BadVR is using government grants to build a business that’s independent of venture capital

When the Los Angeles-based extended reality data visualization company, BadVR, first heard that one of its earliest benefactors, Magic Leap, was about to shed 1,000 jobs and was fighting for its life, the young startup was unfazed.

Despite the very public ties that BadVR had to Magic Leap, as one of the enterprise applications on the platform, the startup was more insulated than other businesses from the pivot away from consumer-focused apps.

The first step was finding money from the government’s Paycheck Protection Program to get more capital coming in and maintaining its headcount. Eventually, the company managed to land additional financing in the form of a $1 million grant from the National Science Foundation.

It’s the second grant that the company has taken from the NSF and is an example of how startups can turn to government funding for capital and avoid some of the pitfalls of fundraising from venture capital.

To be sure, even Magic Leap’s trip to the brink of collapse wouldn’t have been that bad for BadVR, which makes enterprise applications for extended reality devices.

What the Magic Leap story shows is that companies don’t need to take venture capital to make it. Indeed, as costs come down for equipment and remote work democratizes access to a country that’s still teeming with engineering talent, thrifty startups can get the capital they need from government sources and corporate innovation grants.

That’s how BadVR got most of its $3.5 million in financing. Some money came from a grant from BadVR, while at least $1.25 million has come from the government in the form of two National Science Foundation cooperative agreements through the Small Business Innovation Research financing mechanisms.

A headset capture of BadVR’s climate change application, built for the Magic Leap One headset. Image Credit: BadVR

BadVR uses virtual and augmented reality tools to visualize geospatial data for a range of government and commercial applications. The startup’s tech is already being used by big telecom companies to accelerate the planning and deployment of 5G networks. And, within the public safety sector, the company’s tech is used to improve situational awareness for first responders and to reduce training, staffing, and operational costs.

“Society has become aware of the power of data and the impact it has on our daily lives.  It’s critically important that we make the access of data easy to every organization, regardless of technical skill level or background,” said Suzanne Borders, the chief executive and founder of BadVR, in a statement. 

For Borders, the key to tapping government funding is all about proper advance planning. “Those take a long time,” Borders said. “When you get awarded them, you’re looking at a year’s worth of effort. [Our grant] was a testament to us planning for that about a year ago.”

These grants are typically milestone-based, so as long as BadVR was hitting its targets, it could be fairly assured that the money would be there.

“NSF is proud to support the technology of the future by thinking beyond incremental  developments and funding the most creative, impactful ideas across all markets and  areas of science and engineering,” said Andrea Belz, Division Director of the Division of  Industrial Innovation and Partnerships at NSF. “With the support of our research funds,  any deep technology startup or small business can guide basic science into meaningful  solutions that address tremendous needs.”  

Other government competitions are providing the company with additional non-dilutive cash and a chance to kcik the tires on new capabilities.

A capture from BadVR’s augmented reality geospatial data environment, which allows users to visualize multiple live and historical datasets via overlays relevant to their environment. Image Credit: BadVR

That has translated into traction for the company’s Augmented Reality Operations Center. The AROC is a new offering for the product that visualizes data for first responders. Through a challenge hosted by the National Institute of Standards and Technology, BadVR was able to work with the Eureka, Mo. Fire Department to develop a prototype for a specific emergency situation.

It’s an evolution of an early product the company had developed where enterprises can create digital twins of their factories or stores in virtual reality and do a walk-through to examine different conditions.

The visualization work that BadVR does isn’t necessarily all geo-spatial. The company can take all kinds of data and integrate that into an environment that makes the data easier to see. Borders sees the company’s services extending into creating all kinds of collaborative environments for companies.

“The system highlights things that are important to look at,” Borders said. “It’s virtualizing the data visualization experience and bringing it into an immersive environment — and building a more collaborative aspect to that experience.”

Since the COVID-19 pandemic has forced businesses across the country to operate virtually, Borders said the demand for the kinds of. products her company is building — with the government’s help — has only increased.

“That’s been due to increased demand for remote collaboration tools,” Borders said. “We’ve had increased interest in people across the board — but tools that have remote collaboration capabilities — and bring people together to one immersive data experience… those are taking off.”

#magic-leap, #national-science-foundation, #tc

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China watches and learns from the US in AR/VR competition

When Chi Xu left Magic Leap and returned to China, he had big ambitions. He believed China would have its own augmented and virtual reality giants, just as how the domestic smartphone industry birthed global leaders like Huawei, Oppo and Xiaomi that rival Apple today.

Xu, now chief executive of Nreal, one of China’s highest-funded AR startups, is among a group of entrepreneurs uniquely positioned to build world-class hardware. The young generation is well-versed in both worlds, with work experience in Silicon Valley and often an Ivy League degree. They are also well-connected to capital and supply chains in China, which would support them through cycles of iteration to deliver powerful yet affordable products.

Although China has been calling for more indigenous innovation, most of the advanced technologies found in AR and VR are still in the hands of foreign tech behemoths.

They might be proud of China’s technological progress, but they recognize supremacy doesn’t come overnight. More importantly, their firms often have intricate ties to the U.S., whether it’s for sourcing core parts or testing an early market.

Despite Beijing’s push for technological “self-reliance,” Chinese AR and VR companies still depend on imported chips like their smartphone counterparts. Because the industry is so young and no one really has a proven model for monetization, few investors and startups in China are willing to splurge on basic research.

But China has one important strength, said the founder of a Chinese AR startup who declined to be named: “In cutting-edge sectors, China has always lacked the talent to take things from ‘zero to one.’ However, China has the mass production and supply chain capabilities necessary for taking things from ‘one to n.’”

That was the case with smartphones. Once Apple demonstrated the technological and financial possibilities of handsets and gave rise to a production ecosystem around iPhones — in other words, catapulted the industry from zero to one — Chinese counterparts took cues from the American giant, made use of homegrown manufacturing resources and began delivering cheaper and even more powerful alternatives.

“I can’t imagine any Chinese corporations willing to invest in AR and VR as heavily as Microsoft, Apple or Facebook today,” said the founder, whose company sells headsets both in and outside China.

“On the contrary, China is good at playing catch-up by spending money on a race with a clear finish line. For example, chips. If there are already contestants in the area, so long as [Chinese firms] ramp up investment and follow the direction, they can deliver results.”

Chinese innovation

Although China, for the last decade, has been calling for more indigenous innovation, most of the advanced technologies found in AR and VR are still in the hands of foreign tech behemoths, several industry experts told TechCrunch. Qualcomm’s Snapdragon chips are used almost exclusively by serious players, from Facebook’s Oculus Quest in the U.S. to Pico and Nreal in China. Advanced optical solutions, on the other hand, mainly come from Japanese and Taiwanese firms.

Attendees stand in line to try out the new Oculus Quest Virtual Reality (VR) gaming system at the Facebook F8 Conference at McEnery Convention Center in San Jose, California, on April 30, 2019. Image Credits: AMY OSBORNE/AFP/Getty Images

That’s not to say Chinese companies don’t innovate. Prominent venture capitalist and AI expert Kai-Fu Lee famously argued in his book “AI Superpowers” that while the U.S. has an edge in fundamental research, China is stronger on implementation and commercial application.

“It’s true that the more experimental efforts are happening in the U.S., though I’m not sure if any of those are mature already,” Tony Zhao, founder and chief executive of real-time video API provider Agora and a veteran from WebEx, told TechCrunch. “For Chinese companies, there are more opportunities in [user experience].”

As AR and VR come of age, Zhao’s company is devising a toolkit to let developers and organizations stream and record AR content from devices. Use cases by China’s educators have particularly impressed Zhao. One client, for example, built a tool allowing a teacher to interact with a student through a virtual store, where the two speak English while they respectively act as the cashier and the customer.

“I think it’s very revolutionary because a lot of kids are going to be very excited to learn from those kinds of tools. It’s more like a real experience and would be more natural for students to learn to use a language instead of just know the grammar,” said Zhao.

“These solutions are already creative, but also very practical.”

The Chinese market offers other aspects that can keep investors excited. As Gavin Newton-Tanzer, president of Sunrise International, Asia producer of the “mixed reality” (XR) conference AWE, pointed out to TechCrunch:

“Many like to say that in the U.S., Magic Leap sucked all the air out of the room. They raised tons of money and as a result, few wanted to fund [other smart glass startups]. It’d be like funding a competitor to Didi in China or funding a competitor to Uber in the U.S. … Few felt like anyone else could meaningfully compete.”

#ar, #asia, #augmented-reality, #broadband, #china, #magic-leap, #mixed-reality, #nreal, #oculus, #snapdragon, #virtual-reality, #vr

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7 investors discuss augmented reality and VR startup opportunities in 2020

For all of the investors preaching that augmented reality technology will likely be the successor to the modern smartphone, today, most venture capitalists are still quite wary to back AR plays.

The reasons are plentiful, but all tend to circle around the idea that it’s too early for software and too expensive to try to take on Apple or Facebook on the hardware front.

Meanwhile, few spaces were frothier in 2016 than virtual reality, but most VCs who gambled on VR following Facebook’s Oculus acquisition failed to strike it rich. In 2020, VR did not get the shelter-in-place usage bump many had hoped for largely due to supply chain issues at Facebook, but VCs hope their new cheaper device will spell good things for the startup ecosystem.

To get a better sense of how VCs are looking at augmented reality and virtual reality in 2020, I reached out to a handful of investors who are keeping a close watch on the industry:

Some investors who are bullish on AR have opted to focus on virtual reality for now, believing that there’s a good amount of crossover between AR and VR software, and that they can make safer bets on VR startups today that will be able to take advantage of AR hardware when it’s introduced.

“Besides Pokémon Go I don’t think we have seen the engagement numbers needed for AR,” Boost VC investor Brayton Williams tells TechCrunch. “We believe VR is still the largest long-term opportunity of the two. AR complements the real world, VR creates endless new worlds.”

Most of the investors I got in contact with were still fairly active in the AR/VR world, but many still disagreed whether the time was right for VR startups. For Jacob Mullins of Shasta Ventures, “It’s still early, but it’s no longer too early.” While Gigi Levy-Weiss of NFX says that the market is “sadly not happening yet,” Facebook’s Quest headsets have shown promise.

On the hardware side, the ghost of Magic Leap’s formerly hyped glory still looms large. Few investors are interested in making a hardware play in the AR/VR world, noting that startups don’t have the resources to compete with Facebook or Microsoft on a large-scale rollout. “Hardware is so capital intensive and this entire industry is dependent on the big players continuing to invest in hardware innovation,” General Catalyst’s Niko Bonatsos tells us.

Even those that are still bullish on startups making hardware plays for more niche audiences acknowledge that life had gotten harder for ambitious founders in these spaces, “the spectacular flare-outs do make it harder for companies to raise large amounts with long product release horizons,” investor Tipatat Chennavasin notes.

Responses have been edited for length and clarity.


Niko Bonatsos, General Catalyst

What are your general impressions on the health of the AR/VR market today?

We’re seeing some progress in VR and some of that is happening because of the Oculus ecosystem. They continue to improve the hardware and have a growing catalog of content. I think their onboarding and consumption experience is very consumer-friendly and that’s going to continue to help with adoption. On the consumer side, we’re seeing some companies across gaming, fitness and productivity that are earning and retaining their audiences at a respectable rate. That wasn’t happening even a year ago so it may be partially a COVID lift but habits are forming. 

The VR bets of several years ago have largely struggled to pan out, if you were to make a startup investment in this space today what would you need to see? 

Companies to watch are the ones that are creating cool experiences with mobile as the first entry point. Wave VR, Rec Room, VRChat are making it really easy for consumers to get a taste of VR with devices they already own. They’re not treating VR as just another gaming peripheral but as a way to create very cool, often celebrity-driven, content. These are the kinds of innovations that makes me optimistic about the VR category in general.

Most investors I chat with seem to be long-term bullish on AR, but are reticent to invest in an explicitly AR-focused startup today. What do you want to see before you make a play here?

In both AR/VR, a founder needs to be both super ambitious but patient. They’ll need to be flexible in thinking and open to pivoting a few times along the way. Product-market fit is always important but I want to see that they have a plan for customer retention. Fun to try is great, habit-forming is much better. Gaming continues to do pretty well as a category for VC dollars but it’d be interesting to see more founders look at making IRL sports experiences more immersive or figuring out how to enhance remote meeting experiences with VR to fix Zoom fatigue.

There have been a few spectacular flare-outs when it comes to AR/VR hardware investments, is there still a startup opportunity in AR/VR hardware?

Hardware is so capital intensive and this entire industry is dependent on the big players continuing to invest in hardware innovation. Facebook and Microsoft seem to be the main companies willing to spend here while others have backed away. If we expand our thinking for a minute, maybe the first real mainstream breakthrough AR/VR consumer experience isn’t visual. For VR, it might be the mobile experiences. For AR maybe AirPods or AirPod-like devices are the right entry point for consumers. They’re in millions of people’s ears already and who doesn’t want their own special-agent-like earpiece? That’s where founders might find some opportunity.

Tipatat Chennavasin, The Venture Reality Fund

#apple, #ar, #augmented-reality, #brianne-kimmel, #digital-media, #instagram, #investor-surveys, #jacob-mullins, #magic-leap, #niko-bonatsos, #oculus-rift, #quest, #snap, #startups, #tc, #venture-capital, #virtual-reality, #vr

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Daily Crunch: Magic Leap gets a new CEO

There’s new leadership at troubled startup Magic Leap, Uber launches grocery delivery and Palantir files to go public. Here’s your Daily Crunch for July 7, 2020.

The big story: Magic Leap has a new CEO

Can Peggy Johnson, the former vice president of business development at Microsoft, turn things around for Magic Leap? The augmented/mixed reality company laid off most of its staff in April, and while it managed to raise another $375 million to keep going, that fundraise meant the departure of founder and CEO Rony Abovitz.

Johnson will officially take over on August 1. She’s been at Microsoft since 2014, where she was involved in the $26.2 billion acquisition of LinkedIn. Before that, she spent 24 years at Qualcomm.

“Magic Leap’s technological foundation is undeniable, and there is no question that has the potential to shape the future of XR and computing,” Johnson said in a statement.

The tech giants

Alphabet’s Loon launches its balloon-powered Kenyan internet service — Loon is creating high-altitude balloons that are supposed to provide cell service and internet access in areas where mountainous terrain makes it difficult to install ground infrastructure.

Uber grocery delivery launches in Latin America and Canada, US to follow later this month — Uber is starting grocery delivery in 19 cities, with plans to launch in Miami and Dallas later this month.

Amazon Prime Video finally launches user profiles to all customers worldwide — With user profiles, Prime Video viewers will be able to manage their own watchlists and track their own viewing progress, without getting it all mixed up with other viewers on the same account.

Startups, funding and venture capital

Secretive data startup Palantir has confidentially filed for an IPO — Aside from the fact that it has filed confidentially, Palantir (which is known for its work with the U.S. government and intelligence community) did not provide any information about its offering.

TikTok faces ban in the US; pulls out of Hong Kong — Secretary of State Mike Pompeo told Fox News that the U.S. government is “certainly looking” at banning the popular video app.

Facebook-backed Unacademy acquires PrepLadder for $50 million — Unacademy is one of the leading edtech companies in India, while PrepLadder says it has more than 80,000 subscribers.

Advice and analysis from Extra Crunch

8 Black investors discuss the intersection of race, tech and funding — We surveyed eight Black VCs about their investment strategy and their approach to diversity.

Email is broken and Hey’s Jason Fried is here to fix it — An in-depth interview with the creator of the popular new email app.

(Reminder: Extra Crunch is our subscription membership program, designed to democratize information about startups. You can sign up here.)

Everything else

Kerry Washington is coming to Disrupt 2020 — The “Scandal” star has also invested in The Wing, Community and Byte. And she’s coming to Disrupt!

Dear Sophie: What does the new online classes rule mean for F-1 students? — International students have been allowed to remain in the U.S. while taking online courses during the COVID-19 pandemic, but ICE says that will end this fall. Immigration lawyer Sophie Alcorn discusses what this means for a startup whose co-founder is a student with an F-1 visa.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

#augmented-reality, #daily-crunch, #magic-leap

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Magic Leap has a new chief executive and it’s former Microsoft exec Peggy Johnson

Peggy Johnson, the former executive vice president of business development at Microsoft, has been named as the new chief executive of Magic Leap, the company said in a statement.

Johnson, who will begin her new role on August 1, 2020, comes to Magic Leap after a thirty year career in the technology industry.

It’s been a tumultuous 2020 for Magic Leap. Struggling to survive amid a cash crunch and facing bankruptcy, the company laid off most of its staff in April and was casting around for a white knight investor to come in and keep the company afloat. While the Paradise, Fla.-based company found the $375 million in funding it needed, according to The New York Times, that investment came at the price of Rony Abovitz’s position as chief executive.

Abovitz, whose vision for the future of spatial computing managed to rake in over a billion dollars in funding, was a consummate hype man whose products failed to deliver on the promise they’d held.

In Johnson Magic Leap has a proven executive who joined Microsoft in 2014 from Qualcomm as an executive hire made by chief executive Satya Nadella. There, she ran business development and had a hand in a number of the company’s major acquisitions and partnerships including the $26.2 billion blockbuster acquisition of LinkedIn . The 58 year-old Johnson also launched Microsoft’s venture capital fund (known as M12).

At Magic Leap, Johnson will take the reins of a company whose direction has shifted to focus more on businesses than on consumers — a strategy that mirrors approaches taken both by Microsoft’s Hololens extended reality product and by early wearable tech progenitor Google Glass.

It’s also a company that managed to burn through nearly $3.5 billion under Abovitz’s stewardship and lose a valuation of

“Since its founding in 2011, Magic Leap has pioneered the field of spatial computing, and I have long admired the relentless efforts and accomplishments of this exceptional team. Magic Leap’s technological foundation is undeniable, and there is no question that has the potential to shape the future of XR and computing,” said Ms. Johnson.

Before joining Microsoft, Ms. Johnson spent 24 years at Qualcomm, where she held various leadership positions, and served as a member of Qualcomm’s Executive Committee.

“As a company that has been a leader in transforming what will become the next era of computing, we have been fortunate to have a number of extremely qualified candidates express interest in the position of CEO. However, as soon as Peggy raised her hand there was no question in my mind, or the Board’s, that she was absolutely the best person to lead this company into the future,” said Abovitz in a statement. “As Magic Leap drives towards commercializing spatial computing for enterprise, I can’t think of a better and more capable leader than Peggy Johnson to carry our mission forward.”

 

#linkedin, #magic-leap, #microsoft, #mixed-reality, #peggy-johnson, #qualcomm, #rony-abovitz, #satya-nadella, #tc, #the-new-york-times, #wearable-devices

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AR 1.0 is dead: Here’s what it got wrong

The first wave of AR startups offering smart glasses is now over, with a few exceptions.

Google acquired North this week for an undisclosed sum. The Canadian company had raised nearly $200 million, but the release of its Focals 2.0 smart glasses has been cancelled, a bittersweet end for its soft landing.

Many AR startups before North made huge promises and raised huge amounts of capital before flaring out in a similarly dramatic fashion.

The technology was almost there in a lot of cases, but the real issue was that the stakes to beat the major players to market were so high that many entrants pushed out boring, general consumer products. In a race to be everything for everybody, the industry relied on nascent developer platforms to do the dirty work of building their early use cases, which contributed heavily to nonexistent user adoption.

A key error of this batch was thinking that an AR glasses company was hardware-first, when the reality is that the missing value is almost entirely centered on missing first-party software experiences. To succeed, the next generation of consumer AR glasses will have to nail this.

Image Credits: ODG

App ecosystems alone don’t create product-market fit

#app-store, #apple, #apple-inc, #augmented-reality, #consumer-products, #developer, #emerging-technologies, #extra-crunch, #facebook, #gaming, #google, #hardware, #magic-leap, #market-analysis, #mixed-reality, #mobile, #operating-systems, #smartglasses, #startups, #tc, #virtual-reality, #wearables

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Magic Leap has apparently raised another $350 million, in spite of itself

Magic Leap has reportedly received a $350 million lifeline, a month after slashing 1,000 jobs and dropping its consumer business. Noted by Business Insider and confirmed by The Information, CEO Rony Abovitz sent a note to staff announcing the funding, courtesy of unnamed current and new investors.

The who — and more importantly, why — isn’t clear. A key healthcare company may be involved. Whatever the case, the company is withdrawing the WARN notice (a 60-day notification for large-scale layoffs) sent to staff in late April. The move represents an apparent reversal of the massive layoff round it previously announced.

In spite of the change, it seems that the lavishly funded augmented reality company still plans to turn all of its focus to the enterprise, as previously announced — a move that puts it in more direct competition with the likes of Microsoft’s HoloLens.

“We are making very good progress in our healthcare, enterprise, and defense deals,” Abovitz writes. “As these deals close, we will be able to announce them.”

Magic Leap cited COVID-19 as a key reason for April’s news. But the company wasn’t exactly the picture of consumer hardware success prior to the shutdown. In spite of raising an eye-popping $2.6 billion across nine rounds, the company’s early days were defined far more by hype than public progress. After years of teaser videos, its first device ultimately left much to be desired.

We’re reached out to the company for comment.

#augmented-reality, #funding, #hardware, #magic-leap

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The great unicorn retreat

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we’re taking stock of what’s happening to a number of unicorns, both public and private. This is the third time we’ve sat down to document what feels like a wave of unicorn cuts, capped in this case by Airbnb’s decision to cut around a quarter of its global staff (25.3%, according to provided numbers).

Airbnb’s cuts follow recent excisions at Lime, Oyo, and others. Notably the cuts are not only landing amongst the best-known unicorns. Indeed, Crunchbase News (n.b. I was once its Editor in Chief) wrote a few weeks back that 36 unicorns had cut a known 8,416 jobs, according to a layoff tracker.

The numbers are now sharply higher if we only added in Airbnb’s cuts. However, looking at the same database this morning, cuts amongst late-stage startups since the prior count was assembled include reductions at Swiggy, Deliveroo, Sisense, Magic Leap, DesktopMetal, Cohesity, and others.

TechCrunch first covered a wave of unicorn layoffs towards the start of the year, when companies backed by SoftBank’s Vision Fund were rapidly trying to curtail their costs and move closer to profitability. Suddenly their chief-backer, formerly the most aggressive pool of private capital in the world was on retreat, and it was time to batten the hatches.

Those cuts, however, felt less driven by a unicorn-wide issue and more led by quarters of overly indulgent self-aggrandizement by a number of business that ran further in the red than made sense.

The second wave of unicorn layoffs came in the early days of the COVID-19 pandemic. Well-known companies like Bird, ZipRecruiter, GetAround, Sonder, TripActions, and others cut staff as the economy rapidly changed as cities and states asked regular folks to stay home.

That post, out towards the end of March, almost looks like we published it too early in retrospect. It came before Toast dramatically cut staff or BounceX’s own layoffs. In other words, the trend we were discussing was just getting started.

So let’s talk about what’s happened since our March 30 check-in on the state of unicorn employment, and why we’re now in what could be the third wave of unicorn cuts this year.

#airbnb, #bird, #cohesity, #dara-khosrowshahi, #deliveroo, #extra-crunch, #fundings-exits, #getaround, #gocardless, #lime, #lyft, #magic-leap, #market-analysis, #oyo, #pinterest, #sisense, #softbank, #sonder, #startups, #tc, #techcrunch, #tripactions, #uber, #unicorns, #wework, #ziprecruiter

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Daily Crunch: What went wrong at Magic Leap

Magic Leap may be on its last legs, the next iPhone could be delayed by a month and WhatsApp says its efforts to slow the spread of misinformation are working.

Here’s your Daily Crunch for April 27, 2020.

1. Magic Leap’s $2.6 billion bait and switch

“Why are people still giving Magic Leap money?” our own Lucas Matney asked a year ago. The company’s device sales were terrible. Last month it sought an acquisition for a $10 billion price tag that Josh Constine called “crazy.” Most recently, it laid off half the company and pivoted to enterprise.

Now columnist Jon Evans looks back at what went wrong. The issue, he concludes, is that Magic Leap never managed to miniaturize its breakthrough technology into anything actually releasable.

2. The next iPhone could be delayed a month, as pandemic wears on

The Wall Street Journal is reporting that the iPhone 12 may be among the devices impacted by unexpected COVID-19 issues. Apple is supposedly “pushing back the production ramp-up” of the new devices owing to manufacturing issues in Asia and “weakened global consumer demand.”

3. WhatsApp’s new limit cuts virality of ‘highly forwarded’ messages by 70%

WhatsApp’s bid earlier this month to cut the virality of messages circulating on its platform by introducing a forwarding limit has already started to pay off.

4. Facebook launches drop-in video chat Rooms to rival Houseparty

Facebook is co-opting some of the top video chat innovations like Zoom’s gallery view for large groups and Houseparty’s spontaneous hangouts for a new feature called Rooms.

5. Coronavirus could push consumers away from influencers and toward streaming TV

LiveRamp TV’s Jay Prasad notes that prior to the onset of coronavirus, the influencer trend was diminishing while the streaming TV trend became more prominent. Today, influencers have actually seen increased levels of engagement — but they face credibility issues, which could lead to a reduction in perceived value to brands. (Extra Crunch membership required.)

6. Brave accuses European governments of GDPR resourcing failure

Brave, maker of a pro-privacy browser, has lodged complaints with the European Commission against 27 EU Member States for under resourcing their national data protection watchdogs. The company has compiled a report to back up the complaints, in which it chronicles a drastic shortage of tech expertise and budget resource among Europe’s privacy agencies to enforce the region’s data protection framework.

7. Codota picks up $12M for an AI platform that auto-completes developers’ code

Codota is an Israeli startup that provides an AI tool for developers to let them autocomplete strings of code that they are writing — intended both to speed up their work (it claims to “boost productivity by 25%”) and to make sure that the code is using the right syntax and “spelled” correctly.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

#augmented-reality, #daily-crunch, #magic-leap, #tc

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Investors buy The DiPP as accelerators go virtual

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week we had a choice of all sorts of news, but as we cut the show together as a group Danny pushed all the funding rounds up. So, when Alex and Natasha jumped into the show we had a bunch of good news to cover. We’re avoiding COVID-19 news, but the pandemic is just a part of the broader stories we want to tell. For the foreseeable future, coronavirus will be always be part of our interviews. But the conversation can’t start and stop there.

So what was on the docket? Three things: Accelerator news for the early-stage founders, funding rounds, of course, and some layoff news that was worth mentioning as it might trickle down beyond the unfortunate hosts. 

Here’s the rundown:

We didn’t get to talk through some Silicon Valley or European venture capital data, not to mention what we’re seeing in Boston because we ran out of time! More soon.

Equity drops every Monday at 7:00 AM PT and Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

#alex, #boston, #business-incubators, #economy, #entrepreneurship, #equity, #equity-podcast, #finance, #fundings-exits, #lambda-school, #magic-leap, #miro, #private-equity, #silicon-valley, #spotify, #startup-company, #startups, #techcrunch, #venture-capital, #venture-capital-data, #y-combinator

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What happens if Magic Leap shuts down?

Since first uploading a YouTube teaser video of its tech five years ago, Magic Leap’s presence in the augmented reality industry has been controversial.

Some have lauded the team’s ambitions, while others I’ve talked to say the company’s posturing has dissuaded investors from taking chances on other AR hardware startups, which has hampered the industry’s advance.

Regardless of its impact, Magic Leap carries outsized weight, leading one to question what would happen to other AR companies if the company’s situation worsened.

The company announced layoffs today, with reports indicating that it is dismissing around 1,000 employees — about half of the company. Magic Leap’s added news of a major pivot to enterprise makes it seem like that wasn’t its primary strategy over the past year. From my perspective, the company looks like it is on a path to a fire sale and will be dependent on executing a dramatic turnaround, which grows tougher under current economic conditions.

Magic Leap has few users, so a theoretical shutdown would likely have a lesser impact than other unicorn flare-outs; still, losing a company on the forefront of a technology lauded by many as the next ubiquitous platform will certainly impact others that are striving to bring this tech to market.

The impact for startups moving forward would be nuanced. Without a substantial software suite of its own, Magic Leap relied heavily on developer partnerships, though in recent months many of those seemed to promote enterprise use cases. AR/VR startups are already in a rough position, and one less developer platform could force more companies to de-prioritize headset-based platforms and shift their focus to mobile.

#apple, #augmented-reality, #computer-vision, #coronavirus, #covid-19, #extra-crunch, #facebook, #hardware, #head-mounted-displays, #magic-leap, #microsoft, #microsoft-hololens, #mixed-reality, #startups, #tc, #wearable-devices

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Magic Leap reportedly slashes 1,000 jobs and steps away from consumer plans

Magic Leap laid off a “number of employees” this morning and announced they were backing away from their consumer ambitions to focus more heavily on selling to enterprise customers.

Bloomberg reports that half of Magic Leap’s employees were laid off, roughly 1,000 in total. Magic Leap was in the process of exploring a sale, Bloomberg had also reported, one that could value the company at $10 billion.

We’ve reached out to a Magic Leap spokesperson for comment.

Magic Leap is one of the most well-capitalized consumer hardware startups ever, having raised more than $2.6 billion from investors including Google, Alibaba, and Saudi Arabia’s Public Investment Fund.

Citing COVID-19, CEO Rony Abovitz wrote in a blog post that the company needed to shift focus to enterprise applications of its technology. Magic Leap had long emphasized that it was a consumer device company.

“Adapting our company to these new market realities and our increased focus on enterprise means we must align our efforts to focus on the areas of our business that advance our technology, ensure delivery of Magic Leap 2, and expand product-market fit and revenue generation,” Abovitz wrote.

The hardware maker had already adapted its consumer device to enterprise applications. Late last year, it announced the release of the Magic Leap Enterprise Suite, a $3,000 package designed to take on the more lucrative business side of augmented and mixed reality, joining the likes of Microsoft’s Hololens. The company also competed with Microsoft to win a beefy military contract for bringing AR technology to the army, Magic Leap was unsuccessful.

Augmented reality has been a heavily hyped technology with few success stories. While Apple and Facebook have long telegraphed their views that they believe it will be the next consumer platform to follow mobile, no fast-moving startup has been able to build a successful business around AR hardware. Last year, a trio of well capitalized AR startups shut down, including ODG, Meta and Daqri.

#hardware, #magic-leap

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WorldGaze uses smartphone cameras to help voice AIs cut to the chase

If you find voice assistants frustratingly dumb you’re hardly alone. The much hyped promise of AI-driven vocal convenience very quickly falls through the cracks of robotic pedantry.

A smart AI that has to come back again (and sometimes again) to ask for extra input to execute your request can see especially dumb — when, for example, it doesn’t get that the most likely repair shop you’re asking about is not any one of them but the one you’re parked outside of right now.

Researchers at the Human-Computer Interaction Institute at Carnegie Mellon University, working with Gierad Laput a machine learning engineer at Apple, have devised a demo software add-on for voice assistants that lets smartphone users boost the savvy of an on-device AI by giving it a helping hand — or rather a helping head.

The prototype system makes simultaneous use of a smartphone’s front and rear cameras to be able to locate the user’s head in physical space, and more specifically within the immediate surroundings — which are parsed to identify objects in the vicinity using computer vision technology.

The user is then able to use their head as a pointer to direct their gaze at whatever they’re talking about — i.e. ‘that garage’ — wordlessly filling in contextual gaps in the AI’s understanding in a way the researchers contend is more natural.

So, instead of needing to talk like a robot in order to tap the utility of a voice AI, you can sound a bit more, well, human. Asking stuff like ‘Siri, when does that Starbucks close?’ Or — in a retail setting — ‘are there other color options for that sofa?’ or asking for an instant a price comparison between ‘this chair and that one’. Or for a lamp to be added to your wish-list.

In a home/office scenario, the system could also let the user remotely control a variety of devices within their field of vision — without needing to be hyper specific about it. Instead they could just look towards the smart TV or thermostat and speak the required volume/temperature adjustment.

The team has put together a demo video (below) showing the prototype — which they’ve called WorldGaze — in action. “We use the iPhone’s front-facing camera to track the head in 3D, including its direction vector. Because the geometry of the front and back cameras are known, we can raycast the head vector into the world as seen by the rear-facing camera,” they explain in the video.

“This allows the user to intuitively define an object or region of interest using the head gaze. Voice assistants can then use this contextual information to make enquiries that are more precise and natural.”

In a research paper presenting the prototype they also suggest it could be used to “help to socialize mobile AR experiences, currently typified by people walking down the street looking down at their devices”.

Asked to expand on this, CMU researcher Chris Harrison told TechCrunch: “People are always walking and looking down at their phones, which isn’t very social. They aren’t engaging with other people, or even looking at the beautiful world around them. With something like WorldGaze, people can look out into the world, but still ask questions to their smartphone. If I’m walking down the street, I can inquire and listen about restaurant reviews or add things to my shopping list without having to look down at my phone. But the phone still has all the smarts. I don’t have to buy something extra or special.”

In the paper they note there is a long body of research related to tracking users’ gaze for interactive purposes — but a key aim of their work here was to develop “a functional, real-time prototype, constraining ourselves to hardware found on commodity smartphones”. (Although the rear camera’s field of view is one potential limitation they discuss, including suggesting a partial workaround for any hardware that falls short.)

“Although WorldGaze could be launched as a standalone application, we believe it is more likely for WorldGaze to be integrated as a background service that wakes upon a voice assistant trigger (e.g., “Hey Siri”),” they also write. “Although opening both cameras and performing computer vision processing is energy consumptive, the duty cycle would be so low as to not significantly impact battery life of today’s smartphones. It may even be that only a single frame is needed from both cameras, after which they can turn back off (WorldGaze startup time is 7 sec). Using bench equipment, we estimated power consumption at ~0.1 mWh per inquiry.”

Of course there’s still something a bit awkward about a human holding a screen up in front of their face and talking to it — but Harrison confirms the software could work just as easily hands-free on a pair of smart spectacles.

“Both are possible,” he told us. “We choose to focus on smartphones simply because everyone has one (and WorldGaze could literally be a software update), while almost no one has AR glasses (yet).  But the premise of using where you are looking to supercharge voice assistants applies to both.”

“Increasingly, AR glasses include sensors to track gaze location (e.g., Magic Leap, which uses it for focusing reasons), so in that case, one only needs outwards facing cameras,” he added.”

Taking a further leap it’s possible to imagine such a system being combined with facial recognition technology — to allow a smart spec-wearer to quietly tip their head and ask ‘who’s that?’ — assuming the necessary facial data was legally available in the AI’s memory banks.

Features such as “add to contacts” or “when did we last meet” could then be unlocked, to augment a networking or socializing experience. Although, at this point, the privacy implications of unleashing such a system into the real world look rather more challenging than stitching together the engineering. (See, for example, Apple banning Clearview AI’s app for violating its rules.)

“There would have to be a level of security and permissions to go along with this, and it’s not something we are contemplating right now, but it’s an interesting (and potentially scary idea),” agrees Harrison when we ask about such a possibility.

The team was due to present the research at ACM CHI — but the conference was canceled due to the coronavirus.

#apple-inc, #artificial-intelligence, #assistant, #augmented-reality, #carnegie-mellon-university, #chris-harrison, #computer-vision, #emerging-technologies, #iphone, #machine-learning, #magic-leap, #mobile, #siri, #smartphone, #smartphones, #virtual-assistant, #voice-ai, #wearables

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Desperate to exit, a $10B price tag for Magic Leap is crazy

Augmented reality headset maker Magic Leap has struggled with the laws of physics and failed to get to market. Now it’s seeking an acquirer, but talks with Facebook and medical goods giant Johnson & Johnson led nowhere according to a new report from Bloomberg’s Ed Hammond.

After raising over $2 billion and being valued between $6 billion and $8 billion back when it still had momentum, Hammond writes that “Magic Leap could fetch more than $10 billion if it pursues a sale” according to his sources. That price seems ridiculous. It’s the kind of number a prideful company might strategically leak in hopes of drumming up acquisition interest, even at a lower price.

Startups have been getting their valuations chopped when they go public. The whole economy is hurting due to coronavirus. Augmented Reality seems less interesting than virtual reality with people avoiding public places. Getting people to strap used AR hardware to their face for demos seems like a tough sell for the forseeable future.

No one has proven a killer consumer use case for augmented reality eyewear that warrants an expensive and awkward-to-wear gadget. Our phones can already deliver plenty of AR’s value while letting you take selfies and do video chat that headsets can’t. My experiences with Magic Leap at Sundance Film Festival last year were laughably disappointing, with its clunky hardware, ghostly projections, and narrow field of view.

Apple and Facebook are throwing the enduring profits of iPhones and the News Feed into building a better consumer headset. Snapchat has built intermediary glasses since CEO Evan Spiegel thinks it will be a decade before AR headsets see mainstream adoption. AR rivals like Microsoft have better enterprise experience, connections, and distribution. Enterprise AR startup Daqri crashed and burned.

Magic Leap’s CEO said he wanted to sell 1 million of its $2300 headset in its first year, then projected it would sell 100,000 headsets, but only moved 6,000 in the first six months, according to a daming report from The Information’s Alex Heath. Alphabet CEO Sundar Pichai left Magic Leap’s board despite Google leading a $514 million funding round for the startup in 2014. Business Insider’s Steven Tweedie and Kevin Webb revealed CFO Scott Henry and SVP of creative strategy John Gaeta bailed in November. The company suffered dozens of layoffs. It lost a $500 million contract to Microsoft last year. The CEOs of Apple, Google, and Facebook visited Magic Leap headquarters in 2016 to explore an acquisition deal, but no offers emerged.

Is AR eyewear part of the future? Almost surely. And is this startup valuable? Certainly somewhat. But Magic Leap may prove to be too little too early for a company burning cash by the hundreds of millions in a market newly fixated on efficiency. A $10 billion price tag would require one of the world’s biggest corporations to believe Magic Leap has irreplicable talent and technology that will earn them a fortune in the somewhat distant future.

The fact that Facebook, which does not shy from tall acquisition prices, didn’t want to buy Magic Leap is telling. This isn’t a product with hundreds of millions of users or fast-ramping revenue. It’s a gamble on vision and timing that looks to be coming up snake eyes. It’s unclear when the startup would ever be able to deliver on its renderings of flying whales and living room dinosaurs in a form factor people actually want to wear.

 

One of Magic Leap’s early renderings of what it could supposedly do

With all their money and plenty of time before widespread demand for AR headsets materializes, potential acquirers could likely hire away the talent and make up the development time in cheaper ways than buying Magic Leap. If someone acquires them for too much, it feels like a write-off waiting to happen.

#apple, #augmented-reality, #daqri, #facebook, #fundings-exits, #gadgets, #google, #hardware, #johnson-johnson, #magic-leap, #microsoft, #microsoft-hololens, #startups, #sundar-pichai, #tc, #wearables

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