating more than $1B in revenues

* Vuzix currently the best positioned to deliver technology and products to the commercial market.

* Vuzix, Microvision, and Lumus Optical the current leaders in wearable display technology

* Companies like Sony, Apple, and others will have branded versions of their own. Probably with licensed display tech, or the fruit (ha! apples) of their own R&D.

* There will be at least one terrorist attack that has used mobile augmented reality for planning, practice, and execution.

* Marketing, Advertising, and Entertainment will be the early industry leaders to adopt and monetize augmented reality. More practical uses in visualization, training, education, medical, manufacturing, etc. will follow closely, but take longer for adoption as some technology requirements will be more stringent.

* The problem with visual tracking, registration, and orthorectification will be solved within the next 18 months, if not sooner.

* North America will continue to lag behind Asia and Europe. Early market dominance (in terms of mindshare and branding/exposure) will be led by Europe. Asia (particularly South Korea, Japan, and China) will be the quickest markets to adopt and monetize AR. North America will continue to be insular, inward looking, and still lagging behind.

* In general it will take North American venture capitalists and institutional investors at least another 18 months to wake up and engage fully. In the meantime…

* within the next 12 months, a flurry of augmented reality startups will come out of the woodwork in Silicon Valley, and will likely be overfunded startups looking to make a quick dollar and a fast exit. The majority of these will not have a clear strategy, vision, or technology, and will ultimately die a slow death. The early attempts will be on trying to leverage Web 2.0 and Social Networking into Augmented Reality, but this is backwards. Anyone trying to augment web sites or facebook is missing the point entirely.

* The first major VC funding of a augmented reality startup, of at least $5M USD will occur in the next 6 to 9 months.

* The “big boys” will continue pouring more money into internal projects and R&D, focusing on key technology areas, preferring to acquire companies with a broader focus, market share, and applications.

* By 2011, augmented reality will be a target rich environment for acquisitions, and some of the valuations will be staggering.

* Mobile devices combined with wearable displays will prove to be the ultimate combination for the full potential of augmented reality.

* A huge shift in advertising dollars will have a measurable impact on traditional channels, such as print, broadcast, and web. The mobile device already has broader and deeper market penetration, with more information about the user possible. AR will be the method to leverage this the most.

* In 12-18 months, Governments will begin to wake up to the real benefits, implications, and risks of mass-market mobile augmented reality in terms of national security, defense, intelligence, law enforcement, privacy, intellectual property, and so forth. Questions and concerns we have now with the internet, virtual worlds, and social networking will pale in comparison and are merely foreshadowing the future.

* The IPhone will not be the king of the hill. However, Apple will eventually open up their API and quit stalling AR innovation. I also predict their attempt to patent a grossly broad invention of augmented reality on a mobile device will be rejected, or at least suffer significant paring down.

* Mobile Augmented Reality will likely be a contributing factor to economic recovery with the creation of wealth (revenues), new industries, many new companies and jobs, as well as entirely new professions. Artists, designers, developers, educators, trainers, interior decorators, architects, and others will all find new opportunities and job titles.

* Augmented Reality will possibly be rebranded as something else, likely based on the product name of something. This sort of thing has happened in the past where a product has become synonymous with a brand (Xerox, Kleenex, etc.)

* Augmented Reality content (virtual objects) will be referred to as Holograms by the general public, changing the definition of the word. [Personally, I’d prefer to call them holons]

* Early standards, protocols, and methods of ineroperablity will emerge in the next 12 months, but will be radically different in 36. The “best practice” now is to use off the shelf where possible for speed of development, followed by new ones that are designed from scratch for AR and context, relevance, time, and space (location).

* Also within 36 months, early “holographic” interfaces will be experimented with, the industry will finally develop its own lexicon, and there will be much discussion and prototypes for a system of 3D icons (iconographs?) that will eventually become a visual standard for representing different types of data and information in augmented space.

* Tight registration and body tracking from any angle will also be accomplished, enabling users to anchor 3D objects such as clothing, armor, rabbit ears, masks, and animated textures/tattoos to themselves. The Cosplay, Furry, Trek, D&D, and SCA nerds will spend more money on this than the height of the Magic the Gathering industry.

*Virtual pets will be phenemonally successful and will likely be THE christmas gift in 2012. Due to the glasses, and full visual tracking, users will have a Denno Coil type of experience, where the pets can follow them around, interact with other pets, and do all sorts of fun things. Next-generations of this will evolve into “best friends” which will effectively be intelligent agents with limited voice recognition and a host of functionality. Yes, the porn industry will be all over this. As will the Otaku nerds wanting an anime girlfriend.

* Destination experiences, such as Las Vegas hotels, concert halls, sports stadiums, museums, and so forth will all be highly augmented to some degree or another, starting from content and services tied to the location with useful visualizations, to full-on 3D stuff all over the place. It is questionable at this time whether this will be an amazing experience, or if another few years are needed for better implementation, higher standards and interactivity, and adoption.

* Telcos will be at risk of being marginalized.

* AR in the medical field, both practice and research, will establish itself as useful. It will take more time to become necessary.

* A whole subculture of artists, both traditional and urban (grafitti) will begin to assert itself within 18 to 24 months, experimenting and provoking with hidden AR art.

* Branding wars, over what is linked to the brands of major companies, will begin. Overlays based on image (logo) recognition have the potential to be greatly misused.

* Government use of augmented reality will call many things into question. Of particular concern are submlinal messages or other methods of influencing people based on biometric sensors, and other feedback data, combined with visual and auditory cues and triggers.

* The mobile device will have completely replaced the wallet in some countries, and will begin to make inroads in western countries.

* The vision of Dream Park (albeit in a slightly different manner) will begin to be realized as the technology matures and the game industry embraces the cutting edge of mobile AR.

* Telepresence, using life sized avatars in remote locations, will become useful, and not be a gimmick.

* The mass media will completely FAIL when describing augmented reality.

* Some venture capitalists still won’t get it and will wonder why it takes more than $50k to build a company when you could just create a facebook widget or a basic iphone app for the same amount. Further, they will still think this is all a game because it has 3D in it.

* User generated content will dominate.

* No, still no AR contact lenses. Maybe 2018-2020. No mind reading devices either.

* The first major mass market augmented reality April Fools joke will occur on April 1st, 2012

* It will take longer than 3 years for AR to become ubiquitous in education, medicine, and therapy, although early experimental applications and research will gain a lot of ground.

* There will still be no singularity, neither will the internet become self-aware, although a famous celebrity or politician will take credit for inventing augmented reality.

* Bruce Sterling will likely comment on his blog about what I have written here.

My name will still be Robert Rice, and construction on my evil overlord lair will be nearing completion. All your augmented reality will belong to me. Or google.


[* Seriously. You MUST watch Denno Coil. The whole thing. In Japanese with Subtitles. Right now. If you haven’t seen this, you shouldn’t even be in this industry.]

Bad Apple May Sour Early Augmented Reality...

Earlier this year, a group of developers, startups, academics, and others published an open letter to Apple about opening up the IPhone SDK and releasing public APIs to access the live video stream from the camera to enable augmented reality applications. Ironically, Apple filed for a patent the next day for mobile augmented reality which is rather broad and all-encompassing. Apple later announced that it would indeed release new functions in the next version of the SDK, which spurred a flurry of press excitement about hordes of new AR applications that would suddenly appear in September.

The reality though, was that while some functionality was opened, which has made it easy to create “distance” or “directory” AR applications (requiring GPS, accelerometer, compass, and a screen overlay), it did not address the needs outlined in the open letter. Rather, it ignored them completely.

Augmented reality applications that require live video from the camera, like marker based AR that was popular through the first half of 2009 (and still a very viable method), as well as most of the super cool conceptual videos and demos out there (head over to Games Alfresco for examples), are completely locked out. Not only would these applications be immediately banned and not approved for distribution in the app store, the functions and APIs necessary to access the camera are hidden, undocumented, private, and a real pain in the ass to try to work around…even if just to create a working proof of concept for one developer in a garage somewhere.

If this was a matter on the global scale, it wouldn’t be a big deal. The IPhone has barely made a dent in the worldwide market. However, because it is a media darling here in North America, ensorcelling venture capitalists, and resonating amongst the faithful Apple drones, it is nearly impossible for a young augmented reality developer or small startup to get any significant traction trying to raise funds if they are not focusing on the IPhone. This is causing a problem.

Not only has Apple become the very thing they railed against in 1984…a controlling and domineering “big brother” who will not tolerate dissent, true creativity, or openness, but they have a constricting snake’s chokehold on the market. Not only do the execs live in an Ivory Tower, but they are forcing the rest of us to do the same, surrounded by very high walled gardens and orchards with the prettiest apples you have ever seen. However, we are forbidden from tasting that fruit, or making apple pie, or even trying to make some apple cider. If we get too close, the snakes appear with all of their rules and requirements, effectively trapping us. And then we notice how shiny the apples are again, and forget what we were complaining about.

One of two things needs to happen. Either Apple needs to quit screwing us around and make the APIs public so we can get back to the business of innovating and building a new industry, or the respective communities of developers and venture capitalists need to abandon Apple entirely. There are good alternatives out there that may not be as shiny, but are certainly as powerful and definitely more open for us to work with.

I hate to say it, but the only reason my team is bothering to waste time with the IPhone right now is because that is what people think is the validating platform for the whole AR industry. We would be much farther along and creating some mind-blowing AR if we weren’t fending off sour apples, bad worms, and rotten smiles.

You know, there is an opportunity here for someone to create a better hardware platform and completely leapfrog Apple. Mobile AR has a lot of potential and while the IPhone is shiny now, it is certainly not the ultimate mobile device, it is a shadow of what is to come. If Apple stays dominant and keeps things closed, all the cool stuff will be delayed…maybe for years. But if they open things up, or someone puts out a more robust hardware platform (that is competitive on the sexy level) and combines that with something more open and developer friendly, then you will see the industry catch on fire, accelerate, and create some wild experiences and applications. The future doesn’t need to be science fiction any more.

Android is a good candidate here to take the lead and cut Apple off at the knees, but I also wonder what the hell Nokia is doing right now. Their conceptual AR videos are kinda cool, but not always well received? Personally, I think Nokia could be a dark horse that comes out of the gate with something unexpected (they certainly have a large warchest of cash to work with) but they may be hampered by their own internal culture and politics to do something radical (and risky) to knock Apple off the cart.

I dunno. Something needs to change. As consumers we are being cheated out of really cool stuff that many of us want. As developers we are being denied the chance to be creative and innovate in a market that is sadly lacking in fresh ideas. I don’t want more widgets or beer farting apps…I want the next evolution of mobile, media, and ubiquitous computing. And that my friends, is Augmented Reality.

So, in summary, as long as Apple remains greedy and closed off, and the media/money sources out there only have eyes for the IPhone market, innovation and advancement in commercial Augmented Reality will be slowed, handicapped, and stilted as it is forced to restrict itself to the common elements of GPS, compass, and accelerometer.

This isn’t good enough. Open up the SDK Apple.

Back from San Francisco

I’m back from the conference at San Francisco! It was totally worth the time and resources to go out there. We made a lot of solid connections to the west coast venture capital crowd, as well as some other companies that are worth talking to in the future for strategic relationships.

While the overall conference was awesome, I must confess that a few things surprised or disappointed me. For starters, there weren’t very many presenters that were exciting and only a handful qualified as “interesting”. I’ve said before that I think that, as a country, we have lost our taste for innovation. More than a few of the presenters felt like the same types of companies getting funding during the dot com boom. By that I mean I said “huh?” more than a few times…weak business models, “innovative” concepts that were half-baked, and “new” ideas that were simply a rehash or a “me too” version of something else. At the end of each day there was a panel of venture capitalists that talked about what they had seen during the day and what they thought. More than a few of these guys said they saw some interesting things, but not much that was exciting or felt like a home run. Sure, many of the presenters had companies or ideas that can and probably will be profitable, but nothing mind-blowing.

We did get a fair amount of attention and more than a little interest, but it will remain to be seen how many people really want to take things to the next step beyond “interest”. All that aside, I can’t stress enough that we met some great people and some seriously smart individuals.

One of the highlights for me was getting the chance to meet Travis and Adam face to face for the first time. I still find it amazing how much you can do and accomplish online these days without meeting people face to face. Ten years ago people would think it was impossible to work from home and be productive or even manage teams remotely, but today, we have people in several states and a few countries and we get stuff done just fine. It actually works to our advantage in many aspects.

You know, one of the things we heard repeatedly was that funds are only interested in technology plays…content seemed to be a bad word. Sure, content is king, but there is a perception that content is way too risky. Technology is good, platforms are good, but content is an automatic “business plan goes to trash can”. The same people that would say this would also say they would invest in another Habbo Hotel or Club Penguin in a second…but aren’t these content plays? Can you really define these as social platforms and ignore the obvious content? What if people hated penguins? Wasn’t that a possible risk factor in the early days of development? How does this different from the content of a MMORPG? Maybe hindsight is 20/20…how many of these “content = bad” venture funds would say they wish they would have invested in Blizzard for World of Warcraft, knowing now how successful it was?

I have two more complaints before I sign off…

The first was a comment that a senior level exec from EA said (I may have misheard, but the look of shock on several other people at the table I was sitting at makes me think I didn’t). He said (and I am paraphrasing here because my memory sucks) something like “online games and distribution is nothing more than a rounding error as far as EA is concerned”. Yeah. I did a double take too. He was asked by a moderator (or was it from the audience?) what EA thought about online distribution methods and the future of the market. While I generally think that EA survives and makes money simply by luck, brute force, and momentum, I am one of the people that thinks that the EA house of cards is due to fall over pretty soon. I’m still shocked they had the nerve to blow $800M to acquire Bioware and Pandemic and then turn around and lay off people with the excuse that they need to cut back on expenses…well duh, you just added close to 800 people to payroll. How long before they destroy those studios too?

The second was the interview with Curt Schilling from 38 Studios. I’m still amazed he was invited to a recent harvard panel thingy with other “MMORPG veterens” (he is most definitely not a veteren). Most of the questions he was asked were totally softball questions and relatively useless. Total waste of time. I mean, I’ve knocked 38 Studios before, but after the interview I felt like Curt was a really nice guy with a total passion for online games. I’ll give him some kudos and respect for that…I would work with him given the chance. However, the whole thing felt like a total ass-kissing episode where Curt and 38 Studios was getting a lot of attention and credibility because of who Curt is (and to a lesser degree because McFarlane and Salvatore are involved). Neither of the three have any real background in MMORPGs beyond playing them. Sure, Curt is a great baseball player and he has leveraged that for some exposure in the game industry (never as a developer or designer, more like a brand). Todd McFarlane is a brilliant artist (I’ll fight anyone that says he didn’t do the best spider man artwork EVER), and of course Salvatore is extremely well known for his fantasy writing. Ok, so what? Good storylines and concept art does not make a great MMORPG. Maybe they will get lucky with the rest of the people they have brought on to the team to make the game…I’ll have to reserve judgement until I actually see something.

But why are they out raising funds? All three of the founders are pretty damn wealthy (I’d be stunned if they weren’t). I suspect that they hired too many people at a premium rate too soon and their burn rate is probably shocking. Maybe it is time to use other people’s money. Anyway, I digress. The bulk of Curt’s responses to the questions usually came back to “I have a passion for games and I have a great team”. I think the conference would have been better served with any of a half a dozen other MMORPG CEO’s out there that could talk about the industry, innovation, technology, business models, global markets, trends, or whatever. Sure it was nice hearing from someone famous like Curt Schilling, but this was a consumer technology innovations conference loaded with VC’s. While the interview didn’t do much to hurt the industry or people like us out raising funds, it didn’t do us any favors.

So, summary! The conference was great, and I would totally do it again next year. To the organizers I would say if you are going to have any emphasis on online games, social networking, virtual worlds, and simulations, do some homework and find some companies/presenters/speakers that have something valuable to add beyond “I love games and we have a great team!”.