2021 was quite a strange year, but there were several promising updates in the XR industry to make 2022 something to look forward to, and our panel discusses just a few; NFTs, Facebook, the Metaverse, and much more.

Alan: Hey, everyone. Alan Smithson here. Today we're speaking with Michael Jensen, CEO of Labster, a venture backed, award winning company that focuses on revolutionizing the way science and safety is taught at companies, universities, colleges, and high schools all over the world. They started with creating multimillion dollar science labs in a VR headset. And now they're ready to take on the enterprise training world. All that and more, coming up next on the XR for Business podcast.

Michael, welcome to the show.

Michael: Hey, Alan, thanks so much, honored to be here.

Alan: It's my absolute pleasure to have you. I know you were on my partner and wife Julie's podcast, XR for Learning. And I learned all about how Labster is revolutionizing how we teach science, and making it more exciting, gamified, but also bringing the opportunity to create multi-million dollar science labs for the cost of a cup of coffee. So let's unpack that. Michael, how did you get into this?

Michael: Yeah, so that actually started about nine years ago, when my co-founder and I saw an opportunity to create much more engaging online learning content for students and learners around the world. Basically, most people were learning in very boring, non-engaging formats as we saw it. And at the same time, we saw these billions of dollars being invested into the gaming industry to create really engaging games. And we thought, why not find a way to combine and merge the learning world and the gaming world in a more engaging way, so that we can engage learners in the content, make them more excited about the topics, but also use these mechanisms to help them understand some of these more complex concepts in a much better way.

Alan: Walk people through what a typical Labster lab looks like, and why this is exciting.

Michael: There's two main components that we really looked at. One is engagement -- as I just talked about -- and the other one is timesaving, cost savings. And so what we looked at was, how can we best address some of the biggest challenges in the industry by presently creating virtual training -- similar to a flight simulator that was revolutionizing pilot training -- and then create, for instance, virtual laboratories to simulate dangerous experiments or dangerous scenarios -- like safety training -- and then that way help the universities, in our case as well as high schools -- but now also corporates -- dramatically reduce their cost and saving, as well as the time spent on this training.

And we did a huge research project now -- about two years ago -- a $6-million research project involving hundreds and hundreds of employees around the world in large pharma companies, to really analyze and understand, does this really help? Is there a way for us to create better, more engaging content? And if so, does that really help students or learners understand it better? And does it also help save costs? And the results were quite overwhelmingly positive, was published and peer reviewed -- among others -- in Nature magazine, where we saw more than a doubling of the learning outcomes, as well as engagement for learners, compared to -- for instance -- standard online e-learning training, or even personal one-on-one training. So even compared to a personal one-on-one trainer, we found that this virtual immersive training format can be far superior, both in costs, as well as an engagement, as well as the time spent on the training. So really huge, huge opportunities, really exciting.

Early results are two years ago, and since then we've really just been on a mission to create hundreds of different training simulations covering more than 18 different courses now, and now incorporate training we're especially focused on the OSHA safety training. So anything around safety training, where we can see that training is either very dangerous or very time consuming or very expensive. Those are typically the areas where we can see that virtual reality or augmented reality or even also just immersive desktop/laptop based learning can have a significant impact on the learning outcomes and results.

Alan: Where can people find more information? I'm assuming that's the SIPROS project that you were referring to.

Yeah, correct. So on labster.com/research, we publish and share all the different research studies we do. And there's more than 16 different peer-reviewed studies now. And the one-- here's especially the SIPROS related one, as well as one that was published in Nature Biotechnology, as well. It was very-- a really great study. And we have also studies comparing virtual reality to desktop based learning, to really, for us, to learn and understand, when does it really make sense to use XR -- or virtual reality in our case -- and when is it fine to just use laptop based training? Because there are specific scenarios within which virtual reality really adds a lot of value to the training.

Alan: A business person who is looking into-- maybe it's an H.R. manager or a training manager who's saying, "OK, well, I keep hearing about this virtual reality thing. Where does it make sense to engage virtual reality, versus augmented reality, versus just PDFs, or what they're already doing now, maybe video training?"

Michael: So one of the key areas we found as well in the industry is that one of the really hard things, for instance, for corporate learning is the engagement piece. So really engaging the employees and the learning is really important, so that you actually-- you get your employee-- the employees to train, and spend time on the training. And one of the big challenges there is often that the existing content is just really boring. We're talking PDFs of teaching safety training, or often very short in-person trainings that are very limited due to safety concerns, good safety concerns. So I think anyone, any learning department in a company who is considering creating more experiential learning or finding ways to engage their employees more, make them more excited about the learning, should really consider even any type of immersive learning.

So we actually-- we typically work with companies to start using laptop based training. So 3D environments, but on a laptop. So imagine it as a flight simulator, but for laboratory training or any other type of manufacturing type of training, safety training. And then start with that, because that's usually the easiest way to get started. That way you get comfortable and familiar with the technology, get it integrated to the learning management system and LRS systems and so forth. And then from there, our technology is cross platform. And then what we typically do is work with companies to slowly adopt a virtual reality component as well. So any simulation can be played either on the laptop or in virtual reality.

So once they feel like they have a lab ready, we typically start with pilot projects where we have maybe a few hundred employees go through the VR training as well, to see the results there. Then they can test it out in a more smaller scale format and get -- again -- comfortable with the practical aspects of using VR. And in terms of when it makes sense to VR, so what we see is that any type of scenario that is is hard to-- or typically requires an emotional response to really practice it well, such as -- for instance -- an explosion or a fire in a laboratory. You can imagine reading about a fire in a PDF and then you can imagine having it in a virtual reality environment. And if anyone has tried VR, you know how immersive it is and it can feel incredibly real, and you actually get an emotional response, which allows the employees to also train much better under those stressful conditions.

So a simple example, also, we have is around-- we have a lab safety simulation where there's an acid spill, where the employee accidentally gets acids into the eyes. So that's actually part of the training experiment. And they have to then -- with limited eyesight -- you have to run to the safety station, and rinse your eyes and practice the process of rinsing your eyes in VR. So you see people actually bending their head down, doing the actual body motions that are needed to perform such an important safety training. Which is something you can't really do in a real world scenario, you don't want to put acids in anyone's eyes. And it's hard to simulate limited eyesight as well in a stressful situation.

So we really try to use virtual reality, the auditory experience to recreate as close as possible to the real world scenarios. And what we see that-- the effects that we see on virtual reality compared to, for instance, laptop based training is that the the memory recall is significantly higher. And we have some specific studies that dives a lot more into the details of it. But it's really interesting to see that if you have a scenario that requires a spatial environment, for instance, where you need to practice in a specific lab layout, where the safety station -- for instance -- is in a specific area, then when you're trained in a virtual environment, you can much, much better recall the process, the steps of actually doing when you go into the real lab. So that's one of the big areas that we see the benefits of.

Another interesting concept -- this applies mostly to conceptual training -- but if you have a very complex concept, such as, let's say, organic chemistry or something-- biology, for instance, where we need to understand more complex concepts, virtual reality can really help the students understand concepts in a 3D spatial environment again. And that also is something that really helps them understand the concepts. And in some of the cases, we work with companies to train their employees and certain pharmacology research -- for instance -- so that they can better apply cutting edge research in their own research, and find new innovative ways to cure certain diseases. So there are lots of of great cases and application of VR. But I still recommend always companies to start first with the laptops, get familiar with that, just run some tests so you also get to the whole technical setup, the IT infrastructure set up to support that. And then slowly start adapting virtual reality across the different destinations. And that's driving huge results.

And even one thing I haven't talked much about here, but I can quickly mention as well, there's the increased motivation and appetite for learning that that it creates in employees is really important here as well. Many companies struggle with actually engaging their employees in learning. And it's so important for companies to stay innovative, that their employees continuously evolve their skills. And we see that when you use these immersive, engaging type of learning contents, it also makes the learners much more interested in learning more. So there is this reinforcement effect that helps the company increase their learning outcomes. So, again, any learning department who cares about their employees learning more in being engaged in the learning, I think this type of technology has a huge potential.

Alan: One of the things that we keep saying and keep hearing from the industry is that learning in general -- or education, and just training, learning -- is competing with AAA games, Hollywood movies, and social media. So unless we are as engaging or as exciting as those three, we're falling second fiddle when training people.

Michael: And actually, what you're touching a little bit up on here as well is the ability to measure the impact. If we compare it to different types of learning, it's typically very hard for learning department to measure if it really is better. And we've obviously -- given our 16 different research studies -- thought a lot about how can we actually measure the results. And what we find is that when you use these interactive type of learning formats, you can much, much better both administer, but also measure the actual impact that it has on the learners. So are they better able to perform the certain types of experiment or safety protocols and so forth? So even just using these types of trainings as an exam type training is also a possibility, where we can really measure in a much more realistic way if they're really benefiting from. We're really excited about it these days -- especially some of the companies, large pharma companies, down to even small lab diagnostics firms, for instance -- to see the impact it has both on the company but also on their learners, who constantly then want more. "What else can we now start training?"

Alan: I can imagine this is never ending. So actually, that was one of my questions. So I'm looking through your labster.com/simulations and it's mostly science simulations, cellular respiration, chemistry, diabetes, it goes on and on and on... I don't even know what "eutrophication" is... what is the process for creating a new module -- for example -- and how much of it can be reused versus new stuff? Like when a company says, "Hey, we want to recreate our lab, and here are the things we want to do?" What is the process for that?

Michael: Great question. We actually built a whole learning engine, so 3D immersive learning engine or platform, and that also means that we have a very high reusability of everything we do. So everything is actually modular. So you can imagine a little bit like Lego, you're building a house, but then you can actually reuse that and reuse it again in other simulations. So we're getting faster and faster and faster in building these. And since we have hundreds of simulations now today, every new simulation can be done -- if it's a simple one, reusing existing assets -- it could be done in as little as one day. And we actually have companies who often take our training simulations, and then they customize them, change the protocol a little bit to match their own internal protocols, or change the quiz questions a little bit to test the employees in different ways. And that can be done in as little as a few hours.

And what we do a lot now in corporate training for instances is look at the OSHA standards for safety training. Beyond a lot of the higher training we have also now fire safety, chemical safety, and blood-borne pathogens -- which is obviously super relevant these days -- and biological safety, waste disposal, emergency response, hazard identification, and so on and so on. So anything that really relates to the importance of safety within a work environment is areas that we're focused a lot on. And we actually right now, every single week, we launch at least one, typically two new simulations. So there's high demand and also high kind of throughput on our technology and platform these days.

So we would often also in some cases, if companies have specific demands, we will work with them to create an entire virtual campus. So we actually have large enterprises where we work with them to understand how do they want to train both their own employees, but also how do they want to train their customers in using their technologies and machines and equipment. And in those cases, we work very closely together with their product departments to essentially convert their PowerPoint presentation into these much more engaging, immersive formats, where we'll create the specific 3D assets and 3D machines of their equipment and so forth. And in some cases, we build an entire virtual campus. So it's sort of a virtual training campus for a large corporate. And that allows them to actually not only improve the training of their employees, but also open up a whole new revenue stream for them, so they can actually now sell a lot of this training as well to their customers or even some of their partners around the world, which is another very exciting opportunity for us that we're currently pursuing as well.

Alan: You mentioned Lego, and I understand that you guys are Danish.

Michael: Yes.

Alan: Is that like a national thing, where whenever you podcast and stuff, you have to mention Lego or another Danish company?

Michael: Yeah. So it's--

Alan: [laughs]

Michael: I feel like it! So actually, we collaborate quite a lot with Lego, so I think in our case, it's also a little bit extra close to us. But yeah, I think anyone who grew up on Lego. I'm a huge Lego fan myself. And I think to some degree it's hard to show, but I think our builder component -- which is essentially a Lego for virtual environments, training environments -- is in some way inspired by my young days of playing around with Legos, building pretty much anything my imagination could foster. And that actually reminds me of another important aspect of this: when Lego, for instance, is really known for their ability to spark curiosity and creativity in people, especially young adults, of course, but also in employees, it's very important to have-- to promote curiosity. You can imagine in the pharma industry, where you have to constantly come up with new innovations to cure certain types of diseases, curiosity is super important.

And so what we do a lot in our science experiences, the virtual reality experiences, is focusing on not just on how we train specific skills, but also how they can apply those to solve real world challenges and problems. So we're known for this in the higher ed space, especially, where we coach and mentor students on how can they apply their biology/chemistry/physics skills to solve global warming or other types of really critical problems out in the world. And you can imagine how we can do the same in corporate environments, where we work with the corporates to understand, "Well, what type of creativity or curiosity or new types of innovations are very important for them? And then how can we create training simulations that promote that curiosity by helping them see how they can connect the dots in new, innovative ways?" So when you're learning about eutrophication -- or any types of important technique or skills that they might have to learn -- how can they use electron microscopes, for instance, to come up with new ways of measuring or solving important problems?

Alan: Interestingly enough, you were part of the Educators In VR conference and people from -- I think there's 150 speakers from around the world -- met in a virtual world, in virtual reality, in Altspace, and ENGAGE, and the Rumii platform. With this whole coronavirus outbreak and conferences being canceled, this represents a huge opportunity for virtual collaboration platforms like this. And what are you seeing as the next steps with this? Are you able to -- in your simulations -- also have multi-users and have multi-person collaboration around the world?

Michael: It's a really exciting opportunity for us, of course. It's a horrible situation with the coronavirus. But it does emphasize the upsides of using virtual immersive learning, or online learning in general. And the Educators In VR was an amazing event, showcasing how you can actually host now massive online events with thousands of people in the same environments, all remote, and have a really effective collaborative communication around it as well. So we are actually focused a lot right now, especially helping high schools and entire countries right now move their learning online.

So, for instance, Japan recently just closed down all their schools, I believe it was two million or so students that were suddenly prevented from going to school. And they now have to suddenly learn from home, where they have no science facilities, obviously. So we are helping build entire virtual high school science campuses. And we do the same as well in higher ed, where we build an entire online biology degree that works in virtual reality as well. And yes, similarly now for companies, we see the effects, but it's actually already happening, because in the COVID world, we see very high cost of employees traveling from destination to destination to do the specific training, hosting the employees in these different locations, when in fact you could just ship a couple of VR headsets, or even have the online laptop based training and massively reduce costs.

So there's already incentives for companies to do this. They have-- they are already and our partners do it already to an increasing extent. And I think these types of pandemics, like the Coronavirus, will certainly promote or accelerate this adoption. And I think it will open up training departments' minds much more to the opportunities in this type of training as well as the impact. And I'm very excited about it in the way that it will help these people, who have often been maybe a little bit resistant, like, "Yeah, VR..." or "Ah, yeah, well, do we really need this type of engaging, immersive learning?" They will now have to try it out because of the conditions right now. And they will see -- I believe, at least in all cases of our customers -- they will see that the benefits are far superior than any other existing training that they have today. And at the same time, they actually save costs in this, in a big way.

There's really -- as I say -- literally no reason not to try this out and adopt this. And all the research, all the existing applications and companies using it today should be a proof point for more and more companies to try it out. So I'm excited for it, and I'm excited especially for the learners, at the end of the day. At the end of the day, we are a company that's driven by the engagement and the passion that we can inspire in all the learners around the world, to come up with important solutions to global warming and other important challenges. And we see the effects here on the learners as soon as the companies are pushed a little bit in a healthy way to promote this new engaging type of learning. We are scrambling at the moment just to keep up with all the incoming requests and demands because of this, and doing our best to to serve as many students and learners around the world.

Alan: You're doing some amazing work. How can people get in touch with you and your team, if they're interested in bringing this type of virtual learning into their classroom or into their company?

Michael: So definitely go to labster.com. And then also go to labster.com/corporate, there's a lot more information about our corporate initiatives, all the research and work that we're doing there. And there's as well a little contact form, and then fill out the form and then we'll get on a call with you and talk with you about how we can help you and support you in this transition. We have an incredible team that's guiding our partners through every single step of the process. So it's very easy to get started and it can literally be done in as little as one to two days, if people are up for it.

Alan: You've probably already answered this, but what problem in the world do you want to see solved using XR technologies?

Michael: I have a personal dream, that really is what drives every inch of my motivation here. My hope is that in 10 to 15 years, we will see the Nobel Prize winner up on stage, who's cured either all kinds of cancers, global warming, or other really important critical challenges out there in the world. And they will start by saying that it all really happened when they tried out Labster and they got inspired, they got curious about learning more and learning new skills and acquire those skills that really ultimately help them solve these important global challenges. So that's my big dream. And I believe we're definitely on the path to get there.

Alan: I don't even know what to say about that. That's amazing. So thank you, Michael, for taking the time out of your busy schedule to join us in the XR for Business podcast. And thank you, everyone, for listening. Make sure you subscribe to the podcast so that you don't miss any future episodes. This has been the XR for Business podcast with your host, Alan Smithson, and our guest, Michael Jensen from Labster.

Michael: Thanks so much, Alan.

Alan: Great, man. Thank you so much.

Alan: Hey, everyone, it’s Alan Smithson here with the XR for Business podcast. Today we’re speaking with Sean Hurwitz, founder and CEO of PIXO VR, a Detroit based company focused on VR software for training on processes, safety, and emergency response. Much like myself, Sean believes that extended reality — or XR — technologies can unlock human potential, and realize limitless possibilities. He’s assembled an all-star team of game changing VR and AR engineers, and we’re going to talk about how this translates directly into safety and training across all different industries. All that and more on the XR for Business podcast.

Sean, welcome to the show, my friend.

Sean: Hi, Alan. Thanks for having me.

Alan: It’s my absolute pleasure. I’m really, really excited. I’ve been kind of using your VR training video that you did. It was in a basement, and you’re training gas meter people on how to how to — I guess –use a gas meter. But I’ve been using that video to show the diverse range of things that can be done within VR. Tell us about that. Tell us about PIXO VR.

Sean: Yes, I am definitely onboard with the way that XR and training will definitely change the ecosystem, make people’s lives safer and more effective, and hopefully make more money too, at the end. So yeah, the example that you give is a replication of a basement, where technicians were in the traditional way of training, driving around, mirroring or shadowing older technicians as the evolving workforce and the younger generation coming in. And they were training the new employees, the new trainees, and they were looking for a way to do this training that would be close to real life, rather than drive around for weeks or months on end. And they couldn’t show– the problem was they couldn’t really identify or show all the variances in the gas meters in these basements. So we did a multi-user randomized scenario of millions of different setups and scenarios of what these gas meters would look like, and really expedited the training timeline. So PIXO, that’s sort of the– using your video as an example. But we started as a traditional console video game company, moving quickly into mobile and enterprise, and then even quicker in 2016 into getting the first Oculus DK and starting to build enterprise VR training, from that point forward.

Going from making games, because I just interviewed Arash Keshmirian from Extality, and he was doing the same thing. They were making virtual or augmented reality games for phones. And now they’re making enterprise solutions. How did you make that shift from going to making games to enterprise? And was it simply a way of making money or just– what is the precipitating factor of going from making games to basements full of gas fitting technology?

Sean: Well, money certainly plays a role, but really the mission to make people’s lives better, to help improve the planet that we live on, being able to utilize the skill set that we’ve spent combined dozens of years, used the same skill set, even the same game engine as to develop interactive games — which is really what this training is — to be able to replicate things that you either were too expensive to do otherwise or just too risky to do. So, once we figured out that we were able to create the scenarios in the field — or in a basement, like you said earlier — and then actually make money doing it served the purpose and the mission, and also getting paid for solving problems rather than developing games and hoping someone will download it or purchase it.

Alan: It’s definitely one of those things that you can do a lot more good with these things. Now, what kind of elements have you taken from the game production side — or days — and brought them in? Have you gamified these things? Is there like, a hidden thing where I can pull out a sword and start cutting things in half? Do you guys have any hidden Easter eggs in there?

Sean: Maybe not Easter eggs, but something along those lines would be the randomization engine that we have. So every time you enter into an environment where applicable — which for us is the vast majority — where we randomize different hazards or defects or different things that you have to learn. As an example, we developed the fall protection module for mostly the construction industry where you have to pick– you’re up on an 80 storey building — again, utilizing all environments, 3D modelling scenarios that you would build in a video game — and you put someone 80 storeys above the ground on scaffolding, and they have to pick the right harness. So when the harnesses are randomized every time, you really have that decision making utilized there. We use a lot of game level design as well. And if you pick the wrong harness, obviously, you fall to your death — really — on this 80 storey building. Good news is it’s all virtual, so you learn your lesson, one way or the other. So we utilize, really, all game development techniques for that module and everything that we build, whether it be the design, whether it be the game level, whether it be the data analytics and reporting from the user management. And understanding not only how to optimize these applications, but how did you do, it could be used at a competitive basis where you can compete against your previous training, the previous time that you went in, or against other co-workers. So many, many different game aspects used.

Alan: Interesting. What are some of the data points you’re collecting about users and learners, and how are you measuring success with this type of technology, versus just a standard classroom or on the job training? What’s the measurement of success?

Sean: Well, like I said before, the ability to really have someone do something and interact in an environment through an active learning process. One of the best uses that we found for VR currently is in assessment. So let’s just stick with this fall protection. How would you assess if somebody really understood what to do when they were up on this scaffold? This is a way to really test their skill set, and if they fail, they’re able to fail at a low cost and at a low risk scenario. So that’s not something that you can do in a classroom. You can take a test, as you know, PowerPoint. We’ve used in the past. You can you can take a three ring binder and study it, go through it, do a test. But it’s not like actually doing it. So we track all the points, what they pick first, what they pick second, what they look at, where they go. All the data points that make up the story about whether that trainee actually knows what they’re doing. And as you know, with VR — and XR, really — with biometrics coming on to the scene here, in the near future, you’ll be able to track cognitive load and how their body actually responds to those different training scenarios.

Alan: Are things like biometrics becoming part of this, or is this kind of a future plan? Because I would think that being 80 storeys up is kind of terrifying. People’s heart rate must be going through the roof.

Sean: Oh, it sure is. Yeah, I definitely think that biometrics is going to play a huge role in all of XR, specifically in this VR training because you could use it then as an assessment tool. Not only on the individual trainee and the potential employee early on, it could be used at a interview process early on in the cycle or later on. And did they get better? Are they more comfortable in these different situations? As well as to optimize the experience. So is it too much training? We recently developed a emergency response natural gas leak scenario, where you’re in the middle of a subdivision — and again — utilizing multi-user, some AI components and a technician is faced with a potentially very serious gas leak that they have to eventually turn that gas off. Now, the training not only tells you about the individual, but it could also tell you about is this just too much for an individual? Does it require two people? It could influence the real life training thereafter.

Alan: So how do you measure that then? Like, how do you know whether somebody is ready?

Sean: Well, we’re currently not using any biometrics right now, but once the new hardware comes onto the scene with sensors in it, that will track that person’s cognitive load and body temperature, those kind of things. The results of that would tell you if this person’s suited for that kind of role or not.

Alan: The amount of data we can collect from this and share is incredible. It’s not just about trying to sell people more things, but if this data can be used to deliver training in a more efficient, effective way, I think this is the ultimate goal.

Sean: It sure is. And really the still being in that early adopter, early majority phase and having yet crossed that chasm to the later, mid later majority efficacy from this training — I think — will mean everything, will be where it becomes commonplace. So we found that we were over the years, got good traction with the early adopters that we’re most likely going to adopt and integrate early technology no matter what. I think we’re moving into a little bit of that early majority, but I think for the late majority to really catch on, you’re going to need real efficacy where it’s– you can prove it’s saving lives, it’s improved training, you’ve saved a lot of money. And I think 2020 is a big year for that. I think we’re at that crossroad.

Alan: Yeah, I really, truly agree with that. So you guys have been working diligently on building out these scenarios and everything. What are some of the other ones you’ve talked about? Fall protection, emergency response, gas fitting. What are some of the other ones that you guys are working on?

Well, in the very near future, where we got some nice press coming out soon with some of the ones that we’re going to release, we have a first responder operations for hazmat, where we have a spilled over gas tanker for firefighters. Now, the way that we developed these, Alan, is, for instance, our hazard recognition. We have hazard recognition, which are like OSHA standards that would be in a warehouse, but because we’ve productized that application, we could put hazard recognition on a construction site, or in a hospital, or in a steel factory, or an automotive factory. So we’ve productized the actual learning objective behind it and then can very easily flip the environments to be address most industries. So when I say we have hazard recognition, it’s really across multiple recognitions. We have the natural gas leak emergency response that I spoke of already, fall protection, the inside meter inspection that we spoke about already. Now, just to back up for one second. The way that our platform works is our business model is we go to market and distribute the content through VARs, or Value Added Resellers. We’ve also developed on the front-end a content curation side of the platform, that will allow other developers to monetize their content through our reseller network. So through– if you can imagine that all the amazing content that’s been developed and great developers out there that don’t have the sales side of things, our library — if you will — our content side is going to increase rapidly, as we bring these other developers on.

Alan: Amazing. That seems like a scalable way to do it.

Sean: It is. I mean, we– earlier on — when I say earlier on, meaning the last couple of years — we learned that we had a hard time selling to first responders or the construction companies or oil and gas company, because we didn’t know what the pain points were for that training. So partnering with these resellers — who understand the pain points — are much better at selling this training content into their industries. So that’s why on the sales side. And then we’re obviously automating all that through the platform.

Alan: Incredible. Where can people find you? It’s pixovr.com?

Sean: Yep, pixovr.com. We tend to have presence at most of these different trade shows that we go to, but pixovr.com is definitely the place.

Alan: I think this is something that people will be listening, and the goal of this podcast is really to educate business owners and business communities to invest and start using this technology. So what would be the path for a new customer? So let’s say, for example, somebody is in — I don’t know — trucking, and they want to develop a trucking training. What is the path for them to go from reaching out on your website, to having the full thing delivered? What does that look like?

Sean: We would start by having a conversation. First of all, is do we have the content that they’re looking for? Are there other developers that may have already the content that they’re looking for? And then we would most likely pair them up with one of our resellers, that would know– have much more knowledge and education in in the trucking space — in this scenario — to really help integrate. Because as you know, these business owners are finding the value of VR and XR pretty quickly. It’s easy to put on a headset and go up 80 storeys and look over the edge and say, “Wow, this is very impactful. This is game changing.” to actually integrating it into their business. So how does it fit into their business model? Where do they put it? Who does the training? Who trains? How many headsets? And through our resellers, we answer a lot of those questions, because they’ve already done it, they already know where to put it, they already know who maintains it, what category it goes under. So we would be able to help not only on the content side, but also on the integration side.

Alan: Integration side is actually becoming one of those challenges that people– it used to be a technology problem. “Can we make this technology work? OK, now it works. Can we can we make it do something we want? Okay, that works. How do we get it out and how do we scale it in a reasonable way?” That’s the next step of it.

Sean: Over the years, we’ve been faced with multiple problems, really just problem solving and creating a product market fit, and integration sort of rose to the top. The hardware is getting better. The people that [make] VR and the knowledge of VR — and XR — is becoming more available. And then without real strong efficacy, you can’t have integration before efficacy. So you have to integrate it. You have to start using it. And so I think those problems — like we said before — will be addressed. Not fully, but I think 2020 is looking bright.

Alan: Interesting. I agree with you. I think now people are beyond that kind of shiny object syndrome of VR at the beginning, and they’re looking for real solutions. And it’s funny, because I’ve got your webpage open here and it’s just a video playing in the background. But you’ve got everything from a warehouse fall, and fire trucks, and everything. It’s really incredible, the work you guys have done. And I think in 2020 companies are starting to realize the power of It. What about numbers? When somebody says to you — from a number standpoint — this is going to cost X amount. What is my return? How do you deal with those questions?

Sean: Well, I think it’s a good question, because that means that they have a use case, or they’ve identified a pain point or a reason to use it. One of our clients works with a very large auto manufacturer — being here in Detroit, obviously, that’s in our backyard — that we’re sending engines around the world, to train on the engines, replace the timing belt or filter or something like that. So you can already see where the value of VR is. Because we took the CAD of the engine model, and replicated that and made it fully interactive and multi-participant. So they can train the trainees or the technicians all around the world, without having to send the engine out. So you could back into an ROI pretty quickly. Well, how much does an engine cost? How much does an engine cost to ship? How many were we shipping out? And then how much does a standalone headset cost, and how much did the application cost? And so you can see right there in that example of immediate ROI.

Alan: Yeah, absolutely. Something that we’ve seen is in VR, you’re creating these assets for training. But those same assets can be also used for marketing or different divisions. Are you seeing that? Because what we realized is that usually one arm doesn’t talk to the other, and there’s very little crossover there. But as you start suggesting these things that, hey, you just spent X amount by making all these models of these things for your training. Would this be something that they could do into retail or marketing?

Sean: Well, you and I both know that absolutely is possible.

Alan: The question isn’t “Can you?” It is “Do they?”

Sean: For VR/XR, all things under this umbrella, any adoption is great. So early on, anyone that was interested in it, we would work with them and try to license them some content. Yes, though. The answer is yes. At a high level, that it can be used– and we are starting to promote it, because when they look at costs for one department — or one division, depending on how large the company is — then we try to promote them that you could leverage this asset, get more out of it in different categories. Yes.

Alan: And it’s interesting. We tried to do that as well. But it’s one of those things that– they’re like, “Yeah, that’s great. But dealing with the marketing department is a whole different ball of wax.” It’s crazy.

Sean: It definitely is, yeah. And a lot of innovation departments are the ones reaching out first.

Alan: Yeah, absolutely. Though the problems you get with the innovation departments, they’re usually– they want cutting edge things. And it ends up getting stuck in pilots. They get a small budget for a pilot, and then they– there seems to be a disconnect between the innovation department of the company, and actually deploying real solutions.

Sean: That’s true. But I think as we understand integration better and as we solve those problems, we can help the innovation department. Because what we found was, we did some projects with innovation departments and we didn’t know ourselves how they would integrate it and they certainly don’t. So the more we’ve learned, the more we lean on our reseller subject matter experts, the better we’re getting and the more traction we’re getting.

Alan: I guess one thing to consider when we’re doing this. You mentioned standalone headsets. Clearly people want this. Clients are saying, “Hey, I want to move to a standalone headset.” But the tradeoff of fidelity versus that, what are you guys seeing with, let’s say the Oculus Quest, for example?

Sean: Yeah. You know, it depends also on the type of company. We work with insurance companies, where they want to take 40 headsets and put them in the trunks of 40 different agents, and have them go on site on a construction site and do this type of training. They’re just not going to take a PC tether based unit and throw it in their trunk and go set it up. So in that scenario, the standalone, the Quest or other would work very well. Where you have training facilities and you have the staff or the employees trainees coming into that facility to train, then, of course, a unit that’s stationed and you could get that higher quality. But we found that the quality on the standalone is definitely suffice and outweighs the barrier. For instance, this insurance company, they’re just not going to do the other. So the quality is definitely, definitely good enough.

Alan: Interesting. Wow. There’s so much to take in. We’ve got this this idea — both of us have thought about this a lot — of how do we use this technology as efficiently as possible. And one of the things that you mentioned — which I think is similar to our business model as well, and we’re gonna have to talk offline on how to work together on this — but distributing the content through value added resellers, and also reselling content. Because making quality VR content and AR content is expensive, and being able to share those costs across multiple companies seems like the only way to really grow the industry.

Sean: It is. That’s definitely something that’s a little newer for us. We just are finishing some of the tools within the platform that will be able to ingest other content and then monetize it. We’ve created this ecosystem of taking it from content development — that we’re not calling content curation, because it could really come in a number of different ways — all the way through an end user license. So we feel like we’ve put this ecosystem and this process together, and now just continue to automate it through the tools. So whether it’s other people’s content or we’re developing our own content– we even have tools that would expedite the content development for other developers — whether it be randomization engine, multi-user engine, or art environment packs — that we would work with other developers to help expedite the development if they didn’t have existing content.

Alan: So what would that look like from your standpoint, would there be a license fee or how would that work?

Sean: We haven’t monetized those tools yet like that. We would rather just work with the developer to help develop, because we’re after the content. So we would work with them on those licenses or even the use of those tools in order to get these applications or the content. So we have resellers and their clients that are currently looking for content. So if we would work with other developers and provide these tools to help expedite development. So in short, we don’t have a toolkit that we license out currently, but we would definitely work with other developers to use those tools.

Alan: That’s something that I think is kind of one of those things in this XR industry. It seems like everybody’s willing to help each other, and that’s an amazing thing in an industry that we’re still at the beginning. But I keep saying this over and over again. This is not a net sum game. Our industry is going to go from $10-billion to $500-billion in 10 years, creating — by PWC’s estimate — over $2-trillion in enterprise value in the next 10 years. That’s a lot of money to split, and there’s not a lot of companies working at the level of PIXO. And it’s really interesting to see that you’re so open to working with everybody. It’s great.

Sean: Yeah, thanks. I definitely think that there’s room for everybody. I’ve yet to really– when you drill down and you have more of a sophisticated XR person looking into it, I’ve really yet to find two or three companies or more that are doing exactly the same thing. I feel like we all have our little niche, a little bit here, a little bit there, and can leverage each other and those attributes. Because in my opinion, the market really needs to grow in the next year or two. Now is the time. I’d hate for all of us–

Alan: Yeah, I agree. And that is one of the reasons I started this podcast. One to learn personally, but also to inspire and educate business leaders to invest in this technology as fast as possible, because the more knowledge we get out there. And if you look at the podcast, the way it works, it’s done and it’s tagged by industry. So if somebody is interested in retail, that’s up in retail and there’s all the things for them, and for interest in the airlines, or training, or whatever it is. Unfortunately, training comes up in pretty much everyone, because that’s the killer use case of VR. But what is one problem in the world you want to see solved using XR technologies?

Sean: The one problem with 15 seconds to think about it, is I truly believe that exposing people, trainees, people learning a different skill — especially if it’s dangerous — exposing them to that environment, whether you’re a doctor, or a construction worker, or firefighter before being in that environment for real, whether it be crowd management, I think that solving that problem or allowing someone to be exposed to a scenario, before they actually have to go in it, will absolutely make the world a better place.

Alan: Well, Sean, this has been really, really a great interview and thank you. Is there any final words you want to share with anybody?

Sean: So if there are developers out there that have content — or want to develop content — are interested in monetizing that, get a hold of us. Otherwise, I really appreciate it, Alan. I look forward to following up and staying in touch.

Alan: I will hit you up in Detroit. Motor City, here we come!

Sean: Yes, sir.

For more information, check out our past episodes on virtual meeting spaces:

Jacob Loewenstein – Spatial

Jonny Cosgrove – meetingRoom

Gabe Paez – The Wild

Kalle Saarikannas – Glue

Michael C. Cohen – UgoVirtual

Alan: Welcome to the XR for Business podcast with your host, Alan Smithson. Today, we’re speaking with Ferhan Ozkan, the co-founder of XR Bootcamp, a platform to teach professionals how to create VR and AR applications, and support companies to bridge their skills gap in XR development through an intensive onsite program, cutting edge curriculum, and industry renowned lecturers with a focus on industry portfolio projects. I am personally very, very honored to be on the advisory board of XR Bootcamp and helping them really develop the future of how organizations will train their staff on how to build XR technologies. And so with that, I’d love to welcome Ferhan to the show. Ferhan, welcome to the show, my friend.

Ferhan: Hi, Alan. Pleasure to be here. Thanks for inviting.

Alan: It’s absolutely my pleasure. I just want to give you a little bit of history about you. XR Bootcamp started from VR First, which was an organization bringing VR labs into universities and colleges around the world. Is that correct?

Ferhan: Yes. Yes. Back then — almost four years ago — we started as VR First. The main mission was to democratize VR and AR around the world. And you also supported us on these times, because it was hard to find headsets as a developer, as a startup. And we actually tried to tackle this problem with the help of major headset manufacturers – Oculus, HTC, Leap Motion, Intel — and they supported us to create VR/AR labs around the world. And we are quite happy with the impact being created now, these labs are actually really become big and creating amazing projects. And we are actually proud to have this network and enable this network. Yeah, we are now actually around 800 university that we can reach and over 400 startup clusters. But as a lab that we have supported and seeded — as in equipment and other support — we reach to almost 52 labs. And now we see that these labs become actually quite impactful in their own region to create a regional VR/AR development scene, and VR/AR startup and clusters, and they are even creating VR/AR programs — academic programs — and industrial based trainings.

Alan: Ferhan, when did you guys realize that bringing this type of knowledge into the enterprise was the next step?

Ferhan: It is quite interesting, because we talk with institutions not only in educational, but government institutions. They reach to us after hearing about VR/AR. “Can we educate the people in our health institutions? Can we train the people, the employees that is actually working in the– airport workers, like on the aviation industry?” And we understood that there is actually already an initiative happening on different parts of the world, on different industries based on each government’s or each region’s industry focus. And then we decided, “OK, what we can do first of all to start the VR/AR innovation in each key destination?” So as I mentioned, seeding the equipment was the first one. I remember in the beginning of 2017, we had some kind of survey, and unfortunately for every 51 developer, there was only one headset in any institution or in a startup cluster. So think of like you want to create something, but you cannot even access the VR headset, which is a shame for this region. So we first of all started this seed equipment program, and then training programs come afterwards. And the biggest supporters or beneficiaries were actually the top enterprises in this local area, from manufacturing to automotive, from aviation to defense industry. And we would like to utilize all of these ecosystems like a startup cluster. So from the institutional perspective, they can even help creating a regional economy, with the help of science, parks, education institutions, and the agile startups.

Alan: You’ve seen a lot of startups in the industry kind of come– some of them have come and gone. But what are you seeing as the major trend as we enter into kind of 2020? VR and AR are starting to pick up steam. Companies are starting to ask for– what are you seeing from startups now, that you weren’t seeing a few years ago, that is really trending?

Ferhan: Yeah. I mean, this is a question that I can answer differently in every year, because of the rapid, crazy, evolving shape of the industry. But when we look ahead — 2020 and 2021 — what I see personally is the startups are usually creating platforms as a service. They just try to create their own businesses based on their maybe previous experiences, their previous business strategies. But they also see that it is not working like that, especially on B2C side. And what I have realized that there are many agencies, solution providers and startups who have started as a B2C product. Most of them are pivoted to enterprise application, because they see that there is already a market there that they can benefit from. At least to make a proof of concept for the enterprise and prove themselves there, and then skip to the B2C site whenever the mass adoption starts. But on the other side, from an enterprise perspective, most of them already need solution providers and they are not– maybe they were looking for some kind of normal advertisement agency. They were approaching to their advertisement agency, their usual film producer, production agency to create VR/AR experiences. But they understand that if they want more than a glorified POC, they have to actually reach the real VR/AR solution provider or startup. So we are right now seeing the clear distinction between the advertisement agency based VR/AR solution providers, and the enterprise based VR/AR solution providers. Especially in Europe, in Germany, what we have observed, the most successful startups — or startup leaders, let’s say — is coming directly from the heart of the enterprise, because they know how these big corporates work. They know all the old-fashioned — maybe you can call it — infrastructures work. And they are also aware that they have to find a solution based on these IT infrastructures, without changing so much on the IT infrastructures. Otherwise, it would create a lot of decision making process longer or it will make a lot of commitment from the corporate side, which is not easy from a startup perspective. So I have realized that the startups with this kind of enterprise knowledge, previous knowledge, they are the ones who actually achieve to work directly with the corporates. And we also see a lot of, of course, spinoffs from these corporates. They see one niche enterprise XR application needs, and they actually spin off to create the solution for the company that they have worked with.

Alan: What are some of the solutions that you’re seeing that are driving the value now?

Ferhan: Yeah. Instead of maybe the content related stuff, I think the navigation and also what I am seeing right now is on the enterprise application side, there is a lot of remote collaboration solutions right now, that is ramping up. But still it is not easy to show this to the corporate or to a client how it will work from their perspective. They can easily create a prototype and make a very nice pilot program for maybe one seat, two seats, five seats. But when you want to deploy this in the long run, it always comes down to how to scale. And we have witnessed that most of the startups who can tackle with this scaling challenge, are the ones that is actually having much better success while working with the clients.

Alan: So you also mentioned something that’s really interesting to me, the fact that large corporations are kind of spinning up teams, and this leads directly into XR Bootcamp and the work you guys are doing. It almost seems like enterprises have realized the value of virtual/augmented/mixed reality technology — or XR — and they’re starting to spin up teams in-house. What are some of the recommendations that you can give for a company that wants to start an XR division or a team?

Ferhan: What we have seen is, there is actually– this not only for VR/AR. This is usually in some kind of a vicious cycle or a chicken-and-egg problem that we are seeing right now. If I’m– let’s say I’m an evangelist in a large corporation and I see that OK, for my learning development needs, I would like to start the transformation towards VR/AR. Perfect. But there is always a boss that I have to convince. So in order to achieve that, I have to bring a demo to convince the decision makers, the board, my boss, whatever, so that they will provide– allocate some kind of budget for me. And then I’m going to an agency without any budget telling them, “OK. Let’s create a demo. It should look nice. It shouldn’t be maybe the whole experience. But I need to have something to pitch to my boss, to my executive board,” and then agency says “It is not possible, because you are not paying it. And I don’t know if your boss will allocate money for the upcoming potential project.” And since agency needs budget, I cannot even create a demo showcase. From an internal capacity perspective, this is actually a very unlucky situation and disappointing situation for the people who would like to initiate their first VR/AR deployment or pilot. And we believe that instead of trying to find an agency, what if a company creates their own team of VR/AR– we can call it maybe “VR/AR creation team” and then they will be self-capable of creating at least demos or showcases for convincing the bosses. OK? So in order to achieve that, you don’t necessarily need to even hire new staff members, because hiring new employees is always a problem, because it shows that you have to have a long term commitment, etc. But you can easily tell to your own team — or your own content creation team — to create a project for 2-3 hours per week, so that in the following weeks they can even create a small prototype, or maybe you can create a Hecaton. But it all comes down to how you will make your own engineers, your own designers, your own developers become a creator of your XR learning demo, or your XR app interface, or your XR club.

Alan: It’s interesting you say that, Ferhan, because as you know, we spoke offline earlier about what we’re working on. Part of what we’re working on behind the scenes is enabling individuals web– just regular web developers the ability to create spatial computing, and make that as easy as making a website. And I think the tools are starting to come that will allow anybody, in any organization to start making this content. And if you look out even five years from now, the glasses will be super cheap. They’ll be running on cloud and edge computing. So the processing power will be distributed. And it really comes down to making content, and making content fast and inexpensively, and democratizing the content creation, in my opinion.

Ferhan: I totally agree. Eventually– we already see a few examples, but it will become much more seamless — or let’s say frictionless — from the developer perspective or developer– we can call it a developer-friendly, and we will see WordPress or Wix of VR/AR creation. So the most important point here is, that is why we also concentrate on our upskilling bootcamps, instead of trying to show tools — which it can change, because if you have a WordPress or Wix or these kind of tools for VR, you don’t necessarily need to know all the coding and knowledge or all the details of the tools, because it would probably be intuitive and developer-friendly — but understanding how to create an immersive experience or how to even project the data to your AR device on the right moment, to the right person, to the right eye is more critical than explaining or teaching any tools on the market. Of course Unity, Unreal, and these engines is already important to make you enabled, which we strongly recommend if you already have a commitment for VR/AR. But on the basic part, how to create a digital reality and immersive strategy on your own company, how to create a VR/AR demo for your company and so that you can convince your boss, is much more important than other options, because now you become self-capable of understanding how you can work with even the third party providers.

Alan: Basically what you’re doing is you’re enabling businesses to enable themselves.

Ferhan: Exactly. Self-capable, self-capable.

Alan: Wonderful. [chuckles] OK, so how can people find out more information? I know the website is xrbootcamp.com. What do you have coming up in the next little bit with XR Bootcamp?

Ferhan: So with the valuable contribution of our advisory board, our board members include important pioneers, like yourself. And in addition to that, we have VR/AR managers from all the Accenture, BNP Paribas, KLM, Bosch, HTC Vive. So all these people are coming together. We are actually meeting quite often, every month. Even though all of out board members are quite busy, they really give a lot of important. So I would like to thank to all of our board members for their valuable support. And we are actually designating the top skills requirement of today and try to find the best matching modules, so that we can add to XR Bootcamp program. Our bootcamp is starting on May and we will have two paths. One is VR/AR full stack development. The other is VR/AR full stack design. So you can select one of them. And the first batch, it will be in Berlin. But in the upcoming batches, we would like to actually use the opportunity of our network in both US, Europe, and Asia with the help of our labs. We would like to deploy the similar bootcamps with the similar industrial based curriculum on different locations, based on the demand. So from a B2B perspective, of course, when a company wants– a company may want to send one of their employees, or a few of their employees to these bootcamps, or if they would like to upskill all of their designers, developers, engineers. We are also receiving applications for onsite bootcamp. So deploying this similar industry based curriculum inside the company for a few week long period.

Alan: So you have these things coming up soon. You’ve got the ability to do this onsite for companies that have larger teams that want to spin up. You’re going to be running this in Berlin, but then in also North America as well. I guess people can apply to be part of the XR Bootcamp at xrbootcamp.com.

Ferhan: Yes.

Alan: And is there anything else that you want to discuss about XR Bootcamp before we move on?

Ferhan: The most important part that I would like to share: our normal bootcamp programs is– maybe I can mention a little bit about the model here. The coding bootcamps is quite popular around the world. As far as I know, there are over 300 coding bootcamp programs in US. Most of them are providing web development, UI/UX design, product design, sometimes cybersecurity bootcamps, which– some of them are quite good. What I’m seeing here that the perception of upskilling is changing. Of course, universities are still serving an important purpose to give you the fundamentals of your own discipline. But from a bootcamp perspective, there are still people who like access to this knowledge without being part of a university. Since on a bootcamp you have– either you have a full stack– sorry, a full day program, which is, you are actually coming from morning till evening every day, it is three months. But you can also have a after work program, which we call it “part-time”, which you can actually finish the whole program in six months. So what we have seen that people like to access this kind of high-tech knowledge, even though they are not coming from these disciplines, because as you can easily see, VR/AR is something quite interesting for many people. And then you look at from a professional perspective or from an employer perspective, if I have a digital teaching project that I need maybe five people to upskill, instead of finding VR/AR developers and giving them engineering skills, I’m actually finding five engineers and upskilling them on VR/AR development, which is easier than upskilling on engineering background. So that is the exact thing that we are right now focusing. And as I mentioned, for our onsite programs, sometimes companies requires not the whole module itself, but some specific parts. So we can actually shape it based on their needs, since we have an modular program.

Alan: So Ferhan, what problem in the world do you think we can solve or do you want to see solved using XR technologies?

Ferhan: Yeah, so this is– this is hard to answer. And if you are talking about today, my answers will be different than if you are talking about in the long term, because–

Alan: Let’s talk about today, and let’s talk about 10 years out.

Ferhan: Okay. So today, I believe VR is quite a meaningful tool to use, especially solving today’s problems. Especially since we are talking about today, I would expect from the enterprise side, I would like to see people coming to their work or accessing to their– any kind of job opportunity with the help of very nice training and onboarding processes happening on VR/AR. So making the jobs — or even the jobs that requires more skills — and making it accessible is quite important. So making these jobs accessible through VR/AR development is quite important from my perspective. Maybe you have heard as well. The best onboarding is no onboarding, right? So in order to achieve that, maybe you will just start your job today and then start already contributing to your company, by just with the help of augmentation or with the help of virtual/augmented reality tools. So this is the world that I would like to see today and in the upcoming years, which is already shaping up in some companies. And for the next ten years, of course, we may think about a little bit like mass adoption on the consumer level, and AR. We are part of Open AR Cloud. So I believe that 10 years from now, we can see the implications and impact of AR cloud. So VR/AR can also be part of our daily lives, and helping us on any way possible. So I’m expecting that we don’t need to look at screens anymore. So 10 years from now is screenless future that I’m imagining.

Alan: That’s pretty cool. Today’s focus is enterprise. Tomorrow is the mass market in a screenless society. Well, Ferhan, thank you so much for taking the time out of your busy schedule. How can people find you?

Ferhan: Yeah, xrbootcamp.com. I’m happy to connect on LinkedIn, “Ferhan Ozkan”. If they write, they will probably find me.

Alan: Awesome. Well, thanks again, my friend. Have a wonderful day. And that has been the XR for Business podcast.

Ferhan: Thank you.

Alan: Coming up next on the XR for Business podcast, we have Michael Cohen from UgoVirtual. We’re going to be talking about how virtual/augmented/mixed reality solutions — or XR solutions — can be used for front-of-house for customer facing activations, from AR to VR. Pre-experiences, what is it like to book this hotel, looking all around you? And also the back-of-house: how do we use this technology to give the best possible training for the staff, so that the customer experience is flawless across the board? All that and more coming up, on the XR for Business podcast, coming up next. Michael, welcome to the show, my friend.

Michael: Thank you very much. Really appreciate it, Alan.

Alan: It’s my absolute pleasure. It’s been a long time coming. We’ve been kind of doing the dance, watching each other grow. And I’m really excited to learn about what you guys are doing in the hospitality field. It feels like it’s a greenfield opportunity in hospitality, from travel/tourism. A bunch of companies started with, “We’re going to put a 360 camera and let you have a virtual tour.” But explain to us, what are you doing at UgoVirtual, and what is the response so far in the hospitality industry?

Michael: Well, first of all, timing is everything, as we know. [chuckles] And the global travel and hospitality industry is absolutely a greenfield opportunity. It’s primed for scale and expansion in regards to XR. The reason being is that there have been investments and there have been initiatives, both on the brand and enterprise level of hospitality and travel companies, but also in startups and larger companies who have enabled, let’s call it a slice of VR or a slice of AR. Or as you mentioned, enabled OK 360 hotel tours that were maybe derivative out of the real estate market and that sort of scenario. Now, the opportunity is very, very serious for UgoVirtual, because we are the travel and hospitality virtual solutions company, very myopically focused to both consult to the major travel and hospitality brands to help them navigate and make investments and strategic decisions for the next three, four, five years on what XR will be for them.

And also from our perspective, we have a portfolio of XR oriented solutions that are very focused and linear to the travel and hospitality space. So we’re not taking generic solutions and trying to overlay them on travel and hospitality. The group that’s involved with UgoVirtual — who I’m a strategic advisor to — we’re all 15-20 year veterans on hospitality technology commercialization for the front-of the house, which is guest facing solutions and the back-of-the-house, which is employees and staff. So when you overlay that kind of multi-decade experience on how to get technology efficiently deployed, efficiently commercialized, exceed the demands or the needs of travel and hospitality brands, with these now slowly maturing VR/AR/XR opportunities, it’s a wonderful fit for UgoVirtual right now.

Alan: So give us an example. You talked about front-of-house, customer facing solutions. Let’s start with front-of-house and then we’ll go back-of-house. Because I don’t know if you know this, but I actually met my wife working at Delta Hotels in Toronto.

Michael: [chuckles] That’s perfect.

Alan: Yeah.

Michael: Yeah.

Alan: I was a bartender, and she was the night manager–

Michael: That sounds like a great novella right there. But that’s for another day.

Alan: [chuckles] It sure is. Let’s talk front-of-house. What’s going on there?

Michael: Here’s the reality about hospitality specifically and hotels, let’s be more even granular. There’s obviously a massive investments of travel and hospitality startups that are geared towards mobility, they’re geared towards guest engagement, the guest experience, the ability for guests to use their own BYOD smartphones to interact and to experience property or a destination, for example. So there’s been millions and millions of dollars invested — both at the brand level and also at the vendor level — to enable mobile, for example. So things like — I don’t know — mobile key access to rooms, brand apps, et cetera.

Where UgoVirtual has identified a couple of years ago and has been investing into initiatives, is the virtualization of those type of experiences, the enhancements, the scalability of those types of engagement experiences such as virtualized hotel tours, deep virtual tours. They don’t require headsets. They don’t require Hololens 2 for the consumer, but the consumer through their mobile device, their tablet or at home, through our solutions, through our virtual hotel tours that we are fully rolling out in January of 2020. And we have some beta sites already deployed all across North America. UgoVirtual hotel tours solutions are very deep. They’re very much about the flow through a hotel, experiencing the hotel, versus simply a 360 camera and some sort of images.

The reason being is that hoteliers have consistently over decades invested so much in the experiential design and the look and feel and the feature function of their properties. It’s an incredibly competitive market, like many other vertical markets. And their investments in new builds and renovations are massive and substantial. But this is all about the pre, the present, and the post. The pre-virtualization of a guest experience. The pre-experience of what it will be like to book this hotel, or book their convention in this convention hotel, or book their meeting in the meeting space, etc. is a massive benefit of what we call hospitality XR from the front-of-the-house. And those are things that we feel have been — in a limited fashion — enabled in the travel and hospitality vertical.

But now we’re bringing out these solutions that are far deeper, far richer, based upon technology that you and I and others in industry know very well. But it’s all about execution. So one major area is definitely the pre-virtualization of travel or accommodations, so that consumers and the guests — passengers of a cruise ship, for example — they have the ability to differentiate and to make decisions on where they’re going to build their travel itineraries, who they’re going to make their reservations with, who they’re going to purchase services from. That’s a massive opportunity that we’re very focused on executing in the travel and hospitality space. That’s one major area of the front-of-the-house.

The other area of the front-of-the-house that we’re rolling out in 2020 as well is the augmented reality experience within the guest room and the public spaces of hotels or convention centers, etc. And we have invested and are rolling out particular technologies that replace a lot of the traditional content, printed content, even some of the digital content that has been invested in by brands or travel destinations over the last five, six, seven years, to make it a far more seamless augmented reality digital overlay on the skin of the hotel or the destination. That’s another area that you know well what I’m talking about, and I’m sure the listeners do as well. Taking this augmented reality interaction, these activations and actually focusing them on the guest room. So we’ll be making announcements in January, February on our next range of augmented reality solutions for hotels.

And then the last scenario that we very much have commercialized and we’re rolling out is the virtualization of events within the travel and hospitality space. But the reality is that like any other vertical market industry, there’s a wide array of industry events, of vendor events, of organization events that you and I travel to many times, in many ways, in different verticals. Well, we have a technology that we’ve commercialized over the last 18 months and we’ve already landed and are deploying multiple virtualized events of brick and mortar exhibitors. And these are industry related events in our space. There are organizational events and there are also the vendor conferences for — for example — hospitality technology vendors, who may have a conference every two years because it’s incredibly expensive, quite challenging in regards to bandwidth and time for the attendees and the vendors or the speakers. So they may have these events every two years. Well, with UgoVirtual virtualized events, they can have those events every year. One year virtual, one year brick and mortar. And that’s really been a major push crush. And we’ve had a lot of positive feedback on that as well.

Alan: Watching the video, you’ve basically created a system where you can have a virtual trade show, looks like. And virtual meetings.

Michael: That’s exactly what it is. Exactly.

Alan: So that’s not necessarily in VR. I mean, you’re doing that on 2D screens. And so how is that working out? What’s some of the response with that?

Michael: Well, we’ve generated a lot of revenue, and we have multiple events signed and we’re rolling them out in 2020. So I guess that’s the ultimate feedback from the industry, is that people like us, they really like us, as Oscar winners have said in the past. [chuckles] So, I mean, you can have a vision, you can have an idea. If you’re executing in a vacuum, it’s one thing. But when you’re executing and getting positive reinforcement, and actual industry players are signing contracts and investing in virtualizing their events, that’s the ultimate feedback you can expect. And we’re still in a bit of a soft launch, because we want to make sure that we’re executing very, very strongly on these events. But the opportunity to go wide is really there, because here’s the reality.

There are three areas of the travel and hospitality industry globally where virtualized events from UgoVirtual make a ton of sense. One is, obviously, our vertical market industry organizations. There’s organizations called HTNG, for example, that’s Hospitality Technology Next Generation. There’s organizations called HFTP, which is the Hospitality, Finance and Travel Professionals. These are — like any vertical market — these are major organizations where we’re all members, and it’s an important part of our careers. It’s an important part of training and networking. And they all have very large user groups and work groups and so on. So we are looking to talk to those people and move their events — which we are all members of — to a virtual scenario because you have an ability to expand reach, expand awareness, drive actual interactivity between members of an organization or a vertical market.

Because not everybody can travel to New Orleans or travel to LA or travel to Monte Carlo. Not everyone can do that. And no-one has the level in their career as an executive or a decision maker, or they don’t have the bandwidth, or they don’t have the travel budget. And secondarily and very importantly, what we’re doing is also — as many of the people you interview — it’s also green. This is a sustainability play, too. The ability to have more events append existing brick and mortar events with UgoVirtual virtualized event as a sister to the existing event is really impactful from a sustainability perspective as well. Carbon footprint, all those good thing.

Alan: Let’s shift focuses now to the back-of-house. What are some of the solutions that you guys are providing for back-of-house?

Michael: So in the back-of-house space, we’re also a consulting firm, as I mentioned earlier. So we’re focusing on assisting hospitality and travel brands on their strategy for their employees, for their training scenarios, for optimization of their back-of-house, human infrastructure. The reality of travel and hospitality– And you were– now that you mentioned it, you worked in this space. You know that turnover is massive. And that’s a big challenge for hospitality brands, and ownership groups of hotels, and conventions, and other scenarios. The turnover is massive. And therefore, when that happens, a lot of the intellectual IP of how to do what you need to do and your job in a hotel or in a conference center or another hospitality entity, it evaporates. So there’s this constant requirement for new hiring and training.

So taking the massive growth and impact that virtual reality training is enacting in major North American and global enterprise — as well as other vertical markets — we’re bringing that to hospitality. So the back-of-the-house for us is very much focused on VR and augmented reality training. So we’re consulting with firms and we have relationships with the Microsoft team in regards to Hololens 2, the HP team and their scenario. We’re talking to Lenovo and many, many others who have both the hardware and the cloud based infrastructure, so that hospitality and travel companies can utilize this infrastructure, these tools to create their own content, to be able to have a far more efficient, higher retention and tremendous ROI on their training and back-of-the-house staff. So that’s one area.

Another area that we’re involved in — from an augmented reality perspective, in a product and deployment solution — is creating the augmented reality overlays to the physical plant of hotels or convention centers or mixed development properties. The engineering manager of Hotel X been there for 15 years. He knows that the only way to get the boiler in the boiler room to really kick in on the coldest day of the winter is you’ve got to kick it twice and you’ve got to turn the lever to the right. He leaves, he retires. That is gone. That knowledge is gone. I’m using a very simplistic example, as you can imagine. But when you have an ability to deploy a PIN code protected augmented reality overlay next to the boiler, that has all this data, all this intellectual property — knowledge — that’s permanently affixed in an augmented reality scenario next to the boiler, it’s now there for the future. All future employees or anyone who needs to have this information available on the fly. So we are working on the back-of-house, as well.

Alan: Kick twice and go down to the back. [laughs]

Michael: Yeah. I mean, obviously, when I’m using– I’m being pejorative and using a simplified– but you know exactly what I’m talking about. And you’ve seen it. And– I mean, listen, this is not always about inventing something. It’s about taking best of breed solutions that are in industrial and other enterprise scenarios, and overlaying it on a very competitive, a very lucrative business called travel and hospitality.

Alan: Well, it’s interesting. Oil and gas companies have been doing this for a few years now. Microsoft has really focused on enterprise. But when you see “enterprise”, you think oil and gas, mining, construction. But travel and tourism is an enterprise. Any group of companies where you have millions of employees is an enterprise. So what are some specifics? Like, what companies are rolling this out? What are what are you seeing results wise? Is there any specifics you can share?

Michael: Sure. I mean, let’s talk about on the front-of-house side of things. So Best Western, about two to three years ago — major brand, huge portfolio of owner managed hotels — made a mandate in order to roll out virtual hotel tours to each of their Best Western properties. And it was well accepted. It was a very good first major move. They’re one of the first movers in the industry. It’s more of a 360 real estate type experience, but it’s absolutely adequate and it has been adequate for that period of time. And there’s been other brands that are more in the boutique and independent luxury space, who have definitely done the same. Where there is a next gen or next level is in regards to really making these virtualized tours — like we are doing at UgoVirtual — far more — what’s the word? — impactful and engaging, and integrating them into different systems.

When you have a UgoVirtual tour of a hotel, and you can embed in the actual booking of a hotel room from one you’re– while you’re in the tour, or booking of a meeting space through the RFQ interface of another system right within the tour. As you know, engagement and activity. So that’s really where the next level of what we’re doing in regards to the hotel tours. But listen, Marriott has made investments. Hilton’s made investments. All the major brands have had different levels of interaction in regards to the tours. And we’re looking to — what’s the word? — maybe aggregate some of that demand and bring out a very consistent, deeper, richer, virtualized experience there. In regards to augmented reality in the guestroom, the big, big push and the big deployments have been different types of app-based or appless content and interactive solutions in hotels.

I will say that we are in the early stages, and our timing is great in regards to the augmented reality overlay within hospitality. That is — again — an evergreen opportunity. There has not been a massive amount of guestroom related implementations. That’s why we feel we have a tremendous first mover advantage and during our announcements in early parts of 2020, we’re going to make sure we make the most of that impact. But what I will say in regards to augmented reality in hospitality, there’s been a lot of very successful activations by people like Foxwoods, casinos and hotels, and other forward thinking brands and travel companies, who have used it as more promotional and a way to do gamification around their property, to have the guests or the consumers move through the property to — for example — have a digital hunt where you’re looking for different symbols or you need to collect the activations of 12 different photos of Big Papi — former Boston Red Sox, a DH — who’s obviously an ambassador for Foxwoods, for example.

So you have to go through the hotel and you have to find all of the photos of Big Papi, and then use your phone and activate the augmented reality experience. And when you do, you get a bonus offer or you get points or you get a gift. So that’s been really successfully rolled out in hospitality. And there’s the beginnings of what we’re also involved in, is the AR activations for the exterior of the buildings. So you’ve seen this in major brands in the consumer packaged goods and consumer product space for using these major neural activations. Well, that is starting to trickle into the hospitality as well. Because these are buildings, and these are buildings and resorts and convention centers, which have a ton of external real estate — if you know what I’m saying — that the activations of AR experiences are starting to trickle into there, as well. And we’re involved in that, too.

Alan: It sounds like you guys get your fingers and everything to do with XR and hospitality.

Michael: We’re focused still, I’ll be honest, because we’re not a custom development shop, per say. Yes, we’re a hospitality XR consulting company, for sure. But we have selected and have invested in specific lines of business and solutions, that we feel have the most opportunity for travel and hospitality. One thing that’s really important, Alan, I think for this conversation is yes, were a startup and in growth mode, for sure. And we have interest from various parties to help us with our growth. But we’re not– I’m not looking to belittle the traditional startup cycle, but we are overlaying hospitality XR both for the product and service to space and as consultants on the realities of commercializing technology in travel and hospitality industry. We know the budget seasons, the line items, how the widgets have to be positioned from a commercialization and business model space.

That’s incredibly important, because what we’re doing is we’re doing our own proprietary and we have exclusive licensing on a range of technologies that we’re commercializing globally in travel and hospitality. But we are overlaying our own technology or licensed technology on existing business models, that have been proven and are required over the last 30 years. And that is a big differentiator here, because as you know, it’s hard enough to get buy-in authorities or C level folks to engage and get behind a new technology. But if the business model or the commercialization plan doesn’t align with what they’re used to, it’s even another challenge. We have absolutely met that and exceeded that scenario, because we know how to put the square peg in the round hole, and roll out the technology in a way commercially that is both viable, scalable, but also understandable to travel and hospitality executives.

Alan: So if you’re speaking– let’s say– assume that somebody from the industry is listening to this podcast, what’s step 1 for them?

Michael: Well, step one for them is– first of all, if you’re listening to the podcast, we appreciate it. [chuckles] And second of all is, they’re digesting a lot of information. There is a firehose that’s being blown into the travel and hospitality space — like many other vertical markets, enterprise markets — that these executives know they have to get on board. They have to start crystallizing their strategy and their visions on how in our industry hospitality XR — hopefully through UgoVirtual — is enabled within their brands and their properties and their destinations. So they’re already investigating. They’re already collecting information. They’re reading, they’re watching. The goal is there needs to be an alignment of this technology with what’s the successful principles of their business. From our perspective– and that’s why we’ve opened the consulting side of the business, because we’re there to help them align those two important areas.

And then obviously, they need to investigate what is the appropriate next steps if they’re interested in front-of-the-house hospitality XR. What sort of areas or what sort of feature function or benefits they want to achieve? What sort of enhancements do they want to append to their existing successful guest engagement scenarios? And those are things that have to be laid out. And then they would talk to people like us, to help them organize that, but also just to see what’s available in regards to technologies that they can license, technologies that are scalable.

One thing you have to remember is that in the major travel and hospitality brands, either destinations or resorts or hotels or Disneys of the world, everything’s a thousand points of light. It’s usually not one property or one destination. In the enterprise side of travel, hospitality, it’s hundreds. It’s thousands. There’s 14, 15, 16,000 hotels in North America, for example. There’s hundreds and hundreds and hundreds of thousands of guest rooms all over the world. That’s a big consideration. That’s a differentiator from other industries. Yes, of course they have 200 locations, or they may have 50 training centers. These are all really major accommodations that require a lot of planning a ticket to an exponential level with travel and hospitality. That’s a critical, important part of the successful identification, research, rollout, and execution on hospitality XR: the thousand points of light. It could be 50 points of light, could be a 1,000 points of light. But that’s really important.

Alan: Let’s talk about– I do want to bring up one company in particular, because they kind of been flying under the radar. What are your thoughts on a company called Oyo, who — from what I’ve heard — now are the number two hotel chain in the world?

Michael: So we can have this conversation regardless of hospitality XR, because this is really important. So Oyo has a business model and has a system in place and they’ve come out of Southeast Asia and Ritesh [Agarwal], their owner, is a very dynamic CEO and he has major funding from Softbank, so he has taken the traditional hospitality business methodology and he’s put it on its head into almost like a technologies solutions company. So there are great opportunities, great growth, but there are also great challenges that they are facing. Hotels are hard. Every hotel is a snowflake. It’s very challenging to scale traditional hospitality surfaces, traditional hospitality technology, a server, access points, IOT sensors, hardware. It’s challenging to roll that out, because there are different configurations, different designs, and different systems in place in every hotel in the world.

Alan: Oh, I know. Wi-Fi. Listen, the hotel people that are listening to this: please, if you’re going to work on one thing, Wi-Fi that works universally.

Michael: No, Alan, I mean, the point is — you know this, I’m going to bring this back to our conversation — is the consistency and the quality of Wi-Fi. I was– I have been involved in Wi-Fi commercialization in travel and hospitality for 15 years. And I worked with AT&T and other leading hospitality Wi-Fi companies for many, many years. So I’m a bit of an expert, barely stayed up at this one, I could say. And you’re absolutely right. It’s a critical juncture. It’s like oxygen for a hotel, because if the Wi-Fi is not consistent and the quality is not there and the coverage is not there, it’s a real impact to the guest satisfaction scores of hotels. And this is a good segue back into what we were talking about.

Two things: guest engagement, guest experience. So it’s front-of-the-house again. That’s where UgoVirtual– and that’s where the virtualized and augmented reality solutions that we’re bringing out, and the hospitality XR consulting that we’re we’re delivering is key. Because this tsunami of XR that’s going global, which you are a world expert at– and you know I’m not kissing your behind, because I know who you are, we’re friends. And I know the impact that you’re making around the world, and all the travel that you do, and all the events you go to. So the tsunami of XR in all different types of business and enterprise, it has its place in travel and hospitality vertical. But what’s mission critical, it’s not only about revenue and the retail environment, it’s about optimization. It’s about revenue per square foot. It’s about making sure that each aisle is activated in a way that can drive more products to sell.

In hospitality, if you mess with the guest experience, you’re in deep trouble. So the ability to efficiently and intelligent roll out hospitality XR in our vertical is incredibly delicate and also incredibly important. Guest satisfaction scores are the cornerstone of a lot of the metrics in general about hospitality. So that’s really critically important. But second to that is, let’s talk about connectivity and let’s talk about wireless connectivity.

Back to the Wi-Fi scenario. Wi-Fi 6, 5G. You know this, we’ve talked about this in the general sense, but in hospitality and travel, it’s even more paramount. Because you have massive concentrations of guests, passengers, consumers who are on present — so this is the present part of UgoVirtual’s strategy — they’re on premise. They’re interacting with the property, the destination or the cruise ship. Any solution that’s deployed by us at UgoVirtual — or anybody else in hospitality XR space — needs to have seamless connectivity to make sure that experience is 100 percent, because if it’s not a 100 percent because the connectivity is off, there you have the guest satisfaction challenges again. So 5G and Wi-Fi 6 is the massive enabler to this next generation of front-of-the-house and back-of-the-house solutions for travel and hospitality. It’s a critical part of the success methodology for it.

Alan: Well, Michael, I really want to thank you so much for taking the time to explain how XR is going to be used for hospitality. If you look at just from the lens of training people, I mean, that alone is a massive opportunity for hotels. When I was in hotels, the training was not that great then. And it really hasn’t improved since then. So being able to give people the opportunity to train at a higher level, before they even step foot into a property, I think is a really great opportunity for these organizations.

Michael: There’s two quick things I want to add — if I could — to that from the back-of-the-house perspective and I’ll be brief, is in our industry — like many others — the SOPs, the Standard Operating Procedures are mission critical. And like you know, we know, but maybe not everyone knows who’s listening to this. People like Wal-Mart and FedEx and other major companies have made reasonable corporate investments in VR training, for example. And they have realized exponential ROI. Is that fair to say, Alan?

Alan: Yes. At least 10x what they’ve put in.

Michael: Correct. I wanted you to say 10x, because I don’t want to be the hypester. You’re the expert. So what I’m getting at is in hospitality, the ability to pre-qualify, pre-identify through the actual HR process of potential back-of-the-house staff to interact in the actual experience of implementing standard operating procedures and certain tasks — at a hotel or a conference center or a cruise ship, for example — is amazing, because you actually have ability to cull down to the best cohort of your applicants and then you can get them into the company and then you can train them very efficiently. As we know, with VR training, you have higher retention, shorter training cycles and major ROI. I mean, those are– that’s a winning scenario. That’s really important. So the combination of SOPs with VR training and working with brands and working with travel companies from a UgoVirtual perspective, so they understand how to implement that on the back-of-the-house is definitely part of our mandate and our mission.

Alan: I’m really excited for the future of what you guys are working on. And I’ll end on a quick story.

Michael: Sure.

Alan: You know how Marriott introduced VR room service, like VRoom service? So we actually pitched them on that, and they took the idea and built it, and then sent us one. So we got this briefcase where it was like a Gear VR and a phone. And it’s like, “Look, VR room service!” I’m like, “Oh, great, thanks.”

Michael: [laughs]

Alan: I was like, “Oh well, it was a good idea.” But yeah, the hotels are really experimenting with these things and it’s exciting. And hotels, restaurants, everybody will be impacted by it. So thank you again for taking the time to share this vision. Where can people find UgoVirtual?

Michael: Sure. It’s ugovirtual.com, and in LinkedIn just search for “ugovirtual.com.” And we are the travel and hospitality virtual solutions company.

Alan: Thanks so much, my friend.

Michael: Alan, a pleasure. And look forward to seeing you in the future at the next major event. Thank you for this time today. Appreciate it.

Alan: Sounds good.

Alan: Welcome to the XR for Business podcast with your host, Alan Smithson. Today’s guest is always on the bleeding edge of technology. He’s able to predict both tech and business trends. Bob Cooney is widely considered one of the world’s foremost experts on location based virtual reality, and the author of the book “Real Money from Virtual Reality.” I’m really super excited to introduce my good friend and colleague, Bob Cooney to the show. Welcome, Bob.

Bob: Oh, dude, I’m so happy to be here. Thanks for having me, Alan.

Alan: It’s my absolute pleasure. It’s been a long time coming, this interview. But we’re here. We’re excited. And we just are coming off the heels of *the* major North American show, IAAPA — which for those of you listening and you haven’t been there — it’s basically Disney World for VR, AR, and out-of-home experiences. You were there. Let’s talk about what you saw, and what are the trends coming in out-of-home entertainment.

Bob: Yeah, it’s an amazing show. I’ve been going this– I think this is my 27th IAAPA or something like that. And my first one was 1991. And over the last four or five years we’ve seen VR every year just grow in not only the number of companies bringing VR/AR solutions into the market — mostly VR at this point — but the quality is every year measurably increasing. And that’s the thing I think that has me so excited is three or four years ago there was just a literally handful of things that you would even remotely consider as an operator. And last year there was confusion now, because there was– you were starting to see a lot of good stuff and this year it was just overwhelming. And so, yeah, we’ve seen real quality come into the market.

Alan: You’ve seen pretty much everything there is out there. What’s one thing that blew your mind this year?

Bob: Good question. The rise of unattended virtual reality systems. There was a company called LAI Games, which has been around for decades. They’re based out of Asia. They build arcade games. And a couple of years ago, they took a license from Ubisoft: Raving Rabbids, which is a really popular IP. They merged it with a D-Box motion base and they created a VR ride for family entertainment centers, arcades, and theme parks. It’s a two player ride. It was fairly cost effective, but they recommended it be operated without an attendant, and it was the first VR attraction that came out where you didn’t need to staff it. And the profitability of that really made a big difference for operators. And now this year there was another company called VRsenal, that had an arcade game cabinet with– that was a VR based that was unattended, and it was running Beat Saber, which is obviously one of the most popular games out there. And so we’re starting to see companies realize that maybe we don’t need attendants. Maybe people are smarter than we give them credit for. Maybe they can figure out how to put a headset on their face. Maybe they will clean it by themselves if they care about that. And so I talk about a lot about the four-minute mile, once it was broken. People thought was impossible, people thought if you try to run a four-minute mile, you would die. And once it was proven that it could be done, hundreds of people have done it since. And I think this notion of unattended VR is similar to that. And we’re going to start seeing more companies give more credit to consumers, that they’re smarter than we think they are.

Alan: When I was in China, they have VR kiosks in a lot of the malls and some are attended, some are unattended. But I– I remember I was walking through the mall and I was like, “Oh man, VR!” and pull out my phone to videotape it — because this was two years ago — and I watched somebody fall completely on their butt, because they were downhill skiing in an unintended thing and they fell on their butt, and then they got back up and did the thing. And then I was in another mall, videotaping a kid in VR and he fell on his butt. So there are still some risks with this. How are they mitigating that? Because I know the Rabbids one is using a D-Box and you sit in it. So is that kind of what you’re seeing? Because I know with Beat Saber, for example, you’re not– there’s no real risk of falling over.

Bob: There’s risk of somebody walking into your space and whacking them–

Alan: Oh, yeah.

Bob: –over, right? And so what the arcades are doing is they’ll put rope stanchions around those. I think the seated motion simulators are pretty safe. One of the Facebook groups yesterday, somebody posted how their son was in the hospital with a chipped tooth and a broken ankle from playing VR and falling. I don’t know what game they were playing, but they fell and hit their head on the table. And so there are some real risks around VR, that could limit adoption. And that’s– certainly on the consumer side, I think that’s a problem.

Alan: So, Bob, how are these companies mitigating this risk, or what are you’re seeing that’s mitigating this?

Alan: I think operators and setup and safety is important. A lot of them are putting the unattended stuff in view of like a redemption center, where there’s always somebody behind the counter redeeming tickets for prizes. I think the Beat Saber arcade game, they’re putting rope stanchions around them or cordoning it off, so people don’t walk into the space where somebody is actually playing the game. I think the seated stuff is inherently safe. There’s always a chance to get toes can get crushed, and things like that if people are careless. But I think that’s something operators have been dealing with since the very first driving games that had motion’s systems built into them. And I do think it’s one of the things that could really slow consumer adoption, though. If you remember the Wii when it first came out, people were smashing televisions with controllers playing tennis.

Alan: It’s interesting you say that, because we’ve been doing demos with the Quest, and the same thing. You set it up, you set up stanchions. And it doesn’t matter. People still– they get excited. They get in there. They don’t realize they totally lose control. That’s the power of VR, they get right in there. And we’ve had somebody get punched in the face with a controller recently. And it was like, “Oh, jeez.” They weren’t within the stanchions. They were outside of it. And they just– the person lunged out of nowhere.

Bob: It’s the paradox of presence, right? I mean, you’re–

Alan: Yeah.

Bob: –you’re really present in the experience. You forget where you are. The fantasy-reality line blurs. And then next thing you know. And that’s the inherent problem with it, is that that’s– in order for it to be effective, it’s not going to go away. And so I think safety systems– and you know, one of the things I would expect is as inside-out tracking gets better and the cameras get better, if you get too close to an object maybe the pass-through video kicks on. They’re going to have to figure out a way to make this stuff safer overall.

Alan: Yeah, the way the Quest did it, where you can draw out your boundaries and then if you walk through the boundaries, it goes from being in virtual reality to being in the real world or pass-through camera. That actually a really nice solution. What we’ve been doing now is putting people in VR when they’re outside of the boundary, and then having them walk into it. And it’s this kind of a-ha moment, where they go from the real world of crappy pass-through camera to the completely virtual world. And it’s that moment of delight that you see. Now, speaking of moments of delight, because you get to see not only try these experiences, but you’re really intuitive into the emotions that people are feeling when they’re on the rides. What are some of the rides or experiences that you’re seeing that really resonate with people?

Bob: Yeah, look, I think that– it’s funny. There’s a narrative in the industry that we have too many zombie shooters, but the numbers show that that’s actually what people want to play. And people love horror, horror’s had another blockbuster year in Hollywood, and I think people like to be scared. And that’s one of the easy emotions that you can trigger is fear. And so whether it’s Richie’s Plank in fear of heights, or zombie outbreak shooters and stuff like that, I think people love to be scared. And the interesting thing is, statistically, women like horror more than men. There’s all these great viral videos out there about women screaming in these zombie shooters. But I think that’s the thing that really triggers emotion, is that fear is the easy one. It’s the low lying fruit. And I know companies that have put out multiple titles, but their horror titles are always their number one earning and number one ticket seller. And so I think you’re gonna continue to see that, until we figure out how to really tell stories and drive other types of emotion in VR. And I still haven’t seen a lot of that yet.

Alan: What about racing games? I tried one the other day and it was absolutely mind-blowing. It was a 6DOF simulation machine. So the whole thing was riding on multiple pivot angles. And when I hit a bump on the road, I felt the bump on the road. It was just– and when I hit the wall — of course, going too fast — I hit the wall and the whole thing just rattled me. It was wild.

Bob: Yeah, look, I think that there’s a lot of bad motion simulation out there in VR, which triggers motion sickness. If it’s not done well, it can actually exacerbate the simulator sickness that you get. There are a couple of companies that seem to be doing good. Like I did Mario Kart VR from Namco, which is a really fun game. And I think that that makes sense to have in VR too, because you have to look over your shoulder to see where your competition is, to see who’s going to throw things at you or you can throw things. One of the surprise hits from the IAAPA show — to go back to that — was a company called UNIS out of Taiwan, I think they’re based, they had a two player motorcycle VR simulator and it was a track racing motorcycle game. And when you’re leaning into the turn or looking over your shoulder, that presence of VR and to be able to look behind you and see your competition coming up to you was really well executed. And so I think– and I got no motion sickness at all out of it. So it was really well done. So I think companies are getting better at it, and they’re using it in appropriate ways. I think that my personal opinions in a drive racing simulator in a car, you have mirrors, like you don’t look over your shoulder. And so I don’t know what advantage VR really brings. The resolution isn’t as good. The frame rate is not as good as you can get in a big monitor. I almost feel like for driving simulators, you’re better off with a really good 4K monitor at 200 frames per second with good mirrors.

Alan: The one that blew my mind was three panels kind of stuck together.

Bob: Exactly. I think that’s a much better use of the technology. Totally agree.

Alan: It was wonderful. I did drive– because I was at the I/ITSEC show, the Industry– Inter–

Bob: Big military simulation show.

Alan: Big military simulation training. So I got to drive a tank, that was cool. I got to fly a helicopter, which was interesting. I crashed it, dramatically. The guy’s like, “I don’t think I’ve ever seen anybody crash this thing like this.” [chuckles] But here are multi, multi-million dollar simulators, and they’re not as good as the ones that are at IAAPA.

Bob: Yeah, that’s interesting. And I think that– how much of that is just because the military is used to overpaying for everything — we’ve all heard about the $9,000 hammer and the $40,000 toilet — and how much of that is just the nature of the accuracy. Like one of the things I did some work with zero latency and they did some work with the Australian Army in building simulations. And one of the things that everything has to be about muscle memory when you’re in the military. And so these simulations have to be incredibly accurate down to button placement and things like that. And because it’s generally lower volume, I wonder if that has a lot to do with it.

Alan: It could be, actually. It could be the rigorous demands from the client, but also the fact that they’re not buying hundreds of them, they’re buying tens of them.

Bob: Yeah, totally.

Alan: Makes sense. And then, of course, everything’s custom for them and you can’t share the content out. So there’s that.

Bob: Yeah. And look, I think the military has been doing this stuff for a long time. And we saw a couple of military simulation companies kind of stick their toe in the amusement water. And that happened a lot with companies like Doron Simulation, they did military simulators and wound up going to doing some big, large format, large capacity motion simulation in the amusement industry. And I think there’s been some cross-pollinization between the military, some companies and the amusement and entertainment sector companies. I think on a smaller scale stuff, that’s more in the game space. That’s just I just don’t think they get that mark. There was a company called Raydon — who was probably at I/ITSEC — who was a client of mine a couple of years ago. They brought a 50 cow simulator, and they put it in kind of an arcade cabinet and created a game that was kind of like space bugs — think Starship Troopers — with this giant 50 cow simulator, and a butt-kicker on it to create recoil. And it was called Total Recoil. It was a great experience. But entering into the arcade game business, they really [went] from being a military contractor, just chalk and cheese. And I think they struggled to try to make something that was inherently fun and replayable. I think that’s one of the big challenges in the entertainment industry, is people are looking for games they want to play over and over again. And training simulation, you’re doing it for a different reason. It doesn’t have to really be replayable from a fun standpoint. And I think that there are real skills in creating games regarding core loops and dopamine rushes and things like that, that get you don’t want to play it again, that the military companies just don’t need to understand.

Alan: So let me ask you a question, Bob, because this really intrigues me. You talk about these things that make something replaceable, and how maybe military sim or even training is not looking for that. But shouldn’t we — as people creating training simulations — be thinking about that? Because if we make it so that people want to do it over and over again, and have that repeatability, and that want to play it again, wouldn’t that kind of increase their ability to become proficient in whatever it is they’re training?

Bob: Yeah, absolutely. But I think it’s a different mindset. So when you’re training to become better at something, that’s a mindset. And when that’s my profession, I’m driven to do that. When I go to have fun, I’m not necessarily in the mindset to improve. Now, there’s a narrow slice of the psychographic market, that will say “I just want to get better and better, and I want to prove, I want to play against myself, I want to beat my high score.” That’s where the leaderboards and stuff comes in. But it’s not actually the broad market for VR. We find the broadest market for VR is casual impulsive entertainment. People just looking to go out and have a good time with their friends, and to have a story to tell. And so I think you have to really know your market. If you’re building entertainment products, know who your target consumer is and build for them. And there’s a lot of people now building these kind of PVP — player versus player — e-sports games, that are highly competitive and they’re not earning very well so far. I mean, there’s a couple of them that are. I know Virtuix, the Omni arena’s doing really well in its early test locations. They got about–

Alan: Yeah, how’s that going? I actually tried the Cyberith one at the I/ITSEC show. And it was interesting– and for people listening, if you don’t know, it’s a kind of redirected walking. What would you call it? Omni-directional treadmill kind of thing. So the one I tried, you’re strapped in at your waist, and you’ve got these slippery shoes on, and you just walk in any direction you want to go. But what I found was I felt totally hammered drunk, walking around in that thing.

Bob: [laughs]

Alan: Like, I had no control. I kept falling over and like, because you’re strapped in anyway, doesn’t matter, you can’t really fall. But I just felt like I couldn’t walk in a straight line. I was like, if somebody gave you 20 shots of tequila and then said “Walk down the street,” that’s what I felt like. I was all wobbly kneed and it was not the most fun experience, but I guess with practice it might feel better.

Bob: And I think some of that is in the interface in between the hardware and the software and the control mechanism. I think if you try to use that as just a human input device, it’s going to be difficult. And I think there are some companies do that. I think Virtuix invented the device, they’ve been doing it for six or seven years. I think they’ve kind of perfected that. And even with that, it can be a little awkward. But once you get into it, it’s the closest thing you can do to running in VR. And there’s just something visceral about dual wielding shotguns in a zombie apocalypse and running around. And the head is just– there’s something magic about that, Alan, I can tell you.

Alan: It’s interesting. I got to try another walking simulator — and I’ll look it up while we’re talking — but it was walking on a treadmill. It was bi-directional treadmill. So wasn’t omni-directional, it was just bi-directional. But the way they had coded the experience, as long as you stayed within a green circle, you could just keep walking. And my first thought– because the first thought is I’m going to walk into something, because I’m in this big kind of thing. And then when you take a few steps, after about the tenth step, you’re like, “Wait a second. This is really cool. I’m walking and yet I’m not any closer to the wall.”

Bob: Yeah. And one of the things we saw in the large scale free roam — like the big warehouse scale free roam experiences — is the longer– the further you walk, the deeper the immersion goes.

Alan: Yeah.

Bob: Because eventually that’s what happens, your mind says, “OK. Actually, I am walking. I’m in a bigger environment. I’m not going to walk into something.” It lets go of that reality. And you enter that fantasy world where you realize you’re in this environment. And if you can do that for a few minutes– some of these experiences, I’ve traveled as much as a half a kilometer. And the immersion gets really, really deep when you’re in it for a half an hour and you’re just walking around freely.

Alan: That’s crazy. So, you know, in a business where square footage matters, one of the things that the Void did really well is they employed redirected walking or the ability to kind of use the same set for multiple pieces of content in a very small footprint. What are you seeing around that sort of location based entertainment where they take over the whole space?

Bob: Yeah. And I think all of the companies that started out with these big warehouse scale stuff are looking at realizing the economics. A, there’s an economic piece of it and B, there’s just finding locations with 2,000 square feet of open space without pillars in an urban environment can be really hard. I know a guy that was looking in London for a year trying to find a location for Zero Latency location, and he couldn’t. So I think there’s a couple of drivers there. One is just the cost and one is availability of space. And so they’re all trying to figure out how to go smaller and smaller and smaller. But those are tradeoffs, right? I mean, the very first free roam space I played was 4,000 square feet or 400 square meters. It was a 15-minute game and it was amazing. But how many places can you operate? Something like that. And I think there’s one in Chicago, mass VR that’s on that scale, too. But I don’t think they’ve ever opened a second location. So, yeah, I think that there’s a lot of tradeoffs. And look, from an operating model standpoint, everybody’s still trying to figure out where the sweet spot is. You know, The Void is still struggling to try to figure out these single unit economics. I think Dreamscape is still trying to figure it out. Even Zero Latency, I think they just opened like their 37th location in Barcelona now or something last week. But I know I’ve spoken to all of their operators, and some of them make money and some don’t. None of them are really getting their money back as fast as they wanted to. And so I think that the business models are still being fleshed out, and finding that– once people figure out the sweet spot, everybody will rush into it. And the fact that people are still experimenting tells me nobody’s really figured it out yet.

Alan: It’s interesting you say that, because I think that’s indicative of the whole industry. VR, AR, from a corporate standpoint, we’re really just touching the surface of what’s possible and the business models around this. You know, it’s funny. We’re writing financial models for a company and they’re like, “Okay, here’s the products, here’s the clients we want to go after.” And I said, “Guys, you realize that everything we’re doing here is just a complete guess, and it’s all going to be wrong.” Like, literally no rhyme or reason for it, because as we move, the industry is shifting. And I say to this to people, “It’s not just a new technology, it’s a new industry, it’s new business models. Everything’s unproven.” So how do you then– I guess you just got to keep experimenting, which was what everybody’s doing.

Bob: I tell people, this is the most complex market you can imagine. And the solution for solving complex problems is sitting in the problem space longer. Einstein said, “I’m not smarter than everybody else. I just sit with my problems longer.” And I think he was lying about that, he was smarter than everybody else. But he did sit with the problems. And there’s a really interesting thing for the listeners, if you Google the “Snowden leadership framework”, it’s a Harvard Business Review article, it was back in the 90s. And they talk about this thing called the Cynefin model — and it’s a Gaelic word — and they talk about how to deal with different levels of complexity. And they say, in a complex market you have to stop trying to find the solution right away. And I think VR is that, and you’re seeing a lot of companies experiment and share the opening. And the thing I love about this industry is everybody seems willing to share with most people. Because they know it’s day one, they know we haven’t tapped the beginning of the market, and it’s not a zero sum sum game. Everybody can still win at this stage of the business. So there’s a lot of sharing and a lot of experimentation happening. And I love that.

Alan: Yeah. It’s really a wonderful industry to be in. I came from the music industry and music technology, and it was — I guess — a more mature industry. So there was sharing, but not really kind of at the level where it’s like, here’s all my information or I’m on a podcast telling everybody about how VR and AR is working for our business. And even just on this podcast — the XR for Business podcast — we’ve seen a really incredible sharing of knowledge. And I think this is one of the best things about this industry, is people are willing to help. And like you mentioned, it’s not a net sum game at all. The industry — as an entire industry — is about $10-billion in 2019, will close off the year between 10 and 11 billion. And that’s going to increase to 500-billion by 2030.

Bob: There’s plenty of room for everybody. If new entrants stopped coming into the market, everybody in the business today that survive would be a billionaire. So that’s not going to happen, because people are continuing to rush into the market. But yeah, there’s plenty of room for everybody right now. And it’s really exciting to have been watching the industry grow, like I did my first VR product in 1992. I’ve been watching this thing bubble up for 25 years and and it’s nice to have some–

Alan: Is now the time or what?

Bob: Oh, absolutely. Zero doubt in that. I think the technology just wasn’t there before. And the mobile phone revolution with really inexpensive accessible small high resolution LED screens or LCD screens, and IMUs, and tiny processors, and all of the components that Palmer Luckey needed to build his first Oculus headset came out of the cell phone industry. And so we can thank the cell phone guys for making all this possible.

Alan: Well, speaking of cell phone guys, you’ve got HTC as a major player. They actually sold their cell phone division to Google to focus on VR.

Bob: Man, that was crazy. Like–

Alan: I agree.

Bob: Talk about a bold move. And I hope they’re successful, because I love to see bold business moves rewarded. But that was a pretty risky move, but talk about belief. That’s the manifestation of belief.

Alan: Yeah, it’s focused, too. If they’re all in on spatial computing in the future of this, and they seem to be doing well. Out-of-home entertainment locations, I would say HTC is probably the leader.

Bob: Oh, by far. Like, not even– nobody’s even a close number two right now. And some of that has been attitude. I mean, Rickard Streiber early on realized that they had an awareness problem. He said, “All right, let’s support the arcade business, because that’s where people can at least get an idea of what VR is like.” And I criticized him publicly a little bit, because the arcade owners back in the 80s, that whole business got basically disintermediated by the consumer gaming market. So once console systems got really good and really affordable, people stopped going to arcades. And so in a way, he was trying to get arcade people to build VR arcades, so people would be able to buy VR at home, and it would put the arcades out of business. And now that we’re starting to see more free roam and less consumer adoption than anybody expected, I think that those models are starting to solidify a little bit. But HTC saw early on that they had an awareness problem and they are trying to fix the awareness problem, whereas Oculus thinks they have a pricing problem. And so, you know, they come out with a Quest and they come out with the Rift S, and they give really hard technical limitations to both of them to hit a $399 price point, thinking that’s going to move the market. And so two different companies with two entirely different beliefs of what the problem is. It’ll be interesting to see how that plays out this Christmas.

Alan: Have you tried the Quest?

Bob: I have, yeah. In fact, I just ordered one. I tried it early on, before it was released. Obviously, I get to demo a lot of cool shit that’s in development. One of the nice things about my job. But I finally broke down and ordered one, and I’m going to see if I can’t travel with it, because I get so many people that I meet that haven’t tried VR, and I want to be able to just put a headset on them and say, “Check this shit out.” Am I allowed to say that on your podcast?

Alan: You’re allowed to say whatever you want, my friend. Now, this is a family show, but I believe that if you’re passionate about something, these things come.

Bob: Yeah, so. And funny, what got me over the line — because I’m a consumer — was they bundled Vader Immortal with it for Christmas. And so they’re starting to learn about the whole notion of bundling, and what’s going to drive adoption. And then they just then– obviously they announced they acquired Beat Games last week.

Alan: Yeah, that was cool.

Bob: I wrote a blog post about that. And by the way, if anybody’s interested, I write a weekly blog on location based VR at bobcooney.com called Dropping In. So if you’re interested, check that out. But my blog post last week was about the Facebook acquisition of Beat Games and how– try to figure out why they did it. If you think back to the music games of Guitar Hero and Rock Band, those peripheral kits were really expensive. Couple of hundred bucks for the whole band set. 300 bucks, 350 for the Beatles one. And so I think music games have the ability to sell hardware. And I think Facebook realizes that. And they decided to buy Beat Games. They’re going to push that hard. And then you’re going to see a lot of new music coming in. It’s really exciting time. How happy am I for those guys, the guys that started Beat Games and cashing out, hopefully they made a bajillion dollars.

Alan: [chuckles] We’ll never know how much they’re going to make. I think it was–

Bob: But hopefully those guys cleaned up. I love seeing entrepreneurs make money.

Alan: Hopefully they also keep Beat Saber available on other platforms.

Bob: Yeah, absolutely. And they have to. Well, they don’t have to, actually. And I think that there would be a massive community backlash if they didn’t, at this point. And you know, Oculus and Facebook, they’re undergoing all kinds of scrutiny from all kinds of people. And they’re going to have– they’ve got to be careful with everything that they do right now, and how it affects their brand and people’s perception of them.

Alan: Agreed. So let’s go back to IAAPA for a second. If you were to say that these are the five highlights of IAAPA this year, what would they be?

Bob: Yeah, for me, I actually gave out– I have created my own award called the VR Bauble Award. And for recognition of companies that are really doing not only good stuff, but innovative stuff in the space. And Rabbids: The Big Ride was one of them. The VRsenal unattended Beat Saber cabinet was one of them. And there was one that really caught me by surprise, was a company called Ballast– DIVR, they had a product called Ballast, and I had to actually throw on board shorts and get in a pool to try it. And they have a waterproof headset basically built into a scuba mask with a snorkel. And you hold on to one of those underwater propulsion devices — like a little torpedo thing that you hold on to — and it’s hooked up to an air compressor, so it cavitates and there’s a fan that blows jet– a jet that blows the water on you. So you feel like you’re moving underwater. And it was mind blowing, it was fantastic. I was like screaming through my snorkel. And I think that from a business model standpoint, you’ve got all of these resorts around the world that have pools that are underutilized and unmonetized. And now all of a sudden, you can drop 100 grand worth of equipment in there, and charge 20 bucks for a seven minute underwater VR experience and start monetizing pools. And I think you’re gonna see resorts do that. And so that product blew me away. It was really surprising.

Alan: That is super cool. Think about this, for all the people going on vacation over the holidays, how much can you really drink by the pool?

Bob: Yeah.

Alan: Don’t answer that question.

Bob: And the ability– one of the experiences was like free floating in space. So when you get in a weightless pool environment, there’s all kinds of things you can do. So I was jetting through the lost city of Atlantis, but then all of a sudden I was free floating in space in the International Space Station. And that was really cool. And being in the water removes any notion of motion sickness as well. So super accessible. So that was– yeah, that was a great– that was just a mind-blowing experience for me. It really changes the game when you can start doing VR in water, that was amazing.

Alan: Super cool.

Bob: Yeah.

Alan: What else?

Bob: Yeah, there was– the VR bumper car was another one that–

Alan: What?

Bob: Yeah, I know! So you take a 50 year old hard ride, you put a tracking system on it. You put on a headset. And now all of a sudden they’ve gamified bumper cars, and you’re in this cyberpunk environment. It was a joint venture between a bumper car manufacturer called IE Park, a software company called SPREE Interactive — which was formerly Holodeck VR — and a company called VR Coaster, which did the first VR roller coasters. And the VR roller coaster thing was a bit of a fad and it’s kind of dropped down now, because there’s all kinds of throughput issues and roller coasters are high throughput rides. But bumper cars are not, and bumper cars are kind of boring and simple, and you’d never do it more than once, right? And so they’ve taken bumper cars, they’ve made them fun and engaging and replayable, and you’re going up a ramp and the floor collapses and you feel like you’re free-falling. And yeah, really amazing use of VR. And so that was– and that won a Brass Ring award, which is one of the award ceremonies from IAAPA this year. So I expect to see that in a lot of theme parks going forward.

Alan: That’s super cool. I want to try that.

Bob: Yeah, it was good.

Alan: And rounding out the top five?

Bob: Yeah, umm… Oh wow, top five, so… boy, that’s a tough one.

Alan: What other Bauble Awards were given?

Bob: Yeah, well I gave one to Zero Latency, but that was like long overdue for their free room stuff. And I will give, I still think it’s the best of the best in the free roam space, but one of the things that they did — which is speaking of brave moves — was they had developed– because they were first, they developed their own tracking system, right? They had to develop their own headset, their own gun, their own camera system that used machine vision cameras, a stack of servers a mile high. It was a very expensive installation. And when the Windows Mixed Reality system came out — or before it came out from Microsoft — they were the earliest adopter of that. And what they did was they made their own stuff obsolete before their competition did. And it dropped the price of their system in half, made it more accessible, made it more flexible. And I think it’s really hard for companies that invent solutions to let go of their own invention and adopt someone else’s solution because it actually is better, cheaper, faster. And they did that really early. And I rarely see entrepreneurs do that. There’s that whole not-invented-here syndrome. And they’re so married to the technology. And these guys — as technically proficient as they were — just let go of that. And I think that was a really bold, brave move by the founders of the company. And I think it’s paying off in spades for them.

Alan: This is kind of the approach we’ve taken at MetaVRse in building a new platform marketplace. And we realize that, yes, we can make all sorts of great tech. We’ve built all sorts of things; motion tracking, volumetric capture. We’ve built all these things. But the technology’s moving so fast and so rapidly that Microsoft, for example, they have their Metastage is a million bucks plus. But there’s other people coming up that can do that for $100,000.

Bob: Yeah, there was a company at SIGGRAPH called IMVERSE. And they are doing it with the new Azure Kinect cameras.

Alan: Exactly, exactly. And that’s not difficult to do. So if you look at the technology in the way it’s moving, my question is constantly, how do we disrupt an industry constantly and consistently disrupting itself?

Bob: Yeah.

Alan: Our answer to that is to build a marketplace that taps into all the newest technology for the needs of our customers we’re corporate training and enterprise training, that sort of thing. But being able to use all of the latest, greatest technologies and apply it to that, because they will change dramatically over the next five years, ten years.

Bob: Yeah, absolutely. And I think — to get back to location based entertainment space — the innovation that has to happen there is around the business models. Because ultimately you’re selling tickets, and you’ve got to sell enough tickets to pay for the hardware, before the hardware becomes obsolete and you have to buy new hardware. And so I think that’s been the challenge in that space is how do you buy something and know that you’re gonna get a sufficient return on that invested capital, before you have to either replace it or upgrade it. And I think that we’re still sorting that out.

Alan: Well, I think the problem is the headset turnaround times. So I think your maximum you’re going to get out of any headset at this point is two years.

Bob: Yeah, but the headset’s the least component of it. Like, the headset’s 500 bucks now, and the prices are going to continue to come down. And so, for example, the VRsenal cabinets sold for $40,000. If you have to upgrade the headset every six months and it cost you 500 bucks, that’s almost an insignificant amount of money. I think it’s– and that’s what I tell operators, too, don’t get too caught up in the display technology getting better and better, and faster and faster. I think that when you look at the whole stack of what you have to do technology wise, especially in the free roam space, like if you’d invested a half a million dollars or three quarters of a million dollars into a Zero Latency system with machine vision cameras, and now all of sudden you can do it with inside-out tracking in the headset, you’ve literally thrown away $200,000 with the hardware in twelve months. That’s hard to recoup. And so with that, it’s the bigger systems, they have a little more technical heft to it, a lot more infrastructure and especially on tracking systems, which are essentially now going to be free, which is awesome.

Alan: It is pretty awesome. And you know–

Bob: If you didn’t buy one yesterday.

Alan: [laughs] Yeah, it’s true. And the inside-out tracking was kind of this unicorn myth that maybe will come, and it came, and it came fast and it’s here. And it’s just– that’s the new standard.

Bob: And it comes with some limitations. But I’ve got to believe that those limitations are going to go away, as like the peripheral vision, and if you move your hands out from in front of your face, because they’re using the cameras now for hand tracking as well. And so how do you track an object that isn’t in your direct line of sight, whether it’s for hand tracking or controller tracking or whatever. But I’m sure they’re going to figure that out in the next 12 months.

Alan: I think honestly– and I had Alvin [Wang Graylin] from HTC on, and they’ve kind of figured this out a little bit with their Focus, they use inside-out tracking, plus they use the base stations.

Bob: Yeah.

Alan: So you kind of have this triangulated– I think he said with four base stations and the inside-out tracking, you can go up to something like 20,000 square feet. I didn’t understand how that was possible.

Bob: Yeah. And I think hybrid tracking really is the future for the large free roam VR stuff. And a combination of inside-out and outside-in is going to be where we are, and that’s gonna be where we settle. But you won’t need $200,000 with optical tracking cameras. You’ll be able to do it with a handful of infrared laser cameras or whatever. But the prices of that stuff is going to come down to the point where you can mix and match the technologies into a solution that eliminate all the weak spots. And I think that’s the next twelve months, that’s going to be where all the evolution is in the technology of the out-of-home free roam space, is those hybrid tracking systems.

Alan: Amazing. So we’ve gone through a lot today, but what problem in the world do you want to see solved using XR technologies?

Bob: That’s a great question. Thank you. And this has nothing to do with location based VR or entertainment. I want to see it being used for greater interpersonal connection, and to create safe spaces for people to be more vulnerable in their communications. And I think that that’s one of the greatest challenges that we have in society today, is kind of a loneliness problem, this leading to an epidemic of suicide and depression. And I think that it’s a really powerful tool. And as we get better virtual telepresence and more avatars that are more communicative. I don’t think they have to be photorealistic, but I think using– I want to see people using the technology to bring people closer together. Think about the combination of language translation and virtual telepresence, and how that breaks down the boundaries, the geopolitical boundaries that keep us separated as humans around the world. That’s what I want to see.

Alan: That’s an amazing vision. And I think we’re only a few years away from that being ubiquitous.

Bob: I think within five years we’ll be able to have face-to-face meaningful communication across borders and across languages. And that’s going to put a lot of pressure on governments, and the people who want to keep us separated for all kinds of reasons. And so it’ll be interesting to see how that ripples through the geopolitical society of the world in the next five years. It’s going to be– it’s a fascinating time to be alive.

Alan: It really is. Thank you so much, Bob. This has been amazing.

Bob: My pleasure. Thanks for having me.

Alan: Hey, everyone, my name’s Alan Smithson. Coming up next on the XR for Business podcast, we have Steve Bambury, founder of VirtualiTeach. We’re gonna be talking about digital literacy, the virtual/augmented reality platforms, and the question on everybody’s mind: What are the key barriers to adopting VR and AR in schools and how to overcome them? All this and more, coming up next on the XR for Business Podcast. Welcome to the show, Steve. How are you?

Steve: I’m good, man. It’s good to speak to you.

Alan: It’s really great. The last time we saw each other, we were in Dubai — where you live — and you took me to the Dubai Mall, and we went in and we went to the VR Park, the giant VR Park. And I was just blown away by how big and ostentatious everything was. And it was a really great experience. I can’t thank you enough for your warm hospitality in Dubai. But today it’s all about you. So let’s talk about what you’re doing, and how did you get into this? And what are you doing now?

Steve: I’ve been in Dubai for 11 years. And for those 11 years, I’ve always worked at the same school. I was working a school group here known as GESS — which is the acronym for Jumeirah English Speaking School — also broadly referred to as GESS Dubai now. GESS is one of the leading schools in the Middle East. It’s a very old school, at least in terms of international schools in this region. It’s only, I think four years or three years younger than the UAE as a country. So it is very well established. And yeah, so I worked there for 11 years. I worked as a class teacher in one of the primary schools, and curriculum leader. Eventually become head of computing at the primary school. So I was teaching digital literacy and computer science content to four year olds, 3 to 11 year olds. And I ended up in that role primarily because of all the work I’ve been doing to integrate the iPads in the classroom. From 2011, we were one of the first schools in the Middle East to to roll out iPads in the classroom. And then three years ago, I moved into a role that was created for me, which was the head of digital learning and innovation, working underneath the new director, Mark Steed, who’d just come in from the UK. Mark had the pedigree in terms of digital learning from what he’d done at this very, very prestigious school in the UK called Berkhamsted. He’d also chaired the Independent Digital Strategy Group for eight years there. And so Mark created this role and this role took me out of the classroom most of the time. A lot of it involved training with staff. It also involved going back into departments and helping them with enrichment projects. And it was kind of in parallel to that. I mean, part of the reason that my work with virtual reality really took off is because I moved into this new role, and had this freedom to innovate and to explore new technologies. My first VR headset was just a [garbled] headset I imported from the States in 2014. But it was not long after I started this new role as head of digital learning at GESS that I got my first Vive. I took that Vive into the school and started looking for ways to integrate it into different curriculum areas. In actual fact, I’ve just recently started writing a series of guest posts for Vive on the Vive blog. You can go into Google, like “HTC Vive blog Steve Bambury” or something, you’ll probably find them. But I’ve been writing a series of blogs about my journey using and integrating the HTC Vive headsets at GESS. The first one focused on all those initial trials that we’ve run. My background is in film. So before I was a teacher, I worked in the film industry. So I’ve always done a lot of film projects with kids. So one of things that I was doing throughout our journey with virtual reality was documenting all of the projects that we were carrying out. I was capturing student voice. I was capturing staff feedback. And I think that was invaluable in terms of the success of our deployment of higher end VR at GESS, because it enabled me to then use these — not only internally but also externally — to promote what we were doing at the school. But internally it meant that I had this evidence that there was definite impact in terms of the integration of this technology, and the results that were tangible when you were using the Vives in the classroom. And then from there, we ended up investing in more Vives. We brought in Acer mixed reality headsets, as well. I ended up doing trials with the Vive Focus and other hardware. The one thing obviously that is already clearly missing from this mix, is the word Oculus. For those that are outside of the Middle East region, just for context, Oculus has next to no presence in the Middle East at all. The Rift never launched here. The Go never launched here. The Quest has launched here, but only in shops. 100 percent markup price from the Europe and US price.

Alan: Oh wow.

Steve: So it’s been– yeah. I mean, Facebook are here, but they don’t seem to value the region, so everything tends to be Vive, with the WMI headsets sort of in the wings somewhat. So yeah. So I did a lot of cool stuff with VR and started becoming kind of known for the work I was doing with VR. Couple of years ago I set up VirtualiTeach as a platform to share best practice and share my ideas, my theory, my projects. And… yeah. Broadly that became all I ended up speaking about at conferences around the region and internationally. I was becoming “the VR guy”. So–

Alan: You are the VR– You’re the VR education guy!

Steve: So yeah. And it is something that I’m really passionate about, and it’s something that I see the future of education, in terms of where spatial computing will take us. It isn’t just another gadget that schools need to consider weighing up buying into or not. This is the evolution of computing in general. So yeah, so I did that role — the head a digital learning — for three years. And at this point I’d worked for the company for 11 years, and I was looking for the next step. And Mark — the director — he was headhunted to go off to Hong Kong and work in Hong Kong, which he now has. And so in parallel to that, I decided to strike out on my own and set up my consultancy, which is broadly how I’ve spent my summer. Normally in the summer, everybody leaves Dubai, because it’s so ridiculously hot. And there’s so many expats here — 80 percent of the country is expats — so everybody leaves and Dubai’s a ghost town in the summer. Very hot ghost town.

Alan: Oh, it’s so hot. Oh my God. I was there this summer and oh my God…

Steve: So I was stuck here this summer, because I had to deal with all the logistics and the paperwork of getting my company license, my new visa, and everything like that. And yeah, and this is me now, a couple of months in, working for myself the first time in my life. I set up my consultancy called Digital Inception. Anecdotally, the name refers to– it was actually the name of a remote keynote presentation that myself and my friend Luke Reece delivered in 2013, I believe, to the University of Southern California from here in Dubai using the Nearpod platform. And the presentation kind of riffed on the movie Inception and the ideas from the movie Inception, and the idea that if professional development is good enough that you walk away, and you feel like the idea was there all along, that you already knew it, it isn’t something you’ve been preached, you’ve had something unlocked that was already within you. And I always kind of liked that title, I thought it was cool. And it was fitting that I could use it to encompass the work that I was going to be doing with immersive technologies, but also broad enough to encompass some of the other areas that I work with. I mean, I was a distinguished educator. I do a lot with Apple technology. I’m a Microsoft master trainer, so I do a lot of work with Microsoft technology. So I needed something that was kind of broader to encompass all of those things. So yeah, that’s where I’m at.

Alan: [chuckles] So you’ve done all of these things. You’ve been a pioneer. You also do the CPD talks where you interview people. So by all intents and purposes, you are an expert. Well, I would say the world’s leading expert on VR and AR in education. And you also have VirtualiTeach. What is that platform all about? Was that just a repository, a place for you to kind of store everything that you saw? And then it became a website. How did that happen?

Steve: Yeah, kind of. So in 2012, when I was doing a lot of work with iPads in the classroom. Myself and my friend Luke — who I mentioned just now — who also works at JESS with me. And he’s still at GESS, he’s one of the deputy heads there. We were speaking at events, and we were getting loads of people asking us questions and stuff. So we figured it would be a good idea to tackle a website where we could share our ideas and direct people to. So we set up a website called iPadEducators.com, which went on to win an award, and it led to both of us becoming Apple distinguished educators. And VirtualiTeach is– the approach is broadly the same, both of these websites are completely not for profit. I turn down advertising offers on a weekly basis. It’s never been about making money. It’s just about sharing best practice, which outside of the education industry, some people see it’s kind of weird. If you’ve got ideas why you’re not charging for them? But educators as a community, we’ve always been very, very much of the kind of pay-it-forward mentality, that you share what you’re doing, and we grow together. To be honest, it was 2017. And my youngest daughter had been sick. And so the summer plans were canceled that year as well. And I– essentially I was considering writing a book. Ironically, the book was going be called Digital Inception. I was going to write a book about all this stuff I was doing with virtual reality, but the more I considered the time that I would need to spend writing a book, and the delay in this kind of gratification of sharing the content with other people. In the end, I just thought, you know what? Let’s just put another website together, because I can start putting content out quickly. And I like to produce content.

Alan: Writing a book. By the time I read the book, first of all, it’s obsolete. Second of all, you can’t keep it up to date. So we’re struggling right now. We’re writing a book and– two books, “XR for Business” and “XR for Education”. And by the time they’re finished, they’ll be 100 percent obsolete.

Steve: Yeah. Yeah. You know why? In fact, last year in the end, I did put a book proposal together and submitted it through a colleague to a publishing house. And that’s basically what they come back to me and said. They said, “Look, we like your idea. But by the time when you actually write this and we publish it, we’re conscious of the fact that it will be out of date.” And to a degree that’s true of all books based on technology, because everything’s moving forwards.

Alan: Yeah.

Steve: So, yeah. So that’s basically why the website became about. Now, I will give a little caveat to anyone that’s listening, around about the time that we’re recording this, back end of October 2019. So with everything that was going on, with me setting up the company and various other bits and pieces, I took a couple of months break from the website, and unfortunately what’s happened is the website’s designed through Wix, and over the summer Wix have launched a new blog feature. And essentially my website is entirely built– the entire structure of it is built around the old blog feature. And then I use custom feeds to pull theory content onto a page, and Vive related content onto a page, and guest articles onto a page. And it was all done with a tagging system, which has been made redundant with the change to their site. And essentially, I’m now in a position where I’ve got a load of new content ready to publish. But at the moment, I’ve got to find the time to go back and essentially re-label everything that I’ve ever posted, which is like 150 articles. I’ve got to manually go into all of them and and re-tag them. So my site’s kind of sitting dormant at the moment, but hopefully we’ll be back on its feet before the end of the year. Because I do have a lot of new content ready to go on. But I have to say, sadly, the old content needs to be re-tasked first, and I need to do some some layout adjustments as well, to fit the new style that Wix have deployed.

Alan: I’m on your site now and you’ve got– this is like the compendium for anybody looking to do. And it’s VirtualiTeach, but “Virtual I teach”, it could also be.

Steve: Yeah, that tends to be what people say to me. You know what? When I was trying to come up with a name, I’m going backwards and forwards with different ideas. And I’d been reading a lot around the theory of the virtuality continuum. And I had obviously the Curiscope Virtuali-Tee, you know, the augmented reality t-shirts where you can look inside the human body. And I was like “Oh, VirtualiTeach! That’s a really good play on words!” And a couple of people I said it to was like, “No, don’t use that. It’s too confusing.” And I was stubborn and decided to stick with it.

Alan: I like it. So Steve, on the VirtualiTeach site at the very top, there’s an image of you sitting with a bunch of people, but you’re in avatars. What’s that all about? What platform is that?

Steve: So that’s one of the images from the CBD and VR events that I host. It’s ENGAGE, by Immersive VR Education They’re the guys that made Apollo 11 and Titanic VR. The funny thing is people tend to think that I work for Immersive, which I totally don’t. I’ve never worked for Immersive. I’ve got a lot of love for these guys, they’re great guys, and I work closely with them. But ENGAGE, it just is the platform that I chose and continue to choose to use for my professional development events inside VR. So I kick them off. Just before I launched the website in mid-2017, when I first got my Vive, I’d been lucky enough to have a sort of guided tour of the ENGAGE platform from Dave Wiehl and the CEO of Immersive VR Education, and was blown away. It was the first multi-user VR platform that I’d ever been inside and obviously — especially back then — it was the only one that was dedicated to education, and it was just stunning. And I was conscious of the fact that schools weren’t necessarily in a position to be harnessing this technology with a whole class full of students at that point — and to a degree, most schools are still not right now — but a lot of schools had begun to invest in maybe one or two Vives or Rifts or you know, educators like me, who is a bit techie, had gone out and bought their own one. So I decided in June 2017 to test the waters and offer out this free professional development event inside virtual reality. For clarity, one thing I hear quite often — just like I hear the confusion with the VirtualiTeach name of the website — in Europe and in the UK in particular, it tends to be referred to as CPD, for Continuing Professional Development. And quite often I get American educators asking me, like, what CPD stand for? Because in the States you tend to just refer to it as Professional Development or PD. And you know what?

Alan: Not cardiopulmonary disease?

Steve: [chuckles] Exactly. Or some sort of medical procedure. But at the end of the first year, I considered rebranding it to “PD in VR”. And at that point, even American educators like Steven Satter were saying to me “No, don’t change it, man. Don’t change it. It’s got a legacy now.” And it– something about it, it just didn’t sound right to change it. So we ended up just leaving it the same. But yeah, so I did that first session in June 2017. I actually delivered it three times in 24 hours, to three different groups of educators, some of whom accessed via PC, and some of whom were in headsets. Obviously, there’s a limit, and even more so back then, there were limits to the number of avatars that we could have inside the same virtual space. And it was tons of fun, despite all the obvious technical glitches that you face when you’re at the tip of the spear. So I decided to start hosting it monthly, and decided as well to start bearing them up. So I started doing some where I would deliver presentations, normally virtual re-enactments of presentations that I was doing locally here in the UAE or across the Middle East region events. But I also started hosting panel discussions and fireside chats and had some truly phenomenal guests on, building up to the one year anniversary show we did six hours straight last July.

Alan: Wow.

Steve: Opening with Alvin Graylin from Vive. You know, Charlie Fink was on, and Bob Fine. And we had the whole virtual reality podcast crew were on there.

Alan: It’s so funny you say that. We’ve had Alvin, Charlie and Bob as guests.

Steve: Yeah.

Alan: They get around, these guys.

Steve: They do, yeah. So, yeah. I mean, beyond that, I’ve had guest from the BBC, I’ve had from HTC and ClassVR, and all kinds of speakers as well — obviously — as educators. And then after that first year, we were trying to come up with a new idea for another kind of variation on it. So I kind of had this idea to host a chat show. So I do this live from Dubai chat show format under the CPD in VR banner, which I’ve hosted about half a dozen of those. And actually, I’m in parallel to taking a little break with the website, I also took a little break from the CBD in VR events, but just did the kind of comeback show about two weeks ago, which was kind of laughingly jokingly dubbed the Season 3 premiere, because this is the start of the third year of me doing them now. And that was the live from Dubai format. I had Steve Grubbs from Victory XR on and–

Alan: Grubbs’ been on my show, too.

Steve: Yeah, he’s a great guy. Yeah. Dr. Angelina Dayton, The VR Lady, who does a lot of amazing work with the Cherokee Nation, and now the Navajo Nation as well. And Suzanne Lee from Pivotal Reality up in Scotland, too, who does some stunning work with elderly people with dementia. And that kind of encapsulates my approach when I’m doing the panels — or now the chat show format, as well — is try and get a broad spectrum. Somebody said to me once, “Why are you not just getting educators on?” And to me, there needs to be a lot more dialogue between developers and educators, and there needs to be a more open door approach to helping developers understand what it takes to make something that’s effective in the classroom, which is something I wrote about last year for VR Focus. You know, my advice to to developers, if you’re creating an educational app, how is this actually going to work in a classroom setting? You might make the most beautiful experience of all time, but if I can’t harness that effectively with a classroom full of kids, then it is not something I’m going to go back to. It’s not something I’m going to be able to integrate successfully in the classroom.

Alan: Absolutely. It’s almost like you have two camps, you have educators, and then you have technologists or technology providers. And you need both to deliver content in a way that makes sense in schools. What are you seeing, as far as adoption of this on a broader scale. Is this something like– if you looked at– are we’re gonna have VR in every school? Is that in five years? Is that ten years? Is that ever?

Steve: Obviously, my viewpoint is somewhat skewed, because I’m based in Dubai. I would underwrite that with just because I’m in Dubai doesn’t mean everyone’s absolutely minted. You know, schools here don’t necessarily have endless piles of cash just because we’re based here in Dubai, like the GESS group I worked for, was not a for-profit organization, as a lot of the older schools are. So there are obviously somewhat limited resources. Schools in general are very cash poor organizations and they’re also reticent to jump on to what can be perceived as bandwagons. That being said, I mean, at least here in the UAE, what I’m seeing is more and more schools dipping their toes in the water. A friend of mine works in a kind of technology director role across a large school group in Abu Dhabi here in the UAE. And they’ve just rolled out the ClassVR solution across all of their campuses. Two of the schools that I’m currently working with through my consultancy that have already deployed ClassVR as a solution as well. Obviously, some of the schools have looked already into the higher end solutions like Vives, and they may be invested in two or three. And another school that I’m working in, they’ve already marked out a space specifically to be a VR lab, painted big murals of VR headsets and stuff on the wall, but they were conscious of the fact that they needed to make sure that their Office365 deployment and their day to day technology integration was firmly deployed and all accounted for, before they then look at how they’re going to deploy, and what type of VR they’re going to deploy. And a lot of it comes down to the various frictions, as Alvin Graylin refers to them, frictions of VR in education, whether it be the costs or the fear of adopting something that is outdated within a year, or the health and safety concerns, and various things like that are potentially holding schools back right now. I think cost is a huge one, especially when you know that the PCVR solutions rely on–

Alan: See, let’s lay out the factors here, and how — in order to be kind of useful to people listening — what are some of the major factors hindering the adoption, and what are some of the steps that schools and school groups can do to overcome that?

Steve: Ok. I’m going to cheat here, and I’m going to open my website in front of me [chuckles] Because one of the presentations that I did at the biggest education event in the region. So the biggest education event in the Middle East is an event called GESS Dubai, which — as you can guess — is a global brand now, they’ve got events in South America, in Indonesia. And I’ve got a great relationship with these guys, I’ve presented there for probably about seven, eight years now. And this year actually hosted a whole VR stage for three days straight. We did a lot to Tilt Brush demos and hands-on workshops and stuff.

Alan: Cool!

Steve: But my keynote presentation, my prestige presentation — I always try and give them something brand new, some sort of theory content — was this session around the five key barriers to VR adoption in schools, and how to start breaking them down. And I’ve since published this on my site back in March. So if you go on VirtualiTeach, you can access this.

Alan: It’s virtualiteach.com. Scroll down about halfway the page. “The five key barriers to VR adoption in schools, and how to start breaking them down.” Go, Steve.

Steve: You like my wrecking ball graphic?

Alan: I love it. It’s amazing.

Steve: So. Right. So number one, lack of understanding, OK? The simple fact that people just don’t really understand what virtual reality is and what it can do. And I think paired with that, there was a… I can’t remember who published it, but it was a really interesting article earlier in the year. I’m sure you read it, Alan, about whether or not in the long run the Google Cardboard did more harm to the VR industry than good. Because it was brilliant entry-level device, but it then contained what people’s perceptions of what virtual reality was capable of. And I’ve had so many people that, you know, you put a VIVE on them for the first time and the words that come out of the mouth, I’ve heard the same sentence multiple times, “I didn’t even know this was possible.” And that’s partly because people’s understanding of VR is, “I can look around to 360 image. I can potentially look around a 360 video.” And that misconception that’s been built through the use of mobile VR, it kind of needs to be unpicked. You cannot explain virtual reality. It’s experiential technology. You’ve got to put people in the headsets, and particularly in schools, you’ve got to put people in headsets who are the game-changers, they’re the people that have the sway to actually implement change. One of the first people that I stuck the headset on was was Mark Steed, who I met before he was the director of the school. I mean, we were blessed in that Mark was the director. And he’s a very, very, very tech-savvy guy. And he’s open to new technologies. But I stuck Mark on the plank — as I want to do for most people that come to me who want to try VR for the first time — stuck him on the plank. This is a guy with three master’s degrees and he couldn’t walk out on it. Two years later, he wrote a blog article for the Tez in the U.K. about that experience. How much that affected him and how that moment made him realize the power of the medium in general, because he had that visceral, emotive reaction to it, which is not something he’d ever experienced from a different form of technology before.

Alan: It’s interesting that you talk about that particular one, because we actually built a training scenario where you’re in a warehouse and you have to go across a beam and turn off a power supply. And when we built it originally, the beam was three feet across and you were maybe 20 feet off the ground. And it wasn’t scary at all. We decreased the beam to one foot and increased the height to 30 feet, aAnd wow. It is terrifying. And everybody who goes across it is just tiptoeing across. And it’s this mind melt because you’re walking across something — you know you’re safe because you’re in a room — your brain can’t comprehend the fact that you’re 30 feet in the air; you can’t decipher between reality and not. And at that point when, in our particular instance, you actually fall — you don’t fall, you just kind of fall and then it goes black and you start over again — and it says, “don’t forget to put your safety gear on.” And it’s in that moment where you’re like, “man, I will never, ever forget to put my safety gear on again.” Terrifying people, it turns out, is very good education!

Steve: From the psychology point of view, the one thing that I’ve seen again and again and again as well, which — I remember reading Jeremy Violence’s book Experience On Demand — and in that first chapter where he’s talking about putting Zuckerberg on the plank experience at Stanford, and he refers to something that I’d seen in person myself; the fact that you can have a group of people standing there watching someone doing the plank experience and laughing at them and going like, “oh, what’s wrong with you? You know it’s not real,” blah, blah, blah. And then they put the headset on themself, and even though they’ve seen it from a third-person perspective, once they are in it from a first-person perspective, the subconscious takes over and have their reaction to it is completely their own. It doesn’t matter that they’ve already seen somebody else do it. One of them, in fact, one of the early sessions that we did with the first five I got — which if you go in, you can find it on my site. If you scroll right, right, right back to that to the earliest articles, it’s one of the first ones on there. But also the video is linked on that five blog that I mentioned earlier on — so I took the plank experience into the sixth form psychology department at GESS and along with my friend Dr. Joseph Bell, who is one of the psychology professors there. We pull out of 16-, 17-, 18-year-old students through the plank experience. And we captured footage of them going through the experience as well as their reflections afterwards, and Joe provided some commentary in terms of what was happening from a psychology perspective. It was absolutely fascinating. The other thing, in terms of that that I find fascinating, is that — and I wish I was talking to Dr. Sara Jones the other day because she’s actually writing a book about VR, and somebody I’ve known for a number of years — I was saying to her, “I wish I had carried through with this idea that Joe and I had to do this study, because I probably find that more adults can’t do the plank thing.” Kids will walk out on that plank generally with not a fear in the world, whereas adults, there’s a good proportion of adults that just cannot do it. You know, my dad is a builder. He does loft conversions, so he takes people’s loft — or attics, whatever you want to call them — and he turns them into additional rooms. He spent his life on roofs. He’s been spending his life climbing up ladders and walking across roofs, and he couldn’t do that plank experience at all. Couldn’t do it.

Alan: Wow.

Steve: Which I found fascinating.

Alan: That’s weird.

Steve: Yeah.

Alan: Makes no sense.

Steve: You’d think so. Steering back towards what we were saying about the kind of barriers; the second one that I covered was the cost and the ROI — the return on investment. And we kind of touched on this already. The idea that, you know, schools are reticent to invest in technology that they potentially see as just another thing. And you’ve got lots of different vendors and companies trying to hawk their wares, so to speak. You know, STEM is massive. Now, you know that everybody’s like, “do we need to buy robots?” Do we need to buy 3D printers? Do we need to buy VR content?” And I think the difference is — I kind of touched on before — is that we’re not talking about just another gadget when we’re talking about augmented and virtual reality. We’re talking about the evolution of computing. We’re talking about the change in the way the technology is interacted with, full stop. And if you look at that article, you’ll see an image that I painstakingly sourced from Google for the original presentation, which is a group of students from the… I think, from the 80s. At this single PC, which, you know, this was the experience that I had initially when I was in primary school. That there was one computer in the school, and it was on a cart and it was wheeled into “oooohs” and “aaaaaaahs”, because the magical computer’s here and–

Alan: I’m not going to ask how old you are, but I still remember the first time I went to the library and there was three Mac computers. It was like, “Whoa!”

[laughs]

“So awesome!”

Steve: Ataris and stuff. But I specifically chose this image because I think this is the fear of a lot of schools, is that, “well, we’re gonna buy– we can only afford one, we’ll buy one. And then we’ll end up with the whole class sitting round, watching one person interact with it.” My counter to that is, no, you won’t. Because as educators, we now understand better. Pedagogy has evolved and we understand that that isn’t what you should be doing with technology. You shouldn’t have a group of kids all sitting around watching one person interact with the technology. There are so many more ways. We have evolved in terms of our use of technology in the classroom and our understanding of digital learning has evolved so much, especially since the advent of tablets and the first deployments of iPads in the classroom. We’ve learnt new ways to integrate limited amounts of technology and explored bunches of different ways where, I’ve maybe had half a dozen mobile VR headsets deployed for an activity in parallel to a VIVE or mixed reality headset. I’ve had work where students are not just taking turns, but they are specifically paired for a reason; so that one person’s the hands in the physical space, and the other person, they’re immersed in the virtual experience. That was kind of my counter to that. Paired with that is the other one that we mentioned before, which was this rate-of-change fear, and the graphic that you see on the site there, which I always give a shout out to my — sadly — dearly departed friend Chris Long, who died earlier this year. Chris originally showed me this graphic of Martec’s law. It was during the one-year anniversary event for the CBD and VR. He delivered a presentation and this was part of it. And it was one of those graphics, where I saw it and I was like, “this makes perfect sense. How have I never seen this before?” And I’ve started using it in a lot of presentations–

Alan: I’m actually stealing this for my presentations. Thank you, Chris!

Steve: Essentially the premise is that, because technology changes at this rapid pace, this exponential rate, but organizational change tends to be slower. What happens is that the gap between the two increases over time. And ultimately, if a company sits and procrastinates for too long, the gap between the state of technology and the organization and their use of technology becomes so large that an organization can actually need a full reset. And you’ve seen this. You see it in organizations all the time. It might mean that they have to lay off a whole bunch of staff. It might mean that they need to source a huge chunk of investment to catch up. And this was something that I really learned– I mean, I learned so much working for Mark Stevens, in terms of digital strategy and vision. He came into GESS, which was incredibly ahead of the time in terms of technology you use in the classroom. But he came in and was like, “well, look, you’ve got no refresh cycles built in for your tablet or your whiteboards or this. There’s no standardization.” That was what he ended up bringing to GESS, was a much better strategy, and a much better plotted roadmap in terms of technology integration at the school, and where the school was at and where the school was going. So then the fourth one — the fourth barrier to the VR adoption, the fourth common thing — because just for context, again, this article, this presentation was based on the conversations that I’d had both at GESS and with other educators worldwide, and with people that I’ve been using VR and their feedback, in terms of the barriers that they were hitting. So this wasn’t me just plucking these out of thin air. This was based on common concerns that were being thrown at educators. People will come to me and say, “I’m being asked about this. What do I say?” And health and safety concerns is obviously something that was coming up quite a lot. “Is VR say for kids? How long should they use it for? Will it hurt their eyes? What age should kids start to interact with VR?” I wrote a piece off the back of the Commonsense Media Report contesting some of the data that they used, and not because they were talking about content concerns, saying that parents had concerns about sexual content or violent content in VR. OK, I can understand that concern.

Alan: Yeah.

Steve: Yeah. You’ve got an infinitely higher probability of finding that type content on YouTube, which, these same parents have got their kids sitting on their phones with unrestricted access to YouTube because they have got parental restrictions set up. So I thought that was somewhat ironic. “You know, too much time with VR is bad for you.” Well, too much time with anything is bad for you. You know? It’s like me saying eat too many cakes is bad for you. If I read a book for six hours straight, I’m gonna get eyestrain. Too much of anything new, an educated person will tell you that too much of anything is bad for you. Social isolation is another one that was coming up. And, you know, until we get into that place where the social multi-user VR experiences are more common, I think that, you know, there is some credence to that. It’s just a very insular thing when you’ve got a headset on and you know, if you’ve got a room full of people.

Alan: To be honest, my kids have unlimited access to VR and they — I mean, we’ve got a quest, we’ve got Vives, we’ve got Hololens, Magic Leap, we have all the toys — and they don’t want to go in it. And when they go in it, they want to go in with other people. They want to be in social VR, which makes sense if you’re playing Beat Saber or something, but it’s really great when you’re with other people and then engage the platform, or these types of things. So I think socialize– So– that’s really hard to say! Social isolation.

Steve: Yeah. Yeah. I mean–

Alan: Say that five times fast.

Steve: These are things that I pulled out from there, from the Common Sense Media Report.

Alan: Now, the next one is the health concerns of bumping into something, that is actually probably one of the ones that I think actually could be a problem; if your dog walks in the room when you’re in VR and you trip on the dog or hit a table. I’ve seen people get punched in the face.

Steve: Yeah. I mean, devil’s advocate: I approach this from an educator’s perspective. And if you want my take on the Common Sense Media Report, that article is an in-depth breakdown of the whole report and my response to it is there on the site. And if you look at the theory section, you find out, yeah, 13 percent have bumped into something. My response is, of course they have. If you’re not watching kids and they’ve got a VR headset on, of course they’re going to bump into stuff. I’ve had kids using mobile VR headsets where there was no, you know, the three degrees of freedom headsets where they can’t move anyway, and they still stand up and start walking. You have to monitor kids using this kind of technology. If you don’t monitor them, again, yeah, of course they’re going to bump into things. But I’ve used VR headsets with hundreds and hundreds and hundreds of kids. And I’ve never had a kid bump into anything because I control the situation. You don’t just stick them in a Vive and then walk off and make a cup of tea.

Alan: It’s interesting. We had an event a couple of days ago, we just got — this is two months ago — we had just got the Oculus Quest and we had an event and people were playing the sword fighting and… it was our fault, we didn’t put a barrier around them, but somebody walked by as they were swinging. Got punched right in the face. And I was like, oh, jeez, that happened. But that was our fault for not putting a personal physical barrier around the person, even though they have a digital one. So when the person inside didn’t know… it just was our fault and it was only… because we use the Vives, we normally set up an extension so that people can’t get in to the person. But because the Quest was so new and we didn’t know, we just put them in a room and assumed that nobody would walk near them. Somebody swinging their arms around like an idiot. You would think people wouldn’t walk near them. But that happened.

Steve: Yeah. I mean, one very low-cost solution I’ve seen people start to implement is they bring in — and you can actually point ones that are marketed as specifically for virtual reality now — but they essentially put mats of some kind on the floor. You get students to take the shoes off. You’ve got very simple haptics; I can feel that I’ve stepped off of the mat, so therefore, I need to stop. And obviously making sure that you’ve got, whether you call it your guardian or a chaperone, you’ve got that that set up properly. I really like the Quest, obviously, the way that the passthrough camera kicks on once you step outside the guardian, because it draws that full stop. I’m outside of my space. But again, little things like if you’re marking your chaperone, don’t take it right to the very, very limits of the space that you’ve got. So there it goes right next to a pane of glass or right next to a solid brick wall. Give yourself a kind of a border so that if somebody does get lost in the moment and you happen to not be watching them, that they’ve got that kind of leeway, that little bit extra more… I mean, we could do a whole podcast just around this kind of VR and health and safety and stuff with kids. But a lot of it comes down to common sense, ironically, considering this was a response to the Common Sense Media. It comes down to limiting the lengths of experiences and limiting, obviously, moderating the types of experiences that you’re using with students. One of the things that Mark and I started to put before we both left GESS, and once the dust settled in both moves, we do hope to pick up was we were trying to put together a kind of white paper and look at sort of creating an actual formal approach to this. What age would you potentially start using a Google Cardboard with a student? And how long would that experience maximum last? What about a Windows mixed reality headset? Vive? If I’m working with a 13 year old, what would be the recommended maximum length of an experience? Especially with something like Tilt Brush, I’ve seen it happen. You stick a kid in and they get lost in that world. Well, do you pull it out and say, how long do you think you been in? And then say “about five minutes” and you say, “oh, you’ve actually been in there 20.”

Alan: Time dilation is a proven fact in VR, actually. I was reading a study on this early on and the time dilation can be as much as 25 percent that people think they’re in VR a lot shorter than they actually are. And one of the things that you can actually do to completely mess with people is you can put a virtual clock inside VR that moves slower than real time and you can actually increase that to about 50 percent. So people think they’re in for an hour and they’re in for two.

Steve: I’ve never heard of that done before. I like that. That’s nice. So then the last one is, it’s kind of the biggie, from my point of view, is that the benefits alone and ultimately, as somebody who’s worked for a long time now with various forms of education technology, there’s gotta be benefits to learning. There’s gotta be some point to deploy in this technology. When I when I first started doing this stuff, I was doing with with the high end VR in early 2017, the kind of party line for myself and other pioneers like Jamie Donnelly and Steven Sarto, it was like “there hasn’t been enough studies yet. The jury’s out,” kind of. But we’re two years on and the jury is starting to come in now and we’re starting to see more and more evidence come in from all corners of the world. There’s all kinds of data that you see there on the site. From Beijing University and Warwick University and Cornell and Stanford, there’s all these studies taking place showing that no, VR is more engaging than than other traditional forms of media, that it leads to significant retention of learning. The one that came out, Alvin Graylin tagged me in a tweet last week. There was a new study from another university in China looking at–

Alan: Yes, I saw that, too. I asked him for the study. I didn’t get it yet.

Steve: Now, I haven’t seen the actual study, but with statistics looking at language learning in VR, and then from a theoretical point of view, I then start thinking about some of the big theoretical educational models, and the one for me over the last decade that has become very prevalent is the SAMR model from Ruben Puentedura. This is going to become like, if you’re playing ed-tech bingo at conferences, the first thing that you would put down on your bingo card would be the SAMR model on a slide because you can’t get through any sort of ed-tech presentation these days without somebody going into the SAMR model, one talking about the different levels of SAMR. When I was putting this presentation together, this is the first time I’d actually looked at SAMR for a while and the first time I ever looked at it with specifically my VR head on. And for those that maybe don’t work in the education industry, this is a two-phase, four-step model created by Dr. Ruben Puentedura specifically about technology integration in the classroom. The lower phase, the enhancement phase, has the two steps, the lowest step is substitution, where technology acts as a direct substitute; type something on Word rather than you hand-write it. Then it goes augmentation, so your technology’s still a substitute, but, you know there’ll be an additional functional improvement. So you’re using a digital thesaurus, or you’re adding in a clipart image or something simple. And then the second higher phase is the transformation phase, which has the modification and ultimately redefinition. And the idea being that you’re moving towards using technology to create new tasks and access content in ways that was previously impossible. You take the lowest level, use that analogy of having to write something; the lowest level would be just, I type on word instead of handwriting it. And highest-level might be that I collaboratively write something on a Google doc and then we post it to a blog or a wiki, and then we take live feedback from people from around the world. That’s me redefining that task, using technology. And when I looked at this through the VR goggles — pun intended — when I looked at it with my VR kind of mindset, what I found interesting was that it’s like a leap frog, because I can’t see any instance where VR is being used for things like substitution, because by its very nature, because of the experience or nature of VR applications, you’re automatically giving students the ability to do things that they had previously never been able to do before. Whether that’s painting with light or defying gravity with the way that you build a sculpture and tilt brush, or flying around the world in Google Earth, or stepping back in time in the Titanic experience. It’s a transcendent technology in a way that other technologies have not offered before. And I thought that was quite telling. I’m actually at the moment working towards finishing something I started in early 2018. So nearly two years ago, I started looking at VR and another very famous education theory, which is Bloom’s taxonomy and Chris Long, who sadly no longer with us. I, myself and my friend Alex Johnson in India and Stephen. So we were kind of informally looking at this on a shared document and we were going backwards and forwards with it and it kind of got put on the backburner a few times. And then Chris Long and I dive back into it maybe six months later and we really thought that we had something there, something interesting — something somewhat controversial — but interesting nonetheless. And then it went back on the backburner. But now I kind of feel like I need to finish that. I need to get that published, not least because it was kind of the last project that I was working on with Chris. And I’d like to see that through to completion. So 2020, I think at this point, will be when I’m looking to publish that, because as I mentioned earlier, I’ve got to rebuild my entire website before I can publish anything.

Alan: Well, Steve, I mean, there’s so much we can talk about. It’s been really amazing to listen to these. You are one of the world leaders in this. So thank you so much for joining us today.

Steve: Thank you, Alan. It’s always a pleasure.

Alan: Hey, everyone. Alan Smithson here with the XR for Business Podcast. Today, we’re speaking with Richard Hess, the immersive experience lead at the massive multi-national Nestlé, making a billion products a year. A day, he said, but I don’t know, a lot of products. You have them on your shelf, you have them in your fridge. We’re gonna be speaking with Rich about Nestlé’s VR and AR efforts in marketing, sales, enterprise solutions, and training. All that and more on the XR for Business Podcast. Rich, welcome to the show, my friend.

Richard: Hey, Alan. Thanks for having me.

Alan: It’s my absolute pleasure. You and I have spent a lot of time kind of talking over the phone, but also spending some time on a panel at AWB.

Richard: Yeah, that’s right. Yeah, we’ve crossed paths a few times. I’m just happy to be here, to talk a little bit about what we’re doing at Nestlé.

Alan: We’re super excited. Why don’t you make an introduction to you, and what you’re doing in XR with Nestlé?

Richard: Sure. So for myself, I’ve been with Nestlé for about 10 years now. First based out of the US, working for our waters division there. Mostly supporting digital marketing on the technology side. If you go back 10 years ago, the mobile phone was becoming big, people were starting looking at social media as a way to communicate. Through that journey around three years ago, spent about a year in San Francisco, starting with our innovation outpost that we have out there, looking at emerging technologies. And that’s kind of where I gained a passion for augmented/virtual reality, mixed reality, extended reality, whatever kind of acronym comes in the space there.

Alan: Realities? All the Rs?

Richard: All the realities. Yeah. [laughs]

Alan: I actually wrote an article — you can find it on LinkedIn — it’s called “The ABCs of R”.

Richard: Oh yeah, there we go. That’s good, I got to take a look at that. But yeah, that’s when I started getting a bit more hands on from my under the organization of getting “Okay, I’ve seen a lot of tangible use cases.” And around a little more than two years ago I came over here to Barcelona, where Nestlé has set up this global digital hub, that was mostly — at the time — looking more marketing and sales focused on how do we build centralized global platforms, and products, and services that can serve all of our markets and brands across the world, but now is more holistic across all different use cases, whether it’s in the factories, supply chain, HR etc. It’s kind of looking across the whole spectrum. So the past two to three years or so, I’ve been looking at augmented/virtual reality in that way of how do we take all these little different one-off experiences that we’ve done. And when we see a lot of tangible value in leveraging these technologies, we try to bring them to scale in something that is a full industrialized product, that the rest of the organization can take advantage of.

Alan: Let’s give an example of one that you did a pilot, you realized the success of it and now you’re going–

Richard: Well, I think a really good example — and when you think about, it’s a very simple one — but what we used for augmented reality within a sales organization was using AR as a tool in the sales person’s toolbox. So we have a brand called Nestlé Professional and they mostly sell to people like hotels, restaurants, big convention centers, cafeterias. And they’re selling often these big industrial coffee machines, these big Nescafe machines. You need two people to carry, they’re very heavy. And often when they were trying to make a sale, in order to do this, they had a paper cut-out, 2D of the machine. They put it down on a table and they say, “OK, imagine there’s a coffee machine here,” or they would take out a tape measure and start showing them the dimensions, giving them a flyer, things like this. Or usually what would have to happen is we would have to actually ship a machine out before a sale. And more often than not, you have to then ship that machine back without closing the sale. It costs time, it costs money, it’s ineffective. So just a simple use case of say, hey, why don’t we digitize this and use augmented reality to display what the machine would look like, surround it with, say, certain hotspots of different sales material, promotions, switch in different colors or different models, go through the entire catalog of different machines. That was something that is not the, say, sexiest use case of AR. To your peers, it seems very simple, something that’s been around a while, but being able to do that at scale and say hey, we’re gonna take all of our sales reps in the US, test and learn this out, get some feedback. The feedback right away was this is actually providing value. My competitor doesn’t have this or if they do, it’s not at this scale. It’s going to provide a lot of value back to us. And even reducing the number of visits, going to a customer from 3 to 2 in order to make a sale. And each one of those costs couple hundred dollars. You start to look at bringing that to the entire sales organization in that region. You start to see tangible dollars back. You get to a point where you can go to a senior leadership or at a executive level, and say augmented reality is not something that’s just a cool thing that’s going to get ourselves people excited. We can show it’s actually affecting bottom line or it’s reducing costs to sales people that are trying to do their jobs. So that was just kind of one example where we started really small, maybe half a dozen sales reps in the US. And as we built it along, as the technology moves along, we move with it. Starting from, say, you had to have marketed your kit around with you to display that machine, to then world tracking, to then now the advancements of more WebAR that’s coming, and quick look functions in the phone. We’ve been able to take that and then scale it to all the what we call Zone Americas, which would be both North and South America. Looking to next year, we’re going to try to take that more globally into different markets in Europe and places in Asia, Africa. That’s the type of scale that I think we’re looking for, for augmented reality, where it’s providing a lot of utility and a lot of value added back is something that can– it’s easy to prove or there’s tangible ROI there.

Alan: So how are you measuring ROI in that? If you have a measurement like decreasing sales visits from 3 to 2, that’s demonstrable value immediately. But how else were you measuring KPIs and ROI, in order to go and prove that business case to your senior execs?

Richard: Well, definitely the one around cost avoidance is a big one. And that helps speed things along. But also when you’re getting, say, feedback directly from the customers themselves or their surveys, whether it’s repeated purchases, people that want to get more from that. So, for example, last year we revealed a purchase for the Starbucks out-of-home business and saying now instead of just the machine’s pairing that with different products that could be on the Starbucks line, whether it’s different coffee corners, and the coffee corner would be this big cabinet that has a coffee machine there that people go self-serve. You would see it probably in places like the US and Canada, like in a gas station or something like this. Or even just a different point sales material to help sell different packets and stuff like that. Adding these tangible things over time to make it as much of a sales tool for the Nestlé sales rep, but also as a tool for the boutique owner or somebody that’s looking to sell this to customers. Being able to see a swing in an uptick in net sales, certainly that’s the golden goose, if you will, that that’s the one that everyone’s chasing. And we’re starting now to see that over time a little bit more. But for sure, what gets the lightning rod started is to say we can reduce costs right away and provide a more enriched tool. Let’s get that to get the ball rolling and then we’ll see the sales you brought over time. And we’ve been able to measure also metrics not related to finance or numbers. But if we’re able to say this many people are scanning different environments or scanning that leaflet or using world tracking, this is the amount of unique people are doing it versus the number of times they’re scanning. You can measure how many times people are going into stores, how many times they have to scan these things, how many people are doing it versus how many times they are doing it. You could draw those numbers back to “OK. Did this lead to a sale or not?” And so that’s the kind of metrics that we’re starting to collect across the board.

Alan: How are you tracking that? Are you doing it through your sales force or whatever your CRM is?

Richard: Not so much CRM. So I think CRM integration is more of a long term play for us. And it was kind of important to, I guess, have it in a siloed approach, at least initially, just because we wanted to be fast moving and get the ball rolling and helping develop the overall business case. So when we look at, say, a big CRM integration, especially with a company like ours, where you have a CRM tool that supporting tens of thousands of employees, pushing AR integration from the get-go to that, that’s probably going to be a project that’s going to be 18 months long. So where we were more starting first is, let’s prove the concept around augmented reality first and see if that provides value. We can probably do that project or that first test and learn in around eight to ten weeks and then build upon that. And then we’ll have this kind of convergence down the road to say, “OK, everyone’s agreeing that this provides a lot of tangible value. Now it’s time to integrate this as just a function or feature of the CRM tool.” I would more say looking at augmented reality that way, is not the AR tool that we’re adding the CRM functionality to. It would be more long term. How do we add the AR feature to our CRM tool? I think that’s the more long term play. But in terms of adding value now, it’s certainly the AR providing that as a standalone.

Alan: Yeah, I think that– this has come up a few times, where making AR for the sake of AR is interesting, but when you make it as a subset of the bigger sales tool and say, “OK, well, it’s just a feature within the sales tool.” You’re still gonna have printed materials, you’re still gonna have all these other things. It’s just another amazing tool in a sales person’s arsenal.

Richard: Exactly. It will never, I don’t think — at least for the foreseeable future — it’s never going to be the end all, be all and replace everything. It will certainly always be — at least initially — one enhancer to everything else we have going on, and more competitive advantage where other companies are not using and you are, you will have the ability to differentiate yourself against your competitors, for sure.

Alan: So I have a couple of technical questions. How many products did you– did you do the whole catalogue of these devices, or was it something that you rolled out with the five models and then slowly kind of iterated on? And so that’s question one. Question two is, where did you get the models from? Was this from your manufacturing partners? And then the last question I have is, what was the platform you used to make this happen?

Richard: Yeah. So for the first one, we started off small, of course. So we did two models to start saying, “OK, let’s do a coffee machine and a juice machine.” So that was what we started off first. And with that initial tests, with those half a dozen sales reps, as I said, it was just around these two models. Let’s get it out there. Let’s see if there’s tangible value added back. Let’s get that feedback and see if we should go from there. Because we were also in a place like, “OK, we’re assuming this is going to work, but we need to actually put it out there before we make a large investment to justify us making a bigger investment.” When we did see it was adding value, we said, “OK, let’s start to roll this out to different regions.” So starting in the US, we started then to roll it out into Latin America, countries such as Chile, Brazil, Peru. And we’re looking at saying, “OK, let’s add a couple more models, see how this goes. Maybe there’s different makes from market that we had to take a look at.” And actually, one of the challenges that we did find at the time was when you look at the maturity of smartphones around the world, it is getting up there, where a lot of phones will have ARKit, of course the new iPhones, ARCore for a lot of newer Android models. When you go to certain markets, like Brazil, we’re discovering a lot of sales reps are being issued phones that are 5, 6 years old. Sometimes we didn’t even have gyroscopes in them. So we had to kind of take a step back and say, “Well, OK, we’re making maybe some assumptions that this is going to work out the box. We’re going have the best experience. Throw in some world tracking through ARCore on Android.” And we quickly had to be like, “Whoa, OK. We have to maybe take a step back and think about what’s the right way to do this.”

Alan: Hold your horses, man. There’s still people on texting phones.

Richard: Of course, of course. It was quite a lesson learned for us to say, OK, let’s make sure that we’re identifying this up front. We’re building a solution that’s holistic for everyone. So now we have a bit of a mix of different, say, tracking mechanisms or triggers that would enable the experience. But from there, after we did have that fallback option for Latin America, that’s when the brand was more convinced to say, “All right, let’s start to do this for this entire region with all the different machines and coffee corners.” And you look at a total volume for that, you’re looking at around two dozen different models as well. For different use cases outside of, say, this Nestlé professional who sells things. If I take a look at Nespresso, for example, this is something when we look to say, OK, how do we enable quick look or WebAR functions on our e-commerce sites, we are looking at doing the entire range of espresso models and that’s up to around high 80s, 90s, different models that we have with different accessories, different colors, things like this. So we’re starting to kind of get to a point where a lot of people are seeing the value for it and they’re kind of going all in and saying, let’s throw it on our website. Let’s try it out. Let’s get a lot of different feedback and change it as needed. When it comes to the models themselves, it’s a very interesting question and another lessons learned that we had internally for that, because, as you know, there’s almost hundreds of ways to create the more raw CAD file for complex machines, say like coffee machines like Nespresso or things like this, but even point of sales all on this line. So we were dealing with a scenario, where we were getting them in any different type of format in 3D quality that you can imagine, often something as big as multiple gigabytes, something you can’t say put into an AR experience that you expect the consumer is going to deleverage. It wouldn’t work that way. So we had to do a lot of what we called 3D model curation. So we would have to either take the existing model or know what the model that they were trying to bring to life in AR have a lot of the 2D high-res photos of them. Because often you’re selling something like a coffee machine, you have an e-commerce site that’s also selling this. And there’s a lot of photos that have from different sides of the machine. Those have been dumbed down for more high quality ones that have been taken in a product shoot somewhere. So we would have to take either that existing 3D model or 2D photos of those machines, the different dimensions of them and then go through a process of recreating that model that’s kind of AR ready, good to go, something that’s 2 to 3 megabytes, tops that is in kind of glTF, GLB format, something that we can plug and play really easily into an AR or VR experience. So I think for us I think the industry will eventually move towards something where there’ll be some type of automation for that, and an ingestion engine, probably, for taking certain models from different formats and then spitting them out into something that’s AR/VR friendly. And you look at companies like Autodesk have platforms that they’re developing, that say that the goal is to do that. For us, we were more partnering with different providers that had capabilities in that space, to be able to help us bring that to life. People that we’re building their startups or business models around that specific use case, that there’s going to be a content– well, there is; there is a content problem of trying to develop a lot of these things at scale. And they’re gonna help for the first start of that, providing different resources that can create these from scratch, with a more of a long term goal to how do we automate that in the future.

Alan: That’s everybody’s goal. I actually just saw an article yesterday that Nvidia is working on creating 3D models from 2D photographs.

Richard: Yeah. So something like that. When we see stuff like that, it definitely gets us excited of looking at scale, because you said in the beginning Nestlé, this huge conglomerate, we have 2,000 brands, we operate around 100, 80 countries around the world. In order to do this at a massive scale, you’re looking for all the tools that you can get in order to reduce the burden of creating a lot of this stuff. So being able to do what you said with Nvidia, and create a new model from a 2D image, that’s something that would definitely help along those lines.

Alan: Yeah, that’s like the penultimate if we can get to that. *When* we get to that. It’s not even an if anymore. It’s like there’s so much research being done in this. I have a whole folder on 3D from 2D images, so there’s lots of people working on it. You talked about kind of working with startups to help get you where you need to be. What is the platform you’re using to distribute this? Because you talked about quick look in AR. Are you just using kind of Apple’s framework for that? And then what about people on Android? What is the actual nuts and bolts of it?

Richard: We do look at partnering on it with different startups or platforms that are either emerging or established in the space. Every company has to be a digital technology company today. But again, at our core, we’re a food company. We don’t have, say, teams of developers that are doing this space. We’re not developing our own proprietary AR tracking technology or things like that. So we are leveraging what’s out there. So whether we’re working with, say, I would call them like AR content platforms. For example, we do some work with Zappar as one of them. There are some more emerging platforms they’re looking at from an e-commerce perspective, which is great from our end, because obviously there’s a lot that needs to go into educating different marketers and people in Nestlé. People get excited about this. But again, you have to bring it back to that tangible use case, of where it’s going to provide value.

Alan: So easy for us to chase the shiny object.

Richard: It really is. It really is.

Alan: And it’s interesting. Five years ago we were doing 360 videos and then we said, “OK, well, this is easy. Move on to something more difficult.” We then did videogrammetry and volumetric capture, and then we did incredibly complex 3D models. And then VR where you get right in. And it turns out the 360 video stuff we were doing years ago is what people want.

Richard: [laughs]

Alan: They’re like, “Oh, that’s perfect for what I need!” And I’m like “Oh man…”

Richard: Yeah. There’s still a lot of tangible value in doing that.

Alan: Yeah. One of the things that I think is valid for Nestlé — and for every company — is a simple 360 tour of the facility for new employees. Just simple, here’s what our facility is, here’s where the kitchen is. You can kind of navigate around. Even just a Matterport tour of the facility before you even get on on site, because a lot of the first few days of new employees roll is wandering around, trying to find out where to go. So if you could shorten that, put in VR and let them do that at home, then you’ve just saved a couple of days of running around.

Richard: Exactly. And that’s actually something we’ve done a bit with Purina in the US– that’s Purina, the pet food company. They’ve done some– a lot of work around. They’re called VR factory tours. So putting employees or customers into their different factories, having them navigate through it, interact with some things, learn a lot about them. From an employees side, sometimes it’s people that support these guys, maybe from the IT perspective or HR perspective day-to-day. The factory employees that you have to have access to the different tools and things like this. They never actually been to the factory sometimes. It sounds kind of crazy, but when you’re working company as big as ours, that does happen. So just being able to put them in a VR experience — and for this they use the Quest in order to do that, something that they can buy a couple of, carry around, bring them around the office, things like this — and put them to that tour, it gets a lot of tangible feedback. But at the end of the day, it’s a high quality 360 video that has some interactivity that’s been laced throughout it. But it is really effective content, it’s really good and it incites emotion and it gets the point across. So–

Alan: We don’t need to overcomplicate things. Actually, you’ve said that twice now. The 360 video stuff works, and it’s simple, and it doesn’t need to be crazy complex. And then also with the stuff in the AR quick look stuff, it doesn’t need to be super complicated. You don’t need to have a multi exploded view of the product. You just need to see it on the shelf in the right size and say, “OK, that doesn’t fit.”

Richard: Exactly. I mean, there’s always a time and a place for the more enriched complex experiences for sure. But yeah, often what consumers want to see, they want to see, “Hey, buying a new coffee machine. Is it going to fit in my counter? Am I going to like how it looks?” Things like this. It’s a very quick five to six second decision, whether or not they’re going to move forward.

Alan: How are you guys using this kind of on the enterprise side and in your factories? Are you using AR at all on the factory floor?

Richard: Absolutely. And where we look at it a bit differently from what I was discussing before is– so, if we take a step back, look at Nestlé factories, we have, I think, around 400 — don’t hold me to this number — I think it’s 418 factories around the world, 300,000 employees. Whether or not my team exists here in Barcelona, somebody has used augmented/virtual reality in this organization before. So a lot of what we’re doing when it was coming to the enterprise side initially was trying to understand who’s been doing what, what ongoing experiences have been happening, who’re the evangelists in this company that have actually tangible hands-on experience of having it at the factory level. And when we did this kind of analysis, we did see over the past half a decade or so, we’ve had over 30 different experiments with different form factors like headsets, whether they’re mixed reality or smartglasses, different vendors out there. I sometimes laugh. If I go to AWE and I meet all the different enterprise vendors there, everyone’s going to tell me they’ve worked with us before, even though it’s the first time I’ve met them. And I say, “I’m sure you have.” Because there’s a lot of people out there that are interested in this, whether they’re testing it on a small scale or they want to expand. So we had to get a good look at that first and what we–

Alan: How did you collect that?

Richard: So the way Nestlé works, as well as we have people on the factory floor, that are a part of what we call our technical production organization. They have some kind of co-pilots in these factory areas, part of our R&D organization, specifically an organization called PTC, which is Product Technology Center. So they often try out new digital technologies in these spaces to see if they’re viable for factory floors. So what we’re finding is often, yeah, they were testing a lot of this stuff out. We had to do a lot of internal networking. And we actually also implemented across the organization, not just augmented/virtual reality, it could be AI, digital twin, robotics, things like this. We’ve kind of implemented the internal what we call an innovation repository, a space where people can submit the experiments they’re working on, what they’re trying to get out of it, where they are in their experiment. Just to give exposure to other parts of the organization. Because often where you’re seeing, say, you take remote assistance in a factory, we’re probably repeating the same experiment 15 different times in 15 different locations around the world. But these teams weren’t talking to each other. So just getting an exposure to different teams to say, hey, you want to do this? These five teams also did this. This is their success. This is their failures. At least build off of that.

Alan: Yeah, of course, that makes way more sense than being stuck in pilot and POC purgatory forever in every division. I actually have a question about the innovation repository. How do you standardize it, so that it’s easy for somebody to look at the results? Like do you have a standard form or–?

Richard: Yeah. So we use a platform called Startup Flow for that, that allows us to kind of have a good view–

Alan: What’s it called?

Richard: Startup Flow. One we started using last year. But it gives us a good kind of holistic view over a lot of different things that are going on. And there was a campaign to say, “Hey guys, put your stuff in here. Let’s not reinvent the wheel.” Sometimes it’s a difficult conversation because like I said before, this is an inherently cool technology. And sometimes you don’t want to be told you can’t do it because somebody else has done it before. We did get a lot of people to understand the inherent value of that, and it’s not to say that “We’ve done your use because before we’re not going to do it again.” More often, I think the conversation going into this year and next year is once you start to scale this across all the organization of people that raise their hands, where again, you can find a lot of tangible value added back. This just proves the use cases there and that it’s going to provide us a lot of different value.

Alan: I was just looking at the Startup Flow webpage. What a great tool. Wow, super cool. Measuring the ecosystem of startups and new technologies and then measuring the KPI as metrics on one single dashboard. That’s awesome! That’s value. Anybody who’s listening, startupflow.io. I mean, that’s worth the value of listening to this podcast in itself.

Richard: Yeah, it’s a good tool or something. Yeah. We’re using a lot in our organization.

Alan: What other ways are you using this technology? Are you using it for training?

Richard: Absolutely for training. So one example being a couple of weeks ago in a factory here in Spain, in Girona, and they’re kind of mended them in a lot of different factories around the world to follow what is kind of TPM certification, which– it’s not my forte, this area, but I believe it’s for Total Production Maintenance. Or Management. It’s essentially certification for being kind of a best in practice factory. We have zero defects across the board. And one of the areas, one of the steps into getting to there is that they have to have an on-site, say, training center where employees can go and self-train themselves in different areas, whether it’s safety areas for the here’s what you do in a confined quarters. Here’s what you do when there is a explosive situation like a gas leak. If you’re in a height situation, where you’re up somewhere high, it’s not secure. They had to have this kind of facility onsite, that people can go to and learn as much about that use case as they can, and train themselves up. Now, the factory that we’re talking about is one of the more advanced ones in the world, it’s coffee factory. It produces a lot of the same Nescafe, Nescafe Dolce Gusto for good parts of the world. But going back to we have a ton of factories, right over 400. Not every factory has the ability to build a huge training center on-site. They need to find creative ways to essentially get this type of material out there. So using something like virtual reality for that, where to put them in these scenarios now where the form factors are. We look at, say, stuff like the Oculus Quest, where you can just have the headset, controllers, the certain amount of space around you. You can pop into a training session and it’s something that you can have a lot of. You don’t have to set up a lot of different gaming PCs in order to enable that. That’s something that brings a lot of value. You don’t need as much space in order to do that, and to have that type of trainings on-site. That and going through a height training or explosive training in VR, probably it looks much more of a emotional and personal impact to you, like a heightened sense of receiving that content than watching a video or reading a PowerPoint or something like this. It’s certainly something that you could take a look and say it’s a much more effective way of learning that content or material, retaining that information over time.

Alan: Are you guys measuring that? Do you have– is it anecdotal? Are you measuring KPIs against that?

Richard: Right now, we’re still starting out that use case as well. It’s gonna be something that we’re building Q1, Q2 next year. We have done some other safety training in the US with their waters division. That’s also looking at it from that scenario, like pointing out– different scenarios where on the factory floor you have to point out different safety violations, things like this. I believe they are making the KPIs more on how much has it reduced the number of safety infractions or reported infractions in the factory over time, of the amount of people they have through the training versus the amount of reports that they get. So it’s something that it’s still emerging for us a bit, but we see a lot of big potential. And I think 2020 is where we’re going to be looking at it a lot from scale.

Alan: And now, is this something that– again, are you working with vendors there or are you trying to do it in-house?

Richard: Mostly, again, with vendors. And for us, we’re testing and learning with a few different ones, but certainly it’s something that we’re keeping an eye on going into next year. And I think just from the point of vendors, too, I should make a note. As for a lot of these scenarios, we do– let’s say we have global vendors that we love to work with, but we’re always constantly working with different startups in the different communities, because for technologies like this, everything is changing every three to six months. Companies are rising, falling, pivoting, being bought, picked up. So we–

Alan: Yep.

Richard: Yeah. Certainly, we’re in a scenario where we try to work with as many people as possible. The procurement team probably won’t like me saying that. But we do try to. [chuckles]

Alan: One of the problems we’ve been trying to solve is, how do you disrupt an industry constantly and consistently disrupting itself? And so what we’ve come up with is we’re working on a platform marketplace for training and learning technologies. Because — like you realized — companies are coming and going. Technologies are being invented and displaced all the time. So rather than try to invent all of the different technologies and try to keep on top of it, we’re building the platform that synchronizes with the CMS, it synchronizes with the elements that walks the customers through that, and keeps them always on the most cutting edge platform across whatever device happens to be the hottest thing of the year. And so that’s what we’re doing on a per user basis. Then you can just say, OK, we’re gonna use VR and AR across our whole enterprise. And we now have x number of employees doing it, x number of headsets. And then it’s an ongoing thing and you have access to all of the startups that have been pre-vetted, rather than try to go through this selection period. As you know, it’s challenging, right?

Richard: Absolutely, no. That’s something I would love to take a look at that. [laughs] Later, after when it comes out. It’s certainly–

Alan: We’ll talk offline.

Richard: There you go. There you go.

Alan: I didn’t want to highjack this podcast. Like, man, this is exactly the problem we’ve been trying to solve is, how do you how do you overcome the point of–technology is changing, and companies are being bought and sold, and everything. And look, from our standpoint, we’ve started our own accelerator. You know, you’re part of it.

Richard: Mm-hm.

Alan: And having this accelerator to find and identify this talent, make sure that they are able to deliver at the level of the customer’s requirements. Like, you guys have 400 factories. That is a different conversation than one company that has one factory.

Richard: Exactly.

Alan: And maybe wants one training exposure. And then the other side of it is being a managed marketplace. What are the things that you guys are creating in safety? Let’s say, for example, a factory or warehouse for fire safety, or height safety, or driving. What can then be reused and resold to other companies? Nestlé is different because you have 400 factories. What can be then packaged and sold to all the factories? But also what can be generisized and resold, so that everybody can be safer at work?

Richard: I think, yeah, for at least my perspective coming up with a lot of this content, it should be something that at the end of the day, looking at proprietary I don’t think is the right way to do it. If it’s for something that’s safety, that’s going to address scenarios that you’ll find in a lot of different factors — majority of factories — it’s something that if we could help build the ecosystem of understanding on that and it’s something that other, CPGs or fast moving consumer good companies can leverage as well, I think we’re OK helping pave the way for that. I am passionate about this area, and I think all boats need to rise.

Alan: I couldn’t agree with you more. And the interesting thing about this industry right now — and it may change, because as the industry goes from nascent to prolific, the gloves come off, so to speak — but so far, every single person in this industry has been exactly that mindset. How do we all work together? Because this is not a net sum game. More wealth will be created in the world in the next 10 years than all of previous human history. So we’re not scrambling to try to– “I get 10 bucks and you have to lose 10 bucks.” This is not the world we live in anymore.

Richard: Yeah, agreed.

Alan: You have a unique view that most people will never have. You are kind of running VR and AR for one of the largest companies in the planet, across all sorts of different ways, from marketing and sales, to enterprise and training. You really are the poster board for VR and AR in an enterprise, in a company. So what problem in the world do you want to see solved using XR technologies?

Richard: Thank you, no pressure. [chuckles] There’s two that come to mind. So one that may be more unique to us is when it comes to the food industry or the TP industry as well. Nestlé has made a 2025 commitment to make all their packaging sustainable, 100 per cent recyclable and things like this. If XR — through augmented reality or virtual reality to help sell a story, things like this — can help around helping people recycle. Scanning more about, say, a plastic bottle. Getting more information about it, directing into the nearest recycling center, gamifying it somehow to reward people for doing that. I think that’s something as powerful. And using the reach that we have, we have a billion individual packages that we generate every day, to get the communication out on that and tackle a problem that, frankly, we help generate.

Alan: The Nestlé blockchain gamification recycling game. Ooh!

Richard: There you go. Yes. This is something along those lines. Of course, yes. So I think having XR tackle that or be a piece in the puzzle for doing that, I think would be something that may be more uniquely to us and more powerful more across the industry, I think. Helping with the massive upskilling of the workforce, whether it’s robotics, removing repeatable tasks. That example of the factory that we’re there in Girona. They’re using cobots, they’re using different automotive forklifts, things like this. And often the feedback is what happens to the work versus this. And you get mixed tags sometimes, but they’re like, this frees them up for doing other tasks that we need done or we freed themselves up to doing more advanced things that we want to do. I think using AR/VR/XR across the board to help skill current workers or train new workers on next level skills that they need to do, I think, is also something that’s going to be unique to this medium, this industry, where this will provide a lot of tangible value as a kind of learning, training or computing platform of the future.

Alan: Well, I’d have to say that hats off to you for those amazing opportunities, because telling people– well, first of all, Nestlé– hats off to Nestlé for recognizing that they’re causing the problem — or part of it — and saying by 2025, we’re going to solve the problem, and at least fix it. Because this is a global problem, we need to fix it. And we all need to come together. And it starts with big companies who can do it. And Nestlé’s in a position to do that as well. So hats off to you guys for for taking those initiatives, and really excited to see where that goes. And if anything, if we can help in any way, I’m happy to do so.

Richard: Absolutely.

Alan: Thank you so much for joining me, man. This has been amazing.

Alan: Welcome to the XR for Business Podcast with your host, Alan Smithson. Today, I’ve got an amazing guest, TJ Vitolo. He is the director and head of XR Technology Development at Verizon. Today, he leads the commercial strategy and product execution behind Verizon’s VR, AR and 360 organization environment. Recently, TJ and his team launched AR Designer, the world’s first streaming-based AR tool kit that allows brands and developers to quickly and easily create augmented reality experiences, with no technical expertise. You can visit Verizon.com or envrmnt.com. I want to welcome TJ to the show. Welcome.

TJ: Hey, thanks for having me, Alan.

Alan: Oh, it’s my absolute pleasure. I’m so excited to have you on the show. This is like– all the things you guys are doing, from working with the accessibility team at Cornell Tech, to your acquisition of Riot, to working with the Sacramento Kings, Yahoo! News. There is so much going on at Verizon. You want to just give us a high level summary of what you do, and what the plan is at Verizon for introducing 5G and XR?

TJ: It’s quite dynamic here. You know, the VR space is ever evolving. Teams that do a number of things within VR here. But specifically you mentioned Riot. Between our team and Riot, we manage both of the content and creative end of XR, and that’s Riot. And our team manages the technical– technology side of virtual reality. So really, my team is focused on building tools and enablers, systems, platforms on the 5G network, sort of the underlying side of XR, to help accelerate and grow the adoption of the technology. On the other side, Riot’s all about the product and the creative storytelling around VR, which really brings these things to life for people.

Alan: So you’ve got both the technical side and then the creative. And this is something that I’ve been harping on with customers as well, and just the industry at large: that this industry is no longer about just making products. And you look at the VC investments and they’re investing in platforms and products, but you still need people to create the content. And I think you guys have found that balance with Riot. What do you see as kind of the future of how we create this content, is it going to be user generated versus studio content, or a mixture of both?

TJ: It’s going to be a mixture of both. User generation is quite difficult today. One of the products you mentioned, we launched was AR Designer. And really the foundation for that was to put the power of augmented reality and virtual reality into the hands of even the most common user of technology. We built this platform initially with the mindset that schoolteachers– and not by any means that they’re simpletons, but the fact of the matter is they’re teaching students, young children, and they’ve got to have a very effective way to do that, efficient way to do that. And so when we were building this tool, we baseline on children as the audience, schoolteachers as the user of the tool, to produce something that’s really effective. So I think you’re going to see as VR/AR becomes more ubiquitous, access is going to be much greater, and more in the hands of users. At the end of the day, there’s always going to be the community outside of the content or the UGC community producing content. And I think those are the folks who are going to synthesize really compelling, powerful stories to users to grow that adoption. So I think you’re seeing a lot with UGC, where it sort of leads the way to broader, more institutional creation of content, but it could very much see a [inaudible].

So walk me through your platform that you guys have built. Was it in the market already or– walk us through that.

It was in the market. So we pulled back on that platform specifically because we had changed the strategy of our team. Initially, I was brought into the organization around commercialization for Envrmnt — which is Verizon’s XR organization — and we wanted to generate revenue off of the XR ecosystem. And there’s a fair amount of money out there to be made. But at the end of the day is when we started to launch our commercial products, we started to build up and prepare for our 5G launch strategy. And the task of my engineering team was to go down a few different levels in the technology stack, and start building platform enablers into the 5G network that will drive the adoption acceleration growth of AR/VR. So the tool we still actually use today, we’ve got over 10,000 users internally in Verizon that use it across our training organizations, our HRO organizations, our network operations organizations. So it’s been very successful. There is still a plan to commercialize that in the future, but the idea was that we wanted to pin it against our 5G launch, to show what 5G can do for the XR space. That’s where I’m super excited, it’s about what 5G specifically does for XR technology moving forward.

Alan: Absolutely, one of the videos that I watched of you was a retail demo, where you took a phone — just a regular phone with 5G — and you pointed at some products on the shelf, and it not only recognized one product and gave you like that standard AR image recognition and showed some overlay information, but it recognized all the products at once. And I thought that was really a great way of showing how 5G will enable so much more than just simple AR that we’re used to now using our phones. And then as that moves to glasses, you’ll be able to walk down and say, “I’m on a keto diet.” and walk down the aisles and anything that’s keto will show up in green. I think that’s where it’s going. And that demo was really incredible.

TJ: Thank you. Yeah, I think AR, from a mobile standpoint, has been put in this bubble, because of 4G. And that’s one of the examples of what 5G is going to do to AR. It’s going to make it highly functional, highly useful, and a lot more entertaining in that space. Computer vision, graphics rendering. Those are the two sort of fundamental underlying technologies between virtual reality and augmented reality. And what we did there is that we expanded the capability of computer vision by offloading what typically is done on a mobile device over the 5G network — so extreme amount of bandwidth, extremely low latency — to a network node that sits within our network, that is very high powered from a processing standpoint. It allows us to offload all of that computer vision information and provide a response back in real time. This is something only possible over 5G and only possible with our net edge network. Fundamentally, what this does is, it ends the current limitations of augmented reality, blows them out of the water, in terms of their limitations.

Alan: You know, you’re taking all the compute power off the device, and putting it into the edge. You’ve been recognized at the Edge Awards already, winning Best Contribution to Edge Computing for R&D and then Greatest Commercial Potential for Edge Concept. So you guys are clearly leading the way for this. One of the things I saw last week in Wired was startups building a new chip. It’s an artificial intelligence chip, and it’s the size of an iPad. Rather than everybody’s trying to make them smaller and smaller, these guys went the opposite way and made a huge chip, and it can do trillions and trillions of calculations. But obviously you can’t put a chip the size of an iPad in your phone. But having the ability to offload that to the cloud and have the processing power when you need it, where you need it, but only offloaded into the cloud was really incredibly powerful for not only rendering, but also capturing the data that’s around you. A lot of people don’t realize that as much data as you’re pushing from the cloud down to the graphics processing and all that, you’re also capturing data from point cloud data using RGB cameras, or all the phones will start to have infrared camera sensors now. So being able to capture that data, send it to cloud, make sense of it, all within milliseconds, I think is really going to be a game changer for VR and AR.

TJ: It’s a massive amount of data, too. If you look at all those different sensors on those devices, it’s crazy if you look at the future of volumetric video. Well informed on Microsoft came out and said, hey, their studio does two terabytes a minute of data capture.

Alan: Yeah, the Metastage.

TJ: With a handful of cameras and that sort of tech, texture, and depth, and other sensors. But you’re right, the thing that’s going to close the gap between really powerful technology in your hands is extremely low latent, high-bandwidth network connected to computer– very high power, scalable computer network. And it’s not just AR/VR, right? It’s a lot of things, although I’m focused on AR/VR. We are now going to be putting supercomputers in everybody’s hands.

Alan: So, what 5G XR use case– your focus is in XR. If you take 5G to the nth degree and 5G and edge computing, you’ve got autonomous vehicles, you’ve got drones, you’ve got– there’s all sorts of ways. But let’s focus on 5G and XR for a second. What use cases do you guys as Verizon see as happening first? I mean, we’re already seeing it in enterprise, where they’re using heads-up displays to help field and service workers, and machine workers, factory workers repair things, and see-what-I-see, and all of these types of things. But what do you guys– what’s your roadmap for the next 10 years, let’s say?

TJ: Yeah, it’s an interesting question. So our organization fundamentally is working on the platform and services that will enable very thin, lightweight augmented reality or mixed reality glasses. So I think that’s one big step, is to move away from the clunky form factor to something that’s super sleek, and super powerful. So how can I have a pair of standard Ray-Bans look and act like a Hololens times 50?

Alan: [laughs] Oh my god, that’s a huge quote. [laughs] Think about that. “How do I make a pair of Ray-Bans look and act like a Hololens times 50?” Oh man.

TJ: That’s the platform that we’re building, right? That’s the vision. Now, on top of that, once you do that, the world sort of your oyster in terms of what the use cases are. And enterprise is definitely the first entry point into that, because we will go through this evolutionary process with hardware for glasses, that it’s not just the compute– and we’re solving compute problems, but you do have to solve the display problem, and you have to solve a couple other things. But ultimately, at the end of the day, reduce battery power on that device, reduce battery size, reduce battery power by reducing compute on that device. And then ultimately, at the end of the day, through that step by step process, you get something in. But in the meantime, you’re going to get that adoption in the enterprise space. And so we look at — from a use case standpoint within our enterprise organization — things like worker safety, and obviously things around efficiency and improvements of workers within environments. And specifically in the industrial space right now, which seems to be where a lot of the opportunity sits, at least from companies that have been coming to us, interested in the space. There’s only so much that you can do to [inaudible] certain verticals within a market to adopt a technology. And a lot of them are a lot more forward thinking than others. So we start there.

Alan: It’s interesting that you say that, because some of the industries that you actually think would be the least technical — mining, for example, they haven’t changed in 100 years — they were one of the first people to jump on this technology, because they can use it so quickly and so easily in manufacturing. Old school businesses that you wouldn’t think would be technologically advanced are just making these leaps and bounds now, it’s amazing to watch.

TJ: It’s amazing and it’s amazing cultural thing to watch, in my view. It’s like you’d think that these– some of these industries are so advanced and there’s so much money, but they have old school practices. And then you look at other ones who have been forced to innovate and change their culture and adopt in these nascent spaces. And you scratch your head and say, “Wow, that’s really interesting.” And so it kind of throws you off-guard. But, you know, that’s where you have to go. You have to go where the people have a sense of urgency and demand around it. And then you make it happen on that front.

Alan: Interesting. I guess what I’m trying to get at is, what are the 5G XR use cases that Verizon thinks — or you think — will make the best use of the new networks, of the new 5G capabilities?

TJ: We’re looking at a few with the underlying premise that you’re trying to merge the physical and digital worlds together. And so retail was– is a very big area for us, both front office and back office, or consumer focus and then back office. So if we’re looking at the consumer front for a second, we’re looking at the really interesting and I think most people can relate to use case. Here’s where I go into a retail store, and then I’m always on my phone looking at ratings, reviews, pricing information, and other things with respect to those physical products that are on the shelf. And I spend a lot more time on my phone than I actually do perusing and browsing the stuff on the shelf. And so really what we want to do is merge that physical and digital divide, by having a pair of mixed reality glasses that as you’re walking down that store — using a 5G powered headset — you’re literally taking in all the information within your field of view about a set of products and services. So now I’m standing in front of a set of consumer electronics devices, and I want to know which ones are the best rated, which one has the best value. All the stuff that’s typically online, now I can have all that stuff instantly overlaid on top of those products, whether it be makeup or electronics, or even clothing. And then take that off the rack and go and purchase it. So that’s one of the retail experiences. Other has a safety component to it, the one that you saw us demo. I have a family. I spend an inordinate amount of time at the grocery store looking at the backs of boxes, if they contain certain allergens for my family. Now I can tell my glasses to filter for products that are gluten-free, [inaudible], or kosher, whatever might be the case, then instantly everything within my field of view will light up based on those requirements.

Alan: Do you think that will be driven by computer vision picking up the boxes, or do you think they’ll be driven by companies, like the grocery stores — like Whole Foods, for example — submitting planograms, so it knows what store you’re in, the planogram knows where the boxes are, will it be combination of both?

TJ: I think it’ll be a combination of both, because you’ve seen it in the QR space. You’ve seen stores do it themselves, you’ve seen third parties do it themselves. Most of that information is actually publicly available, those databases. And so third parties can actually easily construct that software, but I think it’ll be dependent on obviously the training and the learning of that object — a lot of those imagery is publicly available — and then blend it with the publicly available information for those products.

Alan: I know Google and Amazon and pretty much everybody’s working on computer vision for products. I want to point my phone at a pair of shoes and say, “What are those shoes?” And right now we’ve got a device in our hands that is pretty powerful and can do a lot of things right now. What are some of the things that we can do right now with our phones, that you’re seeing are emerging as killer use cases in this technology?

TJ: That’s a great question. Like I said, I think that going back to sort of the chokehold that current existing networks placed on augmented reality, there’s a couple areas where I see a big amount of potential for a mobile device. And I think a lot of that fits around potentially markets where you have growing economies. You look at APAC and other areas around the world, where they don’t have access to certain types of [inaudible] medical facilities. So one of the things that I saw that was really interesting, is how you could use a mobile phone and computer vision help diagnose patients, by using computer vision and artificial intelligence to look for signs that you wouldn’t necessarily be trained or have access to. One of the interesting use cases I saw was to help support a potential phlebotomist out in the field, where they’re using a phone to detect veins, so they don’t mispuncture a vein in the arm. They could do it right the first time, and completely limit the opportunity for infection.

Alan: I think that’s the AccuVein system, isn’t it?

TJ: Mm-hm, mm-hm.

Alan: Yeah, it’s really great.

TJ: And I think that’s transformative on a world basis, is that anytime you use technology to add intelligence to give access to underserved or underprivileged or markets that just don’t have the ability to. So we look at that space, too. We look at– we talked about accessibility, I think, a little bit. We look very much into that space also, as a way to just improve in general. And I think we share a very similar feeling. It’s about improving quality of life. It’s not about introducing one more thing, one more piece of noise into the environment. How can we help each other sort through daily life, whether it be from a medical standpoint or being inundated with information? How do we make those things simple?

Alan: Absolutely. And as more and more people move into urbanized areas, there’s that culture shift from living in the country to living in a city and– offline, we were talking about taking our kids camping and stuff. My 11-year-old daughter made this huge billboard poster and put it by the fire. It said “No cell phones by the campfire.” And I think we’re really getting to the point where the technology is pervasive. It’s everywhere we are. My kids sit on the couch and watch TV with their phone in their hands. And sometimes they’ve got an iPad and a phone. It’s nuts. I don’t even know how they focus. And the other day, my daughter was watching a show, and she had the show in a small window and she had a game that was related to the show in the big window. So she had like picture-in-picture, but the show wasn’t the dominant part of it. And I thought that was really interesting, how youth are starting to use these technologies. And we’ve done a lot of work on delivering people entertainment content. Netflix is using AI algorithms to give people better movies to watch. Amazon’s giving you better algorithms to help you purchase better. What I think we need to do is harness those technologies and give kids better ways to learn. And I think these technologies can really catapult that. What are your thoughts around VR, AR, AI in education and training?

TJ: Yeah, we we touched on this a little bit. And I think the impact is absolutely [inaudible] that space, specifically with convergence of people either domestically or internationally from an education standpoint. I think one of the things that you might have seen, our team produces a virtual reality platform called Operation Convergent Response. And the idea behind that was to aggregate or bring together a number of people with different backgrounds and skillsets into a single virtual environment — or a war room, essentially — so that they can help support a natural disaster. So if there was an earthquake, bring an earthquake expert, someone who’s an expert in fire, someone who’s an expert in weather — or whatever might be the case — to help quickly triage sort of a situation, without bringing them into a physical location. That’s immense also. You can have highly custom education armaments, where you’re bringing in specialists in different areas, that hold all under sort of one umbrella. Let’s take VR/AR. Someone interested in VR/AR, you could bring in an expert in virtual reality, expert in augmented reality, expert in computer vision, and then you can coalesce and bring all together for the students. Very specific interests in that space, into that area, into that arena. And with virtual reality, you can create a 100,000 square foot space in a 1,000 square space. You put 75 TV’s on the wall, you put one TV on the wall–

Alan: Yeah, it’s great.

TJ: –you can literally create the most dynamic environment that works for those students. And touching on artificial intelligence for a sec, one of the most amazing things I think that comes out of virtual reality training — and also in the medical space and other areas — is the ability for analytics platforms to look at every single piece of interaction that’s going on in that space. What does that yield at the end of the day, it yields a very efficient and effective way to help you understand where you’re improving, where you’re falling behind. And it’s amazing because in essence, in a typical education environment, you’ve got to rely on a teacher — or a boss, as might be the case — to provide that feedback, and you can’t do that for 30 students in a classroom. But if you’ve got an analytics platform that’s in each one of those individual students on a case-by-case basis, you can then custom produce areas in a report where they should be improving and moving forward. And the amount of advancement we make is just because of that little improvement. I think it’s absolutely massive.

Alan: You nailed it. By changing the way we teach and using exponential technologies. It’s not even a 10x improvement. It’s a 100x improvement, a 1,000x improvement because we’re not even scratching the surface of things like how people learn or when they learn. I learn better, maybe from 10 AM to 11 AM. That’s my maximum capacity, so all the hard stuff maybe I learned then, and maybe somebody else learns in the evening. Maybe by using galvanic response or measuring your heart rate or your biometrics, you can then deliver content that is highly personalized, highly contextualized and delivers it at the time of maximum absorption or retention. And we’re already seeing across the board 20 to 100 percent improvements in retention rates in training. One of the things that you guys did was use VR for hostage and robbery training. How did that come about?

TJ: It was an interesting one. It was actually during our early commercial stages, we were looking at different verticals in areas where we can use technology to obviously improve awareness and other things that happen in our retail environments. It wasn’t specifically around hostages, more like store robberies, which don’t happen often. But obviously, when they do, how do you train someone in a traditional environment to address a burglary situation, especially with someone being held at gunpoint? So we use 360 video. We use actors and we pull together a very immersive experience around both an armed robbery and also identifying risks for theft by immersing them in a 360 world. We did monitor different bio signs. We also use an analytics platform that allows us to do gaze tracking and other things. So you saw exactly where they were looking. What they were interested in. Were they looking in the right spots? Were they looking in the wrong spots? And we were able to produce a relatively detailed report based on that, and what that allowed us to do is it allowed us to understand, as much as you could in a replicated environment, what is the normal response for a retail rep when these situations occur? And then it allowed us to cater a training program around that, that helped better prepare them for a situation. So we use it as a way to gather analytics, which then yielded a ton of information for us that we could never capture in a — even if you did this in a real-life scenario and you brought in some actors and you brought in a rep and you them in– you wouldn’t be able to understand where they were looking, how they were acting, how they were responding, without this type of analytics in this virtual environment. So because of that, we felt like we were able to compose a training module that was much more advanced than what was in the market today.

Alan: How do you measure the success of that? What are the KPIs that you guys were looking for?

TJ: That’s a great question. And unfortunately, we provided a lot of the technical support and background for that while our learning development team managed the KPIs. But I think some of the key KPIs that we used was sort of this post mortem experience where we then place them back into into that experience with their training to see where there are improvements. And specifically, we use the gaze data, the biometric data, to then see how they respond in that situation. And I don’t know what the specific performance improvements were, but I know they were relatively more significant. That’s sort of what’s baseline for typical training. Unfortunately, I don’t have that data, but the process, the methodology, was to re-immerse them back into that situation with the tools that they now have. Again, because it’s case-by-case and see where they were looking, how they are acting, how they’re responding, so on and so forth.

Alan: I want to shift away from training, because there’s so much to unpack here in the long term of this technology. 5G is really going to enable a lot. And one of the things that we have to overcome is some of the challenges. What are some of the challenges that you see — or Verizon as a company sees — as standing in the way of the broad adoption of 5G-powered XR, beyond cheaper headsets and 5G coverage? But what do you see as the broader challenges around adoption?

TJ: I think adoption is dependent on establishing a community that understands the technology, in order to build on that. And that is the other half of our 5G labs. I own the development side. We also have a 5G lab– multiple 5G labs, spread across the country which provide developers and enterprises access to this technology, so they can understand it. So education is hugely critical. We are very immersed in the technical side of things. So we’ve won those Edge awards, very technical. And the work we do, while deeply technical, has to be translated to a common level. And I think our biggest hurdle and challenge is making that consumable to the end user. And we are solving that through our 5G labs. We are providing developers with training and access to 5G networks, providing enterprises with a full view into the capability. So as much as we’re having this conversation here, any CTO or CIO or even CEO listening, visit our 5G labs. You’ll get a full view of what we’re doing and how it can apply to your business. There are so many companies across so many verticals that it really helps them understand and inspire what they what they could do with the technology.

Alan: It’s interesting that you guys created these 5G labs with the purpose of showing what the technology can do. One of the reasons we actually started XR Ignite was the same thing. We kept seeing all these amazing startups coming up with crazy, amazing ideas on how to use XR and AI, but the they were missing the business acumen to be able to take those technologies and bring them to a commercialized state. We formed XR Ignite to kind of help bridge that gap between corporations and startups. And it sounds like you guys are doing the same. Sounds like there’s an interesting fit there. We’ll talk offline and see if we can collaborate.

TJ: Yeah, no, absolutely. I think there’s there’s great opportunity for anyone looking and interested in it.

Alan: So what is the most important thing that businesses can start to do now to leverage the power of XR, and AI, and 5G? What can they start doing immediately to reap the benefits?

TJ: Yeah, I think any company should — just like we do here — is to assign someone from the strategy side of the business to either bring someone in or to do their own objective (and to some extent, subjective) view of collection of information. There’s so much data out there. There’s so much information out there. You know, the stuff that I’m talking about is very topical in the sense that this is stuff that you and I have access to. And we’re very immersed in this space. Obviously, we know relatively well, but anyone in any space could find the same amount of information. I work at a very deep technical level, which obviously makes not much sense to businesses until we translate that into a business function at the end of the day. But one or two people in an organization can compile some really compelling amount of data and information that exists out there, to really help transform businesses with this technology. So I think it’s just that first step that you need to take to say AR, VR; what is this about? Right? What does this mean to my business? And I think they’ll be surprised.

Alan: We actually started MetaVRse as a consulting firm to help businesses understand how to use this technology, because our long-term vision was always education. And so we’ve kind of morphed into consulting on how to use this technology specifically for education, training, learning modules and stuff like that. But with XR Ignite, it’s pretty broad. There’s so many companies out there building such great tech and everybody is chomping at the bit to do start leveraging 5G. And I had a meeting a couple weeks ago and I got to see the new Samsung s10 5G phone, and it was the first time I’d ever held a 5G phone in my hand and it kind of felt like this new renaissance of technology is coming, and it’s going to come as a tidal wave, because it’s been years that people have been working on it. I don’t know, Verizon’s probably working on this for a decade. So it’s coming and it’s going to come really fast for people. What can consumers do to prepare for that? Because I think by having a 5G phone is great. It’s faster, whatever. But really, what can consumers expect from that?

TJ: If you look at where we were with 4G and sort of this scale and ubiquity of 4G were in that same phase. — and not just in this scale, but also in sort of the advancement of technology — I think one of the things… so just sort of prefacing this, one of the things that is interesting is that the iPhone didn’t release a 4G iPhone until about a year and a half later. And I think once the network launched, I think part of that is because there are ramp ups to this technology as it gets exposed and becomes more accessible to developers, they could start building experiences on top of that, that really validates the value proposition of 5G. As it stands right now, the biggest value proposition of 5G is just the ability to download an immense amount of content in a quick amount of time. Right? So I want to download entire season The Sopranos through HBO Go, or whatever might be the case, before I’m about to hop on a plane or I’m going to make a split second decision. You know, I don’t have to wait 10, 15, 20 minutes to do that. I can literally do that within 30 seconds or less.

Alan: That’s insane.

TJ: It really makes on demand “on demand,” right? It used to be that you had to plan some stuff, or– one of the great things, I have got music service and unfortunately where I am down at the shore on the beach, I don’t have access to — because I’m pretty remote — to that network. And so I want to be able to download an entire alternative 90s collection of music of 10,000 songs in…a minute? Less than that?

Alan: OK. I got to just… what the hell, man? I used to be a DJ for 20 years and I remember going to the record store and you’d buy a record. Then I had a collection of books of CDs, and I remember when my daughter was about 10 and I gave her my CD collection, and she looked at me, she’s like, “what do I need that for? It all fits in my iPod.” And now we’re talking about downloading entire genre of music in seconds.

TJ: It’s quite crazy. Again, that’s just scratching the surface of 5G. Beyond that, there are a lot of other things that we foresee with the implementation of the Edge network that we talked about and providing access to developers. One of the things that I did wanted to touch on is sort of our last piece a minute ago was that developers, the XR space is still nascent enough that if you’re a business, their may [be]– or likely isn’t — a solution for your business today. And so I’d encourage businesses to go out there, understand the technology and build their own solutions, because half of our practice, going back to our commercial period, was a pro services organization and we were just all ears. We would listen to what companies would come to us with challenges and then we would solve those problems for those businesses. And one of the benefits of being Verizon, a massive company that we are, is that we’ve got so much diversity. We’ve got retail. We have network operations, sales. Right? We can hear these challenges from all these organizations and build solutions that no developer would ever really think of to build. So I’d encourage businesses to go out there and not just look for answers to their problems, but work with folks that can solve those problems.

Alan: That was our entire business model, was to create some solutions, sit and listen to customers, figure what they wanted and build it for them and then develop those into products. Literally. That was our our entire business model, was just, listen! And that would create products, which it has.

TJ: This is an SAP, right? I know I need some sort of platform. I go to SAP and they’re like, I get inside a box software and just customize it. Then that’s answer for my business. That’s not the state of XR. And if you can jump on that as a business, I think you’ll have a major upper hand like we do here. So I’ll give you one example. We have a team that’s responsible for going out and working with community. You have them understand where we’re going to be putting 5G cell sites. And one of the things they do is they hire a graphic artist, a number of graphic artists, to go out and draw what a cell site would look like in a community and they would do it in Photoshop and other tools right there. And then they would bring it to the community board meetings. San Francisco would be the case and say, hey, these are the sites that we want to produce. Right? And this is what the tower is going to look like on this building or on this light pole, whatever might be the case. And it costs them on average just in this one section of the US, $5-million a year contract, graphic artists. So what we did, and what they asked us to do, is how do we solve this problem with augmented reality? Can we just take the poles that they would draw, import them as 3D models and then just drop them into the environment, capture that photo with our camera and submit that to them to the town planning meeting? We said, absolutely. The Verizon rep goes out there, they go to a corner, they pick the pole that they want. They change the color of the pole to match the environment. Right? And then they set it right on the plane of the ground. And then they capture a picture and they upload that picture for the board planning meeting. And literally, that application probably took a month to develop and saved in saving our business $5-million dollars a year just in this one area. That was not something that we’d ever imagined building. But we took that cost out of the business.

Alan: Amazing. Some of the cost savings that I’ve heard on different interviews on this podcast have been insane.

TJ: It’s an insane amount of money, for relatively simple implementation of the technology.

Alan: So with that, last question; what problem in the world do you want to see solved using XR technologies?

TJ: I want to see people’s lives become simpler. Everything that we build, from a technology standpoint, very complex in nature. I think the fundamental idea is to make people’s lives simpler and to make people’s lives safer. I think we’ve come to a point at technology just earns us so much that you companies out there that are now creating artificial digital clones of ourselves to manage the information overload that we have coming in, so we provide them with a set of rules and responsibilities that they could take on our behalf. And I don’t think that’s necessary, if you would, in a way that filters out the noise and makes everything [inaudible]. And I think what that is, is that that’s blending the digital and physical by… I don’t want to be constantly distracted by my cell phone when I’m camping. Right? Because there’s something interesting that I just saw, maybe out in the wild. Was that a deer? Was that whatever might be the case? With glasses, I think that information is so passive to you that we no longer have to be distracted by our device and we can tune in and tune out things as needed. And my view at the end of the day is, we strive for simplicity in our lives. And I think that’s what we want to go with this technology.

Alan: Oh, I love that. Striving for simplicity with our lives, using the most advanced technologies in the world. I don’t know what better way to wrap that up, but thank you so much. Thank you, everyone, for listening. If you want to learn more about the work that T.J. and his team are doing at Verizon, you can visit verizon.com, envrmnt.com, or verizon5glabs.com. I think those are the three places where everybody can get as much information as they want. Thank you again, TJ. This has been amazing.

TJ: Thanks, Alan. I look forward to talking to you soon.

Alan: Welcome to the XR for Business Podcast with your host, Alan Smithson. Today’s guest is Mohamed Rajani, responsible for VR and AR initiatives at Macy’s. Mohamed is part of the new Business Development and Innovation team at Macy’s, and is responsible for driving change through the development of new retail concepts and partnerships amidst an evolving retail landscape. “Mo” also leads Macy’s immersive technology initiatives, including VR and AR in furniture, which is removing key friction points for the customer, enabling an AR view in-room capabilities on the Macy’s mobile app. To learn more about the work he’s doing, you can visit macys.com.

Mohamed, welcome to the show.

Mohamed: Thank you. Thanks for having me, Alan. Happy to be here.

Alan: We had the opportunity to to have a few calls prior to Augmented World Expo. We were on a panel together, and you were talking about the amazing work that you’re doing at Macy’s. So let’s start unpacking that. Mo, tell us about what you guys are doing at Macy’s.

Mohamed: So just a little bit of context that our team does. Our team’s about two and half years old. I’ve been with the company for over eight years, across a variety of different functions. But about two and a half years ago, as a company, we decided to establish a dedicated team that’s purely focused on what’s new, what’s next. That’s focused on the emerging consumer landscape, the emerging technology landscape, and making sure that the Macy’s brand continues to be relevant not only today, but 10, 20, 30 years from now. So as a team, we’re purely focused on looking at new business models, new concepts, emerging technologies, but then really tying those to our strategic businesses. We want to make sure that any new innovation that we bring into the organization has a lasting impact. But more importantly, a meaningful impact that is actually moving the needle.

So if we think about from that context of how we ended up playing in virtual reality and augmented reality, in our business we have a strategic business fillers, and furniture is one of them. It is a business that is high touch, a high margin business, so it’s margin accretive, more profitable to the company, and it’s destination business for us. We’re top of mind for the customer when they’re thinking about furniture. And if you’ve had any experience in buying furniture, it is not a very easy process. It’s one of the few businesses that’s still overwhelmingly physical purchases. More business happens in-store than online, and by a higher margin. And part of it is just the friction involved in it. You don’t know how it’s going to look, how it’s going to fit. And it’s a business that we, as a company, need to fortify. It’s a business that if we want to remain relevant for the next five, 20 years, we want to make sure that we’re not only fortifying the business, but growing and capturing market share. So is that context, whereas we came across emerging technologies as part of our job, we were navigating the landscape and looking at what’s coming out.

This was 2016, into 2017. We started seeing virtual reality technologies, especially in the furniture space, and we started exploring and we wanted to make sure that there was a practical application to a business there. A couple of things that align. One was here is a technology that had a practical application and here is a business that was a strategic priority for the company. So our job was then to go out and figure out how to integrate the two. And so we did that first by launching a pilot in two stores in August of 2017 with a company called Marxent. And really the goal was to understand how this technology can apply to our business, but with two ultimate objectives. One was to drive employee adoption so our Macy’s colleagues and making sure they’re adopting the technology, and two is consumer adoption on the other end of it, making sure that our consumers are adopting an innovative but emerging technology. And we felt if we tackle these two goals, everything else will come together.

Alan: You’re talking about employee engagement or adoption. That is one of the most important things when you bring a new technology into a company. If people don’t use it, then it’s kind of useless. And I’ve heard some stories where a company will buy VR headsets and they just sit on the shelf. So how did you get your employees to use this? What were some of the techniques that you did, and what is the adoption rate now?

Mohamed: The ultimate goal– you’re right. In the past, we may have been guilty — just like a lot of other retailers — in bringing the technology either without a clear practical application or the execution is lacking for some of these basic parameters. So for us, it was critical that we had a comprehensive training program. We worked with our Marxent partners to really build a robust end-to-end training program that clearly outlined and communicated the benefits of the technology, the practical application of it, and what it means for our colleagues. If you’re in the furniture business, your ultimate goal is to drive sales. That’s how you’re evaluated. That’s how you’re commissioned. So it’s really to drive sales. And the idea for us was that if we were able to jump the hurdle and get our colleagues to adapt to this new technology, we knew that the upside was higher basket sizes and lower returns.

So the ultimate goal for us is to communicate with the colleagues, to say “Here is a technology that can not only help you drive higher meaningful paychecks or higher meaningful basket sizes, but also reduce returns,” which if you’re in the furniture business, you know the percentage of returns is not very high, but the cost of maintaining and managing those returns are as significant, as very burdensome as well. It was clearly outlining the benefits of the technology and the fact that we piloted in two stores and saw the results for ourselves. That allowed us to then take it to the balance of the organization and tell them, “Here are the benefits. We’ve done this before. This is what it looked like.” And that allowed us to drive really employee adoption. And that’s critical, because the consumer adoption cannot come if our colleagues don’t adopt the technology. So if we’re able to cross one hurdle, the other one becomes a lot easier, too.

Alan: Let’s talk numbers. You’ve seen some incredible uptake with this technology. You started with two stores. Talk to us about what you saw or what your original findings were in those two stores, because they’re almost unbelievable.

Mohamed: The first two stores eventually allowed us to make a decision that typically retailers of our size did not make: to scale something very, very quickly. So in the first two stores we launched in August of 2017 in Paramus, New Jersey, and in Miami, Dadeland. And we added our third location — our flagship location — Herald Square, a few months after that. But what we saw was staggering: in the initial pilot we saw our basket sizes increase by 60 percent. That’s 60.

Alan: Hold on. What?

Mohamed: Yeah.

Alan: Sorry. The basket size. Now, what does basket size mean?

Mohamed: The dollars for a transaction. So that includes number of items in the basket, and the average unit retail of each product. So the combination of that obviously is the basket size. And we saw the average dollar per transaction increased 60 percent for every sale that went through VR. Now, because–.

Alan: I don’t believe you.

Mohamed: [chuckles] Well, that’s exactly what everyone else said, but they had to see it for themselves. And when you go through the experience, you realize it is not anecdotal information. When you go through the experience, you realize that, yes, I can see how this would increase basket size, because I’m more confident in my purchase, so I’m less likely to return. But more importantly, I have now more confidence in how this is going to look. So you’re seeing more expensive items being purchased, because you’re more confident in your purchase.

Alan: Can you walk us through the experience?

Mohamed: Well, the experience starts way before you put on the headset. You walk into a furniture gallery, you’re met by our colleagues, our season trained colleagues who know the furniture business in and out. They’re probably one of the best in the industry. And when you walk into the stores, you’ll typically engage with a Macy’s colleague, who’ll walk you through our assortment, will tell you how it’s merchandised, and really ask questions around what you’re looking for. And typically, as someone who’s coming in to browse or exploring furniture, you have a sense of idea of what you’re looking for, and you’re tying that to now with either you’re trying to add extra pieces to your living space or you’re totally furnishing a new space. You have a sense of what you’re looking for, but you really need someone to guide you through what the best options are. Around that same process, and they’re typically used to identifying that hesitation around fit, “I’m not sure how this is going to look in my space. I don’t know exactly how big my living space is, or what the relation to the furniture space is.” And that’s where the colleagues now try to solve that problem for our customers. And they’ll bring them to our VR design experience in the store, and through a 3D design application on an iPad, they’ll be able to design. You will provide your general dimensions of your living space. They’ll put input it into the iPad application, and design it with Macy’s 3D content. So we’ve rendered– when we started, we had rendered about a small section of our furniture assortment in 3D. Our library now is ten times bigger than what it was when we first started two years ago. You’re able to design in the 3D application, and then you put on the headset and that’s where the magic happens. With the right dimensions, the exact sizing, you’re able to move things around, you’re able to add new things, edit things if they don’t look right. You’re able to move in closer, look at the texture of the furniture, and really brings the experience to life.

Alan: Can you add windows when you’re designing?

Mohamed: You can at windows, telephones, fireplaces. You can add plants to the experience. You can really mimic your living space.

Alan: Can you change the wall colors and stuff?

Mohamed: You can change the wall colors, floors. You can add wooden floors. You can change different kinds of colors. Everything they can imagine in a design application, you can do it here. And the best part is you can visualize it and do it on the fly. And really, when you go through the experience, that’s when you can really start understanding the numbers and saying, “Okay, these numbers are real, because this experience is so much better. And I have a much better idea of how this is going to look, how this is going to fit. So I’m more confident in my purchases.”

Alan: One of the metrics that I found almost more impressive than your basket size increase of 60 percent was the return rates. What is a typical return rate before VR?

Mohamed: So typically furniture is in a mid-single digit returns. Anywhere between 5 to 10 percent in returns. Just generally in the industry average. And what we were seeing through the pilot — and that’s held through as we scaled, as well — is about a 25 percent reduction in returns. When you take that number and put it at the scale that we have, that’s a monumental impact on the returns line for the company and eventually to the bottom line.

Alan: So 60 percent increase in sales and 25 percent reduction in returns. These are not immaterial.

Mohamed: They’re not. They’re three stores, but not immaterial.

Alan: Yeah, and that’s what I was going to say, is OK, so now you’ve presented this in two stores. You got some data. You go to your executives and say, “Hey, guys, we have something here.” What was the response met like, and how did it go from two stores to 100 stores? Was this like a long term rollout? How did this work?

Mohamed: If you asked me this maybe three years ago, maybe that would be the trajectory. We would do it in three stores and say “This works, let’s take it to five stores. Let’s take it to 10 more stores.” What we met with the reaction from our executives– and they’d seen this, so our CEO was on the ground in stores. Our leadership had been in stores, and they’d seen this in real time and seen how it was working. They’d seen the feedback — from our colleagues in-store, from the leadership in-store — that this was a game changer. It was a differentiator against our competitors. We were the only retailer that had this in VR form inside our stores. And it could be a differentiating factor for us and a competitive advantage in the business. So the feedback from the leadership was “How can we go faster, and how can we go bigger?”

And then it was up to my team to start building the plan to roll out. And we went back a week or two later with our plan to roll it out to 50 stores initially, actually. And that was tying to our strategic priority at the time of our Growth 50 initiative, which was fortifying our 50 top stores across the country with new investments. So we went with the plan to take 50 more stores and add VR to it. The response we got was “No, we meant bigger. How do we go bigger?” And that was 100 stores, which at the time was 100 that ended up being 110 stores. So within a space of actually six months, we added 100 new stores, so by the end of January of 2019 we were in one 110 stores.

Alan: Wow. OK. So there’s one other thing that I think– it would be an incredible addition to any retail location to get an increase of 60 percent and a decrease of 25 percent returns. But let’s talk about the cost that Macy’s spends to bring a furniture store into a typical Macy’s. The cost savings alone of bringing this in versus a traditional furniture store.

Mohamed: That’s the beauty of the technology, right? There’s multiple formats, models that we can really try out. And so the format that we’ve gone with today is to augment the furniture buying experience in our furniture galleries, in our furniture stores. And we’ve got about 250+ of those stores and we’re in about half of them. And the hope is to expand that to all of them. But what the technology now allows us to figure out is there are markets where there is demand for furniture. There is demand for Macy’s to play in. But it’s cost-prohibitive. The ROI is in there, in context of what it cost to build a furniture store there. And that’s where we think this technology could play a critical role in us taking furniture across the nation. We’re in markets where we can not justify a fully fledged investment in building a furniture gallery. Can VR play that virtual furniture gallery with an endless island?

The key there is that if we can expand our 3D content — and we’re on the path to doing that — it’s still a cost-prohibitive process in driving 3D content. But we’ve come a long way to where we were two and half years ago, where the cost continues to go downward. But the idea is that if we’ve been able to build a 3D library that allows us to now take furniture to stores where we don’t have to invest in the inventory in that space, we don’t have to make a 50,000 square foot or even a 10,000 square foot furniture store.

Alan: What is the footprint of the VR area?

Mohamed: The VR space today is– the largest we have is about 500 square feet, but that’s in our flagship stores. You can do it in up to 100, 150 square feet. So that’s– a typical furniture gallery for us is 50,000 square feet, a furniture store inside of Macy’s is about 10 to 20 thousand square feet.

Alan: So 60 percent increase in sales. 25 percent reduction in returns. And a hundred times decrease in the space required, which in retail is dollars.

Mohamed: Exactly right. And so the goal becomes, remember, the 60 percent increase is on any transactions that’s going through VR. Some of that is a function, a result of how much your 3D content library is, or how big your library is. Today that’s a small percentage of our library. But the goal is to continue to expand that. And as I said, we’re increasing in multiples. We’re about 10x where we were two years ago. And the idea is to continue to expand that library, because we know the upside is higher basket sizes, lower returns, and smaller footprints.

Alan: Let me ask you a personal question. If you were any other company in the world, why are you not doing this?

Mohamed: That’s a good question. And if I wasn’t in the role that I am, I probably wouldn’t know that either. I think at the heart of it is, you need a champion, you need an internal champion. You need someone who is– one exposed to the technology. But you also need someone at the leadership level to say, “OK, I’ve seen enough in this. This is big. This is a differentiating factor.” And the companies that get it, by the way, are doing this. The beauty about the Macy’s business is that we have– we’re not a pure play retailer. We’ve got a massive store footprint, and we’ve got some of the best real estate across the country. And then you’ve got a massive digital footprint. So we’re able to leverage this technology across both channels, online and in-store. I think when you talk about investments and when you talk about ROI, sometimes that’s where the hurdle becomes, where you don’t have enough use cases to leverage the technology.

Where the beauty for us is, our singular investment in 3D content goes across our mobile app, goes to our digital properties, goes to our store. So we’re able to spread the investment as well and move faster. I think if businesses really hunkered down and looked at the practical application of this technology, it’s not right for everyone. It’s not even for us. Not all categories have the same practical application. So we’re still thinking about today, how do we take this technology and where else can we use it? Furniture is an important part of a business, our business, but it’s a smaller part of our business.

Alan: Clothing, for example, it would be great to see your own avatar with clothing on, but the technology just isn’t really there yet.

Mohamed: It’s not there yet. Exactly. And that would be the holy grail for us, right? That’s the bread and butter of our business. Apparel.

Alan: If we figure this out, will you sign a contract with us? No, I’m kidding.

Mohamed: I mean, you’ve piqued my interest. Trust me, I spent a lot of time looking at what other technology companies are doing in the non-furniture categories. In fact, we’ve made some investments this year in starting to build our 3D content library in non-furniture, as well. So we’re doing it across apparel, across accessories, footwear. In a small scale, but really trying to understand where also can we leverage this technology? Having spent the last two and half, three years in this space, I truly believe the consumer of the future is going to interact in 3D. We’re one of the earlier movers, and we’re trying to set the foundation. But if businesses are not making those investments today, they’re going to be left behind five years from now.

Alan: Yeah, absolutely.

Mohamed: Macy’s as a brand as you, in spite of everything that you hear from the reporting in the media that department stores are dead, the reality is that Macy’s has always been one of the pioneers. We launched our e-commerce business in 1998, way before any of the other retailers had even started. And that’s a core reason why today we’re one of the largest Internet retailers in the country. And so it’s always been a leadership that has been excited about change, and been investing in it, and having the courage to invest in change. And that’s what we’re seeing here as well. By leadership that we’ve got, their support to really explore how do we evolve our e-commerce business, evolve our stores business, and invest in emerging technologies that really have a practical application to our strategic priorities.

Alan: It’s true. And being able to take the knowledge and experience that you guys have gained. And then thank you, first of all, thank you for joining this conversation, because I think people listening, especially those of you listening in retail, this punctuates the value that virtual and augmented reality brings. Talk about your AR component, because I know you’ve built these furniture visualizers in VR, so you can go into a store. But I think equally as important is something like what you guys are doing in AR, being able to see these same 3D models, you don’t have to create anything new, just the same 3D model. Maybe you decimated a bit or make it smaller for the AR to use on a mobile phone, but you can now see that couch, or that hutch, or whatever in your own house.

Mohamed: Absolutely. And that’s the beauty of this. I was talking about diversifying the ROI. And that’s where an investment in 3D content allows you multiple use cases. Today we’re absolutely scaled in VR in-store. But since last year, we initially started as a test in piloting the augmented reality component in our furniture business on our mobile app. Now mobile is a core part of our strategic priority. It’s our flagship location. Our best customers are omni-channel customers. They shop on our mobile app. They shop on our mobile properties. They shop on our website. They shop in our stores. And really, the goal for us is to continue to drive the mobile app experience.

We’ve got one of the highest-rated retail apps in the app store. Last year, we grew our mobile business by about 50 percent. We did nearly a billion dollars through our mobile app last year across Macy’s and Bloomingdale’s. So you can see it’s a top priority for the company. And the goal is to continue growing that. The way to grow that is when you pack value inside the mobile application, you drive different experiences. And that’s where we’ve made sure that we’re able to extend the AR experience into mobile apps. So we tested it last year. We launched it this year across Android and iOS. So all our app users are able to do that. And really the experience is if you’re on the furniture product page, you’re able to click a button that says “View in my room” and you’re able to– it will use your camera to superimpose the 3D content in your actual living space. And the beauty is you’re able to change colors and try different things. What I’m excited about is with where that technology heads today, so single scene experience. You can put one product and view that in your room. We’re not far away from doing a multi-scene environ where you’ll be able to bring in multiple products and look at how that. And I think that’s going to change.

I think if you think about the beauty of VR, where I like it is, it’s a location-based experience. I have 600 locations across the country in about 250 to 300 furniture locations. So I’m able to drive consumers to our store through VR. Really, the scale is in AR when the consumer through their smartphones will be able to interact with the technology. So that gets us excited. We’re seeing some really good early results, that I’m not able to share yet, we haven’t made them public yet. But they’re really meaningful results in terms of driving conversion, when a consumer interacts with AR in our furniture business. I’m excited about where that’s going to go.

Alan: There’s so many opportunities. Now, something that comes up on almost every one of these podcasts is training. Are you guys using this technology in that capacity, as well?

Mohamed: So– we’re not. Not yet, I would say. I think it’s one of the core opportunities for us, especially as a retailer with a lot of stores and a lot of retail. We’re 130,000 strong organizations, so clearly there’s a lot of requirements for training. And it’s something that we’ve started exploring. We’ve had some conversations, and it’s something that we’re deeply looking into. I think there’s– if I look at that three core uses for immersive technology in general, clearly the need for practical application to specific business is one of them. Training is the second one, where I really think it can add value and meaningfully drive costs, but also increase engagement, and as a result, retention of the training material. And then the third piece is obviously as a branding and entertainment avenue. And as you know, Macy’s is a powerhouse in that sense. We run some of the most sought after events, from the July 4th fireworks, to the big annual Thanksgiving Day parade, to the flower show. So there’s a lot of opportunity for us to leverage immersive technology in these three streams.

Alan: I have one for you. So on the Fourth of July, I posted a couple of AR apps that you could do AR fireworks, and all of them were meh. So let’s make the Macy’s Fourth of July fireworks AR app.

Mohamed: I mean, all year. I think the idea is you want to make sure the experience is authentic. You want to make sure that one, the experience is authentic and you really get immersed into it. So I’m not sure if the fireworks in AR is the right– it’s something that we want to explore. We want to look into it. But we want to make sure that the experience that someone who’s live in that space is experiencing, you’re able to replicate that in an immersive technology setting. So we’re going to look at that space closely. We’ve spent some time with our leadership in that space to talk about it. And I’m excited about what could come down the line.

Alan: There’s so many great things that you guys are doing. And I think one thing that’s really interesting about the work that you’re doing at Macy’s in general, is that you got bit by the VR bug. You found an early use case that showed real ROI. And now you realize, “Wow, if it shows this kind of ROI in one section of our company, what else can it do?”

Mohamed: And that’s the key, finding a practical application. Because that’s the catalyst. If you’re able to find a practical application — when I mentioned earlier about core goals are on driving employee and consumer adoption — because there is a practical application, our job got a little bit easier in driving the employee adoption and the consumer adoption. But then — as you just alluded to — it’s exactly that. Like as soon as– if it worked here, where else can it work? Where else can I take it? And that’s been the mentality on our team. That’s been the mentality with our leadership to say, “OK, this was great. Now figure out how do we spread it to other parts of the company.”

Alan: Absolutely. What advice would you give a new company that’s new into VR? What would the first steps be for somebody that is looking to invest in this technology?

Mohamed: Technology for technology’s sake is not going to work. So there is always that shiny object that’s out there. But I think really focus on what you were trying to solve. Identify a problem that you’re trying to solve, and figure out a practical application. That’s exactly the approach that we’ve used. We had a business that was a strategically important business to us. It was full of friction in the consumer buying process. And here was a technology that could alleviate that problem. If you’re in that situation, then constantly focus on the end user experience — whether that’s the employee who’s going to use that technology or drive the adoption of the technology, or the customer — make sure the end-to-end process is fully embedded out and fully thought through. From training to execution, all of those need to be really focused on how the end user is going to use the technology. And if you’re able to do that– and not all of those, even if you follow that to the tee, things may not work out, but you will learn a whole lot about what are the aspects that worked and what didn’t, and that allows you to pivot elsewhere. But really, the core is to find a problem you’re trying to solve, versus something that’s good to have. So get the basics right, then try to identify real problems that either your employees are having or your customers are experiencing, and then go about finding a technology that’s truly solving that problem.

Alan: Mo, this has been really, really intriguing, and I think it’s really amazing that you’re sharing this information. And I think I want to applaud you and the Macy’s executive team for sharing this, because without these early case studies and these early wins, this technology doesn’t go anywhere. If you guys had just said, “Yeah, we’re seeing these great results, don’t tell anybody,” there would be no reason for other companies to invest in it. And I think what we’re going to see is a much, much larger pie be created from all of this, rather than the scarcity mindset. So thank you for being one of those people that champions this technology.

Mohamed: No, I’m happy to. And I think there is a benefit for us in ensuring that. One, obviously, it highlights some of the great work our teams are doing. Obviously I’m the face of it, but it’s a massive team behind me that’s actually executing this on the ground every day. But more importantly, even our investments today are early investments. So we’re typically– because the market’s not– it’s still not mainstream yet. Our investments are a lot higher than what it would usually be. So the hope in return is that as we evangelize the technology and continue to share, and more players enter the fray as that demand increases, we’ll be able to see some of the costs come down as well, and as a result improved ROI for later players as well. But more importantly, some of our– some of the early movers, such as us. So I’m excited to share. It’s something that I’m deeply passionate about. I think there’s a lot of opportunity in this technology and a lot of retailers — the ones that are truly serious in this space — are actually making meaningful investments alongside us. And the hope is that more retailers come on. I think it’ll be good for the industry in general if more players join the fray.

Alan: It only serves to decrease the costs for everyone because, for example, three years ago, VR developer wasn’t really a thing. You know, you had to kind of go hunting for people that were making video games, and bring them over to the dark side of enterprise. But as more and more people start to see this technology as it expands, I think we’re gonna see what we’ve already seen, a dramatic decrease in the cost to produce this type of content. 3D objects or 3D assets for retail. Three years ago, building a shoe in 3D would be a 1,000 bucks to build one shoe. And now there’s lots of people that will do it around the world. And then there’s photogrammetry techniques, there’s different ways of doing it.

Mohamed: If you think about it, just on our mobile channels we’ve got over a million and half units or products. So if you think about it, the scale that we require, the content price to be able to scale 3D content is monumental. And so we’re seeing it move in the right direction. Our costs are significantly lower than where we were two years ago, but we’re still not at the rate where we need to be to scale. But the hope is that as more players come in, and to your point is there is higher demand for designers, and we’ll be able to continue to see that moving in the right direction. I’m excited about where it’s going, but there’s a lot of work to be done to get to scale.

Alan: Well, it sounds like you and your team are leading the way, so thank you again. I can ask you one last question. Mo, what problem in the world would you like to see solved using XR technologies?

Mohamed: So I will be biased, because I am still– I’m a retailer at heart. So it’s the consumer experience. If we think about where the consumer five years from now is going to engage with retailers, I think XR is the space where that can bring that experience closer to life. If you see today why physical retail continues to be strong, you hear about store closures everywhere, but you’re also hearing about a lot of new store openings. And part of it is because the physical experience going to a store, the online experience can’t replicate that. And if you think about it five, 10, 20 years from now, and if you want the online business to continue to grow and become an equal share of global commerce revenue, XR is, I think, an avenue to help solve that problem, to create a digital experience that mimics as closely to a physical experience. And until we get there, you’ll continue to see physical retail thrive. So that’s one I’m really curious. I mean, obviously I’m at the center of it for some parts of it, but I’m really, really interested in seeing how that comes to life and how– not only does it solve consumer pain points, but also enhances and augments that experience.

Alan: Thank you again for taking the time to join us on this podcast. And I think on behalf of everybody listening, this has been a fantastic opportunity to learn about Macy’s and the technological advancements of a 100 year old retailer remaining relevant in 2019 and beyond. So thank you.

Mohamed: My pleasure. Thanks for having me.

Alan: In a very special episode of the XR for Business Podcast, we’re driving in a car with Timoni West, head of XR… Research?

Timoni: Director of XR in Unity Labs.

Alan: Director of XR at Unity Labs, and Cole Crawford, CEO of Vapor IO. So we’re driving on our way up to Curiosity Camp through these beautiful winding roads, and we decided that we would record a podcast, because Cole, in his incredible company building the infrastructure of cloud computing, they built an AR app to help service that. And I thought, what a cool way to use this technology and this time on this beautiful drive. Wow. Look at the size of those trees.

Timoni: They are enormous.

Alan: Oh, my God. Wow. Well, anyway. Timoni, how are you doing?

Timoni: Excellently. And I’m also enjoying the view. Yeah. Yeah, actually, Cole, I’m really interested to hear more about why you chose to go with that, and what the process was like. My team is working on tools for mixed reality. So for Unity itself, that’s used to make, I think, 90 percent of all Hololens applications right now. Century is using Unity for that. But the tools that we’re making today are allowing, I think, for you to more easily make robust, distributed applications that can work across various devices and for various users.

Cole: And that’s very needed. First off, Alan, I just want to say, you sound like you should be a podcast DJ.

Timoni: So it’s cool that you are.

Cole: Well done. But yeah, I mean, the issue for us when we started down this journey was very much a question of, how robust can we make an experience, about how widely could we make that experience? And the vertical integrated solutions that you had to choose from in the early days of AR/VR, I think, are primed for disruption. I’m super glad to hear that Unity is working on the open APIs, etc., needed to bring this technology to more users, as I’ll quote — maybe a little cliché being where we are and where we’re going — but–

Timoni: Yeah, I want to hear it. What is the problem you company solves?

Cole: Yeah. So we have to think about not four, but 40,000 different data centers; we’re an edge computing/edge data center infrastructure company. And with that means you can’t Mechanical Turk what was originally done in data centers. It works with four buildings. It doesn’t work with 40,000. So we had to build autonomy into every aspect of our business, in every aspect of the infrastructure. And that means building really simple interfaces for what would otherwise be really complex problems. And at scale, from a logistics supply chain — remote hand, smart hands, all the things that you do in data centers — what that means is your FedEx guy, your U.P.S. guy, a contracting company that otherwise would need specialized training, now it’s visually assisted capabilities for what would otherwise be a job that you would train for and then go work in a data center. We simplify that.

Alan: So basically what you’re saying is that you’ve given real-time tools to anybody to be an expert on the field, in the field.

Cole: It’s fair to say that the software is the exper, and what you need are opposable thumbs,.

Alan: Haha! Which democratizes the whole need for training.

Timoni: You know, it’s funny; I was just getting drinks with someone from Open AI. He is working on the robotic hands with opposable thumbs. I wonder whether or not that’s really necessary. It is a tremendous challenge. Okay, so from what I got from our earlier conversation, someone goes to a data warehouse, they’re looking at a… “RU,” you were saying?

Cole: A rack unit.

Timoni: A rack unit. Yeah, right. Yeah. And they get some information that comes up that says if it’s broken, if the client wants it serviced or just repaired or replaced entirely. So anyone can have the Hololens on and, using an image marker, know what is contextually needed for this particular server RAC. An advantage using augmented reality for this versus just having a bunch of displays is that the monitors don’t break; if a Hololens doesn’t work, you get another one. That’s awesome.Is there any other use cases that you’re using augmented reality for? Or virtual reality? I like seeing the warehouse at scale, etc.

Cole: Absolutely. Yes. And some of the work that you guys are doing I think is incredible. If the Hololens breaks or if a Magic Leap breaks or whatever the hardware happens to be, to go back to that cliché quote, Mark Andreesen said, “software is eating the world. If something fails in hardware, you should be able to take out your phone and have that same experience.”

Timoni: Exactly.

Alan: I think that’s the real key to scale.

Cole: It has to be, right? It has to be kind of a “bring your own device.” You have to get to that point.

Alan: Well, even the new glasses. So Nreal launched their glasses this week in AWE and their glasses plug in USB C into your phone. It’s using the processing power of your phone to give you really, really good heads up AR, and it’s positional tracking and everything, just kind of very lightweight pair glasses for $500 bucks.

Timoni: And the image quality was really great. I mean, the field of view, obviously it’s constrained to the glasses. But it fits so nicely in the frame, I was super impressed when I tried it out.

Alan: They’re very lightweight, comfortable.

Cole: And this is what’s amazing about Silicon Valley today. I mean, I’m just reminded of where we are, and I just wish you guys can see this–.

Alan: You know what? I’ll take a video of us driving up and we’ll put it in as a gif.

Timoni: It’s just like Lord of the Rings.

Alan: We’re driving with thousand-year-old redwood trees going up a giant mountain in the windiest road you’ve ever seen.

Timoni: Talking about AR.

Alan: In an enormous tank of a truck.

Cole: It’s true. But the pace of innovation, if you think back — Alan, you and I were chatting earlier about your first experience of VR — and I just–

Alan: Actually I got to say this; my first experience in VR was at Curiosity Camp five years ago, and we’re on our way to Curiosity Camp now.

Timoni: Oh, that’s amazing.

Alan: And then Chris Milk put VR on my head and I had this kind of “aha, come to Jesus” moment when I was like, “this is the future of human communications.”

Cole: And isn’t that what got you into tech?

Alan: Yeah.

Timoni: That’s… Wow. That is so cool.

Alan: Well, I was in tech before, but I made DJ stuff. So yeah, a little bit different.

Timoni: It’s all coming together now.

Cole: It totally is. Convergence, you know?

Alan: You were to talk about kind of the speed of acceleration of technology? And I think people neglect– because maybe they’re working in IoT, or are working in cloud computing, or they’re working in 5G. But if you take a really 10,000-foot view, they’ll all work together. And the fact that they all work together and they’re all in their infancy now, but all maturing at the exact same time. You have IoT, 5G, quantum computing, cloud edge computing, you’ve got blockchain, VR, AR, all at the same time.

Timoni: Also, I truly believe that — and this has been coming up a little bit more slowly than perhaps that you just described — but the moment we started really having sensors on computers and being able to make sense of that data, apply semantic analysis to it — that is another turning point in computing. That’s the equivalent of going from the mainframe that’s the size of a room to–

Cole: I got chills, that you actually said that. Yeah. It’s great that you did.

Timoni: Yeah. That is… wow, you’ve really got goose bumps… this is the next great thing, having all this world information and then having computers able to understand what’s going on.

Cole: It’s a hundred percent right. Lord Kelvin — just a little history — Lord Kelvin, if you know the Kelvin scale.

Timoni: Yeah.

Cole: He said to measure is to know; if you can’t measure it, you can’t know it.

Timoni: I love that.

Cole: It’s a really cool quote. But think about what we could do and what we have access to. Alan, you mentioned 5G. What we have access to in 5G is a network that is as real as the fiber optics in the ground. With speeds that are the same. So from a latency perspective, human eye can see 150 points vertically and 180 points horizontally. And at every point there is a level — you can see about 200 points of data — it’s chemical.

Timoni: And there’s different resolutions.

Cole: And different resolutions. But you take some mild compression associated with that to deliver a 4K experience to each eye.

Alan: And then foveated rendering.

Cole: Its refresh rate. You’re talking about 10 gigabits of data per second per eye.

Alan: And then that’s not including what you’re collecting from the sensors from the outside world to make it all synchronized.

Cole: That’s 100 percent accurate. So I mean, think about what you can do with the contextualised data with the real world.

Alan: That’s all I think about.

Cole: Yeah, it’s incredible, the capabilities we’re going to have over the next five years as these new networks come out.

Alan: It’s super human.

Cole: It’s going to change. It’s going to change the way humanity interacts with each other.

Timoni: Yeah.

Alan: I can’t wait till we go to a networking thing and everybody’s — it’s facial recognition — and it puts up their their names, and who they are, in front of them. Because I don’t remember anybody’s bloody name. That should be the new name tag. You wear these glasses in, everybody’s face pops up.

Timoni: I just said this earlier, but I’ll say it again for the record for the podcast: If you meet me and we’ve met before, and I don’t remember your name or your face, I’m so sorry. As soon as you start talking about what you worked on, I swear to God I’ll remember that part, because that’s always the coolest part; hearing about all the cool shit everyone is doing. I also love that my group has something — it’s a little clique-ish-sounding — we say like, “oh yeah, that person, they kind of get it,” right? What I mean by “getting it” is that we have a shared similar vision of spatial computing outside the bounds of not just talking about augmented reality or virtual reality. Those are components, those areR displays in this larger ecosystem of network computers. They run on edge that are all consistently talking to each other, and had this world information. To me, I don’t want a computer to be a single contained piece of hardware anymore, nor is it, really. Every device I have is networked. But I want to live in a world where computers sort of surround me in the most intelligent and privacy-sensitive way. But really, just sort of customizable to the point where I can wake up in the morning and have computers help me along my day in the way I want them to, as opposed to having a phone, then I have to pick up the haptic glass, or not having my Sonos talk to my shoe lights or whatever. I really want the whole thing to be the computer.

Alan: It’s interesting. I wrote an article recently on BCI and AI coming together as a bi-directional brain computer interface. So, being able to insert a chip into a brain so that you can hijack all the senses. I talked with this example of your walking down the street, and you start smelling cookies and coffee and it gets stronger, stronger because you’re getting close to a Starbucks.

Timoni: Or it hides it so I don’t have to eat the cookies.

Alan: Exactly.

Timoni: Let me give you an example. I’m not talking so much about… like, BCI is so cool, but do you really want everything?

Alan: I don’t know.

Timoni: I’m having trouble with that. But I gave this example in my talk yesterday, and I talk about all the time; when I wake up in the morning, I want to have little snippets of display UI that are kind of scattered around my home. And it could be a projector, could be glasses, or it could be a branch of them or whatever, that are all just little subsets of a larger computer session that is happening in the cloud. And I’ve customized and put these things where I want them. Oftentimes there’s no visuals. Maybe I’m just talking to the computer that is in the house. Maybe I’ll have cameras all around the house. Oh, side note; some people will say things, like, “is it really going to put a bunch of computers and sensors in your house?” A hundred years ago, nobody had electricity, and we either retrofitted or were willing to take out pipes and put electricity in all of our homes.

Alan: I think everyone is going to have a 5G repeater in their house.

Timoni: We’ll build infrastructure as long as there is enough value to us. And as long as we trust it enough that we’re fine with it. And I think that’s really going to happen. I really just want computers to be distributed little snippets of things, like a great Internet of Things combined with the best types of displays you could possibly have in the moment.

Cole: As you say in your side note, you have to make the capital work. I’m reminded of the autonomous drones, autonomous cars, and the dollars that go into putting everything on board. And the way I see this at city scale is that, from a Silicon perspective, why are we putting $100 computers on 1996 sensors?

Alan: It makes no sense.

Cole: It makes no sense.

Timoni: Yeah.

Alan: It’s because we don’t have 5G yet.

Cole: Exactly correct. Exactly right.

Alan: But here’s the thing. There’s so many great use cases for 5G and headsets. And up until… the problem is nobody’s going to have a headset for another five years. Maybe more. It won’t be a thing that everybody has and it won’t be really good enough — in my opinion — for consumer scale. So for now, it’s enterprise. But what can we do with the phones that still give people superpowers? And I think that’s a really practical thought experiment where you have a device in everybody’s pocket. The 5G ones are gonna be epic. And what can we do with that that we can’t do with what we have now?

Timoni: I really don’t want to be running most of my compute power on local devices. Well, Edge, sure, fine; but I don’t want to have an individual application that I must add onto my phone, or augmented reality just simply won’t work. But I don’t want it anyway. Like Google Studio, for example, of being able to run enough frames in the cloud.

Alan: That’s pretty cool.

Timoni: Have them go down to the device. That’s more effectively what I want. And the advantage is that if we all have these compute sessions running in the cloud or concurrently running apps, if I want to send you something, your app’s open, and my app is open, it’s just a better way to compute.

Cole: One hundred percent. And I don’t know, you guys might be shocked to learn this, but I’m old guard telco. And the reality is–

Timoni: By the way, he looks very young. This is a very strange statement.

Cole: Very. Yeah, this is like the late 90s. But we’ve built this thing called the Internet backbone, which we all know on the wireline side. But what a lot of people don’t know is that on the wireless side, we built — fundamentally — four different networks. We built the modern networks as we know them today with AT&T, T-Mobile, Sprint, Verizon, etc. They all built their 3G networks and their 4G networks, etc., and we’re all plugging into this big Internet backbone because that’s what you do. If we’re on our phones and are watching YouTube, we’re going to Amazon or Netflix, — whatever it is — we’re back on the wireline side. We have to get from the phone and the modem and the phone to some radio substation that’s mounted on a macro cell tower site. Take fiber optic cable back to a data center somewhere. And it is so not optimized. I mean, you might be shocked to hear that it is not.

Timoni: I always imagine the building that Netflix had to build in New York. They had, like, Radiolab podcasts about it or something.

Cole: Yeah, yeah. You don’t get better at delivering these experiences by algorithms, because you’re not going to algorithmically speed up the speed of light. This is really where edge comes in. Right? If latency is a function of proximity, all of a sudden, you need to move the compute as close to the device or the user as possible.

Alan: But when it’s not…

Cole: [crosstalk] I’m all for it.

Alan: I don’t think people are ready for this, because once we figure out edge computing at scale with all of these other technologies at the same time? I don’t even know.

Timoni: What are you worried about?

Alan: So here’s what I’m worried about, and it keeps me up at night: AI is going to really quickly replace large swaths of jobs, mainly accounting jobs and data sciences, and huge office towers full of people that are literally doing spreadsheets are gonna be wiped out because they don’t need that anymore. Lawyers — entire swaths of lawyers — are gonna be gone (which I don’t think any of us are really going to complain about). It’ll be the law firms with the best AI that will win. And that’s a whole job category gone. And it’s not that there won’t be other jobs, there will be a transition. But the transition is going to get quicker and quicker and quicker. And I don’t think we have the infrastructure education-wise to retrain and reskill people fast enough, which is why VR an AR is needed for education and training. Your use case is literally paving the way. That’s why we want to do this as a podcast, because you literally have built something that will be a case study for years to come.

Cole: Look, we hope so. But I think to your point — and you could do a whole separate podcast; in fact, we should do a whole separate podcast on the political implications to this. Part II! — do we tax computers? If narrow AI is replacing sort of these first-level jobs in these companies, do we tax them?

Timoni: Okay. So if in the future, we have AI that does genuinely replace human workers — and I have some reservations about whether or not that will happen, that have nothing to do with the tech and everything to do with socialization — I think that if we tax the AIs, does that lead to the window tax problem? In the 16th century, “let’s tax people by the number of windows they had,” and everyone then bricked up their windows to avoid taxes.

Alan: I think we just have to have a restructure of the tax situation so that corporations pay higher tax than individuals, because what’s going to happen is individuals are going to have fewer and fewer long-term jobs and will be more the gig economy, which if we can fundamentally teach the younger generations how to use the tax loopholes by incorporating themselves and using the tax loopholes, then you’ve actually kind of artificially changed the tax structure around; because right now the tax structure is based on taxing the individual at the highest rate, and corporations get all the breaks. Well, if individuals start acting as corporations, then you get the breaks and the government will take a while to catch on… wow, that’s beautiful. We should stop there and take a photo.

Cole: Do you want to?

Alan: I think we should.

[Intermission]

Timoni: So one thing I point out is that through most of human history, we did not have careers.We did not have salaried jobs; only the landed gentry could be assured of this consistent sort of income. And while there were other social structures in place to make sure that most people reasonably knew where they were going to be able to eat or, you know, it was more that the vagaries were natural, not social. This whole return to the gig economy means we were only changing the social structures from the last hundred years. So while people might think of it as this long-term system that is fundamentally changing how humans are. If anything, the last century was the blip and this is a return to the norm.

Alan: I think we can fix making women who just had a baby work after they’ve gone… It’s crazy. We should be celebrating that and making sure the parents have as much time with their children as possible because that’s what makes the whole thing better. Not making people work 80 hours a week.

Cole: A hundred percent. If the computers, if you can tax them, and maybe.

Timoni: Lessen the human burden, is what you’re thinking?

Cole: Well, look, if there’s more time for us to do the things that we care about — not saying that we shouldn’t care about our jobs — but some of the things narrow AI can accomplish alleviate some of the pressures on how we would train, how you would optimize for that function to be done by human. Does it not make sense if we’re taxing the computer that we create some universal basic income?

Alan: One of my friends, Floyd, is a huge proponent of basic income and it’s something we have to. I think nobody’s going to go for it. First of all, in America, it’s not going to happen. But what we can do is we can change the tax laws to tax the corporations to basically redistribute and give services to people and make it so… because tax was there to serve the people, not greedy corporations, that only government… something got off track in the world. It’s not just America, but the world. I think too many people let bankers get away with stuff.

Timoni: I think it’s gonna settle down. The modern economic structure is not even 500 years old, not even. I think we’re at a weird sort of inflection point and people will start over the next few generations. I always like to think very long term. Over the next 60 to 100 years, I think we’ll start to calm down again. I just… dystopias rarely happen, and they happen in blips and they don’t usually last that long. I don’t know. And just one more thing. If it turns out that we actually in the end should have a series of large scale-companies running the world, that might not be terrible as long as the companies are set up correctly.

Alan: I agree with that.

Timoni: A lot of people are going to be like, “no, corporations should not be in charge of anything!”

Alan: Here’s my challenge to that: What is the one measurement of the success of a corporation that the world uses as a standard?

Timoni: Today, you mean?

Alan: Yes, right now.

Timoni: Shareholder value.

Alan: Economics. Yes. How much money? That’s it.

Timoni: And that has always been–

Alan: It’s artificial shareholder value. Like, we drive the share price of companies up based on nothing and drive them down based on nothing.

Cole: Not “nothing.” So obviously there’s a microcosm that exists in Silicon Valley, but for a publicly-traded company, its one of two things. Either a dividend payout, or you’re paying off your debt and growth. That’s what it is.

Timoni: But that has been the case for any social structure humans care to name throughout all of human history. You either grow or you’re stagnant and you don’t grow. Corporations just happened to be like a very close, tight-loop version of any society. Could have been a kingdom, could have been a tribe. What have you. Humans: we’re consistent.

Alan: We are that.

Cole: I feel like the hardware is more consistent. The software… I often think of us as 1st-century hardware running on 21st-century software.

Timoni: Yes, totally. Totally.

[Intermission]

Alan: So we just got back in the car, we stopped on the side of a mountain to take some beautiful photographs and we’re back. I don’t know where we left off, but let’s think about this. We were talking about the future of work, how technology is going to fundamentally change, how we train and educate people. But also…

Cole: We were talking about what’s the role of… maybe this is a question I’ll ask you guys. What is the role of the first-level citizen when narrow AI is starting to–

Timoni: Actually come into play in the factory, and becomes a worker?

Cole: Yes. Yeah. Actually becomes that worker.

Alan: The thing is, it’s not going to be overnight that it becomes the worker. What it’s going to do is slowly, one by one, take large swaths of tasks.

Timoni: So… and two things here. First, AI is a [expletive] misnomer. People are like, “cool, an artificial intelligence.” Nope, this is a heavily-curated and single-purpose, like, basically extremely good algorithm that is designed to do like one single thing. And it might be like, find cats with whiskers versus don’t find cats with whiskers. Right?

Alan: But it could also procedurally generate digital humans.

Timoni: That is not going to happen for very long time.

Alan: Or buildings, which I’ve seen.

Timoni: Oh, you mean like an AI that makes the procedurally-generated buildings?

Alan: Exactly.

Timoni: Sure.

Alan: So the content for something that would take a content artist — a 3D rendering artist — maybe months to build a scene, now they’re procedurally generating this stuff in seconds. So that’s interesting.

Timoni: So you touched on this a little bit earlier. I mentioned this very briefly in our last round of podcasts. But there’s a social component, right? So I have had the good fortune to meet a lot of people who make top-tier, triple-A content for movies and for games. These are the people who will obsessively work, like, thousands and thousands of hours to bring you the final scene in Avengers. And even if they have procedurally generated content, the reality is they always feel like they can just finesse the shit out of it, definitely. And what I see is the creators getting more and more picky. I always go to the post-production talks at SIGGRAPH and they’ll talk about how, like, in Blade Runner, how long it took them to get an artificial human looking good — the Rachel character — and how they had to argue with the director because he wanted the scene in Vegas to have no blues in it whatsoever. And they ended up creating this new type of filter for the camera that had no blues; the director saw it and he was like, “no, I still see some blue,” and had to literally prove that there were no blues in the scene. Now, this is on top of all of the best tech; like, these are the highest-end effects houses in the world. These are the ones who are really pushing the limits and they’re working together. It’s WETA, it’s Rodeo. It’s all of the other greats. And so what do they do when they have these tools and these great machine learning algorithms, they get more and more picky and so on.

In Infinity War, they literally had, I want to say like five petaflops of data, because they scanned every single character cropped in-scene in that whole movie so could have it in post. And OK, so sure, maybe at some point these will actually be replaced by AIs. But I feel like humans inherently don’t trust the machine enough, or we just want to get our hands dirty. And with lawyers, too. Sure, you have an AI that can make a better decision. But the reality is humans do not make decisions based on data. We use data to justify our predetermined decision processes.

Yes, but if we did use data, we’d be actually way more effective. Honey, I know. So that’s the thing. If if a law firm figures this out and says, hey, wait a second, this AI is outperforming our lawyers 10 to 1 because it will on everything, because IBM Watson can read 5 million case files in an afternoon, making the lawyer read five maybe. But what are you trying to do? You’re trying to set a precedent, be looking for precedents. Maybe you’re looking for. You could scan the entire country’s records, looking for precedents in seconds. But who created a.

Cole: So I always come back to the the whole, “do computers dream of electric sheep” and the morality. Look at the divisiveness going on in social media politics right now. It’s been determined that the coders that write this stuff up, they have cognitive bias and they write that into their code. And the code gets trained and it becomes biased.

Timoni: And that’s how you end up with a hella racist [AI].

Cole: [Laughs] that’s exactly correct!

Timoni: But here’s a cool thing. I actually love this about the AIs; when we are concerned about bias and data that we need to de-bias the data — and honestly, we’ve only begun work on what that even means — what does it mean to be biased? What is a cultural bias versus a universal human value that needs to be removed or cleaned up or gotten rid of? Then also it forces us to think about ourselves. And I really love that if you meet a machine learning algorithm that happens to be biased, that teaches you something about yourself. Right? In the cold light of day, if something was you and did the same thing five billion times until it trained up to, like, the essence of you? I think that’s a great learning tool. No one’s gonna think about it like that. And now it has. They just sort of talk about it and reactionary way. But there’s some real value to that. I actually love the idea of having this sort of listener that I can talk to that helps me work through my biases, because it can see where any individual’s action I take or statement I make, like, where that can go, taking to its logical extreme.

Cole: Yeah, I don’t know if humans are ready yet for it for the self-reflection that would take to actually get over it. I think we live in a world of naive realism.

Timoni: You know, I love that. Yeah. I think you’re right. Well, it’s true. For example, I’m a designer by trade. Did UX for years (we called it information architecture before). I studied literature in college. And we always viewed literature through what we called it at the time, “different critical lenses,” which I now know are just different mental models to a different context, or at least that’s how I would describe it. And there are a lot of people online. There are entire communities around rationalism and mental models and really trying to get to the right decision. To your point. Like we don’t care about being… let’s see, what’s a good way to put it?

Alan: We don’t need to feed people’s egos. We just need the right answer.

Timoni: Exactly. It’s what is known about being right. It is about seeking the truth and finding the truth. And this goes all the way back to the pragmatism of William James, early 20th century. Well, he probably even before that. I don’t know. I do feel like we’re… maybe it’s just because I live in my tiny little rationalist bubble, but I do see more and more people talking about this stuff and interested in this stuff. And I can’t help but think inherently most people would rather be right than… I don’t know. You’re laughing.

Cole: No, I think you’re optimistic. But I think you’re right. I just think it’s going to take some time.

Alan: I think this road has gotten sketchier.

Cole: Yeah, it’s gotten narrower, for sure.

Alan: The road went from two lanes in a winding road to one lane.

Timoni: It’s very s-curvy right now.

Alan: It’s pretty beautiful.

Timoni: And it’s right dappled, like the sunlight as we as we go further into the woods.

Cole: Right. We’re going further down the rabbit hole.

Alan: Yeah. This is great.

Timoni: So getting back to machine learning and artificial intelligence, I do think, as I mentioned earlier, I really want to see people starting from where they want to end and start with what their vision is. And then we can work backwards from there to figure out what could potentially go wrong. What I see instead is people sort of being alarmist about what could possibly go wrong with no real end in sight. And that just always ends in this kind of dystopian picture of, well, imagine a world where people know your every thought, emotion, and hope, and therefore can constantly feed this to you.

Alan: I’ve got news for everybody listening. Guess what other people are thinking about you: Nothing. They’re thinking about themselves, really.

Timoni: I mean, it’s true. Marketing is designed to manipulate you. But there’s given a population, too. Right?

Alan: “Make better health decisions. Exercise. Think positive things.”

Sure. But if I’m at Disneyland, which is a gigantic mega corporation and I’m waiting in line for Indiana Jones, the line is designed to make me feel like it’s taking less time than it is. That is a great example of good environment design that does, in fact, manipulate you. And yet, it’s to everyone’s best

[interest]

. You can’t make the lines shorter. Right? So why not make it more pleasant along the way?

Alan: It’s a great analogy. OK, so let’s go deep down, since we’re going down the rabbit hole. Timoni, what is your vision for the future?

Timoni: So I would like to see a world in which everyone is able to use computers to the best of their abilities, imagination, and intelligence. Right now, people are using computers all the time. We talk to computers more than we talk to any individual human throughout the day. And yet we have this sort of siloed set of experiences where people can do a task per application. Part of this is just due the nature. Then I have a niece, for example, who is on TikTok probably six hours a day. But if she wanted to describe and illustrate and animate a dream that she had last night, she would have no ability to do this. I think there are several different ways that we can attack the problem. First is to make creation tools that are easier to use, which I think we’re continuing to evolve, and AI can actually help with that with procedurally-generated things. But I also think that we just need computers to be able to listen and react to humans specifically. We do not have operating systems right now that can listen for what I call “the no.” If a computer does something I don’t like, if an application does something I don’t like or don’t want it to do, there is no “no.” We see this slightly with notifications where it’s like, oh, do you want less notifications or to turn them off? We’ve had computers for 60 [expletive] years and that’s as far as we’ve gotten?

Alan: Turn off all your notifications. It’s actually liberating.

Cole: Yes.

Alan: Turn them all off. You’re going to check the apps anyway.

Timoni: I do the same thing.

Cole: How about a better life hack: leave your phone at home a couple of times a week.

Timoni: Oh, interesting.

Alan: Wow.

Timoni: You do that?

Cole: Yeah.

Alan: Do you really?

Cole: Yeah. Yeah. I mean, yeah.

Timoni: Are you carrying an iPad? Are you cheating here?

Cole: No it’s so good for your mental health. I mean, I’ve not had cell phone service on my phone for 45 minutes now and I’ve not had to look at it. So no, it’s not there. Or if you can’t leave it at home while you go take a hike in the woods with no spectrum, go to dinner with friends. Hang out with real people. Put your phone underneath the salt shaker and whoever picks up the phone first–

Alan: Pays the bill.

Cole: Pays the bill! Put it down.

Alan: Yeah.

Timoni: That can lead to some lengthy small talk after dinner.

Alan: “We’re not leaving, but the bills getting higher.”

Timoni: That’s cool. But any case, getting back to a vision for the future. I want to have my computing session in the cloud. I want apps to work interoperably. I want to have a series of continuous… like, in my house. I have pasted a little digital interface here, a little digital interface there, I put up a little inventory. And it’s got all the things that I want. And I can combine them in any given way to do whatever it is I want to do on a computer. Actually, a RISD… I think MFA student recently posted a concept OS that he made called Mercury. I highly encourage you all to take a look at it. It just came out, I think on the 28th. If you just do a Google search for Mercury OS, it’ll come up. And he had rethought the concept of an operating system as a series of stated tasks — like “I want to check my email” — and then everything that you would need in order to effectively check your email, which does not just include your inbox, comes into a set of containers and this is called a flow state. So you’ve got your inbox, but then maybe you’ve also got your calendar open, and your map open, and your to-do list–.

Alan: Ahh, the tabs that you need for that.

Right. And you can drag and drop in between all of these different what we now think of as applications. But if you remove the data layer itself from the container, from the visualization, then you have a really robust way to interact with the computer and digital objects, and in a way that makes sense for you at the time, in the mode that you’re currently in. The cool thing about this for augmented and mixed reality is that it makes no difference if you’re doing this on a 2D screen display or if you’re doing this in a headset that is also showing your 2D screen, or a 3D screen, or a 3D object if that makes more sense, depending on what you’re doing now. This is really essential for augmented reality that we start to remove the data layer from the container layer, because if I am in augmented reality, if I’m looking through my Hololens and I have two apps open with two cubes that look identical, one in each application, I cannot — and I can’t expect any user — to context switch between what one app does and the other app does. Like, if one of them is a modelling app and the other one is an interactivity app and I’m dealing with the same cube, it needs to be the same cube in the same place. So what I’m talking about is, like, far afield; 50 or 100 years. We’re going to have to rethink computers, but we’d start talking about it now. We’ve been talking about it since the early 2000s. Let’s just continue to push this idea forward.

Cole: Quantum, baby. It was only a matter of time before quantum computers came into this podcast.

Timoni: Ok, so let’s talk quantum.

Alan: Let’s talk quantum.

Timoni: Should we pause and quantum later?

Cole: I think we should quantum later.

Alan: So, part 3 of this podcast is going to be quantum later, around the campfire.

[Intermission]

Cole: …government was any block as part of a blockchain. Now all of a sudden, you are in control. You have an immutable record of truth.

Alan: And you can cancel it.

Cole: Exactly. You can expose…

Timoni: So for context, we’re talking about why is it bad to have your data collected? Why do we keep hearing people say, “oh, but what if the insurance agents know that I have cancer before I do and then [expletive] me over?” The answer to this question as they shouldn’t be able to [expletive] you over. Right?

Alan: That’s the simple answer.

Timoni: In the world that we want to live in, it should be great that everyone knows you have early stage cancer so you can fix it. So now Cole’s talking about this concept to the smart citizen who has ultimate control over their data.

Cole: Yeah. And I just think it’s going to take… so A) It goes back to what you talking about before, which is how do we get corporations to realize that the data they collect is for the benefit of all mankind? And that’s hard to get them over because right now the dividend or the capital power or the debt pay off, etc. or the growth is what these guys get rewarded on today. So I think it takes a–

Alan: What if — ready? What if we had a new system and it was an education-based system that, instead of charging people to learn, you got paid to learn? Every time you learn something–

Timoni: What is this, Scandinavia?

Yeah, well, I come from Canada — we have socialized everything, c’mon. But we paid you to learn. And so, little micro currency; five minutes of reading gets you five points or whatever on you on your blockchain ledger. Right? But what if that same system also took care of your health care, your insurance, your banking needs, everything that you need. Kind of like WeChat, but instead of one corporation owning it, as you progressed in the education component and you graduate, you become an equity shareholder in the company? And the company that has paid you to learn the whole time now is selling you all the services you need, but you own that company that’s selling you the services? So you’ve basically created like a shareholding system, but nobody can own more than anybody else. Everybody’s equal in it, and it automatically waterfall distributes the profits.

Timoni: What the profits are..?

Alan: The profits would come from a number of different ways. So the participants in the program are being educated and trained in mindset and maybe it’s a percentage of their income in perpetuity or something like that. But they always own this company. I don’t know what that looks like in the long-term, but the company itself can make products that are sold outside of the network. We can make products like a health care product; if you make the best health care insurance in the world for your members, other people outside are going to want it as well. And you can give it, make it available to other people, make it a huge profit center. They didn’t grow up in the system. They can only access certain services that are profitable to the system and the people. You have to go through the system to be part of it. You can’t after 18; you’re not allowed in. Like, you have to go through the system, graduate from it. Now you’re in and you’re in it for life.

Timoni: Sounds a little caste-y. I don’t know.

Alan: I’ve been working on different ways to solve this at scale around the globe. So then now you have global citizens all interconnected with the only purpose of helping each other.

Timoni: So one thing that has always puzzled me is why doesn’t socialism work unless it’s kind of sneaked in? Like, socialism is a great idea, actually, I think as a concept — like, on paper. Absolutely, this is sort of a tribal communal way humans kind of inherently want to work and think anyway. And yet at scale, when people claim they’re going to start socialism or a communist country, it always ends up being a cult of personality. Right? It always ends up actually being a fascist society instead. And yet they call themselves that.

Alan: Because it’s usually by some egotistical leader.

Timoni: But why do you think that is?

Alan: Well, why do you think you have the president you have here? The public can be easily swayed by showmanship and flashy shit.

Cole: Is it fair to say that power corrupts and absolute power corrupts? Absolutely.

Alan: I see what you did there.

Timoni: But why can’t we just do socialism from the get-go as a stated goal? Sans cult of personality.

Alan: This is what I’m proposing; a new social exchange where everybody benefits from going into the experience economy. So we’re not going to buy cars. We’re really not going to need to buy houses. We can live anywhere. Imagine, you don’t need to own anything, but you need to have access and experience everything. And so what if part of the program was experiences? And as you educate yourself more and became more valuable to the organization, you got invited to more and more experiences?

Cole: Yeah, I think this has to start. So today we talk about the… I think it’s up to 75 billion connected devices by 2025? Ridiculous.

Alan: 44 zettabytes by 2020.

Cole: Correct. And 120 zettabytes by 2025.

Timoni: I didn’t even know what a zettabyte was.

Cole: A zettabyte is a thousand terabytes.

Alan: Thank God we have a data scientist.

Cole: Beyond the Internet of Things, I think as you pointed out, the experience. So today we have what’s called the knowledge economy. I think after IoT, after the Internet of Things, we start thinking about the Internet of Skills. And with that, with the Internet of Skills, I think you’re going to finally get to a place where, end-to-end, you could build the proper incentives for contextualizing what’s good for a corporation in context of what’s good for a human.

Alan: And what if the only goal of the corporation was the well-being of the students and of the members and owners of the corporation?

Timoni: Have you read The Diamond Age?

Cole: Yes.

Timoni: The Diamond Age has corporations, as sort of citizen state economies where — with class systems.

Alan: I’ve got to read that.

Cole: Yeah, it’s good. That’s funny; I’m reminded of a company… do you guys remember, back in the early, early, early 2000s, around Napster and what was happening? It had prompted me to think about a company that it would — it would be illegal. — put your hat on for like 20 years ago and this is controversial. But could you build a company where if you were a monthly subscriber where that came in the form of some sort of stock in the company, you are a shareholder and you can provide that platform to your shareholders. Back then, could you do some kind of peer-to-peer network where, as a shareholder, you’re entitled to the content that sits on that network?

Timoni: Like Usenet?

Cole: A little bit. A little bit. So. But it takes… I mean, good luck. Have you ever read Flash Boys?

Timoni: Oh, I’ve heard of it.

Cole: Fantastic Michael Lewis book. And he actually has a list of podcasts. And he did a recent podcast, fairly recent, called The Magic Shoe Box. Really interesting. And it’s all about high-frequency trading and the latency associated with high-frequency trading. And a general by the name of Ronan Ryan, who who went and created entirely new stock exchange just to create fairness in the stock exchange. So coiled up miles and miles of fiber, got rid of the HFT guy. So it took no skill at all. The idea of stock exchanges, where you are informed enough about the mission of a company that you feel like you want to invest in what that company is doing and where it’s going, high-frequency trading came about. And a lot of these companies, just because they were one or two milliseconds faster, they just saw big buys happening so they could get in front of that. They could buy it, then sell it to the actual purchaser. Billions of dollars.

Alan: I think the major problems in the world can be solved by putting a leash on bankers, because they tend to make the rules in their own favor. And that’s how you ended up with–

Cole: Money makes the world go around.

Alan: You ended up with a trillion dollar bailout or other.

Cole: That’s right.

Alan: And here’s the thing. Many people don’t realize this right now in America. They don’t realize that the problem in 2008 with the subprime mortgages, it’s being done all over again with retail properties. Some of these big malls that are now empty because the big players have pulled out, the malls are dead. They’re all still being treated as if they were full of triple-A real estate rates.

Cole: So you know, the guy that ran that hedge fund–

Alan: Yeah.

Cole: –is that Curiosity Camp, today. Yeah.

Alan: Wow.

Timoni: All right. Well, we’ll talk to him.

Alan: Let’s have a little conversation about this.

Cole: He was the guy that went to went to Goldman Sachs and said, “hey, this is what we want to do and we can short all of this stuff.”

Alan: Well, he saw an opportunity.

Cole: If you guys are out for it, whether it’s at Curiosity Camp next year or else, I’m down to make this an annual special edition podcast.

Alan: I love it.

Timoni: This is awesome.

Cole: You were talking about, you can just create the rules.

Timoni: Yeah. Yeah. Exactly. It’s to see a curious property of money. And I think also, again, just like the modern economics is just not very old. It’s like as old as the enlightenment and started trading in the rise of what is now the modern day corporation. You do what you want until a law stops you. Usually you can do what you want at least once before someone makes a law to stop you from doing it again.

Cole: Do you guys know this guy, John LeFevre?

Timoni: No.

Cole: John LeFevre has the Twitter handle “@GSElevator.”

Timoni: OK. OH! Yes. Yes. Yes. Yes. Yes. “Goldman Sachs Elevator Overheard.”

Cole: So he actually never worked at Goldman Sachs, but he wrote a book. He did run the syndicate desk for City, if I remember correctly. But he wrote a book called Straight to Hell: Deviance, Debauchery and Billion-Dollar Deals. All of that investment banking in the 90s. And it is… I highly recommend it. It’s very short, but a really good read. And you do make up the rules as you go along.

Timoni: It’s partly like interior social motivation. Like, obviously you want to win. People who do this are highly competitive by nature, etc. But also you do have a mandate to make money. However you feel you can best do that within the law, within your own ethical practices, or whatever you think. I was listening to Knowledge Project recently and I forget who was being interviewed, but they were talking about Enron and how the CEO thought of himself as a fundamentally moral person who was doing the right thing. People are going to laugh, but even his, I guess, pastor vouched for him as just being this fundamentally good person. And I think there comes a point, especially when you are authority, it means that you have the responsibility for multiple different large-scale entities, the corporation itself, to shareholders and then the people in that corporation. I can see where you think you’re really working in the best interests of all against all of what anyone would call conventional morality. And the whole banality of evil, yadda yadda. I get it. But like, I understand where this is not something humans are good at thinking through on a macro scale.

Cole: Yeah, I couldn’t agree more. You end up having to do some pretty gigantic mental gymnastics to get to what Enron did and say yep, there were ethics and good intent behind those decisions.

Timoni: Right. You can see how they got there.

Cole: Totally. C’est la vive.

Timoni: No, “So say we all.”

Alan: Interchangeable. So we just pulled into this…Oh my God!

Timoni: I feel like rowing a boat in choppy water.

Alan: We are in a boat of a truck. Scout camp is beautiful.

Timoni: Oh, so speaking of, you were talking about your first time doing virtual reality. My first…

Alan: Coming up next on the XR for Business Podcast, we have part 2 of the interview with Kent Bye from the Voices Of VR podcast, the podcast that got me started in this industry.

I’m actually one of the founding members of the Open Air Cloud Group and Kronos Group is is really kind of trying to pull together these standards for 3D, as well for e-commerce. I know there’s a group right now trying to standardize 3D objects for e-commerce and retail because right now it’s a dog’s breakfast. Facebook accepts glTFs, Hololens is FBX models, VR is usually OBJs. So you have all these different 3D file formats. None of them really work well together and you can’t– it’s not easy to convert one to the other. And then of course, Apple came along and created USDZ. Or in Canada, USDZed. It’s crazy right now to think that there’s fifteen different 3D model types and it’s kind of like we need to settle on the JPG of 3D, whatever that happens to be, which in my opinion is probably glTF. But I think we need to standardize that and just pick, it so that– can imagine trying to send a photo to somebody and you send it in one format. And we saw this 10 years ago on the Web, just– it was 10 different ways to send a photo in different formats. Your camera would take one format, and it wouldn’t work with your MacBook. I think the tolerance for interoperability, I think the world just demands interoperability now. And if you’re not building for that, well, then you’re going to end up like Facebook and get broken apart.

Kent: Yeah. And I published a podcast with the managing director of Open AR Cloud, and one of the other founding members. And yeah, they were talking a lot about these various different issues. So, yeah, it’s something that you don’t see necessarily a lot of news on, until– unless you’re sort of deep into the weeds of helping design these protocols. But I did go to the Decentralized Web Summit last year, and one of the things that I saw was that there’s kind of like this pendulum that swings back and forth between the centralized systems and the decentralized systems. And I’d say that with cryptocurrency, with the containers being able take different aspects of a server and be able to push it out to the edge. We have it self-contained within either Kubernetes or Docker containers. And just in general, it’s kind of a movement away from centralized systems into more decentralized architectures.

That’s a interesting trend that I think that paying attention to the rise of the decentralized web and what that is going to afford. I feel like it’s a lot more about open protocols and collaboration and having people collaborate in different ways. And that’s something that I’d say has been a little bit lacking within the VR and AR industry. I mean, there’s been a certain amount of not sharing of knowledge, but in terms of like real meaningful collaboration. There’s been a few things like OpenXR and WebXR are of the big standouts, as well as probably the Chromium browsers that a lot of different companies are working on. But in terms of specific things to grow an ecosystem, it’s been difficult for companies to figure out what does it mean to grow community and what it mean to grow an entire ecosystem that you may be a part of. And I feel like the cryptocurrency world has had to deal with that a little bit, in the sense that they’re creating these open protocols, and they have to prove that there’s a buy-in to people participating in these different protocols, and are going to be able to have these different use cases.

And so I feel like there’s this metaphor of a blue ocean and a red ocean, where right now there’s so much opportunity for these immersive technologies that it’s really a chance for people to collaborate and to work with other people on these big initiatives, and that you could actually do a lot of really big important things together. And then eventually you’ll get to the it being a red ocean where in order for you get a client, you have to take it away from somebody else. With the blue ocean is that there’s such an abundance of opportunity that you getting business can actually help other people also getting business, just because it’s kind of promoting the overall industry in general. And so I feel like that there is a bit of like a real openness, but yet right now on the whole XR industry, there’s a bit of– with the launch of the Oculus Quest it’d starting to get locked down a lot more, they’re starting to be a little bit more of trying to grab and own different aspects of the platform. So I see we’re kind of in this shift moving more towards that kind of red ocean mindset, but yet still have a–

Alan: It’s too early to be moving there.

Kent: I know, it’s still– and that’s sort of why I wanted to bring up these kind of dynamics and tensions, because there is value of having a very good user experience with something like the Quest, or the iPhone, it’s also a very closed platform compared to, say, Android. But the user experience on the iPhone is arguably better than the Android. And the user experience in the Quest is gonna be better than pretty much any other competitor that’s out there at this point. And so we have something meaningful come from HTC Vive with the Focus, or Focus Plus. So I see that there’s this kind of pendulum that swings back and forth and that like, yes, we have the Quest. It’s gonna be more of a closed platform, but eventually there’s gonna be something that comes out there, that’s gonna be a little bit more open, and there’s gonna be new affordances that are given with that. So as people are trying to navigate this, I think it’s just important to kind of notice these big, large swings, whereas right now things are moving more towards the closed and more centralized, proprietary. But there’s also a lot of the future of technology that’s being developed right now is trying to support and sustain these completely decentralized systems.

Alan: I hope we move to an open system, because just from a practical standpoint, if I’m wearing a pair of AR glasses and I’m walking down the street, I don’t want to have to close an app, open another one, get it to do whatever it is, and then close that one and go back to– I don’t have tabs. I just want everything to work seamlessly around me as I move through my life. And the only way to do that is through open systems.

Kent: Yeah. How do you manage and maintain, if there is just one platform like the web, then on the web you have URL, which is you’re going to a location. But in the real world, you have a GPS with an altitude. So a geopositional– where you’re at in space and time, essentially. Well–

Alan: Then they can use photo recognition or image recognition to really triangulate down to centimeters where you are.

Kent: Yeah. So I think there’s a lot of stuff that’s still be fleshed out in terms of the AR cloud, the open AR cloud. I think it’s actually healthy to have a competition, and I don’t think it’s reasonable to only have open because you have to have what’s even possible. And usually what’s possible is defined by those closed systems. And sometimes there’s these different tradeoffs. Open source projects, they move slower, they’re more buggy, they have a worse user experience. And so you have more freedom and control. And some people, they opted run Linux because of that. But there’s a lot of people that decide to run a Mac or Windows, just because they don’t have to deal with all the thrashing. So I feel like there’s always going to be these tradeoffs between the closed and the open. I just want to promote whatever the polarity point is, because if it’s too much of one, then we need to have kind of the both to be able to be in this conversation of competition. I think it’s healthy to have those competitions and many different perspectives, but I tend to certainly be biased towards the open systems as well.

Alan: Well, I think it’s an interesting position in time where we are right now, where you talk about the blue ocean, red ocean. And up until now, I’ve seen just almost everybody in this industry collaborate with one another. We phone somebody, ask them for help, they’re able to offer it. And only recently have I realized that some companies, they’re not giving out their metrics around their success. So maybe they try VR training, for example, and they’re seeing some really good traction, but they won’t release it as a case study, because they’re seeing that as a technological advantage to their business. Others are, “Hey, let’s tell everybody this, because it will drive the price of developing this down for everybody and everybody will win.” So you kind of have both of those mindsets. Macy’s started using VR for furniture sales and they’re seeing an average — this average across one hundred stores — 54 percent increase in basket size and cart sizes using VR.

Kent: Wow. The degree to which people are sharing this information, I think it’s always been variable. I think we’ve been in a very actually, if anything, a way more open time in the history of VR than we’ve ever had. Because all throughout the 90s, up until– Laval Virtual in France has been running for the last 21 years. And when I go to different academic conferences like the IEEEVR and talk to different academics, there’s been a very robust ecosystem of VR that’s been happening in Europe consistently over the last two decades plus in aerospace and automobile industries. But what I heard from academics was they don’t talk about it, because of that very reason and because it did give them a competitive advantage. So I still think that there is a certain amount of things that people won’t or can’t talk about.

Right now in Hollywood there’s a lot of stuff that’s happening in virtual production. And I’ve done some interviews on that. But mostly there’s a lot of people that just aren’t talking about what’s happening in Hollywood and the changes that are happening, in part because it’s a little bit of trying to position yourself to be able to own the entire virtual production pipeline or the ecosystem there, because there’s already a lot of visual effects shops. And there’s been a sea change in terms of how visual effects are happening on set, probably starting at least with Ready Player One and Steven Spielberg with the extent to which that virtual reality technologies were being used on the set in Hollywood. So I feel like that there’s always gonna be those realms in which there’s gonna be things that are a little bit harder to get access to.

Another big example is what’s happening in the military. It’s very difficult to have somebody from the military tell you specifically what they’re doing, because not only is it just– it starts to become a national security risk at that point. But it just gets harder to get specific details about what type of training is happening, but VR’s been funded since like the Sword of Damocles that DARPA has been involved with funding VR innovation and technologies consistently for the last 50+ years. And Tom Furness — one of the pioneers of VR — was in the Air Force, and at the same time as Ivan Sutherland was doing all of his pioneering work. But he was quietly working in the Air Force, doing all sorts of applications up until the late 80s. And then he went to go start the HITLab in Washington. But there’s still a lot that has likely been happening within the military realm, that we still have no idea what’s happening.

So I feel like that’s a little bit par for the course. And I do as much as I can to find these people and talk to them. But I find any publicly traded company, it’s difficult for them to talk about things without getting approval from their PR, because it starts to then become a potential impact on their stock prices. And then you have this whole layer of public relations that has to help mediate that. And they’re pretty risk averse. So I feel like if you’re a startup company, there’s less risk. But I would personally encourage any company that’s working on stuff that want to talk about things — I usually solely focus on talking to people face to face at conference — so I encourage them to either come on your podcast to talk about it, or find me at a conference and I’d be more than willing to talk more about all the stuff that maybe isn’t getting a lot of other press coverage, because I do think it’s important to have these conversations. I mean, it’s why I do the podcast, because I feel like there’s so much value of being able to actually have a consistent conversation as to what’s happening, just to give people an access point to keep up to date as to how all this is unfolding.

Alan: It’s happening and it’s happening fast. It’s funny, it’s happening slow and fast at the same time. When you started your podcast in… what, 2014?

Kent: Yeah.

Alan: When you started doing your first podcasts, I’m assuming that you thought things would happen faster than they did, and then they took longer. But then at the same time, they’re moving crazy fast. So I think investors, VCs got in really early and they had all this money and expecting these huge returns. And it wasn’t there. And then they kind of had these false starts. And we put the false starts are getting shorter and shorter in between each false start, which means we’re kind of coming to this crescendo of technology. So we’re excited.

Kent: Well, if you look at the Gartner hype cycle, there’s a sort of the initial proof of concept, and then that has a certain level of hype of what is made possible. And then you have this real realization of like, “Oh, well, that’s what’s possible, but we’re a long ways away from that.” So then you have the trough of disillusionment and then you have the slow climb towards this kind of eventually the plateau of productivity. But I feel like VR has gone through two or three hike cycles. Since the 60s and then the 90s, it really had this huge hype cycle. And we’re we’re kind of in this arguably third or fourth wave of VR now. And I expect that– Gartner doesn’t even put virtual reality in its emerging technology, because it doesn’t really consider it to be emerging anymore. It’s now established.

Alan: No. It emerged.

Kent: It has emerged. And so it’s a proven technology that already has so many different compelling use cases, that it’s not even really considered emerging anymore in terms of the scope of technology, which is a great sign. And I think augmented reality has always been kind of trailing behind in terms of getting to that point of really being useful. I think AI combined with AR is gonna be helping push it.And so there’s these these dual innovations that are happening that are really going to get AR to that point. But looking at these different cycles and a big question in the consumer space is when is it gonna become mainstream? As I go to these different developer conferences, I go to Facebook F8, or Microsoft Build, or Google IO. These are like the major tech companies. And then there’s Amazon, they have Sumerian. You have Apple, with ARKit. Pretty much every major tech company right now is doing some foundational work, to be able to create this spatial computing paradigm shift. So for me, it’s not a matter of when, but it’s a matter of if.

And part of the reason why I say that is because some of the most interesting and most difficult problems are still in the realm of spatial computing, artificial intelligence, the blending of artificial intelligence with spatial computing, because you could start to create virtual environments that are able to train AI neural networks that end up being the exact same neural network architecture and weightings. So you can train a robot in VR, and then take that same training and put it into an actual robot. And you’re able to then basically do an accelerated version of spatial training for some of these objects. Doing that a lot for–

Alan: Wow, I never thought of that.

Kent: –for doing for cars, training these self-driving cars and whatnot. And you’d be able to– and you’re able to accelerate it, because it’s sort of a real time environment, you’re able to do these virtual simulations. And so because of that, there’s kind of like this sisterhood of experiential technologies between artificial intelligence and virtual and augmented reality. Because of that, there’s kind of a co-evolution that’s happening. You start to see some of these use cases for virtual reality drive the need to push computer vision or push pose detection or doing the tracking algorithms. I mean, just from what the Quest is able to do as a self-contained VR headset, that is in a large part for a lot of the AI innovations that a lot of those algorithms may have not even existed like five years ago in terms of the deep reinforcement learning and deep learning approaches to computer vision that have been innovated, but in having these huge, huge breakthroughs. So those huge breakthroughs are actually being applied and deployed into these immersive technologies.

So for me, I just see that it’s not a matter of if but but when. And I tend put it around like 2025 is when I feel that’s gonna be sort of a critical mass when all of these things are just gonna be completely all over the place. It’s gonna be a little bit of like how we’ve been about five years in. I’ve been doing the podcast a May 19th, 2014 as I went into the Silicon Valley Virtual Reality conference. We’re coming up on five years from that. So another five or six years from now, I feel like it’s gonna be a similar to– we went from the Oculus DK1, the first developer kit — 3DOF, really low res, screen door, kind of made you motion sick — to now all of a sudden a self-contained, very high resolution, six degree of freedom, self-contained, tetherless virtual reality system that you can take on the go. And that’s like an enormous– for anybody that’s in the VR industry it’s taken forever. But on that relatively anthropological scale of humanity, that’s really fast. And what the innovations that we’re gonna see for the next five years I think are going to be just as impressive.

Alan: Yeah, I think it’s just going to get faster and faster. And I never even thought about neural nets for vehicles using virtual environments to train the neural net. It’s just it’s this kind of crazy exponential feedback loop which will just make the technology faster and faster and faster. And the singularity might be the point where computers are out-thinking mankind, but I see it as kind of the point where all of these technologies into the exponential phase, where it just goes straight up. And you say kind of 2025 when they all converge. Think about it, even if it’s 2030, that’s 10 years away from now. And we can’t even remotely fathom what the world will be like in the next 10 years.

Kent: Well so that that’s where I disagree. And the reason why I disagree is because you have to look at it through the human experience. And I feel like the human experience is, there’s certain things that we know are going to be a part of the human experience and that these technologies are in service of the human experience. And so whether it’s like having entertainment, dealing with medical issues, connecting to your partners, dealing with grief, or connecting to your sense of deeper purpose, or spirituality, or religion, or philosophy, what we do for our careers and our work, what we’re doing and how we connect to our friends and our family, being able to deal with isolation and to not feel exiled and to feel connected, the way that we express our identity, the way that we have commerce and exchange value with each other, the way we communicate with each other, or we learn and we teach each other, higher education as well. And then being able to connect to our home and family.

That’s a spectrum where I could be pretty sure that the human experience is still going to involve all of those things and that if anything, the augmented and virtual reality technologies are going to still augment what it means to be human. And in fact, it may expand the whole sensory input of of all the different ways in which we can experience things, because it’s a big thing about expanding our senses. And if we are the essence of the human experience, this synthesis of all of our sensory input, then VR affords us to put new sensory input that we could never have. So we can start to develop completely new senses that we didn’t have before. And people have already been able to do that by turning their torso into an ear, by rewiring, taking audio sounds, transmitting it to a different haptic feedback onto your body. And then if you can’t hear, you can get that data information that is getting into your brain that’s in the same data structure as what the cochlear would be presenting. And your brain kind of figures it out. Your brain is very plastic in being able to take input from just about any source, as long as it’s in the right format. And the brain can start to discern those signals, then you start to expand senses and augment senses.

So I feel like that’s a realm where we don’t quite know what’s possible is, what’s the full human potential. But I do think that we’re going to still have the fundamental aspects of the human experience that have never changed. And that’s why I tend to look at technology through the lens of the human experience, rather than through the lens of technology itself. Because, yes, there are going to be all these amazing technological advances. And I don’t necessarily see technologies ever going to be able to achieve the same level of consciousness and human awareness as a human. That’s debatable, as to whether or not we’re going to have hard AI, but for me, I tend to say that human consciousness is something that’s very unique to humans, and that it’s emergent from our organic bodies and our life experiences.

It’s going to take a long time and there might be ways of mimicking it, but it’s gonna be kind of like just mouthing of those emotions rather than the full experience of those emotions by the technology or the AI. So that’s at least how I think about it. And I think by doing that, it sort of re-centers it through the lens of the human experience and puts the humans first, because the risk of thinking that the technology is going to be smarter than us, is that you start to create this hierarchy where we’re in service to the technology, which I think is not the point. I think that the technologies always needs to be in service of humans. And if it’s not, then something has gone seriously wrong.

Alan: Well, I think the problem isn’t that the technology will be in the service of technology, it will be that the technology will be employed by a very small few to leverage its potential against other humans. And that’s the problem. It’s never gonna be the technology that overtakes us, it’s that some people will have control of such vast amounts of technology that they’ll be able to take advantage of the rest of humanity. That’s what I worry about.

Kent: Yeah. That’s a huge thing that I worry about as well, because I do– I totally agree with that. And I do think that both virtual and augmented reality as well as artificial intelligence — as well as all of these other exponential technologies, frankly — they are forcing us into a paradigm shift, where it’s like a reflection over things that are not working, and that we have to kind of upgrade our operating system for how we relate to each other, the type of decisions we make, the way that we run our economies, the way that value is exchanged. At so many different levels, there’s a re-evaluation. If we have all the thing, all the existing structures, then we are going to create this situation where these big major companies basically have complete and total control over everything, which I think is a huge danger, which I think we’re on that trajectory. But that’s why I advocate so strongly for these decentralized systems, because we need these other open decentralized alternatives, so that we don’t have these handful of small companies that are controlling everything.

Alan: Well, I think we’re we’re already in that position where we’ve got Apple, Google, Facebook, Amazon, Walmart. These companies are arguably larger than most states, most countries in the world and their GDP. And so the influence and power that they hold are astronomical. And the distribution of wealth is actually narrowing. It’s getting worse. And I think we need a complete reset of a lot of different things. And my purpose in life is to inspire and educate future leaders to think and act in a socially, economically, and environmentally responsible way. Because the way we continue to do our business, if we don’t fundamentally look at things from the three fundamentals of social, economic, and environmental and start evaluating our businesses based on those, rather than just the one value of measure — and that’s economic — then I think we’re going to run into a brick wall with the earth itself, the planet itself. And people are like, “Oh, we’ll move to Mars.” Why the hell would you want to move to Mars? We have a perfectly good planet right here.

We have to take care of one another and this planet, as one unit. And I think these technologies will start to strip away at the idea of borders. And they will either make them stronger or they’ll actually make them less impactful, because at the end of the day, we’re all humans and we’re all here to work together as one entity. And I think virtual and augmented reality and artificial intelligence really have the potential to give us that one thing that I think is the greatest existential risk we’ve ever faced. And that’s the lack of education as we move into exponential technologies. And with that, I want to I want to just ask you the question that you ask everybody at the end of your podcast. I’m going to ask it here, because I think it’s a fitting tribute to the Voices Of VR podcast, which if you’re listening to this podcast, you made it this far, then you will absolutely love the Voices Of VR podcast. In your opinion, Kent, what is the ultimate potential of virtual reality?

Kent: Well, I think at the heart, what virtual and augmented reality technologies allow us to do is to connect more to ourselves, connect more to each other, connect more to the planet, and to connect at all levels of reality. I feel like there’s gonna be a certain level of self-awareness and contemplation, where we were just kind of talking about all these different moral dilemmas. And the thing about VR and AR is that it’s like the world’s most liberating education platform, that’s going to unlock all this human potential that we didn’t even know was possible. But it’s also the world’s worst surveillance technology, especially if it’s in the wrong hands. So I feel like it’s in this really strange position. For anybody that’s in VR and AR is that you are dealing with these huge major companies, that may or may not have your best interests in mind. And so you see all this deep potential for what’s possible. But yet at the same time, there’s so many ethical and moral compromises that the existing business models of surveillance capitalism have.

But I feel like that’s a sign of the times, is like these moral dilemmas where you, everybody has to navigate their own ethical framework for how they’re going to participate in bringing about change. And for me, I’ve decided to try to embrace the technology rather than reject it, because I feel like the potential for what amazing things it’s going to allow us to do, that potential is just so exciting that I feel like we’re going to have to create new things that don’t exist right now. Because one of the things that I asked one of the co-founders of the Internet, Vint Cerf. I ran into him at the Decentralized Web Summit and I was really curious, because he works at Google. I was like challenging him, I was like, “Hey, Vint, don’t you think that Google should stop maybe doing some of this surveillance capitalism? Because it’s really a pernicious business model.” And his response is really interesting, because he was like, you know, he’s somebody who helped invent the Internet and he’s deciding to work with Google. Why?

Alan: Because he can make more difference within than without.

Kent: Well, he sees that Google’s been able to provide universal access to human knowledge for free to everybody in the world. And they do that. They actually do do that. And if you can find him another way to pay for that at scale, then go ahead and do that and compete with them. At this point, nobody has thought of that yet. And I feel like that is a huge opportunity. But there’s also a huge challenge, because there’s all sorts of economies of scale that happen with having centralized power like that. And it really what it takes is a huge consciousness transformation for people to start to collaborate. And if we are going to have something that’s going to be an antidote to these big major companies, we’re gonna have to work together. We’re going to have to collaborate and work together.

Talking to Anand Agarawala from Spatial, he said “The big thing that they see in Spatial is to think about when you’re looking at a basketball team or a hockey team, and they’re all in synchrony with each other and they’re collaborating, but they’re not speaking. They’re just speaking nonverbally with their bodies. Then the spatial computing technologies is going to be able to enable that for humans at scale.” So what is it going to mean for us to be able to actually work together and build things that would be impossible for us to build on our own? That’s a true potential. And then the reason why we can’t think of the business model yet is because we haven’t seen what’s possible when we have people at scale being able to work and collaborate with each other. And I feel like that’s what the AR and VR technologies are going to enable. And that once we see that, then we’re going to maybe find out some of these completely new paradigms that we’re in the midst of needing.

Because frankly, I feel like we’re on a brink of cultural and economic collapse on so many levels. I mean, sort of the haves and have nots and the different polarizations that are happening in our world are getting so extreme, that we really need some ways that we can find common ground and work together. And I feel like if things do come to pass where there’s some sort of a crisis point, then it’s going to be through these new emerging technologies, the VR, and AR, and AI, cryptocurrencies. The technological architecture actually affords completely new ways of doing things that have never been possible before. And that the thing that is really going to shift for that is human consciousness, both at an individual and collective layer. So I see that there’s this huge philosophical and cultural and economic shifts that need to happen and that VR and AI and AR all arriving just in time on the brink of collapse, because we’re going to need all the potentials of what these technologies can do to be able to form a future that really works for everybody.

Alan: It’s interesting that you say that, because I’ve been working on something that I’ve never really talked about to many people, but I’ll share it here because I see these technologies exactly what you said. They will be able to kind of, I don’t say “save us” because that’s not the right word. But they will be able to unlock empathy at a scale and collaboration at a scale that we’ve never been able to understand. And I actually just wrote an article about “can virtual and augmented reality democratize education?” And really, what I’ve been working on is a completely new education system from the ground up that basically scraps the entire– not scraps it, but just utilizes it. So you already have an existing education system that teaches math and science and geography and these kind of transactional skillsets. But what we’re missing is more of the soft skill sets, the mindset skill sets that really will unlock our full potential as humans. Things like gratitude, mindfulness, creative problem solving.

These are things that if we don’t start teaching those– skills so simple as financial management. For whatever reason, we don’t really teach financial management in any level of school. And it’s kind of a leftover from slavery days, where we didn’t give anybody education, we kept it from them because it kept them in check. And keeping financial education from people — especially kids — keeps them in check and then they go get a job and they work, and they’re on this treadmill working for slave labor. And there’s got to be a point where we start to unlock the education of success principles, rather than something you can look up in your phone. Because Snapchat now has a filter where I can put my phone at a math equation, it’ll solve it for me. So there’s certain transactional skillsets that are not overly necessary in today’s fully connected world.

But the fundamentals of success, being able to focus yourself, meditate, communicate with other people, these are fundamental. And goal setting and marketing communications, being able to create products and services that serve humanity. And instead of asking children what job they want to get. We need to be asking what problem do you want to solve? Or what do you want to give back to humanity? And I think that is the fundamental shift that needs to happen, and these technologies can deliver that.

Kent: Yes, it’s going to be opening up right now. If you can listen to someone lecture at you and you learn really well, you can do great in school. But if you’re an active learner, if you need to have an experience, if you need to play around with things, if you need a story, if you need to be emotionally engaged, there’s so many different learning temperaments that are not being served right now by the current educational system. So I do think that there’s going to be a complete revolution for education. And yeah, I feel like for me, I’ve recorded well over 1,100 interviews at this point, focusing a deep dive into the kind of the evolution of thought within a very specific technological community for the last five years. And I feel hampered by the linearity of an RSS feed for how people consume that information, because I will go and record 15 to 30 interviews over the course of a few days, and I’ll come back and people can only really listen to a couple of them.

But what would it look like to go into a spatialized memory palace, to be able to actually have an architecture that represents the knowledge that has been captured? And if there’s AI to help automatically transcribe it, and to come up and perhaps find these different links between information, then you start to see how you have these memory palaces, where people can go and have an interactive learning experience. Like going to the Exploratorium in San Francisco, you can learn all about physics and these different, more active interactive games that allows you to learn about things. And I feel like all of education is going to be turning into that. So, yeah, I feel like we’re right on the cusp of how these spatial computing technologies are going to transform all dimensions of our reality.

And what I’m seeing is this trend of cross-disciplinary collaboration. So people from all sorts of different disciplines starting to work together. Whether it’s people from the psychedelic culture with meditators on top of immersive technologists. Trying to look at things through the lens of human experience, to be able to then maybe create a virtual reality application to be able to then modulate someone else’s human experience, to eventually help transform and help them grow. And the same thing for this sort of workshop that I’m going to — it’s gonna be in York City — it’s gonna have these cutting-edge neuroscientists that understand human perception, working with game designers who really understand human agency. And the game designers are going to be able to learn from the neuroscientists, to know how to better modulate the human attention and perception based upon what neuroscientists know about human perception. And then the game designer is going to be able to help design experiments that are gonna help the neuroscientists learn a lot more about the nature of the mind.

So I feel like there is this kind of fusion of all these different disciplines that are happening right now, and it’s all being seen through these immersive technologies. It could be that the human experience ends up being the lingua franca between all these different domains. And that’s what I find really exciting, is because we need to have those philosophical frameworks to help understand how we can pull these things together, because we have had a very siloed, sort of reductive way of approaching life. And I feel like this shift that we’re moving into right now is trying to synthesize all these things together and bring all these different component parts together and to sort of synthesize it through the lens of human experience.

And for me, that is so exciting to cover, because it allows me to basically talk to just about anybody. It can end up being about VR, because it’s about human experience. And that’s if anybody is in this realm, there’s a boundless a ways that you can start to learn about pretty much every different domain. So if you are a lifelong learner, you can learn about game design, or architecture, or colors, or human stories, or education. There’s just– it’s just unlimited. Both VR and AR and AI are just– if you like to learn, then this is a great place to be right now.

Alan: Yep. When I got into this industry, I had no idea what to build. So we built everything. We actually came up with the moniker, “We do eVRything.” [chuckles] That’s not the best for business model, but it does keep things interesting, that’s for sure. [chuckles] I want to thank you so much, Kent, for taking the time on this podcast. It’s been absolutely wonderful speaking with you.

Kent: Yeah. Thanks so much for having me, Alan. And I should also just send a shout out to my Patreon members. I am a listener supported podcast. And so if you want to support the work that I’m doing, you can support me at patreon.com/voicesofvr. Thanks a lot.

Alan: And that concludes part 2 of the XR for Business Podcast with guest Kent Bye from the Voices Of VR podcast. Make sure you check out part 1 of this episode for more information about all things XR related with Mr. Kent Bye.

Alan: Hey, everyone, Alan Smithson here, the XR for Business Podcast. Coming up next, we have part one of a two part series, with the one and only Kent Bye from Voices Of VR. Kent Bye is a truly revolutionary person and he has recorded over 1,100 episodes of the Voices Of VR podcast. And we are really lucky to have him on the show. And this is two parts, because it goes on and on. Welcome to Part 1 of the XR for Business Podcast, with Kent Bye from the Voices Of VR podcast.

Kent has been able to speak peer to peer with VR developers, cultivating an audience of leading VR creators who consider the Voices Of VR podcast a must listen, and I have to agree. He’s currently working on a book answering the question he closes with every interview he does, “What is the ultimate potential of VR?” To learn more about the Voices Of VR and sign up for the podcast. it’s voicesofVR.com. And with that, I want to welcome an instrumental person to my knowledge and information of this industry. Mr. Kent Buy, it’s really a pleasure to have you on the show.

Kent: Hey, Alan. It’s great to be here. Thanks for having me.

Alan: Oh, thank you so much. I listen to probably the first two or three hundred episodes of your podcast, and I went from knowing literally nothing about this industry to knowing a lot. And it’s those insights that you’re able to pull out from the industry that’s just amazing. So thank you for being the voice of this industry.

Kent: Yeah. And when I started the podcast, I wanted to learn about what was happening in the industry. And so I felt like one of the best ways to do that was to go to these different conferences, and to talk to the people who were on the front lines of creating these different experiences. And so at this point, I think I’ve recorded over 1,100 different interviews and have published over 760 of them so far. So it’s about for every two interviews I publish, I have like another interview that I haven’t. So I just feel like it’s important to be on the front lines, going to these gatherings where the community’s coming together and to just be talking to people and see what they’re saying. See what the power of this new medium is.

Alan: I had the honor of being interviewed by you at one of these conferences. I don’t know if it ever got published, but it was an honor anyway just to speak with you on the subject. But you get to talk to literally everybody, anybody who’s anybody in this industry. And it’s really an amazing experience to listen to these podcasts. And you really go deep into the technology of it, the listeners of this podcast are more maybe in the business, maybe they’re not really into VR. What are some of the business use cases that you’ve seen from these people that you’ve been interviewing that made you go, “Wow, this is incredible?”

Kent: Well, first of all, virtual and augmented reality as a medium is a new paradigm of computing: spatial computing. And I think one metaphor to think about is how we usually enter into the computer is by pushing buttons and moving a mouse around. And it’s almost like we have to translate our thoughts into a very linear interface in order to interact with computing. And it’s usually also in a 2D space, so a lot of times interacting and designing for 3D spaces. And so there’s kind of like this weird translation that you have to do all these abstractions in order to do computing. So I feel like one of the big trends that’s happening right now is that with spatial computing, it’s becoming a lot more natural and lot more intuitive.

And so anybody that’s doing design and 3D objects, it’s almost like a no-brainer, whether it’s in architecture, or designing 3D objects, or big aerospace, airplanes, cars. All these different people who are making these 3D objects in these CAD programs, there’s just something that you can make design decisions lot faster when you’re actually immersed into this space. And you don’t have to spend all this money to prototype these things out. So you see a lot of it in architecture, engineering, construction. But what I’m really excited about is these other aspects of natural communication. So how is AI going to be combined with these spatial computing platforms, being able to detect what we’re looking at with a Hololens 2, and to be able to then speak these different affordances and actions. We’re going to get to the point where you can just say something and just speak, much more like you would interface with other humans. And I think the computer technology is gonna become better and better at being able to detect what we are intending, what we’re saying.

I said the other huge area that we’re seeing just enormous amount of applications is in training. And really when you’re training, you really want to ideally do it yourself and be immersed into the context of the environment, to have all the emotions that are coming up when you’re under pressure to make a decision. But to be also embedded into a context that is mimicking what the real world situation is. And then you have to make choices and take action. And the action that you’re taking within VR is often very similar to those same embodied interactions that you may be doing in real life. So I feel like there’s so much of a mirroring of what’s happening in these virtual worlds that the training applications are just incredible, in terms of whether it’s a surgical simulation or Walmart’s using it to train for different employees. Elite sport athletes can do lots of different repetitions and be able to train themselves to have a level of situational awareness.

I’d say those are the big ones that I’m seeing right now. In the future I expect to see a lot more information visualization, data visualization, finding completely new ways to analyze data, symbolically and spatially. I think there’s a lot of work that can still be done. But a lot of things that I think about also is just like flow states, like what does it mean to work and how can you cultivate the deepest flow state that you possibly can, so that when you’re working you’re just not having the technology get in your way, but you’re having technology amplify what you’re able to do. So another big area that I’m seeing sort of early indication with, especially when I went to the Laval Virtual in France — it’s an expo that’s going for the last 21 years — this concept of open innovation. So collaboration and communication. Remote assist is another sort of separate thing. But in terms of innovation, what is the keys of innovation? And I think a big part of it is being able to openly share and ideate and brainstorm and tap into the more creative aspects of what you’re doing.

And so I’m seeing a lot of– like Desart Systems was working on some specific products for open innovation, which I’m excited about because a lot of what you’re seeing with augmented reality is for people who are first line workers. So people who are in factory floors, or people who are meeting assistance for remote collaboration, or the people who are on the grounds physically doing these different actions, whether it’s on a construction site or a factory floor. So a lot of the use cases for the Hololens have been very much in that realm. But I’m also really interested in terms of knowledge work, like what does it mean to be able to collaborate with other people and to lower all the barriers?

Alan: We had Jacob Lowenstein from Spatial on the show.

Kent: Oh, cool. Yeah. Yeah, I just talked to Anand [Agarawala] — who’s the CEO of Spatial — and saw the demo and just did a whole breakdown of all what they’re doing with Spatial.

Alan: Well, that speaks to exactly what you were saying; design work and collaboration and higher level work collaboration in augmented reality.

Kent: Yeah, I think that it’s still very early, but just– it’s also very early in terms of having this completely new paradigm for how you do spatial computing. I think there’s going to be a mix of sort of a, flashy Hollywood things that you see where the famous like Minority Report, where you’re kind of going through these different interfaces. That looks great, but it doesn’t always feel great if you have to do that for eight hours a day.

Alan: Yeah.

Kent: I think the key breakthrough is gonna be when you’re able to just not think about it, and kind of naturally move your body and be able to interface with computing with your full body. Because there’s this neuroscience concept, it’s called embodied cognition. And what that means is that we don’t just think with our minds, we think with our entire bodies. And so what does it mean to actually get your body engaged and moving around? It actually makes you think better. And anybody who likes to take meetings while they’re walking, you may find that you may have a different way of brainstorming and ideating when you’re actually in motion with another person. I think that spatial computing is actually going to be leveraging a lot of those different types of concepts, in that we spent a lot of time very stagnant and sitting in our desk. But a lot of the affordances of VR when you’re actually moving your body around, it actually is tapping into deeper levels of the way that you think. So I think that there’s gonna be huge potential for what’s it mean to be able to tap into that?

Alan: Absolutely. It’s really an exciting time. I– personally I do walking meetings all the time. And I can tell you, it just– it’s not the same to have a phone meeting or seated meeting when you’re walking that just sparks something. And I know Steve Jobs was a big advocate of walking meetings. So there must be something to it.

Kent: Yeah. And I think that I’m starting to see that spatial computing is going to be tapping into that. I’d also throw out there, that there’s supposed AR frames.

Alan: Yeah.

Kent: And I expect people going to be wearing like these sunglasses that are kind of shooting spatial audio into your ears, but being able to tie with your phone, getting GPS, and being able to — basically — detect which direction you’re looking at. There’s gonna be a lot of innovation that happens in just overlaying layers of audio on top of reality. We’ll eventually have digital objects on top of reality, but I think there’s a lot of innovation that’s happening, at least in the storytelling around, where when I go to these different film festivals, I kind of see what the storytelling potential is with these mediums. And I feel like there’s going to be this great convergence at some point in terms of figuring out how to engage people within a story to help teach them these different concepts. And I think that’s kind of like the next frontier of what is the blending of the storytelling affordances of VR on top of like the gamification game elements. You kind of have Hollywood mashed up with the game developer community, and VR is like this melting pot of all these different disciplines.

And so that’s what makes it so fascinating to me, is that you get people from every different domain has something to say about VR and AR, because it’s all about modulating the human experience. So I think we’re in this kind of very early Wild West era, where there’s not a lot of very specific best practices or experiential design theories that have been well established, and so you kind of have to figure it out on your own. But I feel like there’s enough proof of concepts to show that it’s effective. But to really tap into the deep ultimate potential, I think we’re still quite a ways of doing that. But one of the sort of dark horses — I’d say — for the enterprise is that there’s going to be an element of story and storytelling there, to really fully engage people. And I think we’re still very early in that era. Like with film, there is a cinema of attractions, where they were still trying to really figure out the language of the medium. I feel like we’re in a very similar spot, where they haven’t really figured out all the different affordances of the language that you use for spatial computing. It’s kind of an exciting time, just because there’s a lot of experiments to be done and a lot of stuff that still needs to be figured out.

Alan: It’s true. We see it every day, where things– I actually came up with this quote, “How do you disrupt an industry constantly disrupting itself?” And every day something comes on the news in virtual and augmented reality that flips the industry on its head. I mean, the introduction of ARKit and ARCore probably put 200 startups out of business. And we’re seeing these kind of rapid advances in technology. We’ve got AR platforms being hosted by Amazon, by Facebook, by Snapchat, where you can develop your own AR lenses. Anybody can do this, not just developers. So I think there’s going to be a democratization on the creation side, as well as this expansion on the enterprise side, which will — in my opinion — drive the consumer market forward.

Kent: Yeah, I feel like VR and AR is such an interesting realm to cover, just because it’s helping define what the human experience is and all the different contexts that we have. Because there are going to be entertainment applications, medical applications, and ways to communicate with our partners — whether it’s our romantic partners or business partners — being able to deal with death and grieving, spirituality applications in terms of connecting to myth and story and philosophy, but also our career and what we’re using in our jobs, connecting to friends and family, dealing with isolation or neurodegenerative diseases. Expression of identity is a huge thing with the facial filters, and I’ve seen that a lot more in the consumer space. But the different ways that we have virtual embodiment, and what does it mean to take on different characters and different bodies, and financial like virtual economies, as well as communication and education, and connecting to home and family. So I feel like there’s all these different specific contexts that they each are going to teach us something new about what it means to be human.

And I’d say that the difference between VR and AR through this lens of context is with VR, you’re able to completely shift your context. So you may be at home, but you’re all of a sudden now you’re completely embedded within an office meeting and now you’re at work. So you’re kind of be able to do this huge context switch. But with AR, it’s less about doing a complete context switch, because if you’re at home, you’re already at home and you may be able to overlay different people inside of your existing context, but you’re still in that center of gravity, of whatever context you happen to be in. So I’d see that with AR, you’re gonna be still embedded and grounded into whatever context you are, but you’re able to kind of pull things in. I think it’s gonna be harder to do a complete context shift with AR, but as AR and VR start to eventually converge, maybe you will see that a little bit more. But that’s at least some of the ways that I’m seeing a little bit of the differences for.

For example, if you want to do an architectural visualization, it may be better to do that in VR, because you’re able to completely shift your context and be completely immersed with that environment. But if you’re trying to look and have a group conversation with five different people about a 3D object, maybe you want to have that in AR — especially if you’re co-located with each other in the same room — so you can have all the affordances of body language and communication that we all have. But if you still want to talk about these virtual objects and maybe having either a Hololens on your head and maybe there’s some tablet’s where there’s different ways of accessing and annotating these different 3D objects. So those are some of the different use cases that I am seeing, at least at this point.

Alan: Yeah, it’s interesting. Jacob from Spatial was mentioning about– because I asked him “Why wouldn’t somebody just put VR on and go into a collaboration room?” And their response actually, I hadn’t considered was: when you’re in a group — let’s say you’re four people in an office, and you’re face to face — you still want to see those people. You don’t want to be in four different VR headsets even though you’re in the same room. It would be weird. Whereas you can also then have the four people that are in the room, and have a fifth person who is somewhere else in the world kind of beaming in,, and those four people then beaming out to them. It really creates this feeling of community and a lot of times you also want to be able to see other devices while you’re in there. And we’re getting to the point where we’re going to be able to port our devices into VR, our computer screens and our phone screen or whatever, but we’re not quite there yet.

Kent: It reminds me of– I have gone to Microsoft Build for the last three years, and that’s a good place to kind of see some of the AR demos that are there in terms of the partners with Microsoft. And so with some of the demos that I’ve seen there were for people who were doing sales for say, medical equipment. Sometimes the medical equipment is very specific to the context of a specific room. And so I think people who are doing sales would be able to look at the existing context of a room and start to overlay these digital objects on that room, but still have that face to face interaction. And especially with the Hololens 2, where you can kind of flip up the visor if you want to look people directly in the eye. But I feel like just in talking to different people, the sales increase in terms of being able to have them see what it was actually going to look like in that context. It also just– Lowe’s and these different companies that when you go to like Home Depot or Lowe’s, they’ll do these whole build outs of an entire kitchen.

But oftentimes you may have a very specific thing you’re looking for and you want to know what that looks like in the context of your kitchen. So being able to detect your space in your context and then put that object — whether it’s a refrigerator or whatever it is — into your– into that context, it lowers the cognitive load of imagination, because it actually is very difficult for you to imagine what it’s going to look like. And you have to kind of just see it before you really know whether it’s going to work or not. And if you can do that and preserve that existing context and then lay the object in there, I think that’s another huge use case that I’m seeing. Whether it’s selling medical equipment or selling kitchen equipment for home renovation, there’s some of the unique affordances of AR as a medium.

Alan: And the great thing about that is that that’ll work on any device, that’ll work on your phone. And by the end of this year, there’ll be over 2 billion smartphones that are AR enabled with ARKit and ARCore. And so you’ll be able to put a fridge in your kitchen in context in the right size and see if it fits. Then you can drop a car in your driveway and take a picture of your new car. So I think there’s gonna be a huge push towards kind of three dimensional retail and e-commerce with these mobile devices, and that you don’t even need a headset for that. You can use the device that’s in everybody’s hands. And it’s not the same experience, but it doesn’t have to be in those cases.

Kent: There’s a interesting point that came up in my mind, as you were saying some of that. And that’s that I think a lot of enterprises, they need to see a lot of numbers in terms of the improvement of how much more efficient things are. And people like Accenture, they’ve been certainly coming up with a lot of those different quantitative studies, and I think a lot of companies would want to see that. What is the return of investment for jumping into immersive? And I think those are important to be able make those decisions. I think it’s also important to point out that there’s a lot of benefits for spatial computing that maybe never be able to be quantified with a specific number. There’s a certain quality of experience that happens, that I feel like there’s a whole realm of the usefulness of these spatial computing technologies that it’s going to be more behavior and cultural shifts in order to use these technologies. And specifically what I mean is that we kind of live in an information environment right now, where we really want fast bite-size information, on the level of tweets. And I kind of see spatial computing as the antithesis of that, because it’s very difficult to hop into a virtual reality experience for a few minutes, although I will say–

Alan: It’s impossible to hop in *in* a few minutes. Every time I go to use mine, I’ve got to wait for all the updates. [laughs]

Kent: Yeah, there’s all sorts of thresholds. I mean, I will say that with Oculus Quest that’s changing for me. I’ve had early access to the Quest. And I do think that the Quest is gonna be revolutionary in terms of making it easier for people to hop in.

Alan: Oh, I can’t wait.

Kent: The focus of Oculus has been much more on gaming rather than productivity applications, but they still have a number different productivity applications that are coming out. Whether that’s going to be Tilt Brush for doing rough prototyping or Gravity Sketch. And we’ll have to wait to see what other enterprise applications come out. But I do expect to see that the Quest is going to have a lot of applications. That’s the headset that has no tether, no wires. It’s completely wireless and mobile. And you’ve got these 6DOF controllers.

Alan: It’s really exciting. What’s the price point? I think it’s–

Kent: So there’s $399 for 64 gigabytes, $499 for 128 gigabytes. However for the enterprise it’s like $999 per headset, with a $180 per year. There’s a whole Oculus for Business that is going to have a whole specific offerings for the enterprise and that you get the ability to kind of turn off all of the main Oculus Home and be able to distribute just your application. And they’re working on different deployment solutions and whatnot. Because if you’re working with dozens or hundreds or thousands of headsets, then you’ve got to have some system to be able to deploy updates and software to all those headsets. And so that’s kind of the software they’re working on. But just to kind of wrap up a point that I was beginning to make, which is that I’d see virtual reality technologies to be very similar to like sitting down and reading a book, where you’re actually making a commitment to be completely immersed and focused on a very specific task. And I feel like that is becoming rarer and rarer.

And I think that’s been in some part the difficulty of why VR may have not been taking off as quickly as some would have imagined. The technology is amazing, but there’s a certain amount of cultural shift that you have to have in order to really commit to being immersed and present within a virtual experience. And I feel like once you cultivate that gets that quality of being, where you can be fully immersed. And I feel like that is tapping into other levels of focus that are becoming more and more rare within our lives. And so the levels of like focus and productivity and consciousness hacking, I expect that there’s gonna be ways for people to be able to really get into these deep flow states and potentially even start to do more work from home, especially if you work in an open office environment where it becomes more and more rare for you to really have this deep focus that you need. So I just wanted to point out that there’s a lot of emphasis right now in our culture on numbers and trying to quantify things.

And I’ve been focusing a lot also in what are the different qualities that maybe difficult to put a number on? And I think it’s like these levels of presence, these depths of connection, the intimacy that you can have when you’re face to face with somebody else. There’s all these levels of body language where you fly across the world, because you want to have that intimacy. I think eventually we’ll get there with VR, we still have a lot of ways to go in terms of body language and emotional expression, where it’s not quite the same as being face to face. And maybe it’ll always be preferable to be face to face with certain contexts. But for some situations, I think it’s gonna be a lot better to just meet in virtual world and to not have to travel as much. And especially if you’re talking about like remote collaboration with many different people, because if you use something like Zoom or Skype, it’s OK for a couple of people. But once you start to have like a group conversation with five or twelve people…

Alan: Yeah, it falls apart.

Kent: You really want to have body language, you will have a spatial audio. It’s so much more efficient to have big team meetings within virtual spaces, rather than trying to mediate it through digital technologies. And so I expect that one of things I’m really interested in seeing is like some of these different startup companies within the VR space that are remote, and they have to kind of dog food their own remote collaboration tools. I think that what that’s going to bring is that maybe there’ll be a less emphasis on specific jobs or tasks where you have to be expected to go into work. And I think eventually we’ll get to the point where maybe you could live out in the middle of the country. And as long as you have a good Internet connection, you could be still interfacing with some of the most talented and brilliant people in your disciplines or domains, and you could be anywhere in the world. And I think the potential of what that means is really exciting, because it doesn’t mean that you have to go and live in Silicon Valley or Los Angeles to be able to collaborate and work with some of these people, or whether it’s New York City or wherever it is in the world, a major city.

I see this other trend of these remote collaboration or remote work, where people are able to work from home. But the thing that’s lost is those group conversations and the more serendipitous water-cooler conversations and stuff like that. So it’ll be interesting to see how some of these remote companies are able to adapt and create these tools. And one thing that I would say from my experience of working at a remote company is that if you’re completely 100 percent remote, then it works great. But as long as you have like a critical mass of people that are face to face, then it’s really difficult to be pulling in all these other people into these remote environments just because it’s a definite context switch. So that’s some of the things that I’m — in long term — looking forward to seeing how this all sorts of play out.

Alan: Yeah. It’s– I think another thing that will make a big difference and it doesn’t seem like a big thing, but eye tracking. Being able to actually look somebody in the eyes in VR. I’ve had the opportunity of playing with the Tobii tracking system with HTC Vive. And just being able to look at somebody, look at them in the eyes and know that they’re actually looking at you. They’re not an avatar that’s kind of a disembodied, cartoonish version of themselves. And to be honest, everybody keeps trying to push towards photorealistic avatars, and there’s the uncanny valley of getting too close to reality, and then your brain kind of goes, “there’s something not right” and rejects it. But I think we can stay on the cartoonish side of things as long as we hope things like eye tracking and hand tracking. It really– it feels right. I’ve done conferences in VR where I’m speaking to 200 people, and I feel like I’ve met some of these people. We have little conversations in the hallway before or after the event. And it feels like you’ve been there. It tricks your brain into thinking you actually were there. It’s amazing.

Kent: Yeah. Both the Hololens 2 and the Magic Leap are shipping with eye tracking. And I think that the Vive, there’s gonna be an enterprise version that has eye tracking as well.

Alan: Yep.

Kent: It does make a difference, especially the social interactions. And the thing that the Hololens was really looking at — Hololens 2 — is to be able to look at objects, and that allows the computing technology to be contextually aware. It knows potentially what you’re looking at. It can detect the object — especially with virtual objects, it can know that you’re looking at the virtual objects — and you can start to use voice commands so you could look at a light and say “off” and then eventually have the light turn off. There’s a lot of talk about edge compute devices and getting away from centralized everything and being able to have these different remote sensors. And so I expect that that’s going to be a huge thing, especially if you are a company that starts to deploy a lot of these edge compute devices that are detecting different aspects in an environment. The user interface for a lot of those devices could be a layer of augmented reality in these Hololens devices or virtual reality devices, where you can start to have your command center within a virtual or augmented space.

Alan: Incredible. There’s so many opportunities and so many possibilities and –like you mentioned — it’s kind of like when the iPad was introduced. It was great. You could watch movies on it, and you could read books on it. And then all of a sudden people started making all sorts of things for it. But you look back 12 years ago, there was no such thing as an app developer, and now there’s millions of app developers. Four years ago, there was no such thing as VR developer — well, maybe five years now — but now there are probably thousands, if not hundreds of thousands, and soon to be millions of people developing for this technology medium. And it’s really about to enter this kind of exponential phase. But it’s not just VR and AR, it’s artificial intelligence, Internet of Things, 5G, quantum computing, edge computing. It’s molecular genetics. All of these technologies, all at the same time, are really going through this nascent stage where they’re entering into this exponential growth phase where they all go straight up. And since they all kind of work together, I think we’re entering in to what is quite possibly the singularity in the next 15 years. 10, maybe.

Kent: Yeah, I’m a skeptic of the concept of singularity. And the reason why is because I feel like there is human consciousness that is way more complicated than these distributed technologies and that– I mean, the theory of singularity is that at some point that the change is happening so quickly that it goes beyond the human comprehension and of understanding these systems. And if we get to that point, then I feel like something has gone seriously wrong, because I don’t think it’s about creating a sort of a self-sentient technology that is so brilliant within its own right that it doesn’t need humanity. I feel like, if anything, all these technologies are in service of humanity. But it does speak to this larger point of explainability and ethics and morality, because an artificial intelligence, at least it’s– when you start to have these very complicated deep learning algorithms and you want to know why something made a decision, then it becomes a little bit of a black box and it becomes unexplainable. So if there is a level of these different machine learning applications that are creating these models that include millions or billions of feature points that are sub-symbolic in the sense that there’s no comprehensive story that you could look at and say “Why did this determine that this was a cat and not a dog?”.

But I do think you’re right in terms of these are exponential technologies, and there’s gonna be ways in which they are combining together that are unpredictable. Just in terms of, say, who would have predicted that having a little extra bandwidth, that eventually the cellphone signals that eventually was catalyzed and inspired text messaging through the accessibility needs, that something like text messaging would be able to facilitate micro-economies in Africa. To kind of take these combinations of things and to see how they’re combined to be able to have these emergent behaviors that are a little bit hard to predict. And I feel like we’re in that realm right now, where there are going to be cryptocurrencies and the blockchain and be able to do distributed trust and sell sovereign identity. And that, in a lot of ways, I think it’s going to bootstrap what the point that I thought of when you were making that point is that, yes, there are app developers and there is a value of having a closed ecosystem to be able to do native development.

However, I do think that there’s value of having open systems and open protocols and to look at the power of the open web. Because you do have this kind of tension between the closed walled garden app ecosystems and the power of the open web. They kind of are working in antithesis to each other. I feel like they’re always going to be a dialectic between the closed and open. In some ways, the app ecosystems can be on the bleeding edge. But the downfall of being on the bleeding edge is that if you want something to still work in a year or two years or five years or 10 years, then there’s a lot of like technical debt that has to be maintained for a long time.

Alan: [laughs] Sorry, I laugh because to think that something that we build today is going to work in 10 years is almost laughable.

Kent: But there’s VRML projects that were created 20 years ago that still work today. There’s websites that were created over 25 years ago that still work today. So that’s the value of interoperable open standards, is that you *can* actually create stuff that is going to be able to be looked at in five or 10 years. I feel like that’s a dynamic conversation that I don’t hear as much about in the larger consumer VR. But in terms of the enterprise, especially if you’re working with these different systems where you don’t want to be maintaining a huge systems each and every year and just making sure that the unique build still works. There’s value being on the bleeding edge, but there’s also value of waiting for the open standards, like the OpenXR for hardware, or the WebXR, or the OpenWeb, for these open standards for identity.

So I feel like — depending on what you’re doing in the enterprise — if you do need to have stuff that is still accessible and usable in three to five to 10 years, then I think it’s worth looking at some of these other alternatives that maybe move slower. But once the WebXR 2.0 spec finally launches — within the next year or so, I imagine — then you’re going to see a huge renaissance and the alternative like OpenWeb, because I feel like not having those standards fleshed out has been leaving all the spoils left for to do development within either Unity or Unreal Engine. And for anybody who’s doing serious applications, I would definitely recommend them to do Unity or Unreal, but to also keep an eye on what’s happening in the OpenWeb space, because it’s going to be a huge part. Especially as depending on who you’re doing, the downfall for those app ecosystems is that you have these walled gardens, where you have curators who may or may not want to support or promote your different applications. If Facebook does go down the route of only looking at gaming, then if you want to create a consumer application that is usable by the enterprise, then it may be harder to get it onto the platform. So I think there’s a lot of different tensions and tradeoffs that I just wanted to kind of flesh out there.

Alan: And that concludes part one of the XR for Business Podcast with our guest, Kent Bye. Coming up next on the XR for Business Podcast, we have Kent Bye, part 2.

Alan: Hey, everybody, Alan Smithson here, the XR for Business Podcast. Coming up next, Kyle Jackson, founder of Talespin. You may have seen Barry the virtual human that you can fire in real life. We’ll be talking to them about their enterprise software solutions that leverage immersive technology to transform the way global workforces, learn, work,, and collaborate. We’ll also be discussing how you can use immersive technologies as an assessment tool to better prepare your workforce for exponential growth. All that and more on the XR for Business Podcast. Kyle, welcome to the show, my friend.

Kyle: Hey. Thanks, Alan. Thanks for having me.

Alan: Oh, it’s so exciting. Ever since I saw the video that popped up of Barry, the lovable older gentleman avatar that you can fire. How did that come about? Tell us about Talespin, and how did you get here, where you are now?

Kyle: Yeah, Barry became famous very quickly, because it’s such an ironic idea. And that’s really what I think caught people’s attention; the idea that you could use virtual humans for soft skills training was something that just seemed sci-fi and ironic. But then once you started to peel back the layers of it, it just starts to make a lot of sense.So how we got there, was we started looking at all of the future skills gaps, surveys, research, everything that was surfacing from the Shift Commission, to the World Economic Forum, to McKinsey Global Institute. And we just kept seeing — obviously opposite AI and automation and robotics, all the things that are going on one side of technology — that there was this increasing index toward soft skills for some of the most underserved areas for businesses going forward. We’re building this platform which is supposed to help transfer skills and really align us to the future of work. And every single survey says soft skills is one of the things we should be looking at. And we went, “Wow, is there anything we can do there?” The thing that was most important for us in thinking about that was we have to hit emotional realism to do this. This isn’t like a point-and-click replacement. It needs to be something that when I’m sitting in there and I’m opposite Barry or any other virtual human now, that I believe the emotions and the frustration and all the things that are thrown at me. And to do that kind of at scale. From both an assessment standpoint, content, and deployment to large companies.

Alan: So how did you guys overcome the Uncanny Valley of Barry? I’ve seen so many human avatars that are almost there, but they got that creepy feeling. And if you’re going for emotional realism, creepy is not what you want on the delivery side.

Kyle: No. Well, we kind of pulled up short in our opinion. So we were pushing further than where we landed. And you can get to even more photo-real than Barry is. But soon as you do, you start to push over that ledge and it starts to really be creepy. We’re kind of right in the sweet spot of north of Pixar, but not hitting realism. And that seems to work. We focused a lot on micro-expressions and figuring out like a programmatic way to add a lot of micro-expression to the silent moments too, because I think one of the things that technologists immediately do is we had to figure out how to do animation systems, lip sync systems and things like that for when people are talking, but especially in soft skills, a good majority of the hairy stuff is the unspoken. And so we were thinking a lot about like, well, how do we build scalable systems for the unspoken and for the nuances of those micro expressions. And so that took us on a whole other track. And it seemed to really work, because people– we’ve had dozens and dozens of people who would take that headset off and be upset, or really have that kind of walk-the-plank moment that we all had in VR, but around this this idea of like, “Wow, I just I really had a weird feeling about this fictional character.”

Alan: You know, it’s crazy. I actually dug– I bought Richie’s Plank again, and I’ve been putting people through it. And I forgot how amazingly simple that is. Wow. It’s so effective.

Kyle: And that’s what the Barry demo was. So we aren’t building software to teach people how to fire people. That’s not really what’s being sold. But we went, “Hey, what’s the Plank Experience of emotional realism?” And this obviously focused on soft skills, focused on business. And we went, “Well, here’s a universal situation that kind of everybody knows is uncomfortable, either having been on one side or the other. Let’s use that as the thing that basically people sit in and go, this is uncomfortable or I knew how to push through that objection or whatever.” And it seemed to be pretty effective. So the actual stuff that’s being sold is actually more on the empowerment side. So looking at how do I get more proficient in giving good feedback, or how do I get more proficient in sales? Things like leadership bias and other topics that are much more about empowerment than they are about termination.

Alan: The last podcast I had was with somebody working on trade skills. So, driving construction equipment and electrical and HVAC and these types of things, and you guys are looking the soft skills, and it makes me kind of question is there anything that VR and AR is not better than the traditional training? I don’t know the answer to that, we really don’t have enough data. But what are your thoughts?

Kyle: I think one thing that they both have in common is focusing on places where you really don’t have a safe place to fail in real life. Soft skills, it seems ironic that it’s still on the other end of hard skills, but at the same time it’s the exact same thing. It’s like when you go into one of these situations and you fail. It’s just as potentially filled with liability and other issues as it would be if you drove a forklift into a warehouse shelf. It’s actually a kind of a– to me, it looks like a very similar theme. But yeah, you’re right. Without pulling back those layers of why the value is so much higher, it kind of– from the outside, it’s like, “Wow. There’s nothing this can’t touch.” But there is really clear consistent lanes that seem to be huge ROI.

Alan: Yeah. It’s interesting, because I have seen some things — especially in the education side of things — where it doesn’t really make sense to put in VR, and maybe they just didn’t make it right. But there’s some some things that I’ve seen that are just like, well, you basically just put a 2D screen content into VR and that doesn’t really cut it. It wasn’t interactive– it was, but very basic interaction. And I thought even then I’m sure they’re seeing better results because of VR, because you can hijack people’s attention. But it really wasn’t that. So yeah, I’m looking at your Talespin. So first of all — if anybody wants to visit its Talespin.company — where you’ve got this co-pilot training, which is the Barry virtual humans, but you’ve listed here “With co-pilot training modules, you can teach interpersonal skills with emotional realism” Amazing. “Simulate nuanced professional situations, practice soft skills in the safety of a virtual environment, create scalable and repeatable soft skills training programs, and measure the development of interpersonal skills.” How does that compare to what companies are doing currently around these types of things?

Kyle: They don’t have measurement. That was the crazy thing is.

Alan: I didn’t think so.

Kyle: Yeah, there’s no measurement. And– I mean, there’s anecdotal measurement at best. So if you’re lucky enough to get put in a group of employees that get leadership development, or other types of more privileged trainings, those are usually role-plays or summits or things like that. They’re very expensive to administer, or to facilitate. And they usually are– if you’ve got a really big company, even the consistency between facilitators is pretty variable. And so they roleplay through things, it’s a check the box on “Did you get access to that program? Did you go through it? Did you hit all the milestones over a 12 or 16 week program?” But with this, obviously, it’s kind of a different animal. So what are the things that we’ve had a lot of discussions with people, is giving the things that would historically have been reserved for middle management not giving those, giving access to people much earlier in terms of their own personal development for these types of topics. And then doing that in a way where obviously, as you’re going through the scenarios, we can measure everything. We can measure your own posture. We can measure your sentiment. We can measure all the decision points that are made in any sort of given conversation. And so servicing that data backup in kind of an aggregate way really starts to have a value that businesses haven’t even really had before. So it’s interesting to see how that’s going to get used. But I think to answer the questions, they just don’t– it’s not really measured today.

Alan: The last podcast, we were talking about KPIs, how do you then measure against baseline when there’s no measurement to begin with? Or do you just say “From now on, henceforth we will have measurement?”

Kyle: That’s a good question. Do we– I mean, basically the obvious things are when you get into leadership bias, and some of the diversity inclusion topics, conflict resolution topics. There is some core strategy retention that you can measure, just like you could in any sort of skill or knowledge transfer application. So right now we’re using the idea that there’s kind of a 2x increase and information recall for twice as long. We’ve been able to measure that. We’ve been able to see huge increases in satisfaction over the training, 93 percent over e-learning has been what we’d better across all the different things that we deployed. Just generally, one of the things that was most eye-opening was people’s ability to elaborate on something that was in the learning. What we saw– we did an A/B study. And we gave people e-learning, where they were sitting in a classroom environment, strict traditional learning modalities, some video, and other PowerPoints and stuff. And when you started asking questions outside the learning, people tap out pretty quickly. “That wasn’t really in what we went over, so I’m not really sure.” But with the VR, we did a B group, where they had one fourth the amount of exposure, and they were able to elaborate 400 percent more. Mind-blowing. It translated into confidence that wasn’t even necessarily part of the core thing, because they were connecting the dots.

Alan: Wow.

Kyle: Because of the way it is administered. So that kind of stuff, it’s not soft skills ROI yet, but it’s hard to debate it. And so we’re now getting to the place, where we’re going to have really– by 2020, we will have really meaningful measurement across these big deployments. And we’ll probably come up with ways to actually show that improvement curve. We’re also getting some more off-the-shelf models so we’ll have a catalog, plus the stuff that’s being built specifically for businesses. It’s obviously off-the-shelf stuff. We’re gonna have thousands and thousands and thousands of users. It’s exciting to start to be able to build, put measurement behind some of that stuff.

Alan: What does the typical rollout looks like?

Kyle: So I would say, generally speaking, around 1,200-1,500 people has been like kind of the minimum group size where it all kind of pencils out this early on. And that obviously gets kind of more expensive today than it will be next year. And then as far as the way it’s been administered, we’ve seen a pretty wide variety there. We’re often classroom based, to like, “Hey, let’s put 10 headsets in twelve cities, and just let people book time.” We haven’t really seen that solidify yet into one kind of deployment methodology.

Alan: What works best from your standpoint?

Kyle: The regional stuff works pretty good. Obviously with the improvements that are coming from the enterprise platforms now, we actually can get to the place where we can facilitate regular monitoring and updates of content, if you have regional training centers. Up until this summer, we were trying to get people to stay in one center as much as possible, just to kind of keep the deployment craziness down. But I think that’s going away. Honestly, we’re now seeing more and more people go the other direction. And then there’s not really a whole lot of room between, “OK, I’m going to twelve cities.” versus “I’m going to end users.” And hopefully we start to see that there’s enough value in the amount of content that people can access, that they start buying headsets per user.

Alan: What are the headsets? Obviously HTC Vive and Oculus Rift, but are you seeing more deployment now or more excitement around the standalone units?

Kyle: Yeah, yeah, for sure. Yeah. I mean, the standalone units are, from an ease of use, just a huge step forward. And we just finished a really large– actually I think it’s going to be the largest enterprise study. We just did a 3,000 person study with about one 150 Oculus Quests, and that deployment and that methodology, and the uptick and everything is really, really exciting to watch.

Alan: So, how many Quests?

Kyle: About 150 Quests for 3000 users.

Alan: Amazing. That’s incredible.

Kyle: Yeah. And deployed in– it was under 60 days. So pretty quick turnaround time for that many users.

Alan: So, did people just book time with it, or did they like, “OK, when you’re done, it goes to this person. When you’re done, it goes to this person.” How do you manage that?

Kyle: Yeah, it was booked time. There was still some hand-holding at the head end, because a lot of — as you’d imagine — most of the users were first time VR users still. So there was still some hand-holding, but honestly it was a fraction of what it was for any of us two years ago.

Alan: Oh yeah, I get– last night, my friends came over to my house and my mom was putting on VR and she’s done it before. But yeah, it was still a challenge.

[chuckles]

Oh…

Kyle: Yeah, yeah. The nightmares of– we had a traveling circus, where we had like 10 shipping containers that were– that had been converted into VR base for one of the enterprise clients two years ago.

Alan: Oh my God.

Kyle: Oh my gosh. How many times the censors broke out, the controllers broke, and the signals broke. I mean, we ended up having two full time people, just to keep them up.

Alan: Yeah, I believe it.

Kyle: So we’re a long ways from that.

Alan: Well, I mean, we still– some of the stuff we’re still doing on the Vives and it’s a full time job just keeping the computers up to date. It’s crazy.

Kyle: Yeah.

Alan: That’s a disaster. Every time you turn it on, it’s like “Windows needs to update all these filters.” [laughs]

Kyle: Yeah.

Alan: Oh man. So let’s talk about some of the — I guess — customer engagement. So you have a product here for– I don’t know which one it was, I was just looking in the– “Talespin for Insurance.” What is that all about?

Kyle: Yeah. So, essentially even the soft skills stuff kind of came out of the insurance industry. So when we started the company, we spent the first several years just looking at what are the trends in the future of work? What are the things that we can count on as staples for how work is going to be delivered and what’s going to matter most? And so we had decided that we should look for companies and industries, that have really large distributed workforces already. Because of the gig economy is expanding, and work is being distributed even more remote. So if there’s industries that have that characteristic, we should focus there. And then the other was businesses or industries, where they operate in environments they don’t own or control. And that was because the value is so much higher for them — for early VR adoption — that it is safe for a retail company, even though we’ve seen some adoption there. But they have thousands of training centers, if you think about it. Every store is a training center. So the idea that access to the environment is limited is another reason why you see such a big uptake in oil and gas and some of these other industries. So insurance happened to really embody that. Obviously, they have tens of thousands of employees that are out in people’s homes, doing really difficult work and it’s highly variable. So the idea of simulation and the idea of being able to really leverage all of VR’s benefits was a 100 percent fit. And so once we got down that lane, one of the other things that became really obvious and apparent, was that they have a really high number of situations in which soft skills are really important. Because they almost always meet their customers on their worst day. Your house is either flooded or burned down, or you’ve had an accident, or whatever, their interactions with their customers are all soft skills interactions. And so we ended up in this industry. We’ve started working with Farmers Insurance in 2016, and we just saw incredible results. And as we just dug in deeper and deeper and deeper, we just found that there was a huge appetite for this kind of product in that industry. And so we started building off-the-shelf products for the industry, because not everybody has a substantial animation budget to really break new ground. But they all definitely want the benefit. And so we built a platform specifically for the insurance industry. I mean, it’s really an expression of all the pieces of our platform we built. And then we just started building a content layer on top of that for the insurance industry.

Alan: Amazing. So what are they doing? Other than the soft skills? Because it shows a guy holding a piece of wood. Are they training them to just deal with people in a better way? Or are you even looking at augmented reality, of being able to capture spaces for that sort of thing? What is it exactly?

Kyle: Yeah. So the platform we’ve been building is really… we look at the problem we’re trying to address is this whole idea of like how do we accelerate knowledge transfer and the alignment of skills for how important it’s going to change. And so if you think about that, that’s something that touches every single stage of the employee lifecycle. So just addressing it as a training platform that only people get access to it at onboarding is going to probably miss the mark. And so we start looking at like, well, what can we do for assessment, or during recruitment? And what could we do for empowerment, when people are out in the field? And how can we look at the broad lens of spatial computing in each of these lanes? We mapped that out over a couple of years. And so, yeah, we’ve got basically a framework for processing object-based learning, which is the guy that you mentioned earlier, holding the 2×4. So we’re teaching people how things are made. What are things even called? There’s a lot of day-one, on-the-job stuff that’s just getting up to speed on nomenclature and how things are connected to each other. And so we built a framework for being able to rapidly build those types of experiences, then process is pretty obvious. So in the insurance use case, the first thing that we did with Farmers was, you stepped into a simulated home in which that home had been flooded or had caught fire, and then you basically had to go and play investigator, and you had to sort out all the issues. And that meant also understanding how the house was built. And so it really embodied all of the benefits of VR. And because people got a chance to go out and do 10 or 20 or 30 cases before they ever set foot on the job, obviously, you got really good results. And then out in the mixed reality lane, we’re exploring kind of like, how can we either be able to recall — really quickly, recall — via voice like, “hey, I don’t know what that is.” And through mixed reality, it brings up some job aides that you may have had in your onboarding, starting to connect all these things. So it’s kind of one cohesive, continuous learning string.

Alan: Incredible.

Kyle: And so that’s what we’ve been working on, and just focusing on one industry to start because, you know, we kind of have to figure out all these things that are systems and standards and frameworks. And then as we get that figured out, we can look at other areas. Soft skills is kind of a whole other area by itself, because it just branches across industries so fast.

Alan: It touches everything. I think a big one for you guys is going to be banking.

Kyle: Yeah.

Alan: I would think that’s a natural progression. Insurance and banking would be kind of in similar fields. The only difference being insurance people are in an environment like you said, that’s not in their control, whereas banking you can control their environment a little bit more.

Kyle: Yeah, we’ve got a lot of interest from telecom, from construction — that’s kind of an obvious one, because insurance and construction kind of touch a lot of the same things, from a process and object-based learning standpoint. But for soft skills, yeah, it’s across the board. Health and life insurance, health care, banking, you name it. We’ve got it inbound in conversations going on in just about every sector. And it’s interesting, the problems that people are trying to solve aren’t that different. It’s a lot of the same stuff. It’s a lot of like, “how do I have a critical conversation where I don’t blow up the situation? How do I give good feedback?” There are skills that somehow the younger generation coming into the workforce have lost, because of becoming so digitally native. And so they want to give them an opportunity–

Alan: It’s funny, the more “social” we’re becoming on social media, the less social we are in real life.

Kyle: Yeah, that’s what the business world is saying.

Alan: It’s crazy. Yeah. Now we’re using technology to fix the problem.

Kyle: Yeah, that’s the irony, right?

Alan: Oh my God. What’s happening?

Kyle: It’s just this recursive loop now.

Alan: Yeah man, it’s wild. What else are you excited about? And what else have you got coming up in 2020? People are going to want to–

Kyle: I think for us, everything is finally at a maturity point where we’re seeing a lot of the big, traditional SAS and software players step into this space. They kind of can’t deny the results. There’s enough ROI calculations and things that have surfaced that they know their customers are really bugging them about having a solution. So we’ve got some really good conversations going on there, to work along with channel partners and other kind of big ecosystem players that I think will become exponential for the industry. I’m really excited about spending a lot more time down the lane of the assessment side, because I think we always… like, the thing internally we talk about is if you could remember back to your 12- to 15-year-old self — and I grew up in Colorado, and we had good schools and generally had access to a lot of things — but the idea of what you wanted to do was still very much dictated by your parents’ suggestions, or just kind of whatever you had nearest access to. And that’s just not really a good system. And so the idea that with these mediums, we could potentially have a better understanding and assessment of our own real skills early on, and start to look at what kind of opportunity lanes are out there for me, and and start to build explore those? That to me is a really exciting idea. I think it would really be a huge difference in how people ended up living their lives. I get really excited about the idea that we’re heading into a period where maybe we can better align our individual purpose with opportunities, because we’re actually going to have better insight into ourselves and to those opportunities through these types of mediums. That, to me, is like a systemic rewrite of how people assess and start to build their lives. And we’re like, I think that’s a 2020 area of focus.

Alan: Isn’t that crazy? Like, it’s hard to fathom that. But that’s where we are right now. We’ve been struggling with the future, but the future is now.

Kyle: Yeah, it’s wild to think that that’s where we’re at. It’s not really a science experiment. It’s just about committing to the work.

Alan: Yeah, I mentioned this on a previous podcast; it is not a technology problem anymore. It’s a people problem.

Kyle: Yeah.

Alan: It’s just convincing people to adopt this technology. Speaking of that, I want to dig in; what are some of the biggest challenges you guys have faced with this in general?

Kyle: I think the scale question. Everybody’s like, “this is amazing. The results I can’t deny. How do we scale it?” And there’s this idea of having to bring more hardware into your business, and that creates a lot of friction for businesses. So I often — being contrarian in that moment — sometimes you have to really push. I’ve said, “well, listen, is your goal to scale access? Or success? Because if your goal is to go access, then you use the wrong medium for you today. But if your goal is to scale success, then you need to look past some of these other things because you’re just getting in your own way.” The effectiveness is through the roof. And that obviously, that’s a challenge that people… that puts them back in their seat a little bit and they go, “it’s actually a good question because we are really focused on access. And access doesn’t necessarily equal success.” But yeah, the scale question is by far the biggest one, which is amazing that we’re having that conversation. Right?

Alan: It’s a great point.

Kyle: Yeah. And that’s just the fact that we’re even there is, again, night and day over two years ago. That question never came up. Now, it’s “we can’t get out of the first meeting without having to figure out how to answer that question,” specific to that organization.

Alan: Wow. That’s amazing. Is there anything else you want to share before we wrap it up?

Kyle: No, I think it’s just exciting for all of us. I think in the next year, hopefully there’s a lot of kind of infrastructures in place to help rise all boats, and 2020 is the year to do it.

Alan: Indeed, that’s one of the reasons we started XR Ignite as a community hub; for startup studios or developers to come together and — like you said — rise all boats, because I think there’s a lot of great work being done and there’s a lot of camaraderie, but nobody’s really brought everybody together as a community. Aside from the VR/AR Association, which is doing a phenomenal job as well.

Kyle: Yeah, you guys have done a phenomenal job of that.

Alan: Thank you, thank you. Our mission is to hyper-accelerate the XR industry. So when you look at it from that standpoint… we have two companies, MetaVRse and XR Ignite — XR for Business Podcast will also be a news aggregator and stuff so people can get access to the information they need about their industry. But these are all tools that are trying to help the whole industry move forward. Right? If we can create a tool that helps people find the right supplier at the right time for what they’re looking for, and helps them cut through the crap — because let’s be honest, if you’re an H.R. manager and you want to do VR, where do you start?

Kyle: 360?

Alan: Well, they don’t even know what that is! They just [think], “I saw a VR headset at a trade show. It was amazing. What do I do? Who do I call?” So there’s a lot of that going on.

Kyle: I don’t think we’re even close to the end of it. I mean, the education piece is starting, I think, to get a little bit more mature because of the help of the work you guys have been doing. And we’re now at the doorstep of, like, really needing to think about the critical infrastructure; like the AWS-layer, is what I always say.

Alan: And that’s funny that you say that, because we actually pivoted about a year ago to focus on that. What does the back-end tech stack look like to not only deliver this content, but standardize it? Because if I go… and we’ll just use insurance company as an example because you brought it up; I go in there. You’re talking about the VR being used for the soft skills training, but if you take a Matterport camera into a flooded building, you can now capture volumetrically the problem firsthand for legal purposes. There’s all sorts of ways this technology can be used across an enterprise, and there’s no standardization at all.

Kyle: No.

Alan: It’s the Wild West. So if we can figure out what those standards look like, and also the quality standards… I know everybody out there, if you’re developing stuff, here’s Rule #1: Don’t make people sick. If we can just adhere to Rule #1? I think we’ll be just fine. But I tried something the other day. I tried to an experience, and I had to take off after two seconds. I was like, oh, God. And this is this is a publicly-available thing on Oculus Quest. I was like, okay…

Kyle: Yeah, I’d hope would be that we were done overcoming that objection. Right? But it’s still there.

Alan: It’s a problem for the industry. It’s not a problem from our company, or your company. But if you have a CEO that had a bad experience — and I did a 5G experience, it was one of the large telcos, like a massive telco. They did this 5G experience and it showed as they turned from 5G, it was an AR experience wearing glasses, and you had to do a task in the physical world. But the pass through camera, they they went from 5G down to 4G, down to 3G, to demonstrate the difference. And I’m like, why are you making people sick? It’s so nauseating. There’s such a delay. And it was like, oh, my God. And my wife and I were both sick for hours after that. And that was at a major conference.

Kyle: Yeah, that’s not the kind of way that we should be convincing people of 5G.

Alan: Yeah, “5G is awesome. Look, it makes you sick.”

Kyle: Yeah.

Alan: What is one problem in the world that you want to see solved using XR technologies?

Kyle: I guess it’s that 15-year-old self. I want us to be able to, as an industry, give access to kids to be able to explore the world in such a way that they actually step out of their formative years on a path that they already have conviction for. And that’s a ubiquitous… that’s like the new standard, not like the exception for exceptional kids. That is something that’s right there in front of us. And it’s just a matter of walking out for a few more years.

Alan: You know, it’s amazing; 25 percent of our company is owned by a trust. And the trust’s goal is to deliver on that promise to deliver education at scale. Our goal, our mission, is to democratize education globally by 2040. And there’s another group in Toronto that I’m a mentor at called the Knowledge Society. And they take 14- to 18-year-old kids and they really just help them find their passions. Because if you can find your passion young in your [life] — and your passions are going to change — but if you can just find how to find your passion and really just live that passionate learning mindset forever? It doesn’t matter what your passion is, as long as you have the passion and you realize that you can learn anything about anything instantly. So I think this technology will will hyper-accelerate that as well.

Kyle: And I think it also changes people’s definition of success, which I think is something that is also going to be critical to our world going forward. And so it’s such a good time to be able to focus on those kinds of issues. And the fact that there’s huge institutions like the ones you’re working with and they’re all out there putting their everything into it is really, really inspiring thing to be a part of.

Alan: PWC just announced that they’re earmarking $3-billion to reskill and retrain their staff.

Kyle: Yeah. And we’re seeing those pop up. You know, I mean, AT&T did a billion dollars last year. Amazon did $750-million. I mean, this is a topic that is obviously, I think, near-and-dear to any large employer. It’s just a question of whether they’ve decided to step up, take the responsibility.

Alan: I don’t know if this is true or not, but I heard a stat that Accenture has to hire 50,000 new employees a year.

Kyle: Yeah, but that’s that’s about the right range. Yeah. You know, you see us 25,000 new associates every year. On the associate level.

Alan: Wow. Kyle, I want to thank you again for joining the podcast.

Kyle: Yeah. Thanks again for having me, Alan. It was fun.

Alan: Hey, everyone, Alan Smithson here. Today, we’re speaking with Cortney Harding, founder and CEO of Friends with Holograms, about their full service VR and AR agency, that focuses on soft skills training and best practices for creating powerful content that delivers results. All that and more on the XR for Business Podcast.Welcome to the show, Cortney.

Cortney: Oh, thanks for having me.

Alan: It’s my absolute pleasure. I’m so excited to have you on the show. You guys have done some incredible things and you’ve been a pioneer in this industry for quite some time. But I’ll let you talk to everybody about how you got into this and where you are now and where you’re going.

Cortney: Yeah, great. So I got into VR about almost five years ago now, which is crazy to think about. I have a background in the music business and specifically I was a journalist.I wrote for Billboard. I was an editor there for quite a while. I then went into the music tech space right around the time Spotify launched in the US. It was a great music and tech ecosystem.

Alan: You and I have a very similar background.

Cortney: Oh, funny.

Alan: I was a DJ for 20 years and then created the Emulator, the DJ touchscreen.

Cortney: Oh, cool.

Alan: Yeah. And then I got into VR. I was like, “What?” Go on. I didn’t mean to cut you off. I was like, “Wow, this is great.”

Cortney: No, it’s great. Yeah. So anyway, so I did music tech stuff for several years. I was– I lead business development, and strategy, and partnerships for a couple different startups. And then I saw this VR piece at an art museum about five years ago, and it really broke something open for me. And I was fascinated by it. So I spent about a year — I was still on contract with a music tech company — and I was still writing at the time. So I wrote about VR, I learned about VR, I met a lot of people. And in 2016, at South by Southwest, I did a panel on music and virtual reality. And one of my other panelists was this guy, Kevin Cornish, who’s starting a VR production company, he’s a VR director. And he and I had a really nice conversation, we hit it off. And I joined his VR production company, leading business development strategy. I worked there for about a year and a half. I learned a tremendous amount. It was a very, very intense experience and a very gratifying one.And then I split off to do my own thing. And so Friends With Holograms has been around for about two years now, sort of in its current incarnation. And in those couple of years, we’ve done a lot of different projects, which I’m really proud of.

Sort of our our best known project is the Accenture Avenues Project. So we worked on that with Accenture. And the backstory behind that is pretty fascinating. So Accenture came to us, I believe, right about two years ago now, right when we’re first starting and said “We have this idea, we want to do this really amazing social work training project. And would you like to bid for it?” And we, of course, said yes. So we bid for it and we were awarded it in the spring of last year. And then everything kind of went quiet for a while. And we were working on some other projects. And I just kind of in the back of my head thought, “OK, it got cancelled or it got changed around or somebody left.” As a bunch of a bummer as it is, that stuff happens. And then in June of last year, I got a call from my contact at Accenture who said, “Oh, yeah, the project’s back on. Want to– let’s chat about it. Do you still want to do it?” And I said yes. And so I got on a call with her and she outlines the project, which is very ambitious and really groundbreaking and has an incredible mission, and a two and a half month turnaround. [chuckles] And I thought, “OK, here we go.”

Alan: Hurry up and wait.

[chuckles]

Cortney: Yeah. And I think that is the experience working with any big company. I think at this point.

Alan: Yep.

Cortney: But that was a really amazing project. So we dove in headfirst. We produced a 20 minute long voice-activated VR training piece for social workers. It is a branching narrative, so the bulk of the piece you’re asking questions of different family members. The question that you ask determines the answer that you get. So there’s all these different paths you can go down and there’s all these different levels of learning, because not only are you learning to actually do family interviews, you are also learning about how to ask the right type of questions. And there’s a lot of sort of visual cues in there as well. It was an incredible opportunity. It took years off my life, but it was very worth it. And so that piece came out just over a year ago. That piece won Best VR/AR at Mobile World Congress, beating China Mobile and Huawei, which is kind of insane. It was a finalist for South by Southwest Innovation Award. We did a ton of demos at South by. The second chapter of that piece came out last month, and it’s now being used by a number of different social work departments across the US. And I just found out yesterday it was shown in Germany.

Alan: Amazing.

Cortney: So it’s an amazing project. We’re incredibly proud of it. We’re incredibly proud of the work that we did. So that’s been sort of two of our larger projects. Another big project we did was for a company called DDI, which is a learning and training company. They came to us with an interesting problem to solve, which is they do a lot around workplace inclusion and workplace exclusion and training around that. And their challenge was that a lot of sort of older corporate executives hadn’t really felt excluded in the workplace, so they had no really incentive to do this type of training, like it wasn’t real to them. The feeling of workplace exclusion wasn’t real to them. So we created this piece called Can’t Win and you’re in a meeting and it is– again, it’s voice-activated. And this sense is one of frustration. You are getting talked over, and you’re going to ignored, and you’re getting talked down to. It’s very, very subtle, though. So by the end of the experience, we demoed it for a lot of people, and they’re just like angry. But they get it. They get that feeling. So that piece was a top HR product, named that by HR executives. So that’s been really rewarding and that’s been a lot of fun to work on. We work with amazing directors. Kevin Cornish directed the center pieces. Gabo Arora — who’s directed stuff for UN and The New York Times — directed the DDI piece. So that’s a big sort of core part of who we are as making stuff that’s really high quality and cinematic. In terms of consulting work, we’ve consulted for Verizon, we’ve consulted for Coca-Cola, mostly in the augmented reality side of things. We have done some work with the Air Force on voice-activated pilot training. We just worked with Unity, building augmented reality projects. And we are in the process of signing an agreement with a very big retailer. And I can’t say which one yet, TBD. But it’s something we’re incredibly excited about. So things are pretty good.

Alan: That’s fantastic.

Cortney: Yeah, it’s a lot of fun.

Alan: So, now these– are these 360 branching narratives, is that what this is? Or CGI or…?

Cortney: Not CGI. So that actually dovetails perfectly with the second thing I wanted to chat about, which is best practices. So these are 360. They’re shot in different ways. So in some cases, the actors are shot against a green screen and composited into a 360 background. In some cases, it’s a full 360 shoot with — again — the voice interactivity built in. So we have, as a company, several core principles for our soft skills work in particular.

Alan: All right. Let’s get into it.

Cortney: So the first one is–

Alan: This is the good stuff right here. We now know what they do. But now, how did they do it?

Cortney: Yes, we’re– well, this is all stuff you would see this just by watching our stuff. So it’s not like I’m revealing too much, but– so the first one is, it has to be realistic and you have to use real people, because CGI characters — no matter how good they are, and I’ve seen some pretty good ones — you still know that they’re not real. And there’s something called the uncanny valley, where it’s a little bit of your brain sort of knowing that a CGI character is not a real person. So you lose a lot of the intimacy and the realism when you’re talking to what is essentially a cartoon character.

Alan: You mean Firing Barry is not going to be as real?

Cortney: No. I mean, it’s not. I think it’s a high quality game engine character, but it’s not like talking to an actual person. So that’s the first thing. And that’s our sort of core principle as a company. And that’s for soft skills. Obviously, for hard skills and for fun and games and commercial stuff, that’s a very different story. But for soft skills training, it has to be very, very realistic. We cast mostly actors and actresses from the theater world, because we find their level of sort of emotion and delivery is the best for VR. And they’re also really good at not needing multiple takes, because shooting multiple takes in VR is very different than shooting multiple takes in 2D, just because of how it gets cut together. So that’s the first thing. The second thing is the interactions have to be as realistic as possible. So I have a lot of headsets. I’m sitting in my office right now looking at all of them. And I cannot wait until the day that I can take all my controllers and like run over them with my car, because–

Alan: [laughs] We’re actually going through this.How can we get the hand tracking in Oculus Quest?

Cortney: Well, yeah, the hand tracking Quest is going to be amazing. I’m really excited for that. But more to the point, when you’re doing soft skills work, the controller is useless, Because again, when I talk to you, I don’t point a controller at you and click. That’s absurd. I talk to you about using my voice. And so everything that we designed for is with voice prompts. So you need to use the controller to start the experience, because that’s a function of Oculus, not anything we have control over. But then you put the controller down. And what we’ve seen is that opens it up to a much wider audience, because there is no worse experience than feeling incompetent in VR. You’re already a headset. It’s already kind of weird. You feel a little self-conscious already, just given the nature of the technology strapped your face. So the worst thing you can do is make someone feel even more scared and confused. And a lot of people — including myself — are not video gamers. They’ve never used these controllers before. So the single worst experiences I’ve ever had in VR have been the experiences where someone has stood over me and barked orders me, “Click here, click here. Now you’re teleporting. Now click this, click that.” And I just– I’m like, no. And I just walk away. Because if you want your experience to have any sort of scale or wide adoption or usability, you can’t be hanging over someone telling them a million times to click a thing. That’s– your product is rendered useless because of that. So we use voice, we use gaze, these are natural human interactions. And also we keep people immersed as much as possible. So another very common trope in VR training stuff is these quizzes, which are so bad. They remind me of a bad 80s teen TV show, where the character would freeze-frame, break the fourth wall, take a little quiz about should he ask Susan to the prom or not? I mean, it’s ludicrous design. It’s not real. I would love to have like a break to quiz every time I try to make a life decision. Guess what? I don’t have that opportunity, as cool as it would be. So the idea is, you don’t break the immersion. You use voice or gaze or other natural ways to move the story forward, move the narrative forward, move the training forward, so that you’re not jerking people in and out of the immersion all the time.

And so — again — those are just our three main core design principles. Obviously, we design custom for each client. As an agency, we don’t have a pre-built product. We have vendors that we like, vendors that we enjoy working with. But none of them are exclusive partnerships or relationships. We have no financial interest in any of them. So we are able to come into our clients and say, “What is your problem and how can we solve it?” So that’s very different than a lot of products companies, which are selling sort of off-the-shelf one-size-fits-all solutions, which certainly have their place. They really have their place for certain companies in certain markets. But what we can do is really come in with — again — these core design principles. But from there, we’re wide open. So if somebody says our problem is XYZ, we start with that problem. We’re not trying to shoehorn our solution into it. We’re starting with what is the holistic view of the problem, and then how can we use this technology to best solve it?

Alan: I love it. And it’s an interesting way to approach it, because everybody else is saying, “Hey, we’ve built this product and we’ll sell this product. But even if it doesn’t fit your exact needs or the problem that you’re trying to solve, we’re going to sell it to you anyway.”

Cortney: Well, they’re not, though, is the thing. Because if it doesn’t fit their needs the company probably won’t buy it. [laughs]

Alan: Well, I mean– or they’ll buy it, and then it doesn’t fit their needs and then they go, “Well, VR sucks.” And that’s the end of that.

Cortney: Yeah. I mean, that’s been the hugest barrier for us. Bad VR, right?

Alan: [laughs] Yep. And we’re not talking about Suzanne Borders’ company.

Cortney: No. [laughs] No, we’re not. We’re talking about– I think a lot of companies underestimate what it takes to make VR, both from a financial perspective and a technical perspective and a creativity perspective. And they you try to do it in-house, and that fails, or they they don’t know what they’re doing. And so one value that we really provide is we know what we’re doing. We’re subject area experts in virtual reality. We’re not subject area experts in what company X, Y or Z is working on. So we collaborate very closely with our clients on their subject matter, but we know how to build VR and we know — again — what works and what doesn’t in VR. And I think a lot of companies tried to make VR, maybe on their own or they worked with people who weren’t experts in the space, and they got burned. And I think that’s been a really big challenge for us to overcome. When you talk to people and they say, “Oh, I did VR once and it made me sick.” and it’s kind of explained to them “Well, that’s not VR. That’s VR that’s not done well.” We’re explaining to them that, “Look, this stuff is not going to cost you the same as it cost you to make a training video.” It’s a completely different level of production and interactivity and design. The flip side is — and there are so many statistics, and I don’t know if we have time to go into all of them — but VR *works*, far more than any other type of training out there. And we’ve seen that time and time and time again. It scales better than any other form of training out there.

This is something I have been talking a lot about recently, because I gave a talk on this at the Northwest Arkansas Tech Summit.VR is the best thing that has happened to workers, because they are now able to use VR to train to do their jobs better. And it is empowering to workers to be able to do their jobs better. It’s great for bosses, because bosses have better trained workers. And when you look at what is the cost of VR, which is fine, people have to think about their bottom lines. But what is the cost of a poorly trained worker? Best case scenario, poorly trained worker, just kind of messes up some stuff up, and there’s productivity issues, and maybe they are unhappy and they leave, and then you have to hire someone else. And these are all costs that are associated with not training your workers well. Then you get into the soft skills training, and we work a lot on sexual harassment. And that’s a black eye on the company. First of all, because you’re gonna get sued. Second of all, I wouldn’t work in a company where women were mistreated, and I think that’s many women who feel that way. So you’re losing a tremendous amount of talent. And then you go all the way up to situations where workers can be maimed or killed. And then, of course, that’s hugely negative. So it’s really looking at when you balance out the costs and the benefits, you have to look at the numbers about how much better of VR training actually works and then ask yourself, “Well, what is the real cost of people not being trained well?”

Alan: Well, let’s talk about the actual cost, and then we’ll work backwards. What does something like this cost?

Cortney: That is a question that’s basically impossible to answer without any sort of a–

Alan: How long is a piece of string?

Cortney: Yeah, exactly. It’s– how much does a movie cost, right? I mean, I can make a movie on my iPhone for nothing. The cost of an iPhone. You can make a Marvel movie that costs millions and millions and millions of dollars

Alan: All right. So let me rephrase that. When you meet with a customer and they want to do soft skills training, what is the range by which you quote them? Because at the end of the day, somebody has to make a decision on how much it costs.

Cortney: So that’s dependent on a number of factors. And I’m not trying to be swishy here–

Alan: Well, no, what are some of the factors, so people can–?

Cortney: What is the creative? So is it a sort of linear narrative? Is it a branching narrative? What is the–

Alan: That make a big difference, I would assume.

Cortney: Huge, huge difference. What is the level of interactivity? Is it a couple different voice prompts? Is it a conversation? Is there gaze activation? Is there something tactile. What is the interaction? How many actors do we need? How many locations do we need? Where are we shooting? Who are we shooting with? How long is the piece? Because that impacts production time. How many video files are associated with the production? Because that’s production cost. How long is the script and how intense is the script? Because we hire writers and we work on a lot of the scripts ourselves. That costs money. And scripts need to be designed for interaction and VR. So the different voice platforms we work with need different things to be in place. So it needs to be scripted a different way. If we’re using a different voice platform so that the voice platform will work. Obviously you can’t have people reading incredibly long questions, because that’s a readability issue. And on and on and on. So it’s really this kind of holistic package that people need to consider before they–

Alan: So how do you scope this with the customer? Do you sit down and you figure what the problem is? What does that look like?

Cortney: So we actually have a separate product that deals with that. The way our flow works is we get introduced to someone. We do a capabilities call — a capabilities meaning a demo session, that’s all sort of just our business development — and once there is a pretty firm interest, we have something called a VR/AR jumpstart. And that’s a one week program, it’s five days. We embed– ideally, we embed in the office of the client. If that’s not feasible, we have done some over Skype or video chat. Generally, we like to be with the clients. In the VR/AR jumpstart is a flat fee for one week, and it’s two people and we come to you. Day one is–

Alan: What does something like that cost?

Cortney: So the VR/AR jumpstart is $20,000.

Alan: Yeah. OK. So a $20,000, it gets you going.

Cortney: Yes. So the $20,000 is basically– here’s what it gets you: day one is, what is the problem you’re trying to solve? Because a lot of people still don’t really have a clear sense of what VR is best for. So they’ll say “Oh, we want to do this, because someone else did it in VR” or “We want to solve this problem that is very broad.” And so we’re defining the problem. We are like, what exactly do you want to get out of this? What are your KPIs? What are your measurements? What’s your budget? Everything, so that defines it all. Day two, we work on the creative and we work on the script. So what does this concept look like? How many people are involved in this? Where are the interaction points? And then we start writing not the final script, but a skeleton of the script. Day three, we get a bunch of people from your office who did high school theater, and we put them in a room with a 360 camera and we shoot a basic prototype. It’s a way for us to sort of work out the blocking and the scripts and the interactions. And obviously we’re not building something that’s fully interactive in a couple of days, but it at least gives us the opportunity to check our own work. Day four, we go off and do a little side office and we auto-stitch the footage. We obviously can’t build something fully interactive, we dummy in whatever interactions there are so it seems kind of natural. And then day five, we use our test. So the client brings in four or five different people who are users, a representative of the users. And they go through and they test it, and they give us their feedback. What the client is left with at the end of the week is an MVP that is by no means ready for prime time, but is something that they can show to their boss and they can say, here’s user feedback. Here’s sort of the first draft of this. And then that’s kind of the end of that initial engagement. And then the second part of the engagement — once it’s fully funded — is that we do the whole big thing. So we revise the script, get it to the final points. We hire the director, hire the cast, do the shoot, do all the production, do all the post, do all of the design for whatever interactions there are, and then we deliver a fully finished product to the client.

Alan: That’s awesome.

Cortney: Yeah.

Alan: What a great process. It saves a lot of time. We’ve been kind of down this road a few times, and this seems to be a great way to save a lot of time for a customer. and give them something that they can go and get buy-in from the higher ups.

Cortney: Yet, because for most people, VR is still very theoretical at this point, and they haven’t seen a lot of good examples. And maybe they’ve only seen VR video games, which are fun, but I’m the CFO or CIO or something of a company, I am not going to immediately link my kid’s zombie shooter game to what can we do in training. So a lot of what we do still to this day is just demoing for people. We spend a lot of time putting people in headsets, and that’s great. I do think that’s going to change as the headsets are more widely adopted. I also think that’s a huge barrier for us. So we were on the call with a big telecom company — I won’t say which one — and they brought us in to chat with them. Did this big group call, because they really wanted to do VR. They’d heard their competitors were doing it. They were like, “Oh my gosh, we have to do VR now.” .

Alan: We get that a lot. “We went to my CEO and CES, and he needs VR, ASAP!” [laughs]

Cortney: Oh god, I know. So anyway, we were on this call with them, and even leading up to the call, I said, “I’m happy to share some work with you. We can share our work to your Oculus Go headsets, if you just let me know the address. I’m happy to share and send some examples to you.” And the person I’ve talked to said, “Oh, we don’t have an Oculus Go.” And I thought “I’m kind of tempted to cancel this call.” because an Oculus Go costs $200. You can buy it on Amazon, you can buy it at Best Buy. You can find it a lot of places. If you are serious about investing in VR as a company, and you’re going to put down a reasonable amount of money, you should at lest spend $200 to buy a headset. And that, to me, is kind of the mark of people who are serious about this stuff, as opposed to just like, “Oh yeah, somebody decided to yes. Wouldn’t it be neat?” So that’s been kind of my marker at this point as to who I’ll sort of seriously take meetings with is if you’re not willing–

Alan: What a great way. What a great barrier. Here, go buy a VR headset. We’ll send you some content to take a look at. Then we’ll have a meeting.

Cortney: Yeah. I really should have a referral deal with Oculus. [laughs] I’m not asking people to buy a Vive and a gaming computer and a this and a that. I fully understand that people don’t have those. Those are very expensive. They’re great, but they’re expensive. And they’re– But this is the type of thing where, to me, it kind of separates out who’s serious and who isn’t. And it’s not a hard and fast rule, certainly. For me, I have to look at other factors of are you serious or not? But it’s a little bit more of constantly reminding myself that a lot of us are much further out ahead than most companies. And what’s interesting to me is that a lot of companies are just kind of letting it pass them by, when their competitors are really crushing it. Walmart’s a great example. Walmart have invested a lot into training in VR and they’ve had a tremendous amount of success, and Target, Costco–

Alan: But here’s the thing: with any new technology that disrupts– I mean, how many companies didn’t have a website for years and years and years?

Cortney: Oh, yeah!

Alan: And then all of a sudden, if you didn’t have a website, you weren’t on the map. And I think the same is going to happen with VR and AR training, because it is such a big difference between your regular training, whether it be paper, manual or e-learning, whatever their current learning is. When you put it in spatial computing, when you put somebody in a headset and hijack their entire senses, it is exponentially better.

Cortney: Oh, yeah.

Alan: And so companies like Walmart, they get it, because they are way ahead of it. And it will come to a point in the next three years — I think — where every company, if you don’t do it, you’re gonna be left behind.

Cortney: Yeah. I mean, your example is spot on. And it’s funny. I remember right when we were first starting out, I had a meeting with this big agency that we’re now probably going to do some work with. And my contact there led me out to the elevator after our meeting. And he said, “Look, I worked in agency.com in the 90s for years, and I was pitching companies about building websites.” And everyone would say stuff like, “Oh, the Internet’s a fad!” or “Oh, we’re in the Yellow Pages. What do we need a website for?” And like every excuse, and he does couple of years of pitching, pitching, pitching. And then he said basically one day you walked into the office and he had 20 voicemails and everyone’s like, “We need a website tomorrow!” And I do think– I mean, listen, I can’t tell you the number of people who didn’t take my calls for months and all of a sudden they’re calling me in a frenzy. Like I’ve had a couple of people–

Alan: That weird turning point, where the your outbound suddenly becomes inbound.

Cortney: Yeah. I mean, I’ve had a couple of people sort of say, “Oh, we’ll never do this. This will never happen.” And then a year later, they get back to me and they’re they’re begging us to do this. So–

Alan: You’re like, “Well, the price is now 50 percent more.”

Cortney: I mean, some– yeah, look, I’m– sometimes– well, I don’t actually do that. I price very honestly. But it’s more the type of thing where I’ll fully call myself out on this. I was a magazine editor in 2008, 2009 when Twitter was really starting to take off. And I just remember looking at Twitter and being like, “What is this? This is stupid.” And I was like, “Let’s make the interns do it.” And now it’s a much bigger thing. People learn, people change, and people get into this stuff. And I definitely do think it is moving forward. I think that people just have to be very clear on — again — defining the problem, doing really good creative, because that’s the thing. So much– I’ve looked at the training videos, and they’re so bad and they’re so pointless.

Alan: They’re so bad. The bar is so low. [laughs]

Cortney: Yeah, I know! And I wrote this thing recently — and I know we like to joke about it, and I certainly do — but if you look at sexual harassment training, I teach at NYU and I had to do the NYU sexual harassment training recently. And it’s laughably bad. It was made for $20. And it’s fine to laugh at it, but it’s also not because it’s a huge problem. And you’re basically–

Alan: Why bother doing it?

Cortney: Yeah. Well, no, I know why you do it. Because in New York, legally you have to. But it’s so lawyers can tick a box and say, “Okay, we did this.” It’s not about like, oh–

Alan: But it doesn’t actually move the needle. It doesn’t actually make an impact.

Cortney: And the thing is like it’s minimizing women’s pain. Like this is minimizing the pain and the trauma that women feel when they have to deal with this. Because training about this is a joke, right? Training about diversity and inclusion, people still joke about. And it’s like it’s minimizing the feelings — the real feelings and the real trauma — of women, and people of color, and disabled people, and LGBTQ people. And it’s a really massive issue that goes beyond just, “Oh, let’s just do this dumb little training for an hour, that no one pays attention to.” So I think that’s the real key with VR is again, it brings it back to the point of this is a good thing for workers.

Alan: Cortney, let me ask a question.

Cortney: “Are you now, or have you ever been a communist?” [laughs]

Alan: [laughs] Are you? No, what my question was, knowing what you know and all the projects that you’ve done, could you build a generic system that could be sold to multiple companies? So that a company didn’t have to go through all the custom, but it would just be a “Here’s an inclusion scenario.” It’s really well produced, and it touches on everything, but not specific to one company, for example.

Cortney: Sure. And that’s what we– I mean, our Accenture — Accenture was a client on our social work project — and that is currently being used by several different social work departments all across the US. So you don’t have to build something that’s custom for like California, or Georgia, or Illinois, or New York. It can just be training for social workers. We can also do — and we’ve talked about doing — white label products specific to different state regulations or different– some states have huge problems like opioid addiction. And so there is that. So, yeah, I mean, a lot of our partners are doing things where basically they are then selling them on to a number of different consumers. It depends, you definitely can do something that’s generic and off-the-shelf, for certain companies or for certain scenarios. And then you need something that is more specific in other scenarios. So if you’re dealing with really specific regulations, that’s one thing. If you’re dealing with just sort of like “Here’s what you do in a situation where you’re dealing with sort of discrimination,” that can be more broad. So, yeah, I mean, when I talk about the work that we do, nothing that we do is so incredibly specific, it can only be used by like one tiny company.

Alan: What I was thinking — when you mentioned you Can’t Win platform or project that you worked on — for senior managers of every company, that should be mandatory.

Cortney: Oh, totally.

Alan: Put yourself in the eyes of a black woman in your company in a management meeting, and see how that works out for you.

Cortney: Well–

Alan: I mean, it’s very difficult to understand what that’s like, if you are — I’m just going to throw it out — if you’re a white male executive, you can’t fathom what it’s like to be ignored and not included in the conversation.

Cortney: Here’s the thing. I don’t think VR can make you understand someone else’s perspective. I have done a lot of your experiences where it’s like, “Now you’re a such and such. Now you’re a such and such.” And I’m not, I’m me. Putting on a VR headset is not going to race almost 40 years of me being me. So what VR can do really well is not like, “Oh, now you’re a young black man, and you’re looking at this weird melted cartoon version of yourself.” And that’s supposed to have empathy. Like, no. The second I take the headset off, I’m gonna kind of forget it. What it can do, is put me in a scenario where I am having those same feelings. So it’s not about, “Oh, now you’re this totally other person.” It’s about “Now you’re having this new feeling.” But again, the more we ask people to suspend a ton of disbelief in VR, the harder it’s going to get. So we’ve actually– I’ve seen this in doing some testing about the Can’t Win experience. The first draft of the Can’t Win experience that someone else did — not us — was — and that’s why we got brought in — so let’s say you’re a woman and you’re in a meeting, and men are sitting here talking about basketball and ignoring you. They put that on men and the guys were like, “Yeah, so? I go to a sports bar with my buddies. They’re following a team I’m not following. I don’t care.” So you can’t just be like “Now you’re a lady. Now you’re a person of color. Now you’re an old person. Now you’re a this.” That does not work. What works is–

Alan: That’s intriguing.

Cortney: –you’re you, but you’re in a new situation. That’s another really core belief of ours is the social worker training we built has been seen by a lot of people, which is amazing. But it’s for social workers. If we’re building training for police officers — let’s say — the perspective is of a police officer. I’ve seen police officer training, where it’s constantly shifting perspectives. And I don’t like that. I don’t think that works. I think it is very confusing. Like there was a Verizon piece that came out — we didn’t work on this, obviously — so there’s a Verizon peace that came out recently, and it’s been posted all over. It’s public. It’s like perspective shift. So the first perspective is you’re a Verizon store employee, and some guy comes in and he’s mad because his phone doesn’t work. And then you sort of see him and he’s like, “Oh, my daughter’s trying to call me on her birthday, and I can’t get it to work.” And I mean, sure. But then there’s no learning. The learning in that piece should have been “OK, this guy comes in, he’s clearly upset. How do I ask him the right question, to help him explain why his phone doesn’t work?” That’s the stuff that you really need to do. It’s not like, “Oh, understand that people are upset or everyone has a story.” We kind of already know that, you shouldn’t have to teach people that. That’s kind of an obvious thing. So the real thing is, yeah, perspective shifting, it doesn’t work. It’s too clunky, it’s too fragmented, it’s you herky-jerky. And this is our sort of core design principle, is meet people where they are. Don’t ask them to sort of suspend their disbelief once they put on a headset.

Alan: Amazing. I have one last question for you, Cortney.

Cortney: Yeah, totally.

Alan: All right. What problem in the world do you want to see solved using XR technologies?

Cortney: Oh god. So the biggest one — I mean, there’s a lot, obviously — the biggest one for us is sexual harassment. And that’s something we’re working on right now. And I think a key thing that you can do in VR — that you can’t do in any other medium — is really notice the nuances of someone’s body language. So the VR piece that we’re going to do on sexual harassment — and I can’t unfortunately say who the client on this is, but all will be revealed in time — the idea is people can say the same words to you, but their tone and their facial expression and their body language convey very different things. So the idea is basically you’re having a conversation with someone. You say something that’s kind of borderline and they’ll either lean forward, they’ll laugh, they’ll genuinely say, “Oh my God, that’s so funny, hahaha.” They’re into it, it’s cool. Or you say something, and they look down, and they kind of look away, and they shrink back, and they say, “Heh heh, that’s so funny.” They’re saying the same words, but every other signal is telling you different things. So, again, it’s really about how do you read body language and sort of handle that in social situations? And then it gives you the opportunity to course correct if you need to, because it’s not punitive. Everyone’s sort of said something that lands flat. So it’s really about like, how do you read the room? How do you read people’s expressions and read their body language? And I think that would be great for sexual harassment, it can be great for consent, deploying that on college campuses where there’s a lot of issues around like affirmative consent. That stuff is really, really important. And that’s stuff, to me, that I would love to dive even more deeply into than we already are.

Alan: Welcome to the XR for Business Podcast with your host, Alan Smithson. Today’s guest is Anne McKinnon from The Boolean. Anne is a VR and AR consultant and writer. She is an editor and contributor to Charlie Fink’s book “Convergence.” Charlie, as you may remember, was one of the very first episodes we had. Her consulting bridges the gap between entertainment and technology. As an advisor, Anne grows and curates a community of digital artists to leverage new and emerging technologies. Anne is actively engaged in the entertainment industry at the intersection of music, arts, gaming, and tech. You can learn more about the great work that Anne and her team are doing at theboolean.io. Anne, welcome to the show.

Anne: Thank you, Alan. I’m really excited to speak with you today, and also cannot wait to speak to a lot of the listeners.

Alan: Yes, it’s been a while. We’ve known each other quite some time, and you do some work with VR Days and they’ve been on the show as well. And it feels like a family, like a network of people that are all just kind of coming together. So how did you get into this crazy world of technology?

Anne: Actually, VR Days was one of the major events I went to and I started working in tech. And it was as a blogger and just kind of looking at how can we solve problems in VR, what can we use it for, and how can we make improvements to every aspect of our lives? And VR Days was one of the best conferences that bridged the gap between technology and arts, and also brought together everyone from military to education to healthcare, and also the creatives to drive that innovation. So that way, I guess I met some of the teams that I work with now and we’re looking at how to solve all these problems and to bring it to audiences around the world.

Alan: Let’s unpack that. What are some of the problems that you’re working on solving?

Anne: I want you talk a lot today about one of the projects we’re working on for almost two years, and that’s with Miro Shot. So Miro Shot is a band and we’re touring a virtual reality live concert around the world. So to kind of put in detail about what that looks like, is that the audience is physically present and the band as also physically present. And when the audience enters, they have VR headsets on and they are immersed in dreamscape visuals, and the pass-through camera’s a big part of what we do to connect the realities, and to experience music in a new way. And one of the problems that a lot of VR experiences have is how do you reach audiences around the world with live performance, and also how do you reach a large scale audience? A lot of what we’re focusing in business is how do you grow experiences from live to at home. And this is something we’re doing with the band, with up to 30 people at a time for live concert.

Alan: People simultaneously in VR?

Anne: Simultaneously in VR. So a lot of it is based around the concepts of gaming. So we’re really looking at VR as something that’s not contained, taking from classical genres, from theater and cinema and gaming. So everything starts in a gaming lobby. And they start the experience together and depending on where they look, they’ll be able to experience different parts of the world of the music. And they’re also because of the live performance, they’re really tied to the real world, experiencing it in a new way.

Alan: Are they at home when– or is this at a physical location?

Anne: Completely live. One of the recent ones we did was, we were at VRHAM! festival in Germany. So we did 18 live immersive concerts over four days. And what it looks like is we have up to 30 people every time. We do six to eight shows per day, and they last about 30 minutes from start to finish. So the audience is coming into– we were at a warehouse on the outskirts of Hamburg. And what’s so amazing is that this experience we can take to– we’ve performed at churches at the Institute of Art in Amsterdam Baptist Cinema. We did an underground music venue in London, New Blush in Paris and Gaité Lyrique. And yeah, the audiences there, they put the headsets on, the band comes in and plays a couple of sets, and they see these amazing visuals and they feel haptics and temperature and scent. Whole new way to explore music.

Alan: So they’re live. They’ve got a headset on. So when they walk in, there’s a bunch of chairs or is it standing?

Anne: Seated. So because again, a lot of people are experiencing VR for the first time, I can be a lot to take in, especially when you have the powerful music, a band, and you have all these different scents and feelings and also voice-over that’s talking about world-building. Because a lot of this in a way is building the future of how we’re going to experience our world.

Alan: It’s incredible. So I was at the FIVARS Festival, which is the Festival of International Virtual and Augmented Reality Storytelling, and they had a band there and the band was playing in a small room and everybody kind of came in to watch. But the band was playing to 3D mapped visuals. So somebody had projected it on a wall and had a couple of pieces, and one guy had a drum and the 3D projection was on the drum. So this is like that only times eleven.

Anne: One other thing is we learned very early on is that if we want to make it the best we possibly can, we have to collaborate with people who are from different backgrounds. So we have a collective about 700 people from all over the world who contribute to the visuals of the band, like the one who saw at FIVARS Festival But also, too, we have two master students who are working with us in the band, and they create a lot of these virtual scenes and virtual worlds. We use everything from haptics. So it’s not just VR. Again, we can’t– I don’t think think– let’s look at immersion, we have to look at something beyond VR and how can we create an atmosphere and how can we create an experience. And one of the posts I wrote recently on my blog at theboolean.io was about Sleep No More and how it’s everything that VR should be. And it created a lot of good debate on Twitter. So I’d love for people to join that conversation.

Alan: An amazing article. So explain how the haptics are working. Are you using something like a SUBPAC or…?

Anne: Yeah, SUBPAC has partnered with us for a lot of events and we use their– the one that’s like a backpack, we put them on the chairs. We also use wind, so people can feel– it’s funny, because a lot of the times we do a bit of an intro into the experience and sometimes I’ll forget to say, “Oh, you’ll be scented, we’ll use wind.” And then afterwards, when we’re talking to our audience, they’ll say “Did I smell the desert?” or “Did I smell the ocean?” because we have Timothy Hand, who does scents for us and he’s at Somerset House in London. So we do have a custom scents for shows.

Alan: Oh my God. I’ve got to come and try this. This sounds amazing. First of all, what kind of VR headsets are they?

Anne: This is a great question for artists, because I think a lot of the struggle is how do you find the right hardware and how do you talk with the right teams? Because we’re a super, super low budget, like the label has been incredibly supportive. But a lot of it is independent. So HTC has given us some Vive Focus and we love them, because being untethered is a huge important part of having audience come in and not feeling like it’s a hassle, but really having this like ritualistic atmospheric experience without breaking that sense of immersion. But we don’t have funds to port. So that’s something that we’re looking for. But otherwise we’re using the Samsung Gear VR. And those have been absolutely amazing. Again, they’re tetherless. They’re easy to put on and off. We can pack them up and take them in boxes around the world. They’re super easy for production. The pass-through cameras are great. So we’re really keen on using those. But again, it can be really difficult to talk to big companies, or we rent the headsets out for every event.

Alan: Yeah, I think device management with VR is a bit of a pain in the butt, because you have to keep them charged, especially with the Samsung Gear VR’s great, because you can just swap out the phones.

Anne: Yeah, it’s really–

Alan: Stack of phones charging while you’re swapping it out, whereas if you’re using something like an Oculus Go, you’ve got to take the whole machine away. So there is pros and cons, but the only problem that is Samsung in the future is not going to be supporting Gear VR, looks like.

Anne: Yeah. So definitely in the process of transferring over. The Quest would be absolutely amazing for what we’re doing because again, it’s super high powered.

Alan: And if you think about the Quest on a price point, it’s actually way cheaper than a Gear VR because a Gear VR is, let’s say $200 for the headset or 100, but then the phone is like a thousand bucks.

Anne: Yeah, but we rent for every single show. So at the moment we’ve been working on this for two years. They’ve received some grants from the Dutch government. A lot of personal support. And we have– I’m going to be in a meeting in Vancouver International Film Festival, then I fly straight from London at the show — at the International Festival Forum — to pitch in Vancouver for funding at the film festival. And then we’re also representing to Creative XR Art Council of England for opportunities to bring this to its full potential.

Alan: Now, you mentioned funding and I think this is an important segue, because I talk to a lot of companies on the show and a lot of founders, and most of them are funded that have been on the show funded of some sort anyway, whether it’s seed funding or venture funding. But funding is a key element, especially when you’re experimenting with technology. We’re pushing the limits. You guys are pushing the limits of what’s possible with this technology. And sometimes it doesn’t work. And if you’re looking at it from a strictly monetary standpoint, you would never take any risks. If that was the case, if you were only looking at it from the business standpoint, where you would never take any risks because the risks are high. So how do you convince funders and who are the sources of funding that you guys have tapped into to allow you the creative freedom to do what you want to do and bring this really incredible show to life? But also, are they expecting return, or is this government grants, or what does that look like?

Anne: This is a great question for how we’re approaching this project as creative based. A huge important part is that we have the freedom to be really innovative and that we’re not meeting certain deadlines and goals. And we’re also bringing together a lot of collaborators who are working with us on a project as open source band, if you could say. So, making it open source, making it accessible, making it somewhere where everyone can be a part of it has been something we’ve moved towards to make it– to bring it to where it is today with a very, very small budget. In terms of an XR project that’s touring the entire globe — and we’ve sold out every ticket to date — the amount of money that’s found to it is very, very little. But the potential is– and we’re presenting in Texco actually. Our partners are presenting for us and that’s in Singapore. So when we have access to corporate events and author galleries and institutions, where we bring those types of budgets, that’s what’s really allowing us to build it out. In terms of investors, it’s something we thought about very carefully. Do we want to have an influx of cash immediately? Do we want to grow and scale this right now? Or are we going to let it grow in scale organically? Are we going to retain that freedom to build it independently without meeting business deadlines? I think this is something a lot of companies–

Alan: Tell me you guys kept the autonomy and freedom.

Anne: We did. Yes.

Alan: Yay!

Anne: It’s been worth it every step of the way.

Alan: Absolutely. Because let’s be honest, when you get pigeonholed into venture capital, there’s a boss leaning over your shoulder saying, “Do this, do this, do this.” And right or wrong, you are beholden to a board.

Anne: Yeah. And I think I’ve heard some people say, too, that once you get your first drive in venture capital, you’re always gonna be raising your next. So it’s a huge demand, I think, to scale that at a rate that can take a bit of time, especially as we’re all learning industry now. And what you plan for in one year might completely change as we learn new things and discover new applications.

Alan: It’s exactly why we haven’t raised as a company until now, because we had a little bit of seed capital. We found some clients that were very interested in doing great new stuff. So we actually used our clients budgets — typically in the marketing sector — to do our R&D, because as you exactly just said, this industry is moving and it’s fluid and it’s changing every day. One day Apple will come out and say a new feature. And then Google came out with a new feature. And those two features alone will wipe out 100 startups. So being able to be nimble and look at the big picture in the long term is really, I think, the key to long-term success of this whole industry. I think there’s gonna be a lot of companies that are building, building, building, and they’re raising capital. And while there’s– who went out of business? DAQRI!

Anne: Yes.

Alan: DAQRI, the augmented reality helmet, they raised enormous sums of capital. But one, they were too early. They were doing this for 10 years. And the market for that, what they were doing is just starting to kick off now. They just raised too much money too early in it. It can set up companies for failure more than its success. And I think this is a lesson for people who are listening, who are startups, who have a great idea. But just be very careful where you get your funding from. And the best form of funding — in my opinion — is customers.

Anne: Yeah. I mean, when we’re booking out the show to something– because we have to be very nimble and also we are growing and scaling at — I think — a great pace where we’re also at the right timing, and also for consumer adoption it’s not what everyone expected it would be this year. And I think a big part of that is having accessible and very innovative and creative arts pieces, and there are lots of them out there. But when you go to VR, a lot of VR studios — or I should say arcades — a lot of them, it can be very difficult for someone to get to, buy a ticket and then you have to sign up and you wait 30 minutes and you try one thing, but you don’t really understand how it’s used. So I think a lot of times it’s like when people first started watching theater, they would go out and see theater. And then it was on TV, and they’d go to the movies, and they understood the concept, and there was a show, then it came into the house. And it slowly expanded to where people were comfortable with it in the home as well, and also interacting with it in many ways and shared it with their friends. I think we’re slowly, slowly building up to the same rate as what we see with other mediums that we’re drawing from.

Alan: The FIVARS Festival does a great job. They kind of have these little areas where it’s just walled off by curtains and you can sit there and you can– you load an experience so they have it all synchronized to a tablet. I was going to ask you about this. How do you synchronize all the headsets? What program do you use, or what do you use to synchronize the headsets so that everyone is getting– or are they getting the same experience?

Anne: Yeah, they are. So we have our own app on the Oculus store. And we invite everyone into a gaming lobby, and we use a networking system. We can’t rely always on the Wi-Fi of the places we are, so we always bring our own routers. And this is we can connect. I mean, as we do more testing– when we first started in 2017, we had 10 people going through an experience at once. And now we’re doing live shows at 30, just because the restrictions for renting. That was we did more tests and we kept accessing our budgets. We can do 60 people in the live experience and the connectivity is so important for that, because the show only happens once those people of the show is sold out. So we have to have a stable network and a stable experience in hardware.

Alan: But I would think that the entire experience is probably preloaded onto the devices and you’re just using the network to trigger them, right?

Anne: That’s right.

Alan: Yeah, because I think pushing the content would be too onerous.

Anne: Yes. We actually have a live system. So as we’re performing different songs or different experiences or two different audiences, we customize what people see and change in tune with the music. So everything from the haptics, the temperature, airflow, the scent is all controlled through the app we’ve created, controlled through an iPod or any laptops we’re using on stage.

Alan: Wow, that’s so cool. Now, can people experience this *not* at a live show? Is there any way that they can download the app on the Oculus store and enjoy one of these concerts at home?

Anne: It’s something we’re building up to. We’re going to find out in the next couple weeks. We’re extending it. A lot of that what we’re looking at is how do we make it accessible, and community building, and user generated content. I’ve been exploring a few partnerships with Science Space and also Synth Riders with Kluge Interactive, and also building out our own experience that hopefully will be available in 2020.

Alan: So cool. It’s amazing being able to crowdsource the graphics, and everything will be amazing. It’s never-ending at that point. I think the ability to create this technology, to create 360 and VR and AR is dropping dramatically. Five years ago, the cost was in the millions and now it’s in the tens of thousands and soon it will be free, like everything else. Making a video on your phone and posting it to YouTube is pretty much effectively free. Except for your selling your rights to advertise. But that’s a whole different story.

Anne: That’s something we’ve explored, too. So how can we commercialize this, how can we make a successful business beyond ticket sales. And doing activations so we can import any Unity scene. So if we’re talking to gaming companies we can import them and do live activations. L’Oreal does a lot of really neat work innovations on how we can incorporate an experience or activate a new game. If Fortnite comes out with a new– how do we do avatar integrations. So it’s very, very flexible in how he present this, what content we present in it.

Alan: So cool. And I think one of the missing elements to live events in VR — for example, if you’re watching a basketball game or a live concert — is the social aspect. And one company — Big Screen VR — has done a really good job at one thing, they allow you to watch a big screen. So you sit on a couch or on a space — wherever you pick your room — and you can watch a movie on a big screen. And one of the key things that struck me about their business model is that they allow you to sit on the couch with a friend and have a conversation while watching the movie. For movie purists, it would be terrible. You can– I’m assuming you can mute the person. But just being able to have that conversation with somebody, maybe your girlfriend’s across the world and you just want to sit and watch a movie together. I think that bonding time is really important. And with live events, live events by yourself aren’t– turns out not that much fun! But being in an event where you can share with other people, is that something that you guys are looking into as well?

Anne: Yeah. Well, I mean, based on our live performances, the entire dynamic of it is that we wanted to focus on something that was social, so rather than having it as a passive experience, ownership of the experience was also something we thought was very important. So as you have people contribute to the visuals the show we feature them around the world. Because we’re working — again — in the music industry, a lot of this off that base we’re also working with fans, and fans love to be a part of what we’re doing. And for us, it’s also a huge honor to have them being involved and growing a project with us. So Kent Buy also talks a lot about this feeling as if you’re actually there as well. So how when you’re in the scene and when you use the pass-through camera, you see people wave to each other while they’re in VR sitting next to each other, even though they have the headset on or smelling each other or spinning each other’s chairs during this concert or pointing at the band, trying to figure out what’s real and what’s not. And these are things I don’t see in a lot of demos, and people almost want to get up. And you can tell that they’re really excited and they’re looking at the visuals and and trying to understand it, and they’re talking to their friends after– we almost always talk with everyone after the concert, and we get a lot of feedback from our audience. And that’s something also that’s allowed us to really get a lot of the ideas was from speaking together, speaking with our users and people who are on the fence who liked being a part of it.

Alan: It’s wonderful. So have you built in the interaction for the user into the headset? So maybe gaze control, where they look at something and it triggers something else, or even like a survey at the end saying, “How was your experience? Rate it from 1 to 5.” or have you’ve done that?

Anne: Yeah. So we’ve done the gaze control work when looking in the scene. People are flying through it, they can control the direction that they’re travelling. However, we do surveys at the end because it really is concert in a live production. So people line up, let’s say the warehouse in Germany, people would line up on this like beautiful industrial space and they’d have one of those classical red ropes. People are all waiting to have their tickets for a certain timespots. And no one had to wait. They all come at the time when their show is going to begin, and they come in and it’s very ritualistic. So even before people put the headset on, the performance has already started. It’s very much like when you walk into a dark room and you’re expecting to see an amazing theatrical performance. And there is kind of soundscapes and we have voiceover and they’re talking about their childhood, talking about adventure. And they get the headsets on, we explain a bit for what they’re going to experience. And then we had to experiment so much, too, about when does the band come on. Because if the band comes on after they put the headsets on and leaves before they take it off, sometimes people don’t even realize the band was real. So when they’re seeing them through the pass-through camera, they just think that the technology is so amazing, because the band looks so real. [chuckles]

Alan: Oh, wow. So you guys are using the pass-through camera with visuals?

Anne: Yeah. So we use added visuals. We also use lots of dry ice and smoke, with lots of lighting. Our entire team, like our– we have a tour manager. He also went off and does lots of work with Grace Jones. The label is Believe, and they do DJ Shadow and Björk, and the management is East City with alt-J and Wolf Alice. So the team is incredible. Our booking agents are AEG, Live Nation, CODA, Paradigm. So in terms of ability to take this all around the world, it’s absolutely amazing.

Alan: No kidding. That’s so cool. When are you coming to Toronto?

Anne: Oh, we hope to come to Toronto next year. Right now, we’re speaking with our partners in Singapore, about doing Hong Kong, Singapore, Tokyo. And we’d love to do– we’re looking at the West Coast tour from San Francisco to Los Angeles for early 2020.

Alan: That sounds amazing.

Anne: It’s great, too, for companies. In a way, it’s as a showcase of the technology, since we’re having the headset, and we have haptics, and we have all these different technologies coming together. It’s such a good way to show the capabilities of this technology to a new audience.

Alan: Yeah. You know, it’s crazy. SUBPAC just partnered with Beat Saber to make a custom Beat Saber SUBPAC.

Anne: Yeah, I know. It’s really amazing to have the collaborations and something that people — whether or not they feel like they’re a part of it — can also take it home and and have the gear, and in a way, be a part of the team.

Alan: Well, I guess they can be part of the team because you’re crowdsourcing content, which is if you look at the history of human presentations — from concerts, and music, and theater, and TV, and movies — the user wasn’t really part of that process, ever. They were just consumers. And now we’re moving into a world where anybody can be a creator, like the number one social media platform in the world right now — well, growing — is TikTok. It’s enabled kids to be creators again and given them an easy way to make really cool stuff. VR and AR have this unlimited untapped potential to let the crowd design and run wild with their imaginations.

Anne: Yeah, we have a 16 year old, who is part of our collective in Virginia, who’s taken some amazing drone footage that we used in our music videos. So not only are we doing VR, but we’re also [researching] integrations into gaming. How do we– what’s [unclear] me about ScienceBase and some of the partners we’re working with is you can access their– it’s like a massive multiplayer online game with user generated content. So we have our own area and you can access it in VR, you can access it on desktop. And also our game designers are building out this experience. So it’s an experience, you can activate different music videos, see different artwork from the collective, and also be a part of it. So we always encourage everyone to be part of growing the industry, because now is the time when you can really become involved in it.

Alan: I started in VR in 2014, but one of the things that stuck with me I was listening to– actually it was Kent Bye’s Voices of VR podcast. And one of the things he said was, “At this point, it doesn’t matter if you’re a Hollywood producer or you’re in your basement. Everybody’s equal, because nobody knows how to do this stuff.” And it almost feels like– we’ve come a little bit of ways, because we know how to make 360 films. We know how to make VR and AR, and there’s tutorials online. But four years ago, there was no tutorials online. You just had to try it. And it feels like we’re still at that kind of beginning time, where anything’s possible and anybody can do it.

Anne: Definitely. One of the challenges we faced was the idea that we had to be ready before we released into the world. And we started in 2017 like underground performance at the Institute of Art Amsterdam. And then it took until actually this year, when the first single was released with the band, Miro Shot, that we started doing public performances with press. And one thing that our team would encourage people, looking back, is to put it out in the world and work with other people and get feedback, because it’s never gonna be perfect. Art is never perfect. But innovation is always amazing and people appreciate it.

Alan: I wish we could tell that to our corporate customers, who are– you’re like–

Anne: [laughs]

Alan: “Hey, we want to be the first in the world to do this!” And when things go sideways — as they often do when you’re pushing the limits of technology — they’re like “Why doesn’t this work?” and you’re like, “Well, because it’s the first in the world. And we told you it might not work, and it doesn’t work.” [chuckles] But thankfully, we have customers that are willing to take those risks with us, because you really do have to push the limits.

Anne: Or working directly with the creative team, because then they won’t necessarily understand the restrictions of the technology, and they’ll come up with really cool solutions. And then also the company will find more innovative ways of exploring their potential of what they want to communicate.

Alan: Absolutely. I mean, if you leave it to people that are in the technical realm to develop everything, they will only do what’s technically possible. But if you leave it to an artist and say, “Here’s the technology, what do you think?” and then you go, “Hey, can we do this, and this, and this?” And the technical people are shaking their head going, “No. No, we can’t. No, we can’t.” And then somewhere in the middle, somebody goes, “Well, we’re going to, whether it works or not.” But there’s always that that adventurous feeling with artists. I don’t know if you know my last company, Emulator, we developed a big, huge see-through touchscreen DJ controller. And we got to work with Linkin Park. We gave Mike Shinoda a big touch screen in the program. It was a MIDI controller. So he could do whatever he wanted. He came back and he showed us a video that he had made. It was like just a bunch of octagons on the page and it looked like nothing. It looked like a bunch of things thrown on a page. And he started to play it like a piano. He was playing a touch screen like a piano that he had designed from scratch himself.

Anne: That’s amazing.

Alan: These are the kind of genius brains that you get with musicians and artists. And I think the marriage of technology and art is one that will never get divorced.

Anne: Yeah, I mean, one thing that’s so [unclear] about any narrative and any story, is that that’s what people are going to remember — so when we’re releasing all these new products, so like Quests and headsets, Hololens, augmented reality, haptics, so even SUBPAC is a great example — is people aren’t going to remember as well, without a story or a context. And a lot of that comes from the creatives, because they can fill a part of that story or connect to that story by making something and working very hard for something, and then using an amazing way of sharing it with the world.

Alan: I agree. So what’s next, then? So you’re going on tour. You’re going to Vancouver. You’re raising some capital from grants and in different things, you’re selling tickets to this thing. What is the 2020 schedule look like? It must be getting crazy.

Anne: Yeah. So for 2020, we have huge plans. And definitely right now is the time when we’re confirming all the technology we’re using, all the marketing we’re doing. We’re speaking with Razer as well. Doing some amazing stuff because the equipment we use, it’s in a live show and we have to use the best that there is. And we share that with our audience. We talk about it, we put it to the test. So all of that now and our next few shows that we’re working on towards the end of this year, that’s going to lead into global tours in 2020.

Alan: It’s going to be amazing. I’m definitely going to catch one of the shows next year, for sure.

Anne: Yeah. No, I cannot wait for everyone to be a part of it. And also, as we build out the at-home experience, we’re going to invite a lot of the community to experiment with us for the first time.

Alan: I can’t wait. This is going to be incredible. You made a custom scent. In your opinion, what does it smell like?

Anne: Well, I think a lot of it is going to be about the context. So when you walk outside in the day, you experience the light in different ways, because how you feel and what your experience is. So when you smell something, if you’re flying over an ocean or a desert, I think a lot of that will have all the senses coming together to make a new impression. That it is whatever you make it to be. We relate from your experiences.

Alan: Interesting. So true, because it really comes down to your own perception. That’s why I was asking that, because what smells like summer to me may smell like something else to you. And smell is one of those senses that is really, really underrated. We’re working on training, and scent can add an element to it that may be very subtle and people maybe don’t even notice it. But let’s say, for example — and this is not something we’re working on — but you’re training somebody in a mine and you want to give them that understanding of what it’s like to be in a mine. You can either turn up the heat, if it’s hot underneath or cold and give them that that smell, maybe it’s iron or sulfur. These are things that you can prepare people for. And subliminally, they really resonate with that. And it enhances training, enhances the experience overall. So I think just adding the scent and the wind and the haptics. You guys sound like you’ve really got the whole package there.

Anne: Well, I mean, does it really have that wow factor anymore in the sense that you can’t put on a Google Cardboard and show a cool video of somebody going down a rollercoaster? We have people who are really experts in VR and AR right now and immersive technology. And we really have to be making cutting edge experiences.

Alan: I couldn’t agree more. I was at FIVARS and I’m a little jaded, I’ve seen a lot of cool things. And the ones I saw were really great. I looked at one called The Life In 2049 and it was looking at what is life going to look like in the year 2049. And it was all CG, and it was OK, it was good. But there was another one going to Mars, and the quality was just incredible. I couldn’t believe how great the quality was from the Gear VR. I had kind of in my brain said “OK, well, the Gear VR is not very good,” I’ve kind of turned it off in my brain. But having tried it this weekend, I was like, “Wow, this thing is really still great.”

Anne: Yeah, the way– a lot of it, too, as we work with the creative teams and developers, it’s about making it initiate the file in a certain way. So it’s not too dense. So in terms of layers, is there any movement and motion? It’s how can you compress the motion, so that when we’re streaming it through headsets live, it comes out as the best visual quality.

Alan: You can take it right away all the polygons, and just apply a video overlay. And it looks really photo-real, but there’s no depth or texture to it, so.

Anne: Yeah, there’s been some amazing video games that use really low poly visuals and it’s just stunning, stunning. And a lot of it is just about setting the mood and setting the atmosphere and going on an adventure in this new space.

Alan: Yeah. You know, the one thing that you mentioned that I think is really important — especially for location based entertainment, including live concert — is setting up the atmosphere before you put the headset on. I think it’s very important. And the one place that does this really well is a place called– what is it called? VR– Oh, I can’t remember what it’s called. It’s the huge VR arcade in Dubai, in the mall. I can picture– they have– when you first walk up to it in the mall, the entire cityscape of Dubai is hanging from the ceiling upside down in three dimensions.

Anne: Wow.

Alan: And everything around it is video screen. So you get these buildings kind of coming down from the sky. At one second it’s daytime, the other time it’s nighttime. That’s even before you walk in. And you walk in and do a Vive experience. It was one where you’re bank robbing or whatever, which you go in a bank vault and it’s all littered, there’s newspapers on the ground. It’s like you went in a bank vault that was just robbed, and then you put on the VR headset.

Anne: Yeah. I mean, those are such good escape room things too, where you actually physically in a cool area.

Alan: Yeah.

Anne: I was at Dreamscape Immersive with Carter [Hulings] giving me and my colleague from Miro Shot, taking us through the experience. And it was awesome. Very [unclear] doing from the moment you walk in there, it’s like going into a theater. And we have all these, I guess, relics and books about travel, and I think it was Ron McJunkin — who’s based in Switzerland with Dreamscape — he said they’re like a travel agency. And when you go in, you put the gear on, you step in, and you’re waiting in anticipation. And they did also so cleverly, the redirected walking. So even though you’re in such a small space, you feel as if you have just gone on a one mile adventure. And it’s exciting, because you actually feel like you’re in open worlds. So doing really clever things like that in the physical space and having it, like I said, during that you’re participating in and there’s interactive features, it’s hugely impressive.

Alan: Yeah, I think the first time that I ever engaged with physical objects in a virtual world blew my mind. We were passing around a ball and the ball looked like a basketball. I grabbed it and we were passing it around and just the act of passing a physical object around was cool. And then the ball turned to a fireball. And then he passed it back to me, I was like, “I don’t want to touch it, because it’s on fire.”

Anne: Yeah.

Alan: But then being able to play catch in VR with a physical ball… like, that’s so meta.

Anne: One thing with that, too, is like avatars. I think a lot of people are aiming for total realistic. But we forget that there is gamers all over the world who prefer animated characters, and they seem like you can– even just when I’m in a VR experience with colleagues or friends, you can tell just from like, let’s say a very basic robot figure, just by their movements you can really identify who they are. And that’s something that’s quite amazing.

Alan: I actually– I got to speak with Philip Rosedale from High Fidelity. And one of the things that we’re talking about security in VR and we’re talking about retinal scanning and this and he said, “Well, to be honest, one of the easiest ways is gait analysis, because you are a certain height and you hold yourself a certain way, and the headset will rest, and you will move in a certain way that is unique to you. And it’s very, very hard for people to fake.”

Anne: Yeah, again, it’s a natural cadence and rhythm that becomes part of our identity, which is another huge question in VR.

Alan: Yeah, I think we’ve only scratched the surface of digging into our own identities within VR.

Anne: Yeah, but it’s a very exciting industry, in terms of innovation and creating new experiences and engagement, and having it as something that’s more than just an eyeball on the screen and a tick in the box, then I think this is really something that can make experiences and sharing stories and really creative and beautiful connecting medium.

Alan: I agree. The fact that we’ll wear glasses every day, probably within the next 10 years, probably in the next five years. And all the compute power will not be on the devices themselves, it will be in the cloud. So the computers themselves will be super cheap. The cloud streaming service will be super cheap. And then the content will be crowdsourced and user generated. And so it will just be this big hub of user generated content, that gets upvoted and downvoted based on people’s likes and dislikes. But also if you apply artificial intelligence algorithms to that, you can really then start to drive content to people in a meaningful way. We use a lot of incredible algorithms to sell people more crap that they don’t need. What if we sold them more learning, and used marketing techniques and algorithms to drive people to learn more with an altruistic outcome, rather than just try to sell people more stuff?

Anne: I think– I mean, it can democratize everything like collaboration, education, healthcare, access to education, even. I know travel comes up a lot on your podcast as a distance. And yeah, it’s one of the– I was so, so lucky I got to go present one of my short stories at this event called Virtual Futures in London the last two years. It’s just a speculative fiction and it’s exactly about that, is how can AR solve lot of the global problems and one of them is that need to be materialistic. So how can we we use overlaying data on the real world and light, and then solving that need for physical items. And also a lot of the physical gear that’s needed for communication systems. How can we make communication systems better with the cloud? There’s still a huge way to go. Globalization, I think, is very much in its early days and this technology will again decrease the distance. And in terms of every way that we can innovate AR and VR, I’m sure we’ll be a part of it.

Alan: Well, I don’t even know what to say to that. That’s amazing.

Anne: I guess when we’re talking about business, it’s a good time to invest.

Alan: Yeah, you think? This is why we waited. We actually sat on the sidelines and waited and did all our R&D and everything. We’re like, “Okay, we’ll wait until there’s real proven use cases so that we can go to our investors and say, this is where the money is made, and we’re going to go and get it.”

Anne: Yeah, that’s right.

Alan: Yeah, absolutely. What problem in the world do you want to see solved using XR technologies?

Anne: I think to say that, “the one problem,” I think is very, very difficult thing, After just saying that, I think can be a part of everything. But I think that what I can be a part of is just to facilitate learning, and learning from others, and also working together. And it’s something that everyone can be a part of. And, again, really education and healthcare and the arts and creativity and access to resources. As you say, tutorials. There’s so many ways to be a part of this. And I think we’re all working to make it the best it can be.

Alan: Well, I don’t know what else to say with that. Anne, thank you. And thank you, everybody, for listening. This has been the XR for Business Podcast with your host, Alan Smithson. If you want to learn more about the work that Anne is doing, you can visit theboolean.io and make sure you check out Miro Shot live VR performance, coming to a festival near you. Thanks, Anne.

Anne: Thank you so much.

Alan: Hi, it’s Alan Smithson here. Today we’re speaking with Dan Lejeskar, founder and chairman of EON Reality, a world leader in virtual/augmented reality based knowledge transfer for industry and education. They believe that knowledge is a human right and it’s their goal to make knowledge available, affordable, and accessible for every human on the planet. We’re going to find out how, in the next XR for Business Podcast. Dan, welcome to the show, my friend.

Dan: Thank you so much.

Alan: I’m really, really excited. I know you guys have been working– well, you specifically have been working in the 3D virtual space for many years now. How did you get involved in VR and learning?

Dan: In my past, I used to work with simulators — big aircraft simulators, etc. — and I got really excited about seeing the effect it has on pilots and soldiers, and I always thought that it would be useful to do the same, but for normal people, nurses, etc. But obviously these people couldn’t afford a $50-million simulator. So I had to be patient and wait until the computers follow Moore’s Law; become cheaper, faster, better. And by ’99, the hardware was there, so you can start running this on PCs. So we were very early adopters of virtual reality already in that period.

Alan: We’re talking 20 years. Most people know VR and AR as if kind of something in the last five years. But what was it like kind of going through these growing pains of going from a million dollar simulator — millions of dollars simulator — to now we can buy an Oculus Quest for 500 bucks?

Dan: It’s been an interesting journey, with a lot of ups and downs. And very much VR has been like AI. I’m sure you’ve read about the “AI Winter”, when things didn’t go that well. We’ve had quite a few ups and downs in virtual reality. ’99 was fantastic, because that was the era of dot-coms. And we started with something called Web3D, so you can do 3D on the web. It had actually millions of users. Then we had a hard landing 2001. Remember when dot-com crashed? And we had to move our business from industry and education to defence because we had September 11th. So that was kind of what saved our business, doing homeland security centers and the like. And then slowly and surely, we picked up the business up to 2007, 2008. And during this period, there were several iterations. There was something called people avatars and virtual worlds, that was very popular around 2007. That raised and crashed also, pretty tough. But we managed to navigate those water until I would say 2011, 2012, when the hardware became available for mobile devices. So this was before Oculus. Already then we could see where the industry was going.

Alan: Oh, you guys, you never lost your path. You’ve veered a little bit from military, to industry and education, back to military, and then back to industry and education. Obviously, the passion is in the industry, knowledge transfer and education. What are some of the projects that you guys have done in the last few years that really just made you go, “Wow, this really is something that, quote unquote, normal people can use?”

Dan: So, you’re right. We realized quickly that the biggest value has to do with knowledge transfer. And we started thinking how can this technology be used to solve big problems? And we identified three areas. One is government. We have an initiative that I’m happy to talk about. We call Human 2.0 or Enhanced Humans. And we roll this out with more than 50 governments around the globe, national governments. Then we have also the initiative for academia, which we call Classroom 3.0. It is transforming education by experiential learning. And then we have a third group we call Industry 4.0, or our enterprise solution. And in each of these sectors, we have concrete projects. So in the government sector we do something called interactive digital centers. Those are pretty big investment from governments, can go up to 6-7 million dollars per location. And I’m just about to inaugurate the new one now in Morocco — of all places — that we work with USAD.

And what we’re focusing on this bigger project is to address the gap of skilled, smart workers. As you know, technology is a big killer of jobs, but also big creator of jobs. And in this creation process, we have to teach new people new skills. And virtual reality/augmented reality proves to be very efficient there. That’s one type of projects. With education, we do the same. We work with big universities. We work with regions. And again, that is to help students learn faster, retain information longer, and make better decisions. And industry, we work with two areas. We work both with the area of productivity increase, predominantly using augmented reality, but also with learned trade; training using virtual reality. So that’s very broadly what we do. I can go into the specifics of each.

Alan: Why don’t we break that down? And so we’ve got kind of these large government centers. You mentioned they cost between six and seven million dollars. What is in that? What are they getting for that? What is the value created?

Dan: So concretely, there are four elements in a center. The biggest one is a dissemination machine to up to 7-10,000 users. We have a platform we call the Augmented/Virtual Reality Platform that essentially does both, it’s a mix of virtual reality, augmented reality, and mobile based solutions. So it works agnostically on everything from an iPhone to very sophisticated headset. So that, the first part of the center is to essentially do a regional deployment. I’ll give you an example. We’ve just done one in Bologna in Italy. So that deployment is done both with a university — the University of Bologna, with 6,000 students — and it’s done also with industry, the Ferrari, Maserati, Ducati, all this industry that they have there. So that’s the first part.

The second part is we have a showroom, and the showroom displays all type of technology, from large screen environments, room size environments [which] we call Icube, to headsets. So people actually can not only be aware of this technology, but understand what it does.

The third element of this is an IP and content creation. So we have something we call the VR Innovation Academy, and we train local resources how to develop and deploy virtual reality and generate local IP. And the fourth element is a marketplace. We have something called the Vault and the Vault contains lots of assets, that we accumulated over 20 years, developed by ourselves or partners. Think about it as a Netflix, but containing virtual reality objects, objects and application focused knowledge transfer. So those are the four elements of a center.

Alan: When you’re building these centres, I guess you’ve mentioned the universities in an industry. I assume government is involved in that. What are the benefits, then, to the university? Is it more to [bring] their students up to speed? Because you mentioned also the knowledge transfer or content creation using local resources. Is this something that the universities are using to bolster their employment statistics or…?

Dan: Yes. So if you look at academia in general, there are three big problems today they have. One is a quantitative problem. They need to teach more with less; less time, less money. They have a second problem, which is a qualitative problem. The skills that they used to teach — which is remembering and learning, understanding — they are not any longer applicable. You have to now do analyze, evaluate, create, so it’s a different type of skill set. And the third problem is what I call “the sage on the stage.” Since 1400, we used to have a guy standing in front — typically guy — stand in front of a lecture hall and preaching. And that doesn’t work any longer, because today’s students are social learners, multi-taskers, short attention span. So you have to universally start realize that they have to do something different, and that something different is what I call experiential learning.

So rather than just teaching you about logistics, we give you a Heineken brewery and you learn logistics within that context by solving a problem. Now, that is fantastic, but it’s pretty expensive to get your hand on a nuclear power plant or a brewery. And that’s where virtual reality really comes to play. So Eon has the world’s largest library. We have 870,000 assets. So if you say, let’s say particle accelerator: sir, we have it. So what we did is we went to vacuum clean all 3D warehouses and created these building blocks. And then we developed the platform because today– this is a big problem. I don’t know if you realize, 82 percent of universities have tried VR and AR. 82 percent, in some fashion. But when a majority of them — I would say 90 percent — do not pursue it. Why? Why do you think that is?

Alan: They don’t see the value in it. For one, my second guess would be that it’s too expensive for two. The third one, in my opinion, would be the fact that they just don’t know what to do.

Dan: You’re pretty much right. They see the value. The value, most people understand the value. Expense is a problem, because if you want to roll this out to 8,000, you’ve got to buy Oculus for everybody, and even that’s too expensive. But the biggest problem is actually they don’t have the content. It takes time to develop content, and it takes skills to develop content. So I would say that’s the biggest one. I just was recently with a university in Mexico. They spent $4-million on equipment, but they don’t use it, because they had only two or three curriculum that they can use, and it took them two years to develop. So fundamentally, we address these problems with our platform. Number one, our platform works on any device. So if you have your iPhone or the 4 billion of smart devices, so you don’t have to have a fancy headset. It works with a headset also. So that’s how we eliminate the cost aspect.

Then the other aspect, make it easy. How do we do that? If you’re familiar with IKEA, right? IKEA, you buy a furniture, build it yourself. So our mantra is easy. It stands for effortless. So I can teach you to develop an application in less than one hour. And the skillset you have is PowerPoint or less. So you don’t know anything about coding, Unity, Unreal. So that’s the first one. The second one is affordable. So for $12 a student a month, you’ll get access to the full platform. The third one is self-service. So that’s the part of do it yourself. And the third– fourth one is interconnected. So you can interconnect. I kind of– it was a segue from your question about academia. But academia wants to do it, most of them. And they want to do it, but they don’t have the ways. We help them with a platform to integrate and deploy it, not to 30 guys in a lab, but to thousands and thousands of students. Affordable.

Alan: So how do you then get people to learn how to do Unreal and Unity without teaching them? How does that work?

Dan: Let’s dissect the problem with content creation and virtual reality. So there’s three elements to this, if you think about it. There’s one, you need to get data in somehow, right? So you need to get 3D models created. Then the second thing is, you need to bring that to life. So let’s say you bring in a piece of machinery. When you push a button, something needs to happen. And further, you need to publish this on something, whether it’s a headset. And then, of course, you need to manage. So the traditional way to do it is to use Unreal or Unity. And that’s what we used to do. And that takes a lot of time. So after about 10 years of doing that, we said, “Wait a second, 80 percent of the time we do this repetitive thing, that we can make it easier.” So we don’t have to go in scripting and coding, because 99 percent of our customers don’t have a clue how to do that.

So what did we do? First of all, we’re getting data in. We teamed up, so you don’t have to create models. You can go into a library and search about 870,000. And if it happens that your specific model that you want is not there, you can also import under 20 different formats. So CAD, Autodesk, Siemens. We teamed up with SAP, so you can do that. And it happens behind the scenes. So you just drag a model in, and it pops up in the application. So that solves the first problem. Second problem is bring that model to life. How do you do that? So we created a non-code interface that allows you to do a number of things, easy. As easy as PowerPoint. If you want I can go more into detail on that. And the last one is publishing seamlessly to anything. So that’s the platform. And we have a lot of lectures in our website how to do it. And we are coming up with a freemium model actually later this month. So you will have a free version also of the platform that you can play.

Alan: So basically what you’ve done is you’ve templatized the creation of virtual and augmented training.

Dan: That’s it, yep. You’ve got it.

Alan: All right. So is there anything you want to touch base on the showroom?

Dan: Not so much, to be honest. The showrooms value is diminished, because if you go back 5, 10 years, there were no major producer of hardware, for virtual reality. So we kind of have to integrate our own systems. We have something like Icube and obviously it’s like a cave, basically you walk in and you’re surrounded by walls and you get the same experience that you do in a headset. But we still have–

Alan: Yes, I’ve been in one of those giant caves. They’re awesome, except very nauseating.

Dan: Yeah. If you don’t know what you’re doing, and if you have a bad match between the refresh rate, especially if you do roller coasters or stuff like that. Yeah.

Alan: Ugh. Why do VR people show roller coasters as the first experience? Stop doing that! Anybody listening, stop doing that! [laughs]

Dan: [laughs] That’s true.

Alan: Then you talked about IP and content creation using local resources. So how does that work?

Dan: So let me give an example. So we teamed up with Loyola University in Chicago and the best ophthalmologist, among the best in US. And they were very interesting to use this for learning how to examine a patient. What’s the process? Because a lot of students are not comfortable to do it, do that physically. So they had all the knowledge and we had, of course, some resources and we had the platform. So we teamed up together. This IP is developed, validated by the university and the experts there. And then once when that’s created, first of all, of course, they use it themselves. And then in a span of a few months after releasing that, we had everyone from Harvard to Stanford to purchase this application. And then we do a revenue split between us and the university. And that IP then propagates, it’s put in the Vault in the marketplace and it’s sold around the world.

Alan: Pretty awesome. So kind of like– how did I say it? Maybe I guess the Unity asset store would be the same. Only instead of for games, you’re doing it for learning.

Dan: Yes, you can say that. It is important because you still have customer that not even want to create, even if it’s easy. They just want to buy something off the shelf. And that’s where we have the Vault. The Vault contains not only building blocks, but full applications that have been certified by an expert, because we are not experts in ophthalmology. Or almost any of the areas we cover.

Alan: Huh, interesting. So I guess you’re relying on your partners to, I guess, help develop– not only develop, but certify it.

Dan: Yep.

Alan: To make sure that it is doing what it says. Now, how do you deal with that? So let’s say, for example, you work with the university in the US to develop this content and then somebody in Europe wants it. But maybe the education is a little bit different. How does that work?

Dan: Basically, it’s– the idea is, a large amount of our customers don’t want to basically learn how to create content themselves and they much rather prefer to get the flying start by selecting existing assets. So we have this– looks almost like Netflix, with description of each application, and then we have a needs assessment session. And during that session we walk through them, what exactly they’re interested. How do you want to start? And then we together pick up maybe a dozen application for a pilot and subject to their satisfaction. Then it could get full access to both the platform and evolve.

Alan: You do a trial with them, say here’s ten pieces of content, try it out for a month and then pay us and you have access to everything.

Dan: Yeah, I mean, we are flexible. Typically we want to make sure that there is a genuine interest. So we do insist on having this type of session, a workshop essentially where we fully understand their needs. We make sure that we under-promise, over-deliver. But once we establish that and establish that they have a genuine interest in a budget. So assuming that they are happy, they will purchase. Yes, no problem. We can give it to them for 30 days at no cost.

Alan: How do you– I guess the question I have is, it’s a Netflix. So is it like Netflix, 7.99 and all you can watch? Or is it three dollars for this, and four dollars for that, or five hundred for that?

Dan: Yes. So we are not yet there. We have two types of sales. We have what I call top-down, where it means we are approaching large organization or national governments or regional governments. And that’s when we do this many 10,000 licenses at once. And then we have what we call bottom-up, when we start with much smaller things. As little as 50,000. But we typically are B2B. We are not yet B2C. So if an individual person wants to use it, we are coming out this month with a freemium so you can actually get to test everything. But for a low amount of cost, but you don’t have all the features. For example, there some patients who can do five lessons in application, but that’s it. So we are coming up with models, but we are not yet at the Netflix level with all-you-can-eat buffet for a amount of money. But it’s going that direction.

Alan: I think everybody is trying to figure out the Netflix model of everything. And then, of course, Disney+ comes along out of nowhere. One of the things that has come up previously on the podcast is 3D models, and the fact that there’s no standardization. You mentioned that you work with SAP to kind of import any types of 3D models. Can you talk us through that?

Dan: Yes, absolutely. So this is a well-known problem that we’ve had for 20 years, even in the previous platforms. The more advanced ones we used to do, that require programming skills. Still, you have to be able to import. And originally when we started, we had to import through neutral file formats. But if you do that, you lose a lot of data. So you have to go native. Not only do you have to go native, you have to — if you want to support a Boeing, or Airbus or, any of the big companies — you have to support various versions. So, for example, Catia, which is a Dassault’s CAD system, you have to support version 6.467. And to do that, it requires a lot of resources.

So what we did is we looked at who’s the best in the world to do that. So we worked with two or three companies. One of them was Aries, not long ago acquired by SAP, so that’s why we have that partnership. And we basically licensed their importers and embedded in our platform, but make it much more easier for someone that doesn’t know a lot about CAD and polygons and polygon reduction. So that’s our approach. And then we also assure that as new versions of CAD come out, that we are compliant with that. Because of this important. So currently we can support 120+ formats through these various collaborations we have, which is pretty much everything except the obscure formats. And it’s not only CAD. It’s also if you want MRI device or you have GIS data, BIM data. So it’s– or scan data. Or even 360 videos, we support that, too.

Alan: It’s kind of crazy if you think about it. The world of 3D, 120 formats. For people listening, if you don’t understand what this– imagine JPGs, you want to send a photo to somebody. But there was 120 different photo formats that you could send to somebody, and not every phone or device would accept it. This is crazy.

Dan: Yeah, it is. There is a reason it’s not so easy with content. You have to tackle this problem, otherwise you don’t get even started without the model.

Alan: It’s true. It seems like more of a non-starting issues with all of 3D, not just VR and AR, but even just putting something. Because you mentioned when you first started out, you had Web3D back in– before ’99 you said, I think. You had 3D on web.

Dan: Yes. So we would start with that, which was quite fantastic. I still– I mean, we had a very large contract — more than $5-million — with office depot to do furniture configuration of chairs, and office planners where we had hundreds of thousands of skews of furniture. And it was used and it worked, very well. We had done configurators for Suzuki’s motorcycle, because they make most the money in part. But those were kind of kiosk like settings in a dealership, where you basically picked the favorite bag you have, and then put all the gear that you want, saddlebags, everything you want, and then automatically we got you the price, etc. So that type of things we had to do then, because nobody was wooed by virtual reality. So how do you make money and support yourself? We’ve been self-funded since 2001 as a company. We don’t have any VC money. We just make money based on the value we provide to our customers. And that puts us in a pretty unique situation.

Alan: Amazing. It really does. Then you look at something like Blippar, who raised 110 million– actually more than that, $110-million and then went bankrupt in a four year span. What are your thoughts on that?

Dan: You know, it’s nothing different from a dot-com or any similar cycles that you have this hype curve. People come in, they overestimate the benefits, underestimate the issues, the practical things that you have to fix. Then people realize the problems with– that happened with dot-com exactly. And then most of the companies then crashing. And then there are a few that survive. Small companies like Google, and eventually people like Facebook and others, and create this revolution. And I don’t think it’s different in anything. It’s the same happened in VR. The interesting thing with VR is we’ve had these cycles three, four times during 20 years. You may not remember, but there was a VR revolution back in ’95 and I was part of that. There were clunky headsets. You basically have to have something supporting your head. And then we had crash 2001 and then we had another crash in 2007. A billion dollar to spend on virtual worlds. I don’t know if you remember that wave.

Blippar is part of this– and Blippar is not the only one. I would say 90 percent of Chinese VR companies went bankrupt last two years, and you have similar in the US, a lot of hardware companies that demolished in the long run. And you do take a big swing from an investment perspective and you’re all in and if it doesn’t work, it doesn’t work. We have a slightly different approach to it, because we are owning our shares and we care about our customer. And we don’t take huge risks. And it proved to be a marathon.

If you told me in ’99 that virtual reality didn’t take off still– in fact, to be very honest with you, what happened with me is that by 2007, 2008, I said, “This is it. I’m quitting VR. I mean, it’s a wonderful business, but it’s more lifestyle business. Yes, we make money and yes, we grow. But this is not going to be a billion dollar business anytime soon.” And I was instrumental to take when I was 37 a company to $500-million. So I was like, “This is it.” So what I did, I left the company. Still being a big shareholders in custody of my friend, the current CEO, and I said, “I’m gonna do something totally different.” So I went into smart devices. I created a company called Greenway System with a friend, former CTO for the consumer department of a large IT company. And we took that company to $250-million between 2008, 2009 to 2011. And I was planning to never come back to virtual reality.

So then I get a call in 2011 from my friend, and he says, “Dan, you have to come back.” I said “Why?” “Virtual reality’s coming back.” I said, “No way. It’s not going to happen in our lifetime.” But then I came back and visited, and I saw that his order picked up and the volume of business picked up. And I said, “What’s the secret?” And the secret was very simple. The thing you have in your pocket. These phones could handle applications that we used to run for uncle for million dollar systems. You could run it on your phone. So then I realized, wait a second, this is earth-shattering. And VR has been the love of my life for long periods. I said, “I have to come back.”.

So I sold my shares with Greenway and came back. Then I came back and said, “OK, let’s take a hard look at the business and see how can we grow it. We have fantastic customers. We have a good product. We have good reputation. We do make money.” We actually know how to make money, which is not so easy in this business, as you know. So how can we expand? So then we came up with this idea. Why don’t we take our knowledge and share it with various locations around the world by building centers? Those are the centers I was just talking about. So we embarked with our team. We went to 130 different countries, visited predominantly with governments and universities. And I think we had a problem solution to the problem. What keeps them up at night? That’s what I typically take. If you ask a minister in a country in Europe what keeps him or her at night?

Most likely the answer will be that I’m worried about the jobs. I’m worried about the disruption that technology causes, because it kills and creates so many jobs. And I wonder what in 10 years what’s going to happen with all these displaced people, and how do we take a truck driver that today will become unemployed in the next five years? We can’t turn him into a coder, right? That’s not going to happen. So what we do is we help them to use virtual reality — and augmented reality — to train them to become welders or nurses. And that’s the programs we put together with government. So we came up with the idea to set up this center to solve big problems, not small problems. Because if you talk with a minister, virtual reality is not on a top– probably not top 100 list. So anyway, so we started setting up those large centres, and then we partnered each location with either governments or institutions. And this way we not only had a presence in all these places, but could grow the business, but we also had a customer because oftentimes these governments want to do workforce development, you have complete projects. And that allowed us to expand the business and have a presence that today, although we don’t have investment, I think we have more locations than Magic Leap, that has a $2.7-billion investment.

Alan: They’ve spent an enormous amount of money, and we shall see.

Dan: No, no, no! Actually, no, I’m just going to Vegas this year. And I’m together with Magic Leap, I think Magic Leap is a wonderful product. We are very proud to announce that we are releasing the platform now in January together with them. And the actual senior vice president of Magic Leap, John Gaeta, joined our advisory board. So we think it’s a great company. So is, I think, Microsoft with Hololens. So we tried to stay– I’m from Sweden, we try to stay neutral in this contest. We like neutrality.

Alan: I love it. All right. Is there anything else that you think you want people to know?

Dan: I’m very excited about success stories. And in our company, we have a three word mantra. Build the platform, sell the platform. It makes customers successful. And if you sell software as a service platform, you’re not better. If a customer wakes up tomorrow, says, “OK, I don’t like the platform any longer. I’m not happy with it.” Then they stop paying, and we charge per month. So customer success is super important. And we are just about to release a series of — from 28 countries — customer success stories. We’ve published– I think I published one of them just recently in my LinkedIn. And we are rolling those out, because people are curious. And in the first six hours, I have thousand views, because people really are hungry for it. So we understand the benefits of VR and AR. But show me someone that actually benefits. And I don’t want to hear from you. I want to hear from these customers; why they use it, how they use it, and why they continue to expand. So that’s something that we’ve put a lot of effort in and you’ll see a lot more news from us in that context. Giving the customers a voice.

Alan: That’s wonderful. I think that’s what’s been missing. A lot of people over the last few years have been saying, “Oh, VR can do this. AR can do this. We could do this.” But when you think about it, there’s not been a lot of people saying “We have done this. And here’s our results.”

Dan: Yep, yep, that’s correct. And by the way, we don’t really think AR, VR, mobile, it is in our context and for our platform, it’s mainly the same. But if I was to think about it a bit deeper, I would put it in three buckets. The first one — and this is how would we approach a product, also — the first part of our problem is the learning. You use it to create content to learn. The second part of our platform is for training to apply what you learn. And the third part of this is performing. So once you learned and trained, then you– let’s say you work with engines, and you’ll get to Alaska and you have to repair that engine. And you may not remember all the steps. That’s where AR and the contextual knowledge injection comes to place. So those are– it’s a learned trained performance.

And that’s how we see that more or less all the customer success stories, they evolve. It may take baby steps in the beginning with learning. And we want them to make it easy, because if you tell a large corporation — even an Exxon — that “Oh, you want to roll out to 10,000 workers? Oh, you have to be 10,000 Oculus.” They get discouraged. They will never do that. But if you tell them that, yes, we could roll out 10,000 workers, but you can use your tablet, existing tablet, even your own devices. And then, slowly, let’s say you have 10,000 users on these devices, then you have maybe 200 headsets. And over time, as the headsets become cheaper, faster, better, you can have more. So I think that has been a big limitation for a lot of companies that try to sell platforms, because they are dependent on the high-end devices. And let’s face it, the larger devices have disappointed, right? Even great guys like Magic Leap or Hololens. If you look at the figures of units, how many many they’ve sold, they are not that much, yet. But it will come. It’s just a matter of time. So our strategy is to make sure that we satisfy customers today, tens of thousands of users with an organization at an affordable way so they don’t have to wait for the cheaper, faster, better devices.

Alan: Now, there’s some really amazing advice. So I think with that, I think we should wrap it up. Any final words, Dan?

Dan: No, other than that, I’m living like a kid in a candy store, you know, I plan my next 7,000 days, which is– 7,000 days is about 20 years. So I hope with good health and exercise and a few other tricks in my bag, I’ll be part of this amazing journey. Just fun to be around and see this revolution in VR and AR.

Alan: Well, what problem in the world do you want to see solved using XR technologies?

Dan: Ha, that’s quite simple. I’m sure you’ve seen Matrix, right? Where you’ve got to take the blue pill or the red pill. I think humanity at the moment is at the bifurcation point. You can take the left turn, which means that increasingly machines take over humanity’ role in workforce. And if you believe scaremongers on AI that eventually they take over completely, but at least take our jobs. So you have a huge amount of population that we can render useless. So that’s one vision.

The other vision is that we become human 2.0, enhanced humans, where we stand on the shoulders of machines, use our curiosity and blend ourselves with machines. I think things like [garbled] working to put wires into your head. I think that that’s going to take too long time. In fact, if we wait for that by then, the machines have taken over. So I think AR and VR has a huge importance to create that bridge between man and machine. So instead of today interacting with machines at speed of thumb — which is very, very slow — we operate with machine at speed of sight. And we get the information. The machine knows where you are, who you are, what you want to do, and it feeds that information to you. And you have this superpower. And that’s the future that I’d love to see for us. And that’s what I will try — in whatever capacity I can — to do for the next 7,000 days.

Alan: Man, thank you so much, Dan. Here’s to the next 7,000 days.

[Transcript coming shortly]

Alan: Hey, everybody, and thanks for joining in on the XR for Business Podcast with your host, Alan Smithson. I’m really excited today. I have Dr. Björn Schwerdtfeger from Germany. He has more than 15 years experience in augmented reality. Together with the German industry, he’s evaluated almost every idea for AR in applications in the industry. He’s been a co-inventor of Pick-By-Vision at TU Munich. And during that time — when computers for AR glasses were still carried in large backpacks — Björn holds a PhD in industrial augmented reality as a serial entrepreneur. And among other things, his company, AR Experts, is advising about a third of Germany’s most important production companies, and is shaping their augmented reality roadmaps. You can learn more about them at ar-experts.de. And they have another product that they’re gonna be talking about today. It’s ar-giri.com. Björn, welcome to the show, my friend.

Björn: Yeah. Welcome, Alan. Nice to meet you. Nice to meet you online. I’m looking forward to this podcast.

Alan: It’s so exciting. The work that you’ve been doing over the last few years — like a decade and a half — is really starting to come to fruition now. I mean, all of the hard work that you and your team have done to evangelize a technology that — let’s be honest — 15 years ago, the technology really wasn’t ready for the market. Tell us, how did you get into this, into AR?

Björn: It was actually quite funny, while still studying at the university, computer science, and then somewhere else, augmented reality which popped up. And someone had a demonstrator, where someone took some glasses and glued a webcam — we had external webcams earlier — just hot-glued to some glasses and using some [unclear] stuff and highlighting it. I think it was just a cube. A virtual cube… And it was so fascinating that you can bring this computer interface into the real world. Quite a long time ago. But it was really nice.

Alan: Björn, did you say there was a webcam hot-glued to a pair of glasses?

Björn: Exactly. That’s how we did augmented reality 15, 20 years ago.

Alan: Amazing. You are one of the OG, the originals of this industry. You’ve been building and advising brands and companies around their strategy for production. What is the one thing in augmented reality right now that you’ve seen the most ROI?

Björn: It’s probably… we’ve seen a lot of companies trying to do everything. Basically every single one of us have tried to out, in the last three decades, and failed with it. And we’re figuring out what is actually the core of augmented reality. And the core of augmented reality is not– it’s not a measurement tool, it’s not a tool for everything. It looks like a display, and it is a good display. But where its core is, where it’s so good in, is in communication. It displays communication and augmented reality is big. It’s so much more close to your reality, that perception is getting much better. So what you tried to communicate with exosheets, nice PowerPoints; it’s getting so closer to the user with augmented reality. And they figured out that the communication got so much better using augmented reality — using *good* implemented augemnted reality, it’s quite important — you can do a lot of mistakes there. But this is helping so much. And that’s why you’re seeing currently augmented reality mainly in marketing, because marketing is a form of communication. You see it in museums, because museums are also a form of communication. And then work training, because training is also a lot of communication. Communicating the knowledge someone has to another user is key. It’s the same in the museum. A few people have some knowledge of what has happened the past, of the stories. This is a tool to improve the way you’re telling stories, basically. That make sense to you?

Alan: Makes total sense. So, when you say communications, are you meaning, I put on a pair of glasses and an avatar pops up and starts talking to me, or maybe a video screen? Run a certain example of what that would look like in an industrial space.

Björn: It’s– augmented reality, it doesn’t do a lot, but what it does, it really improves the way we communicate things. An avatar can pop up, but it’s also communicating technically-complex things, like someone has constructed a car, or a lot of people have constructed a car, and a lot of other people need to produce that car. There’s a lot of technical challenge you need to talk about. You can make those things visible. AR is a good tool to make things visible. Also, for training processes, AR is really good thing, a tool to make things visible. And also museums, you’ve got some boring things there, but then you could put the story over it as a new layer, and the story is being told through augmented reality. And that’s why it’s so nice.

Alan: I recently read a book called “The Age of Smart Information” by Mike Pell, and he talks about how information now is just information. I mean, we have access to the world’s information — I can Google pretty much any details — but it just gives me the information. It’s not in context to my world. It’s not in context to me. I can ask Google questions now; Voice, Amazon, Alexa, and Google Voice. But really, what they’re– what you’re discussing here, what you’re talking about is being able to look at a machine and the machine providing you with the story on how to fix it, or how to deal with it. Is that what I’m gathering here?

Björn: Well, for part of it, and also bringing this information, registering to the real world. That’s what you’re saying. Yeah, you’ve got the information in Google, but Google has information somewhere in servers, you can pick it up using your smartphone. But actually, you want to look at a machine or an exhibition, and you want to get information which is there exactly for that machine. And that’s where augmented reality can help, and where it makes so much more fun; finding the information so much faster and with making it fun, basically.

Alan: I recently read an article that came out. It’s a study by IBM saying that over 120 million people are going to need reskilling and upskilling as AI and robotics replace human workers. 120 million people. In my opinion, AR and VR are the fastest ways to do this. But you mentioned something that really struck me. You mentioned that it’s a lot more fun. And I think, if you look at education as a system, it’s competing with Hollywood movies and AAA video games. If we don’t start making education faster and more fun, then I think we’re gonna start falling behind, as we need to reskill people as fast as humanly possible. What are your thoughts on this?

Björn: We’re talking about a lot of topics now. So, one part is that 120 million people need to be reskilled. Seems that, I guess it’s one billion people working in production. One billion people producing things every day. I see that are a lot of more people need to be reskilled every day, because also the jobs are getting more complex. So when you’re working with clients, you always try to do an internship first with the customer. So you’re trying to do the job, which we try them. They get the support. We then analyze the situations and realize, hey, this guys doing a job since 10 years, 20 years, but now life is getting more complex, because they need to handle the more complex machines. The tasks are getting more complex, and they need to do so much more work, so much more different work. The world’s moving faster and the environments that you’re working in is getting so much more complex. The answer is always “Okay how can you fix it in the future?” The always say that you need more people. It’s always an answer, because those people are not thinking about making it easier to work on the more complex tasks. At least in Germany, we face a problem. You cannot plant more people for doing your job.

Björn: This is universal, my friend. They just did a study recently — I’ll have to put it in the show notes — but they did a study of 3,000 youth in the US and China. And they asked them what jobs they wanted. They gave them seven jobs to choose from. And in China, the number one job was astronaut. In America, the number one job was YouTube influencer. Think about that for a second: in Western society, our kids would rather try to be a YouTube influencer traveling around the world on Snapchat and Instagram, than actually contributing to a business. And the mindset of that, I think is going to start haunting us in the future, where AI is being taught to grade five children, and grade school in China.

Björn: And also, China used to be the workbench of the world 20 years ago; everybody was proud and rising up to get a good job. And now, as you’re saying, everybody wants to be an astronaut. What we figured out is, there’s some old people who like their job, but they don’t find new people for the actual boring jobs. What we figured out is, we did a lot of– obviously a lot of interviews with the workers, and they’re saying, when you’re doing this with glasses and I can self-qualify myself for that workplace? That’s really interesting, because on the one hand, you don’t put production workers on some different things because then they’re liable to do a lot of mistakes. But on the other hand, they want to do so many different jobs. But it won’t be so expensive to qualify them for so many different jobs. But for the business on the one hand, they need to do it. And on the other hand, they want to do it. So when you give them the possibility to qualify themselves for so many more, different jobs, that’s making it interesting.

Alan: If you look at people’s LinkedIn — especially younger people — they’re changing jobs every three years. And that from a process standpoint — from a factory, if you’re running a factory, you need somebody to work on a machine, and every three years you’re having to change it out — and there are people that are working there now, but the average age of people working in industry is escalating above 50. And people are starting to retire en masse. So you have this huge group of people retiring from jobs that they’ve been in for 20, 30, 40 years. People coming into those jobs, they’re looking at them going, “Well, I only want to do something for three years, most. And I want to try something new. I always want to be challenged.” And I think you mentioned something earlier — and I thought it was bang-on — is that we can make training fun. And by doing that, you’re not only being able to train people on new jobs fast, so they can feel like they’re always growing. But I think also you said that these jobs are becoming more and more complex, which I think is actually a benefit to everybody, because if it’s more complex, it’s actually more challenging for the learner or for the person working. And I think that’s really what gets people excited, is a real challenge in life. What are your thoughts on that?

Björn: As you’re saying, it’s a better fit for everybody. You can look at some jobs and say, okay, I need more people for this. Perhaps that’s not a good fit for everybody, because more people means more stress, and more cost. And everybody’s just doing one job, and people want to do different things. Or you look at the other side — you give people the possibility that they are getting the power to do more complex jobs, and different jobs — qualify themselves. Be more proud of what they can do, being more interested in that they can do different jobs. From the business side, that’s more flexible workers, they make less mistakes. They, say, remember 70 percent more. So it’s a better fit for everybody. If you look at this from a broader perspective, the benefit is — as with most things — is survival of the fittest. That’s the English saying for it, right? “Survival of the fittest,” Right?

Alan: But I think now we have the ability to– imagine, 20 years ago, if you wanted the facts about something, you had to look them up. There was no– well, I guess the Internet’s been around, but it was really difficult to do it. Now, I don’t even have to pull my phone out; I can just ask Google and every answer is there. So, it’s not really about what you know anymore. It used to be what you know, and what you knew gave you an advantage. But it’s no longer about that. It’s about how you apply that knowledge. And I think this is where augmented reality becomes a tool, like nothing we’ve ever had. You did a PhD in industrial augmented reality. What did that entail? Cause I know that that was a big part of your life. What does a PhD in industrial augmented reality mean, or what does it look like?

Björn: You need to look quite holistically at augmented reality. You cannot simply say, “oh, this improves a job,” but you also need to find a way how it improves the job. Industry is using things only if they work. So, does it work from the technical side — does it really do the job? If they work from the business side, does it save you money? And if it works for the people? If you don’t find a solution for all three areas — technology, people and business — it’s not working.

Alan: That is pretty much– if nobody takes anything else away from this podcast, that is it. You got to have the technology that works. It has to serve the people. And it has to make good business sense.

Björn: Exactly. And then there are also a lot of other obstacles. What was funny in the last years was — particularly in the last year — quite often sitting in management rounds, and the managers always were saying, “oh, we cannot give it to the workers. They are not accepting it and they don’t like it. We’ve got old workers. They cannot work with it. They were rejecting a lot of technology.” But if you work close together with people, with the workers, and figure out what they really need — what really helps those workers standing there, also the old guys — it’s really age-independent things. “It’s cool. When can we get it?”

Alan: It’s so true. You mentioned that– I had somebody else in the podcast, and they were saying, “Look, you really need to engage. You need three people in a conversation about rolling this out. You need the very high levels — you need maybe the CEO or somebody in the C level — to champion to say, yes, we’re gonna do this, you have my full support, go for it. Then you need an internal champion from the management level, who’s going to keep the communication between the C levels to keep the funding going for the project. And then you need somebody who’s actually going to be using it. Somebody who’s on the factory floor really doing this. And by having the buy-in of the three different levels, that’s how you get real change.” Is that what you’re seeing?

Björn: Yeah. Also, I think the most important — you need you need he OK from CEOs, from the innovation manager, but what you really need is commitment from the users who will really tell you what they need. It needs to be a solution for the workers. If it doesn’t work with workers, they are simply destroying your glasses and they’re not going to use them anymore.

Alan: Yeah, I can see that. So if you look at augmented reality in the enterprise, are you seeing more of this moving to glasses, or is it tablet-based for now? What’s being used most, and what is kind of delivering the most effective ROI?

Björn: You see some stuff happening on iPads. And it’s always quite nice. It’s scalable. Everybody says it’s a more robust technology. But if you’re doing a deep dive into technology — into the perception of information — it’s very different with glasses. You have a window to the world; you’re basically standing in your house. You’re looking through the window into the nice world. It’s like there’s some distance. What’s cool about augmented reality is that there’s this real-world overlay and it’s the distance between the point where you need information. It gets information presented. It’s going to zero. And this effect, you only have those glasses. So that’s why we’re seeing more and more people working on glasses. Also doing a lot of rollouts with glasses, for sure. Now you see a lot of rollouts for smart glasses, which is already — we don’t call it augmented reality in Germany. I know Americans do — but it’s good that it’s happening. So you see a lot of rollouts with smart glasses. We hope to see also more rollouts with the augmented reality glasses, and a lot of VR glasses getting rolled out — AR glass are not currently not getting rolled out because no one’s currently shipping AR glasses. There’s Magic Leap–

Alan: Still a challenge.

Björn: Yeah, but there are a lot of things are solved. The Hololens line. This device is like 4 years old. So yeah.

Alan: Yeah.

Björn: Everybody’s got the HoloLens 2, but they’re also waiting for some competitors [to start] shipping their glasses. Because from the general point of view, the technical challenge which is AR, there are some recent companies that have solved those problems. But it’s a matter of time. It’s a matter of months now, that Microsoft is shipping a new HoloLens; some other companies are shipping glasses. NReal is going to be shipping some glasses. Magic Leap is putting out their next generation of glasses and also shipping to the European market for sure — we have the glasses here, but we cannot currently roll out those glasses, because they don’t even have certifications for the European markets. So these are the next-level things which need to happen now; the glasses getting all the certification for the market.

Alan: It’s interesting, Björn, you mentioned– the first thing you mentioned was technology, then people, then has to make business sense. I think we’re still struggling with the technology side. We have glasses. We’ve proven the business cases; they work. And it’s just a matter of “Oh, you’re shipping them at scale now.” I think over the next six months, we’re going to see an absolute tsunami of technology being introduced to the marketplace. You mentioned three different types of glasses. You’ve got overlay glasses — or ones that kind of show you a heads-up display — like RealWear, for example, who just raised $80 million. And those are not really augmented reality glasses, they’re more heads-up display, similar to Google Glass. And then you’ve got VR headsets. And then you’ve got AR glasses. And the latter — the AR glasses — are the ones that are able to look at a machine and project images on top of it in context to that, in the real world. And VR has its place, heads-up displays have their place. But really, the magic is in the these AR glasses. Is that what you’re saying?

Björn: Exactly. And at the end, has the biggest benefit also, because the way you’re perceiving information, it’s made better if you get it presented in a stereoscopic way. That’s what glasses are doing. They benefit this way. But if you want to achieve this 70 percent of memory effect — that works really good, that people really are remembering so much more information because this is information in place — you need to do it with glasses.

Alan: I don’t know if you can give any specifics around companies that are deploying this. Are there any companies that you know that have deployed AR glasses at scale? Like, real AR glasses? Or are we still in the pilot purgatory of this?

Björn: Not really in scale yet. So, scale is like thousands of units. There are some companies using several thousands of devices, but really count as a problem. No devices are available, and the last Hololens was shipped one year ago. Now it’s like, all the glasses are breaking, because they so old. So you cannot roll out 1,000 glasses, because you cannot ensure that they will hold for such a long time until you get a replacement. That’s currently not happening. But I think it’s a matter of time. And also, the companies, the glass makers are fulfilling all the IT requirements that you can integrate into those glasses, and large infrastructures that can have property-wide management certifications, you’ve got health certifications, and all that stuff. But we think, from the technology point of view, it’s actually solved… well, not every glassmaker has solved every piece of puzzle.

Alan: Yeah, I think that’s interesting. You look at all the different glass manufacturers and they all have different parts solved.

Björn: Technology’s not a problem. There are many possible companies because we are scouting for all the AR/VR glasses. So in the last three years we’ve been reviewing, I think, 228 glasses. 228.

Alan: [chuckles] Holy crap.

Björn: That’s really quite a lot. For most glasses, half of them are shipped. For most of the other glasses, we’ve figured out, what is missing there? They all have different focus; what they want to be. You’ve also seen — which is quite sad, actually — we’ve seen the Meta glass, for example, quite early. And it was looked over by physicists and optical experts who said, “there’s fundamental problems here. Why the hell are they doing it?” And one year later or two years later, they went bankrupt. It’s the same device. But it’s so complex, augmented reality — also, virtual reality — and the companies also need to learn this. But we’ve got the feeling there are a few companies now who’ve learnt a lot, and will be able to ship a lot of glasses by the beginning of next year or so, I guess.

Alan: All right. So let’s talk about specifics. What are, in your opinion, the top five AR glasses? Out of– you reviewed 228 pairs of them, which is incredible. I would love to get that information to share with the listeners, if possible. But yeah. What are your top five, then?

Björn: I mean, the bigger ones you probably know as well. Yes, sure. Microsoft tries to be the leader of market, but they’re not shipping. It doesn’t show up in the top five company because they don’t ship. Magic Leap for sure. I mean, everybody’s saying Magic Leap is not so good, and they oversold what they ship. But a few things about Magic Leap are still better than Hololens 2.

Alan: Like what?

Björn: Wearer comfort is still better with Magic Leap than HoloLens 2. Because in the end, it’s way more lightweight.

Alan: Yeah, because they took the compute power off of the headset. Have you tried the Hololens 2 on?

Björn: Yeah, for sure. It’s really good. From the control, it’s way better than the HoloLens. The interaction is really good — they placed the HoloLens 1 on so many heads, and they always needed to explain a lot of things.

Alan: Yeah, yeah. That little pinch to click, nobody gets that. Anybody over 30 doesn’t get that right. We’re kind of in this weird place, where it’s like we know where the ROI is, companies want to deploy it, and we can’t [laughs] For whatever reason.

Björn: And then there are problems with a second row of companies won’t ship until the beginning of next year. I kind of was like, you know, all those companies. NReal doing quite a good job.

Alan: Yeah. NReal really impressed me as well. NReal is a spin off from Magic Leap. They took all of the best parts of the Hololens and Magic Leap idea. They’re like, “hey, really, what we need is just a lightweight display with a bit of tracking, and that’s it. We don’t need 8 cameras, and we don’t need a computer on the head, and all this.” And so they run it through USB-C — which now actually this week you can plug it in to your computer, I think they just announced — and you can also plug it into your phone, so your phone becomes the compute device, which makes the glasses much, much cheaper. I think they’re shipping at $599. Or that’s what they’re taking pre-orders for. I can tell you right now, we’ve done a lot of VR and AR development, and we used to haul around a big huge computer to do demos for people. We’d bring around, set up the computer, wire it up, put up the sensors, all of this. And I got the Oculus Go, thinking, “Oh, this is gonna be great for VR.” And it was just underwhelming. It was only 3 degrees of freedom. You could look around. But it overheated. The battery didn’t last very long. It was glitchy. And so when the Oculus Quest came out, we kind of said, “We’ll just wait, it’s not going to be as good.” But I recently tried it about a month ago, and I was very, very impressed with the Oculus Quest. As a VR headset that is standalone, the tracking is amazing. And now they just introduced a plug-in, where you can actually, via Wi-Fi, stream your computer to the Oculus Quest, so you can have computer-based rendering and graphics pushed to the Quest, which now makes the Quest an incredible tool for VR. I mean, it’s not AR, but man, the technologies behind these things really are getting much, much more impressive over the next little bit. So we’ve talked about Hololens, Magic Leap, NReal. What are some other ones that are kind of popping up in the top of your head that maybe are shipping in the near future?

Björn: We’ve gotten a lot over the years, so I’ve got a huge heap of glasses next to me.

Alan: Got a big pile?

Björn: Yeah.

Alan: You’re going to start a museum, Björn.

Björn: We called it– it’s a kind of museum. Yesterday, by the way, I was at the Deutches Museum — Germany’s technology museum — and they had the Oculus DK1. It was looking so good, because it’s looking so old already — it’s only 6 years old. But it was already looking so old. This technology has improved so much.

Alan: Yeah. The DK1 was the first VR headset I ever put on my head, and I remember looking at it. Somebody put it on, they had these big headphones. I thought, “Man, I don’t know what this thing is, but it looks ridiculous. [laughs] So big!”

Björn: [chuckles] Yeah, it’s like scuba diving.

Alan: Yeah, it was ridiculous. And I got to try, was it the Pimax? The one that’s 8K and it looks like a big V. Oh my goodness. It felt like I strapped a fishbowl on my head.

Björn: Yeah, but now it’s getting smaller, actually.

Alan: Yeah.

Björn: It’s small. And then also some other glasses are getting smaller. So technology’s advancing quite a lot.

Alan: You know what’s interesting about mixed reality? The AR glasses are going from a glasses standpoint, where you can see the real world and then you’re kind of putting holograms on top. But another company — Varjo from Finland — they’re taking a different approach. They built a really, really good VR headset and then they use pass-through cameras to create the mixed reality, or AR effect. And I tried it and I thought I was pretty skeptical, because usually when you have pass-through cameras, it’s nauseating. It makes you very sick — or makes me very sick. And so I put it on. And we had the pass-through cameras. I looked at my hands. And first thing you do is look at your hands, to see if it’s real time. And it was really, really accurate. It didn’t make me sick. It looked proper. And then being able to bridge that gap between, OK, you’re in VR — or sorry, in AR — you can see the whole world and then all the sudden they’re adding virtual layers to it. And I went from being in the real world with a car in front of me, to being in a completely virtual space. It was incredible. It’s maybe not practical for certain applications, but for applications where you need to see the real world and you can wear a big, bulky headset connected to a computer, I think it’s great.

Björn: It has some benefits. Varjo’s doing a great job, also has visors with a rich display, which helps a lot. Varjo is doing a great job, particularly with their retina center display. It’s amazing, what they are doing. It already helps a lot because you can see much more clearer situations in the industry to evaluate things. That’s quite good. What I didn’t get was a story with the see-through glasses. I saw it. I tried it. They’re doing a good job but still see-through. We had also the glasses of a Canadian startup. I forgot to name that it’s the same. They were acquired by Apple.

Alan: Oh, Vrvana!

Björn: Vrvana, yeah.

Alan: Yeah, out of Montreal.

Björn: Yeah. Yeah. We’re having basically the second device that they ever shipped.

Alan: Oh, very cool. You know why Apple bought them?

Björn: My guess was, as they were quite good in the latency and [unclear]. What was it?

Alan: There was those two things. But the one thing that they did — that nobody else could figure out — was occlusion from a single camera source. And if you look at the new ARKit system, the new ARKit allows you to do occlusion. And for people that don’t know what that means, if I’m looking in AR glasses and I look at a hologram that’s 3 feet away from me and somebody walks in front of that, it should know that they’re walking in front of it and to block it out as they walk through. If they walk behind it, it should walk behind it. But in most AR, it doesn’t recognize the depth. So as somebody walks through it, the object just becomes really big because it’s now projected on top of them instead of into the real world. And these guys solved that. And if you look at the new ARKit release that just came out, that’s actually one of the things that’s embedded in it now. So I think that’s one of the reasons they did that, because occlusion from a single camera is very, very difficult.

Björn: I saw the demo of the ARKit was showing this occlusion. I was really impressed. I was really impressed that this was working because I know about all the technical challenges behind it. And I was questioning whether it would only work with a stereoscopic iPhone, or a structured light sensor. But it’s not. It was only done by a single camera. This was looking so good, they a person walking around, you could see this person was walking in front of or behind the table. And this is amazing for augmented reality, because we test the technology to make the augmented reality look really good, to be more immersed to it.

Alan: Yeah, there’s nothing worse than somebody walking through your hologram when you’re trying to do something. [laughs] It’s very distracting.

Björn: Going back to the Vrvana device and media see-through. That’s the scientific term we’re having for it, media see-through augmented reality, in comparison to optical see-through. Media see-through part has a lot of other obstacles. So you’re having the frame rate issues, the latency issue. So, saying “is it real-time” when you move your hands, which is very important.

Alan: That’s what I think Varjo got really well. They nailed it. I mean, it was imperceivable, the latency.

Björn: That’s quite important. Then you having the amount of between black and white.

Alan: The contrast, yeah.

Björn: Contrast. That’s important. I mean, if you’re in a dark room, that’s fine.

Alan: How many people work in a dark room, though? Not very many. I think HoloLens 1 was pretty bright, and had some good colors and had a good contrast. But I think we need to do better, because most people work in very bright environments.

Björn: Yeah, but it’s even more complex when you’re looking at the biggest issue, because the cameras have low contrast and it’s only just to a certain area of environment. So what you can see is the monitor of the device, it’s only part of the world. If you’re standing in front of the window, you can’t help that it’s getting quite bright, or it’s getting dark and you can’t see what is outside the window. That’s the challenge.

Alan: I think it’s gonna be a challenge. For now, we need to be in windowless rooms for that.

[laughs]

Björn, I want to switch gears, because we have a little bit of time left and I want to switch gears and talk about AR Giri.

Björn: That’s our approach for training. For worker training, for training processes. So we figure it out in 2016 — a long time ago — we were asked to make some training apps. We did a lot of innovations at the assembly line, along with interviews with the workers, creating a lot of prototypes. And then yeah, we went live with some system and performance tests and we get random people coming in and we taught them, using Hololens, how to assemble a car engine and everybody managed it. In general, everybody managed it. And afterwards a guy came out of the one day experiments and say, “Hey, I never, ever assembled a car engine — I just assembled a car!” I said, “wow.” We’re doing it since so many years and now it’s working. There’s some room for improvement. Yes. But after so many years, now, it’s working. We also could figure out together with our partners or customers that the a learning benefit is so high — it is so really high — that people can quantify themselves. Motivation is higher. They remember more. But also, the old management guys who aren’t used to work in augmented reality said, “OK, that’s nice, but that’s not a business case because you can never, ever manage to scale this because of the content crash.”

Alan: Yeah. It’s a problem.

Björn: I want to get all this content inside. We also need to get 3D data. Once we get that figured out, you don’t get so many 3D data. Arrows are much more important than 3D data.

Alan: It’s so true. Somebody else came on the show and I can’t remember, but they were saying that at the beginning — it might even be you, I think, when we recorded this previously — you were saying that we used to take a machine and recreate it in three dimensions and overlay it on top of the real machine. And then what people realize is that it’s kind of a pain in the butt, because you couldn’t see the real machine because the digital one was on top. So just take all that away and just put the arrows of what you need. Very simple. “Do this.” An arrow, a finger pointing at it. Seriously, as a technology industry, AR/VR technology, we really overthink things. And sometimes the most simple things are what end up being the most impactful.

Björn: Exactly. And we need to figure this out. So complex to figure this out.

Alan: Yep.

Björn: At the end, we’re only working with arrows and videos. This really helps a lot. And someone needs to generate the content.

Alan: Yep.

Björn: And if you’re having, for example, the trainer who knows how the process works, and then you’re having the guy who knows how the AR works, those two guys play ping-pong.

Alan: Yep.

Björn: “Oh I want to have it like that.” OK. You do it like that. Then the programmer gives it back to trainer to translate. If it’s not what I tried to say, they do it again; they play ping-pong all the time. So in the end, what we’re doing is that we the trainer — the guy who knows what needs to be trained — he can generate everything by himself. But where we need to generate it? Not somewhere in the office. Production’s happening in the production line. It’s the assembly line. So the trainer puts on the glasses, goes into the editing mode, drags and drops what needs to be done. Records basically what he’s doing. It’s pictures, live-recording, using the Hololens or using some other glasses. Let me just say, “Okay, now start the training,” and the training is generated automatically.

Alan: Isn’t that amazing? That’s incredible. So if people are interested in learning more about that, it’s ar-giri.com. Being able to enable trainers to create this content is going to be the key. And I think one more piece of the puzzle is being able to allow companies that create training — because some training, they’re going to recreate environments and 3D models and all this — but being able to have some way for them to share that as well, because the content creation right now is very expensive, it’s time consuming. But I think what we’re going to see is companies that spend a lot of money on developing content, they’re going to want to be able to monetize that as well, because there’s got to be a way to share that content across different entities. And that’ll decrease the time to training right cross the board.

Björn: Exactly. And it’s also important to share the content. Someone could be working with a civilian training company on sharing some 3D model content. Sometimes it’s quite good to test 3D models. Also, you need to think about different training stages of car. For example, the car doesn’t exist; the assembly line doesn’t exist yet. You need to train others in virtual reality, because you don’t have a car. And then you are moving over and the latest car exists, the training is also getting more concrete. What needs to be done? That’s more augmented reality. If you can reuse some 3D models — all those items which already exists — makes the whole process much more scalable. There’s another thing we realized is content creation from what the workers are saying. “It’s nice if you guys generate us a training, but problem is, production is not static. It’s not like you make a product for years and you do it always the same way.” It’s like, if you’re having errors and you’re having errors every week, then they change something, it improves the process. This new process needs, again, to be trained towards the other people. Basically, a training can change every week because production is changing. It’s also not that you’re only assembling one car at one place. You ship different cars; you produce different cars. It’s the same assembly line. And there’s a lot of variation in the trainers all the time. And so for each work place, you need to improve or modify the training all the time, basically.

Alan: Well, Björn, we’re coming to the end of the conversation. But before I let you go, and it has been a fascinating conversation about augmented reality, the different glasses, how companies can roll it out. To package this whole conversation of that, those are the key points. What is one thing, one challenge in this world, one problem in this world that you want to see solved using XR technologies?

Björn: We’re kind of doing the training for the boring jobs. Which is our business, which makes a lot of fun for us. But there are bigger problems in this world, like in education. I feel like my history education was so bad, really so bad. I learned a lot of things later. But augmented reality is such a great tool which is ready to tell stories, stories of our past. Also to tell stories about technology and about complexities about the basics of technology. For example, yesterday in the Deutches Museum they reproduced the labs, the office of Galileo.

Alan: Oh, cool.

Björn: Galileo was the first guy doing structured experiments and filling out a lot of the basic principles. It was looking so nice. And there were a lot of experiments and a few of them explained, but it would have been so nice to have Galileo be inside there. anyway. It would have been stirring and would have so much impact to entertain people so much. It’s the possibility.

Alan: And it’s not hard to do. I’m writing an article on volumetric capture right now. And there’s 55 volumetric capture companies in the world. So far. That we know of.

Björn: And that’s good. Learning and education, you having… in Germany, the best-paid people that the German government pays are teachers. Sorry to say this, but most of them — I’m feeling — are not doing the most wonderful job. There are some good teachers, but most of them, no.

Alan: Well, it’s hard to have the best teachers in a system where a teacher is in one school teaching a group of students. If that teacher now can teach students around the world in a one-to-many VR presentation — or AR — you can now start to bring really contextualized, personalized learning to the world. And I think the world’s education system — systems, because there are multiple systems around the world — but they’re just not going to be adequate for a world where the jobs are changing every few years now.

Björn: Exactly. That’s a different story of what skills that you need in five and 10 years, and 20. But if you’re starting to digitalize, it’s not about replacing old school teachers, but it’s about them giving… teachers need to do different jobs later. And and it’s also about, for example, if you need to teach a certain topic, and there are also different views in the world on this topic. But if, for example, you could take the three best people in the world — you ask a Chinese opinion, a European opinion, and you take the best teacher from the US — who has a certain opinion. You take the best teacher from Europe who has a different opinion. And the teacher from China who is also different. But you would have the chance to record those people once and then giving every student the possibility to experience all those different opinions presented in the best way to give them the best teachers. And then you can get it for the next topic. Also, the three best teachers.

Alan: Björn, I really thank you for joining us and thank everybody for listening. This has been the XR for Business Podcast. You can learn more about Björn and his team at the ar-experts.de. And you can learn more about their training platform, ar-giri.com. Björn, thank you so much.

“Well, thank you guys for joining. Again, welcome to the Blue Room at VRX 2019. My name’s Alan Smithson, and we’re gonna be talking today about the transformation of education using XR. I want to just quickly talk about MetaVRse. We’re building a platform for future-proof learning. And what that means to us is as more spatial computing technologies come on board, what we want to do is make sure that organizations — from training and enterprise, and also schools and organizations in high schools and universities — all have access to not only the content, but the platforms to let them make their own content. So what we’re building is a platform marketplace for technologies and content to grow.

We’re entering into the exponential age of humanity. We’re hitting the point at which all of these technologies converge together. So in the next 10 years, more wealth will be created than all of previous human history. We’re entering into an inflection point, where education systems are going to be stretched beyond our wildest imaginations. Over the next 10 years, more wealth can be created, but right now — currently — we’re building a city the size of Manhattan around the world globally, every single month. Yeah.

We’re going to experience massive changes, from environmental changes, to job force changes, to educational changes, all of these changes are happening to us at a pace that we’ve never had before. It’s happening faster and faster. And somebody said this to me the other day. They said “Today is the slowest it will ever be.” It’s terrifying, it’s so fast. But learning is required at every level, whether it’s skilled trades, unskilled trades, whether it is retirees. We’re working on technologies that will make people live to 150 years old. What are they going to do? We need to rethink learning from a ground-up level. All types of learning, whether it’s at work or at school, all of these things that need a complete rethink.

Here’s a crazy stat: 75 percent of the global workforce will be millennials by 2023. Who else is terrified by that fact? Right? 120 million people need to be reskill, retrained, and upskilled due to AI and automation in the next three years. We don’t have the systems in place to deal with this. Two trillion dollars, that is the global impact that VR and AR will make over the next 10 years, by 2030. And this is an estimate by PWC.

So why is now the perfect time to get into virtual and augmented reality for learning? So over the last three decades we saw the rise of the personal computer and it took 20 years — 30 years, almost — to get everybody onto the personal computer. And then we saw the rise of mobile, and that took about 20 years. XR is going to take about 10 years to go to global mass. So by 2030, we’re gonna be wearing glasses around and those glasses will be inexpensive. They’ll be running on the cloud, so the compute power won’t be on your phone or on your glasses. It’ll be in the cloud, it’ll be all edge computing.

So we’re gonna see this massive growth. And right now, we’re past the hype cycle. We’ve already seen proven business use cases. We’re seeing real ROI being driven. And if you look at the compounded annual growth rate of this industry, it’s unprecedented. The only other industry that’s growing as fast is AI. And it perfectly correlates with the global education market. This is all of education, this is corporate training, this is K to 12. This is all education. We’ll hit ten trillion dollars by 2030. It’s six trillion now.

“Teach me and I will forget. Show me and I will learn. Involve me and I’ll understand.” You know, if you look at how we learn, if we read things, we retain about 5 percent. If we do them, we retain up to 75 percent. And VR, it shows — and AR — hands-on learning is directly correlated one-to-one with actually doing it. So we can create scenarios where people are learning full job requirements with never having set foot on a work site. Think about this for prisoners or schools, where you have people that are there trying to learn a trade or a skill, they can learn it before ever stepping foot on the worksite.

Now, XR and AI are kind of the most efficient, effective learning systems we’ve ever created, and we’re only starting to see this happen and come online right now. But we anecdotally came here three years ago, and it was like “We could use VR for training, we could use it for this!” But guess what? Now the proof cases are there. We’re actually seeing real use cases across 360 video with Strivr. We’re seeing people use this right now. We’re using AR on our phones. There’s 2 billion devices that have AR capabilities as of right now. This has a global scale to it. And then your virtual reality and CG, being able to train people and put them environments.

And VR has this amazing capability of not adhering to space and time. You can be the size of an ant and the size of a god in the same second. You can go back in time, you can go forward in time. So being able to to transcend space and time using this technology is something we’ve never had the ability to do in any education learning format. The amount of data we can collect about learning is obscene. When you start to have eye tracking, head tracking, gait analysis, gesture analysis, hand tracking, pose analysis, speech analysis, biometrics. If you take all of these data points and then start to apply AI algorithms at a scale, you can start to deliver hyper-personalized, hyper-contextualized learning, to everybody, real time.

But the proof is in the ROI. It really doesn’t matter for businesses, unless there’s an ROI. So you look at Wal-Mart is seeing 90 percent reductions in training times. Sprint saved 11 million dollars on one training application and decreased their time to competency by 85 percent. UPS, is training all of their drivers now in virtual reality, decreasing their training time by two thirds, and also increasing safety. Delta Airlines reduced their maintenance training by 90 percent. And I know Shelley [Peterson] — is Shelley here? — Shelley has decreased their training times and their time to completion at Lockheed Martin by 93 percent.

Our mission at MetaVRse is to democratize education globally by 2040. We believe that those silly boxes on these kids’ heads will turn into a sleek pair of glasses that everybody wears. There will be super lightweight and it will be running on the cloud. And at that point, it really comes down to creating content at scale. So we believe that investing now in the content platforms, and creating the standards by which the rest of the world adheres to, I think is the real key to delivering education at a scale we’ve never done before.

So I want to just say thank you to everybody for joining us today. We have a really amazing panel and I’d like to introduce the panel now. Come on up.”

[Editor’s Note: due to an uploading error on my part, this episode was previously released last week with the wrong audio. We’re re-releasing today with the correct audio. We appreciate your understanding, and in particular, Jeff Meisner’s understanding in this matter – Chris, Podcast Editor]

Alan: Hi, I’m Alan Smithson. And today, we’re speaking with Jeff Meisner, CEO of Sector 5 Digital, about their pioneering work on the Fantastic Journey Anatomy VR Ride, Fork Lift Training Simulator, and the work they did with Bell Helicopters, shortening design times from years to months. All of this and more on the XR for Business Podcast.

Jeff, welcome to the show, my friend.

Jeff: Thanks, Alan.

Alan: I am super excited. So, Jeff, you are doing some incredible work at Sector 5. Let’s start with the Fantastic Journey Anatomy VR. Right. This just blows my mind.

Jeff: Yeah. Yes. Just as a historical perspective on this, we’ve been working with this particular healthcare client for a couple of years now. And we started out initially doing a 3D digital cadaver, basically, that allowed them to do facial anatomy. And the company is in the business of doing injections into the face and hand. And so they needed a way to have safe areas so the injectors would have training. So we created a basic virtual training tool and that was initially in 3D, not in VR, but it was driven through our tablets and things like that. So it had kind of an AR component to it.

Alan: You will learn in 3D dramatically better than even just on a 2D screen.

Jeff: Yeah, exactly. And we actually did a conference which had over somewhere between 200-300 of their folks training with a massive 3D screen in front of them. So it was used as a training aid, and really now, it’s gone global. So it started initially in the U.S. and got picked up by this company, because they are a global company. And what they wanted to do was take that next step, if you will. And so We’re creating this, what we call a VR Fantastic Anatomy Journey. We’re going to be taking their folks through… well, if you know what Fantastic [Voyage] is —- as most people do — but taking them through the human body. So you’re going to have a really cool edutainment-type experience, whereby you’re going to be on somewhat of a of a VR roller coaster, although it being through the body, we’re going to be adding some elements of teaching at various points. So it’ll stop and you’ll be asked questions. It’s really, the major focus is to be very much a learning experience. But one of the things we’re finding —- and I know you are too, Alan —- is if you make it fun or people, it becomes a much more memorable experience and they want to do it again and again. We’re combining kind of that gaming-type element, if you will, but with actual data and experience, to make it something that their injectors are going to be learning from, and not just the entertainment element.

Alan: When you guys started rolling out the 3D digital cadaver, how are they measuring against baseline? So, what was their baseline learning before? Just a textbook? Or..?

Jeff: No, they were actually using “live” cadavers, and cadavers — and this may sound a little gruesome — but they’re somewhat hard to come by, especially outside of the US. The regulatory issues that you deal with are very, very high barriers there. When we came along with the virtual cadaver initially, as I said, it was really only being used in a very small area. But when they realized that they could take this globally, and they now didn’t have the same barriers that they had in the past, that really opened things up for them and opened up their eyes as to the value that this would bring.

Alan: It’s really incredible. Medical is the by far and away leveraging virtual reality more than any other sector. I mean, design is kind of a close second. You’ve also done some work with design, and we’ll get into that in a bit, but the medical industry is just ripe for disruption. I mean, buying a cadaver, like you said, is onerous, is expensive. It’s heavily regulated. And let’s be honest, people don’t really need that anymore with VR.

Jeff: Correct. And even if these sorts of things are used in front of the intensive training — obviously there’s regulatory bodies and things like that would demand certain certifications and things like that — and in some of that, we can do. But we also can be right in front of that to, again, make these experiences a little more fun, a little more engaging. I will have to tell you that one comment that we got from the training we did was this lady actually said that our training was “more realistic than the cadaver,” which I had to laugh, because it’s like, how could that possibly be? But the fact that she thought that this thing was so immersive that it was actually better than the training on a cadaver, really spoke to me.

Alan: That’s incredible. That’s nuts. But if you think about it, you only get one shot at a cadaver. If you’re pulling it apart, you really can’t, like, split the face apart and look inside the brain if you want. With VR, you can take the whole skeletal layer right out. You can literally see the layers as you need to see them, versus cutting into the skin. There’s definitely, I think, for the physical training of the last part where you have to learn how to inject or that sort of thing, you still need that feel. You need to know how far you go down — there’s a feeling to it that I don’t think will be replaced. But when you’re learning about the anatomy, I don’t think there’s any better way; you can literally just remove all you want. “I don’t want the body to have any skin. Okay. There’s the bones.” This is really powerful.

Jeff: And a lot of people now, instead of what, in the past, you know, they had to fly doctors and nurses, nurse practitioners into training centers. And the cost of doing that was amazing. Now they can go to these areas, to these doctors, set these things up, as you know. I mean, all you really need is a fairly small technology setup.

Alan: Are you guys moving the stuff to Quest now? Or are you still on Vives and Rifts?

Jeff: Yeah, we’re fairly hardware agnostic, so we’ve done projects in just about any type of hardware. I will say we do have the strongest partnership with HTC — with Vive. We’ll get into that a little bit more when we talk about the forklift project. But I mean, it really doesn’t matter to us. As you know, the technology is changing so quickly right now. And so we’ll look at it from a perspective of what is the best technology available at the time for the client.

Alan: Let’s move from Fantastic Journey Anatomy VR and let’s talk about your forklift training, because you mentioned it a couple of times, and training people on moving vehicles, forklifts, excavators, anything where they have to drive around — it becomes really expensive. It’s kind of like bringing a cadaver in; bringing people into a facility and letting them drive around on a forklift, when they have zero experience, is a little bit dangerous, and a little bit expensive. But imagine giving them the ability to put on a headset, practice driving around a warehouse, practice some close calls, maybe some things fall off the shelf. You could practice scenarios that may happen in a warehouse, but are very rare. But you can give people that real sense of practice before they even step on the machine. Talk us through that forklift training, and how that came to be.

Jeff: Sure. Sure. As I mentioned, we have a really strong partnership with HTC Vive and they were coming out with their new Vive Eye Pro headset, which has the eye-tracking in it. And so we’ve been talking to them and we were ourselves trying to think of the best demo that we could go, because we had a conference coming up — the EWTS conference that was just in Dallas fairly recently — and we were talking to them and we said, when we do something that’s really going to be an enterprise-type application, that’s going to take advantage of the new capabilities of the Vive Eye Pro. And so we kind of went through project scope with the folks at Vive and we came up with the forklift training demo. What’s unique and different about this one is utilizing the the eye tracking software of the Vive Pro. We take the user through a simulation where they’re essentially inside a forklift. They have to drive a forklift in a warehouse, and we give them some visual cues. For example, if they look at the row of pallets that are in the warehouse, one of the pallets, we’ll highlight in green. So then they know, that’s where they need to go in and pick up that pallet. And then we also have a loading dock area where there’s different, like, A through F, I think loading dock locations. So once they pick up the pallet, it’s highlighted where they need to drop that pallet off on the loading dock. But in between that process, we are tracking all of their eye movements. So, for example, if they pick up the pallet and they don’t turn their head around to see what’s behind them? We’re tracking all of that. And I think where it really hit home was we put a replay function into the application. So someone will go through this experience — and we timed it specifically to be about a three minute experience because we knew we were taking it to a trade show — but we did a replay in double time. So we had about a one-and-a-half minute replay. And through the replay process, it shows exactly where their eyes were through the entire experience.

Alan: Cool.

Jeff: Yeah.

Alan: What kind of insights are you able to glean from that?

Jeff: Basically, we also — kind of on the side — again, we made a little fun, made it into a game with kind of a leader board. But you got points for doing things right, and then you got points deducted for doing things wrong. So, for example, if you didn’t turn your head when you were backing up, or you didn’t see the cones that were in the warehouse — those sorts of things — you got points deducted. So we can actually take a visual which is showing exactly where the eyes were, and here’s where you got points deducted, or where you got additional points for doing things right. So it’s that training element that reinforces to them, “oh, OK. Yeah, my eyes were down instead of looking up because I had… I should have been looking up higher to the third row of the pallets,” and things like that. So you have a visual interpretation of what you’ve done, but you also have, combined with a scoring system, to reinforce the points or reinforce what what you did wrong.

Alan: That’s really impressive. In one of the things that I think this will do for people is really shorten the training times, because if you’re training on a real machine and you don’t do these things, we have no way as a trainer, or as somebody teaching you, knowing whether you did it right or not. In VR with the eye tracking, now you can say, “hey, you didn’t do this right. Do it again until you get it right.” And people can repeat the training as often or as much as they need to perfect mastery. Are you seeing a decrease in training times with this as well?

Jeff: We haven’t gotten to that point, because it is fairly new to now see, once they actually get on the forklift, is that reducing the training times? But that’s a definite goal, is to have those metrics. And as I said before, this kind of can front end that initial training that people get, that’s fairly boring and people are just, they want to get on the actual forklift. Well, let’s do things ahead of that so that when they get on the forklift, they’re not hurting themselves. They have the concept. “I’ve got to turn my head. I’ve got to look.” You know, those those sorts of things. So I think that’s yet to come. But that is definitely the goal of this moving forward. The other thing that we noticed, at EWTS — because we had over 100 different corporations take this forklift demo in and try it out at the show — what we noticed was a lot of them were saying, “yeah, we have over a thousand forklifts of all different types,” because I know that there has been some really immersive form of training done in the past for specific forklift manufacturers. And that’s fantastic, probably as a next step. The issue, though, is that a lot of these corporations have four or five different forklift manufacturers, so they have something a little more generic. That kind of front ends up process is very valuable for them.

Alan: And I would think that despite the fact that there’s 20 different types of forklift, safety protocols are probably very similar regardless of the machine itself.

Jeff: Exactly. “Hey, you need to follow your eyes. You need to be alert. You need to be looking all around.” Those sorts of things are absolutely the same, regardless of the type of forklift, or regardless of the type of warehouse or materials. So that’s what really makes this exciting.

Alan: One other thing that I thought would be really cool is making an option where it’s like an open play version, where you can have fire come out the back of your forklift and it can go really fast.

Jeff: [laughs]

Alan: Maybe some missiles or something. No?

Jeff: I’m sure any studio would love to add that, Alan.

Alan: [laughs] Yes. You’ve got to shoot the boxes instead of pick them up.

Jeff: Yeah, there you go.

Alan: So you you recently deployed 200 virtual reality headsets for a large airline. You want to talk about that?

Jeff: Yeah. The exciting thing about that, and I think this is part of the value that XR brings, is that we did a project — and this is going back over five years ago — we did a project for the world’s largest airline, whereby they were placing, at the time, the largest commercial aircraft purchase. And we modelled all of their business class and first class cabins in 3D. So we use these 3D models, we did a a website for them. We did a kiosk — in-terminal activations — for them. And so these digital assets that have been been used and been around for over five years, we then took those digital assets into VR and we showed that off. We initially did four headsets at their leadership conference and then their global sales executives just went crazy over it. And they said, “this is exactly what we need in Brazil and in Japan and in Europe and all over the world, because when our sales folks are sitting down with these corporate buyers and these buyers are trying to decide if they want to travel on on this airline or another airline, we can actually take these headsets and we put it into the Oculus Go headset and we could take these headsets, give them to these corporate-travel buyers and say, put this on. This is what your executives would be experiencing if they were traveling on the new 777. Three hundred in first class or business class. And here’s the bar. And they can explore the cabin and they can see how the seats fold down and they can check out the workspace and all of those things.” So that was really revolutionary to them, having that experience and making it much more immersive. And it’s really fundamentally changed the game for that.

Alan: They’re taking the headsets and they’re going to the trade shows or customer meetings. How are they using it?

Jeff: Yeah, they’re actually taking them to customer meetings them. And now, as you know, the barriers to entry with the technology has now come down to make this opportunity available. And also the fidelity of the headsets themselves have gotten so much better that they’re actually going to meetings with these corporations, because — these are like global 2,000 corporations — that their executives are travelling millions of miles on various airlines and international travel. And so they’re actually taking that into those meetings, and not only telling those corporate travel buyers about all the benefits of traveling on this airline, but also they can actually put them in and make it a more immersive experience.

Alan: So we went from training people in forklifts to selling people on airlines.

Jeff: Yeah.

Alan: Oh, and digital cadavers. Holy crap. So you guys are at the forefront of medical, industrial, and sales. And there’s one more big one that… before we put a pin on American — guess I can say what the company has since you said it was the largest — American Airlines.

Jeff: Sure.

Alan: How are they comparing the sales with and without it? Is there a way to do that, or are they just anecdotally saying it’s better?

Jeff: Well, they’ve done their own internal [research]. But unfortunately, for competitive reasons, we’re not allowed to say, you know, how much. But, yeah, they definitely had some kind of before-and-after, A-B-type testing as to how it was before and the response versus how it is now.

Alan: One project that I know you can talk about — because we talked about it previously, and I know there was some massive savings being gained here — but that’s the product you did for Bell Helicopters. Let’s talk about that. These guys designed a helicopter and took it from years to months.

Jeff: Yes. And really, we had been working with Bell for a few years. We had done a VR experience for one of their military aircraft that had not yet… had not actually been built yet. But it was a project that they were selling to the military. And so we did it. We did a VR experience for them, which took them on kind of a mission, if you will. But it was really an eye-opening experience for the CEO of Bell. He’s a game-changer. I mean, he is such a forward-thinking leader. And he really wanted to transform Bell from a really historical, very engineering-centric military helicopter manufacturer to be a leading-edge technology provider of urban mobility solutions. And this was part of the journey, was when he saw the response at this particular show. And this show is called AUSA. It’s one of the world’s largest army show, I believe. And when he saw the response there, he said, “we need to be thinking more like the car companies and we need to be coming up with concept aircraft and things like that.” And he challenged his team — he had created an innovation team within Bell — his team, and this was basically October. On the commercial side, they had the world’s largest commercial helicopter show coming up in March. And he said, “I want a concept aircraft on the show floor in March.” And so basically from October to March, which ended up being less than six months, we went from the sketches of the aircraft; over 100 sketches to 3D models, put the 3D models into VR. Actually had Bell’s test pilots put the headset on and give us different changes back and forth of the aircraft. And we went through that iterative process and came out the other end with only a single 1:1 scale mockup of this aircraft. And we were on the show floor at at Heli-Expo in March. And oh, by the way, we also incorporated two Microsoft Hololens experiences into that one; one for the pilot and one for the passenger. But it was really revolutionary, in that it was really one of the best use cases of enterprise XR — taking a process that historically had taken them years to go through, and multiple models, and to get to that point, and we shrunk that down into less than six months.

Alan: Well, I mean, if that’s an indication, it looks like right across the board, you guys have been in medical, in industrial, in sales and marketing, and design. You guys have touched everything. Sector 5 Digital is kind of like this powerhouse of design in spatial computing. And I’m really excited for what’s next. So, Jeff, what is one problem in the world that you want to see solved using XR Technologies?

Jeff: I think it goes back to the training. If we can take people out of the environments that are hazardous — safety environments — and we can provide training to them such that they can learn to the point that they no longer have to be exposed into these environments, not only in a training perspective, but have the knowledge and capabilities that eliminates any sort of future hazards in those environments. I think that, to me, is an area that’s absolutely ripe for this technology. And I’m so excited about the future and how we can help people in those environments down the road.

Alan: My name is Alan Smithson, your host for the XR for Business Podcast. Today’s guest is a good friend, John Buzzell from You Are Here Labs and You Are Here Agency. John is an award winning 28 year veteran of the digital industry, creating interactive experiences across augmented reality, virtual reality, video games, mobile apps and numerous high volume websites. To learn more about You Are Here Labs and You Are Here Agency, visit yahagency.com. John, welcome to the show.

John: Thanks, Alan. Good to be with you.

Alan: And of all the people we’ve had on the show, you have a lot of experience in this field. I mean, you built the AR Porsche visualizer where you could drop a Porsche right in your living room and I actually have a photo of a Porsche in my living room from your app.

John: [laughs] That’s great. You know, that was an interesting project, because we started off on the Hololens and it was a really interesting project. But at some point, Porsche said this is a little too future for us at the moment and we need something that the dealers and the salespeople can use without fear. And so when ARKit popped up from Apple and they said surprise, now everybody with an iPhone 6 and above and use augmented reality, it really changed the game. And we very quickly converted that experience from the Hololens to the humble iPad and it took off from there. So we were really excited to have one of the first ARKit apps that was really connected to a major company or brand. And I’m glad you liked it, too. That’s cool.

Alan: It was really special. Can people download it now still?

John: Well, no, they can’t. That was about two years ago that we did it. And for all of us in technology, who knows how fast it moves. Porsche is a global company and they were very impressed with the innovation. And I think they were excited to kind of pull it back to HQ and see what they could do globally with it. And also our clients left for jobs at other companies simultaneously. [laughs] So–

Alan: That’s the challenge in technology, you’re working on a project with somebody, you’re all in it, and then they leave. [laughs]

John: I mean, I think that’s one of the neat things about emerging tech is, is it really can help vault peoples careers into the next dimension, in the sense that these technologies are so profound and they will affect the work that we do and the way we live our lives for so long in the future, that people that have this experience, it’s really great for them individually.

Alan: You’ve been doing this a while longer than myself, but I’ve been in early VR since 2014. And I’ve noticed that a lot of the people that were just building demos and stuff like that, now are running huge companies. HP and Microsoft, they’re running huge departments in this, just because they were early and learned how to do it. And they learned in a time when there was no YouTube video on how to make AR, you had to just kind of guess.

John: Yeah. I mean, my career resembles that, in the sense that I got started doing interactive marketing on diskettes before CD-ROM. Our friend Cathy Hackl says, “Don’t talk about that, it makes you sound old!” but I think the experience is worthy, because you see things change to CD-ROM. You watch them change again to narrowband Internet. You see them change a third time with broadband. You watch it change again completely with mobile, and then of course with social. And now on to this. The people that do have the experience, I think have more of a long view, a different perspective, where they don’t see AR, VR, or XR. They don’t see it as an adversary or a competitor to things like 5G or IOT or artificial intelligence, machine learning, what have you. They really see AR and VR as the screen, because if you look at these other technologies, they’re all ingredients. None of them is an interface, with the slight exception of perhaps AI and voice. If you’re able to understand AR and VR, how it’s used, it can really propel your company and your own career.

Alan: So is it safe to say that XR is the window to emerging technology?

John: I think so, although I think it’s fun that we’ve been looking at glowing rectangles since the first movie back in the 1800s, and now computing is kind of broken through that window, right? No offence to Microsoft, but we’re not living in Windows anymore. This technology is aerosolized now and it can show up anywhere, in any way. And that’s one of the really exciting things about augmented reality.

Alan: So a lot of people are calling it “spatial computing.” You want to maybe give it your– explain to people listening, what does that mean when we break free from this? You talked about Porsche taking the Hololens and saying “This is really awesome, but it’s a little bit too out there, too advanced for us.” And taking it back to an iPad, which is great, because everybody has it and has massive scale. By the end of this year, there will be over 2 billion AR enabled smartphones and devices in the world. So now you’ve got scale. What does it mean for spatial computing and 3D everything?

John: For so long, we have dealt with scarcity when it comes to technology. In the 40s, 50s, up through the 70s, you had to go to a university campus or something like that to have access to computing. Malcolm Gladwell says that part of the reason that Bill Gates was so successful — he and Paul Allen — is because they had summertime access to computers at a local university.

Alan: And their parents fundraised and put a computer in their school.

John: Yeah, absolutely. I mean, part of the reason I got into it is we had a computer club in my elementary school. And so that was a concentration of computers and people that liked computers. It’s more rare today, because we don’t really have a scarcity problem anymore. We tell people don’t text and drive and we put giant iPads in the Teslas. We, say, got computers on our refrigerators and we can have Alexa powered microwaves, and computers aren’t scarce anymore. And so the idea of having to sit down at a desk in a home office and log onto the Internet, I mean, there was a a joke about that in the latest Avengers movie. Or no, it was Captain Marvel, I guess. In any case, when we live with technology and we’re in a post-scarcity world, what does that mean? That means I don’t have to go looking for a screen. I don’t go have to go looking for a device. And much in the way that the phone has been in our pocket, having migrated from the desk to our backpack or briefcase and into our pocket and now on our wrist, this slow motion merger of computers and our brains. The next step is for our eyes. And for a while we’re going to hold a phone or an iPad out in front of our face. And then when our shoulders get tired, eventually Apple and others will sell us this integrated with a pair of glasses that don’t look too nerdy. As Matt Miesnieks — I don’t know how to say his last name — but he made the good point that for now, people will get paid at work to look dorky in these devices. Eventually everybody will wear them, because they’ll become fashionable. So I think from a business perspective, so much of what we do is repeated process. For a trainee or for someone who’s working a long shift, or if they’re working in a critical application like medicine, having that attachment and that immersion in process can be really helpful, to know that “Okay, well, if I’m doing an organ transplant, how far away is that organ?” or if I’m waiting on the curb to catch an Uber for my next meeting, “How far away is that? Am I going to be late?” Or if I’m in the guts of a warehouse or manufacturing facility, and I need to know what machine to go to next, “What’s the machine, and which direction do I need to head?” So this is something that we’re all doing right now, and it feels pretty seamless to pull the phone out of our pocket or look down at a tablet. But we’ll probably look back in just a few years and and laugh at how quaint that seems, because now we’ll be getting it right in our field of view.

Alan: It’s crazy. My friend showed up at my house with a BlackBerry and I was like, “What is that?” [laughs] We’re gonna be looking back. And my guess is ten years, maybe 20. And we’ll say, “Do you remember the time when we used to hold these little square boxes, and carry them around in our pockets all the time?”

John: Well, yeah. And I think people naturally react with a healthy amount of skepticism for this, because a lot of people have just now gotten adjusted to smartphones. But it’s funny you bring up BlackBerry. I had a BlackBerry 10 years ago. It was a smartphone, had a screen and a bunch of keys on it. But yeah, it feels so antiquated now. All the technologies that we would need for these glasses exist today. It’s not able to be made cheaply enough. Or perhaps the battery life wouldn’t be able to be as long. But if you wanted to have a next-gen experience for a few minutes, that experience can be had. So it’s really a question now is do you want to subsidize as an OEM these devices to make it more affordable and to spur adoption? Or do you want to kind of squeeze a little bit more cash out of the current category, the way that smartphone manufacturers are? I think we’re on the cusp of a change there.

Alan: I think you’re seeing it with product like Hololens 2, where they could have brought the price down, for sure. I mean, it doesn’t cost them $3,000 to make this thing. And maybe they said, “No, we’re gonna keep this at an enterprise price of $3,500.” And I think it’s the right thing to do, because people think “Oh, it’s too expensive.” Well, this isn’t for everyday use. This isn’t for somebody playing video games. This is for industrial applications where you can either have remote assistance, see-what-I-see training on the job, instruction manuals, that type of thing, which are driving real business values. Jonathan Moss from Sprint was talking about how they used just tablet based AR for training. And they’ve been keeping some different KPI metrics, and they’ve made millions of dollars in sales and they’ve saved millions and dollars in travel, simply by using this AR education. They’ve been tracking it. And I said, “Well, how much did it cost?” And he said, “Oh, between a 100 and 200 thousand.” It’s astronomical numbers in savings and profit here. So I want to dig into a little bit more of the industries and companies that You Are Here Labs is serving and what you guys are doing. You want to maybe talk about the different industries and companies that you’ve been serving lately, and what you guys are working on?

John: Sure. And if I can try to tie into your last comment, we really have that same practical world view. You and I were joking before we started recording this podcast, that we had better not get into all of the technical gobbledygook that so many people are very precious about with these devices. The devices are coming out constantly. Some of them are even being subsidized to spur increased adoption, and they’ll continue to come out for some time. I mean, people are getting new TV’s all the time now, whereas previously they held onto TV’s for a decade. So we take the long view. We focus on the practical side. We see if this technology is going to be around for more than twenty five years, what do you do? Because buying a consumption device isn’t going to get it done. Buying a guitar doesn’t make you a good guitar player, you’ve got to practice and prepare. So we work across industries really quite a few, including automotive, commercial real estate, construction, consumer packaged goods, energy and oil, food and beverage, heating and cooling, manufacturing tools, transit, a whole bunch of different industries. But we’re really try to pull one thread through — and I think your audience will like this — which is that we focus on delivering results quickly and over time. And what I mean by that is that we help companies understand what these technologies are. We help them explore how they fit into their business, including the critical applications that their workers go through. And then we help them figure out how to integrate and scale those solutions over time in responsible ways. Because all of us, you, me, and everybody else that’s been on this podcast and more, we’re all stewards of this fledgling medium. And we want to see it succeed, not just for us as individuals, but as a whole. And so hopefully that answers your question.

Alan: Absolutely. And you kind of touched on something that really resonates with me, especially with this podcast. I do this podcast just out of a labor of love to try to promote it and give people that are listening the idea of, I can invest in this and it will give me a return, because I think there’s been so much hype around VR and AR for gaming and for this. And oh, we’re in the trough of disillusionment. We’re not in the trough of disillusionment. If you, three years ago, put a million dollars into a company expecting they were gonna be a billion dollar company by now, yeah, you’re disillusioned. However, if you thought we’re going to invest a million dollars and start to solve real problems within industry, you’re doing all right right now.

John: Yeah.

Alan: And you have clearly figured that out. And we did the same thing. We took this view of, what are the results we can deliver now versus in the future. Caspar Thykier from Zappar got a really great point. He’s like, “Yes, we can talk about WebAR, we can talk about when glasses come, we can talk about all these future things. But why don’t we just make things that are existing and capable right now?” The technology that exists right now in AR and VR is so spectacularly amazing, that we should be focusing on it now, not a year down the road or five years down the road.

John: Yeah, absolutely. I mean, if you’re in an industry where you have physical objects, widgets, car tires, surgical equipment, tractors, anything really at all — anything that’s not kind of abstract or ephemeral — then you need to be investing right now on the tools and the skills to translate that into digital. The web was kind of quaint until digital cameras and flatbed scanners got inexpensive, and then suddenly you could have an eBay, because you could show grandma’s old jewelry that you wanted to sell. Although that’s kind of sad that you’d sell grandma’s jewelry, but you could. [laughs] And we’re in a similar space right now with XR, in that the tools for creating a digital version of physical objects have never been cheaper. They’ve never been easier to use. And a lot of businesses spend tens, hundreds of millions of dollars schlepping around big, heavy, dangerous stuff to trade shows, to customer events, to do demos. And it doesn’t have to be that way anymore. There is a web conference style transformation going on, where you can configure and sell a car without the car.

Alan: Yep.

John: You can imagine how dental equipment would go into a dental hygienist office, without bringing any of the equipment. You can decide how much concrete you need for a giant office complex, without any surveyors. So there are so many use cases now in business where people can start saving or making money with AR and VR. I would love to see more people embrace that.

Alan: The great thing is there’s lots of– when we started a few years ago, there was nobody that could do this stuff. Literally nobody.

John: Right.

Alan: Colleges are starting to roll out programs, and there’s a lot more information online. So people are learning it. And even companies. What we’re doing now, we’re finding companies want to bring a lot of the stuff in-house. And so what we’re doing is consulting on how can they build the team without building a huge team, or whether you need a 3D model or maybe you need a Unity expert. What are some of the people on your team that built out your round team, that you guys use on a project like the Porsche one?

John: Yeah, I mean, I think the work — like you said — has gotten– for those of us who have been in the industry for a little while, it’s certainly gotten more strategic. We’ve moved from an era of “Can we do that?” to more of an opportunity to ask, “Should we do that?” And so we definitely have a lot of people that speak XR strategy here in our team, that can consult with various companies in their embrace of spatial computing or XR or whatever you want to call it, to help them find the best opportunities to do first. And the ones to save for later. And so that’s an important part of what we offer. Similarly, we have some very bright software developers, people that come from the game development industry that understand the different engines — Unity and Unreal being the two most popular — and try to work that across different devices. We do projects on the Go. We do them on the Hololens. We do them on the Vive and Rift. We do projects on iOS and Android. We do projects on the Magic Leap. We really– we don’t specify devices to people. So you need a versatile team of developers for that. We have technical art directors that — for those maybe who don’t understand game engines as much — there’s a real skill into doing special effects — whether that be lighting or texturing or particles — to make augmented reality graphics fit into the real world better. You’d be surprised how hard it is. And then finally, we really rely on a group of engineers to do 3D scanning, volumetric and photogrammetry capture, project management and QA. So it’s a lot of the same roles from other types of software development, but with some specialties as well.

Alan: I get this question all the time. Who do I need on my team for this? And my first reaction is “just hire us and we’ll deal with it for you.”

John: [laughs]

Alan: The second thing is you need a big team. You need somebody who understands Unreal or Unity. You need a 3D modeller, you need somebody that understands the textures. You mentioned making things look real in the real world. And you’ve entered into the spatial computing era where we’re not creating something on your phone. We’re creating something on your phone that has to look real in the real world, despite the different leading changes and that sort of thing. So if you have your car sitting in a parking lot next to another car in the shadows, pointing one direction for real and the other direction, because that’s how you built it. That’s really weird.

John: You’re talking about a level of polish that’s possible that really makes apps shine. If you’re using this for business and you’re trying to sell a bulldozer or you’re trying to teach someone how to repair a bulldozer, if you can make it look real, your trainee or your customer, your prospect can forget that they’re looking at a simulation and focus on what you’re really trying to tell them. We put great care into making sure that things look as real as possible, so that you keep that suspension of disbelief, like they talk about in the movies. Eventually, this stuff will be so easy, it’ll just happen magically. You don’t have to worry about lighting or animation. But for now, there’s a bit of skill and that’s where it can help to partner, as opposed to having somebody on your team.

Alan: I really love what you just said. People, because it’s so real, they can forget that it’s a simulation and focus on the key messaging. And that’s so vital for a number of things, sales and marketing, but also training and upskilling. You’ve done a number of things here. What are some of the real life data metrics, analytics, specific KPIs? What have you guys seen as those things? How are people measuring their success?

John: Yeah, I would put that– I’ll actually answer that in two parts. There’s what our customers care about. And then there’s what we’re looking at. I think, for the customers, they measure success in a variety of ways. For people that are still struggling a little bit with their digital transformation, maybe they finally got their mobile app out recently, or they’re proud of their website, which is great. Everybody needs to get there. Success for them can be as humble as just executing a proof of concept, or pulling together innovation budget from other parts of the company. It may be getting some employee or market validation. I would say for the intermediate clients, that they’re maybe comparing XR solutions to other methods, comparing traffic or lead generation and retention. That’s what they’re worried about. And then our advanced clients are really beginning to unearth deeper insights, based on usage data from these experiences. And that kind of more closely mirrors what we look at, which is we’re looking at numbers of users, length and depth of engagement, repeat use. Are they sharing this experience if they can? Does that converge to lead capture or commerce for enterprise training? The names are different, but it’s pretty similar that they’re looking for higher enrolment, time on task, quality, how well they’re scoring, and what do they retain. So we use, behind the scenes, everything from head position, eye tracking, looking at the difference between where they’re holding a VR controller to where they may end up, as a measure of kind of intuition. It’s not as tight and concise as it is in other media yet, but it’s moving there fast. And I think as different companies embrace these technologies, they’re getting more sophisticated ways to measure success. Does that answer your question?

Alan: Yes. I have literally nothing else to add.

John: [laughs] We’ve hung out too much, right?

Alan: We really have. I want to talk about specifics. Give us an example of a case study that you want to share.

John: Apologies in advance, I’m going to have to kind of thread the needle here to not mention specifics, but I think there’s some lessons to be learned. We’re in phase two of a project or a major infrastructure organization, and they deal with almost 10 million citizens per day in the execution of their service. And a lot of the equipment that they use to serve these people is antiquated. I mean, some of it is older than 50 years old. They’re in a real situation where they need to improve the way they do things, but they also need to continually replenish the staff that services this infrastructure, because some people are retiring and it gets expensive to keep them around. It’s nice work if you can get it, though. So in any case, we were brought in to create training materials using augmented reality and virtual reality, but there was no digital objects to start from. And just like we said earlier, that web got pretty great when you had digital cameras and cheap flatbed scanners. There’s finally technology to use to digitize real objects. And so we got in, scanned a lot of these objects, digitized them, made them ready for mobile devices, delivered over 3G, 4G, 5G, Wi-Fi, what have you, and started assembling lessons, working with their subject matter experts. They have a training program right now that takes a half a year. And we think we can get a really serious reduction in that. And we’re starting to see really promising results in early trials. So for them, it was pulling them out of the 1900s and really preparing them for the next hundred years. Smart training can be delivered on any device, in any location, and really across a range of different skills. So we employed a lot of versatility. We had to be very nimble on this project to react to different changes. And we learned a lot. I think they did, too.

Alan: What are some of the early metrics? Because we’re seeing decreases in training times, dramatic decreases. You mentioned six months training. My guess is you could probably get that training down to about 45 days using this technology.

John: It’s really dramatic. There’s– I’m going to mangle this old adage, but it’s something like, “I remember a little of what I see, less of what I hear, but I remember almost everything that I do.” And in that way, these people can gather around– currently gather around a big, heavy piece of equipment. It takes two hours to take it apart. Not everybody can see what’s going on. And maybe they’ll get a chance to ask a question and it better be a good one. But with this technology, everyone can be there all at the same time, moving at their own pace, asking questions, looking at things from any angle on their own. And no one has to scratch up their knuckles or injure themselves. Nobody drops a 400 pound piece of cast iron on their toe. We’re seeing a lot better retention. We’re seeing faster moves through the curriculum, with people being able to go through it more often. So I agree with you. We should be getting hard numbers on that soon. And if I can share them, I will. But at the moment, we’re already starting to see giant gains from an industry that’s been doing things the same way for almost 100 years.

Alan: I get excited about this, because I see that this type of technology as being the thing that democratizes education across the world. We’ve got smartphones which are doing a fantastic job providing the information quickly, but immersive technologies have been able to do something, and also just see it in three dimensions. You mentioned being able to see a machine or whatever and pulling it apart. When you’re in virtual reality and you make a mistake, there’s no consequence that anybody else can see. You make a mistake and you can make as many mistakes as you want. And humans learn through error, we learn by making mistakes. Being able to make mistakes in a completely private and consequence-free environment, that reinforces learning at a different level.

John: Yeah, and not only that — which I love your point — but in addition to that, the software can be watching you and making suggestions. “We’ve noticed you’re having a little trouble with this. Would you like to go back and repeat this part of the training?” There was a particular thing that we did on this last project, where you were supposed to take apart a complicated system of parts that all went together in different ways. Some were threaded, some were slipped into place, some were bolted down and watching people being — to your point — being able to try to figure this out. They were learning in a way that a classroom lecture or a video would never get done. Education, whether that’s educating somebody about your product, or educating employees about working with central equipment, or educating practitioners about compliance and safety, it’s all communication. And one of the reasons that I’m so amazed and in awe of this technology is it’s really bringing together all of the progress that I’ve seen over the course of 30 years working in the industry. It’s really going to be profound for people.

Alan: I know this is a question that I get from listeners all the time, and it’s a simple one, how much this stuff cost? What is our initial outlay? And maybe instead of just saying this particular one costs, let’s talk about how to budget, like how can a company from the first minute they meet with you to rolling out some project like this, what are kind of the steps and what does the process look like from your standpoint, that you’ve seen work really well?

John: There’s an XR or AR/VR solution for every budget. And I’m not saying that as a dodge, or to be slippery in any way. I think that… look, if your budget is $5,000, pay somebody that’s an expert in the industry to come talk to you for a little while. Have them explain their perspectives on the industry, have them maybe do a little bit of light brainstorming with you for use cases that make sense for your industry or your company, your category. If you have $50,000, maybe think about doing a proof of concept, where you ingrain yourself with real requirements. You do either a lightweight series of experiments on a particular idea, or maybe you create a horse race, where you take three different experiments and you try to see which one is most successful and then learn from why. If you have $250,000, you’re probably further into it, having already spent money at the lower levels. But that’s really when you want to start thinking about doing an integration test or maybe scaling up a team. And of course it goes on from there. People can– a buddy tells me, “We can make this as complicated as you want, John.” [chuckles] But yeah, I think there’s ways for people to get involved. The most important thing is to understand that we’re visual creatures and we live in a physical, three-dimensional world. Computers can finally live alongside with us, and that can bring just-in-time education, or marketing, for so many different things. And we don’t have to look at a computer and try to figure out, “Well, where’s the button for this or that?” You know, there’s this is great scene in The Matrix from 20 years ago — which is kind of amazing because it still feels futuristic — where the main character, Neo, kind of laughably plugs something into his head and he says “I know kung-fu,” but the idea of just-in-time education is already here. I mean, if you look at how many lives an AED — an Automated Emergency Defibrillator — how many heart attack victims have been saved with those devices, because somebody got just-in-time education? We can all walk around being just-in-time experts for any number of things. Administering first aid, or teaching somebody how to work for a particular problem. And we’re going to be able to deliver that in a way that’s more seamless and more compelling than ever before. And I think that’s– you need to think about your business in a way of like, what is a real business problem or delivering just-in-time training or education along with 3D objects would be helpful? And there’s probably a whole lot of them.

Alan: What is the most important thing that businesses can do right now to leverage this power of XR?

John: Companies need to do more — and I’ll get specific in a second — but if you’re not already spending time or money or both on XR, you’re helping your competitors. The largest companies in the world have decided that this is what comes after the smartphone. They’ve seen the smartphone sales start to plateau. People probably aren’t going to pay more than a thousand bucks for a smartphone. So what are they going to do next, to keep us all buying new devices? And if you look at IoT, AI, cloud computing, and big data crypto, if you look at a 5G — all the technologies out there — they’re mostly ingredients. We’re visual creatures. We need a screen and the AR, and VR, XR, spatial computing — whatever you want to call it — this is how we’re going to interface with the future of computers.

So companies need to do more. Businesses need to recognize that this is really serious for their marketing and training, but also kind of their workplace tools, workforce development. It’s not a competitor to any of these other technologies. It is what brings them all together. So if it’s the evolution of computing and the successor to the smartphone, if you haven’t started experimenting with this tech yet, you’re falling behind. So I think if you’re a beginner, you need to do more, attend to conference, hire one person, do a proof of concept with a local agency. If you’re intermediate, maybe strengthen your teams and your partnerships. Try to figure out, “well, OK, so we have a lot of 3D. Let’s scan some something and see what we can do with it.” If you’re an advanced user, people need to do more integrations, need to polish their skills, build their teams because the future is going to be 3D. It’s going to be contextual and it’s going to be spatially aware. So I think just simple answer would be to more than what you’re doing now, because this is rapidly approaching. And I see across industries, companies that are probably competitors of your listeners already investing lots to learn how to make the most of this tech.

Alan: This technology; once you try it, you unlock Pandora’s Box. You’re like, “oh, wait a second, we just saved $100,000 not flying people around [the world]. We could have a meeting and it was more productive because people can’t be looking at their smartphones while they’re in VR.

John: I think that’s the best business case for XR, honestly; shortening and improving logistical challenges for companies. When the web came out, people in the magazine and trade show industries were pretty fearful — and with good reason. And you know, there’s still trade shows and there’s still magazines, but people do a lot of business online. Similarly, the opportunity — and there’s some companies with products already in the market for this — the opportunity to work across devices and across distance and time to allow people to collaborate and not just have a web conference where you’re looking at slides, but really, to manipulate. “What if we put this thing over here? What if this was smaller? Can we make this out of carbon fiber?” We have those experiences in our lab. Companies like Spatial or Glue. You can go take a look at the future for that right now. And I think it’s going to be profound. You won’t have to go to the office to work. You won’t have to travel to Hong Kong to have the meeting. You won’t have to go to Palo Alto to have a design session. You’ll be able to just put on a headset or hold up a device and do it right there. It’s happening today and it just hasn’t been deployed at scale.

Alan: We’ve only just unlocked it and being being able to present and bring knowledge around the world without having to get on a plane to travel, because let’s be honest, travel’s fun business travel not so much.

John: Yeah. I mean, I think you’re already living in that future. There’s this great quote from William Gibson, a fantastic science fiction writer, and he says The future is already here. It’s just not evenly distributed yet.

Alan: It’s true.

John: You’re already living in that future. Right.

Alan: And to be honest, let’s be fair. There are still challenges. It’s still not the perfect solution yet, but it’s very close.

John: If you can think of how many web conference tools there are out there, from Blue Jeans to Hangouts to WebEx. Slack has theirs; Skype has theirs. There are going to be so many of the companies that can do this. Like I said, we have it running in our lab. It is going to be transformative for people when it comes time to renew your expensive office lease. And you’ve already got maybe 30-40 percent of your workers working remotely. You begin to think of, “gosh, is it worth all that money per square foot?”.

Alan: Yeah.

John: I’ve had conversations with people in the banking industry that said, “you know, what about virtual branches? We spend a lot of money on branches. Could we start off in VR chat where you’re interacting with an A.I. and then you get escalated to a real person on the other end of the line?” Absolutely. The technology exists. It’s just spreading out.

Alan: Absolutely

John: So that’s exciting.

Alan: So my final question, what problem in the world do you want to see solved using XR technologies?

John: Well, I said earlier — and may have spent one of my good answers on The Matrix example — but having just-in-time education where average human beings like us could be activated or mobilized to do super-heroic type things on demand. I would love to see that, because humanity needs a lot of help right now. But, you know, I have a couple daughters, and maybe closer to home for me is with all the money that’s spent moving our carbon bodies around from home to work to an airport to another place to another office. I would really love to see spatial computing and XR helping with climate change. I think that logistically we’re smarter than… we’re still operating with 19th century technology to get around in a lot of ways, and we can do better. And I think that XR offers a chance for all of us to be more efficient and more powerful on what we do.

Alan: Welcome to the XR for Business Podcast with your host, Alan Smithson. Today’s guest is Michael Ludden, global head of developer advocacy and principal augmented reality advocate at Bose Technologies. Michael is a technologist, futurist, strategist, product leader, and developer platform expert who loves to operate on the bleeding edge of what’s possible, and is a frequent keynote speaker at events around the world. Michael was previously director of IBM’s Watson’s Developer Lab for a AR and VR, among some other career stops. To learn more about the work he’s doing at Bose, you can visit developer.bose.com.

Michael, welcome to the show.

Michael: Wow, what an intro. Thanks for having me.

Alan: It’s my absolute pleasure and honor to have you on the show. I’m super excited. I was talking to all fine and last week. I was flying from Toronto to San Francisco, and I just happened to sit beside a guy who we started talking about AR and I pulled out the North Glasses. He pulled out the Bose Frames; we swap. And we had this kind of meeting of the minds. I had the visual, he had the audio and it was really cool that I got to try the Bose Frames. What an amazing piece of technology.

Michael: Glad you liked it.

Alan: So you’ve had a storied career here. You’ve done everything from IBM Watson, to Google, to HTC, Samsung. How did you end up in technology, and why did you get so fascinated on futurism?

Michael: Well, it’s sort of been a running theme in my life. I read a lot of science fiction as a kid and I was always interested in technology and — not to date myself — but at a certain point in my life when I was a young adult, technology started to really aggressively eat everything, starting with mobile. And I just found that was really the point of inflection in my life where I studied musical theater in college, I went to UCLA. I thought that’s what I was going to do. I really did. And I did get a B.A. so I got a little arts education, too. And at the same time, I was always tinkering with stuff, building my own PCs. I started my own web development company at one point to make Web sites in Flash, CS2, and CS3 in the early days; it was brutal.

Alan: There’s a conference in Toronto called Flash in the Can; FITC.

Michael: Nice.

Alan: That’s old school.

Michael: It is very old school. And, you know, I never really thought I’d make a career out of it, but I needed money. I was a starving actor in L.A. and one of my friends who I just made by being nerdy, worked for a company called HTC. They were releasing the first-ever Android phone, which was called The Dream — or the G1 in the US. So I was in contact with this guy; he got a promotion. He said, “you should take my old job,” which was L.A.-based, and I was living there. And I said, “I want to do it.” I was working on a podcasting platform called This Week In — not This Week in Tech — but This Week In. It was a Jason Calacanis-led network out of the old Mahalo Studios in Santa Monica. But it paid me pennies. And when they told me what the job paid and what I’d be doing, I said, “OK, I guess I’ll do it.” I needed the money, and it was very flexible. It felt really easy to me, like that’s really all you need me to do.

And so I ended up starting to go around door to door. What was it like? T-Mobile shop, Verizons shop, AT&T — like, carrier stores — and show them about the phones. And I was like, this is so easy. And then they started sending me to conferences. And I started giving talks about stuff and doing the demos at the booth. And then I got wind that they were starting a developer relations organization. I have no business even applying for something like that. But I really wanted to have a forcing function to teach myself a program for Android, learn Eclipse, etc. It was Eclipse at the time. And so I basically begged the team for six months. I just let my enthusiasm kind of guide me, and the rest of the stuff you mentioned in my past kind of followed from that enthusiasm. It really actually hasn’t stopped. It’s just sort of morphed towards different things. The latest thing is obviously immersive technologies, but I found that they valued my time and it didn’t feel like work. What more can you ask for from a career, really?

Alan: Isn’t that awesome? So let’s fast forward you’re now working with Bose, one of the giant pioneers of audio in the world. What does Bose have to do with augmented reality?

Michael: Well, that is a great question. Yeah. So Bose is doing something really fascinating and innovative, and that is trying to create a new lane for augmented reality that is focusing on a different sense that’s not your sight; that’s sound, which I guess is pretty brand-appropriate. We are building a whole new area of Bose focused on turning the company into a platform company and building a platform for developers to build mobile applications that are sound-focused, that operate via a series of gestures and spatial sound capabilities, and possibly even voice input, and prioritize those over staring at your phone screen and touching, so that you can maybe do things by those methods of interaction while having your phone in your pocket, even though there’s an app running. In that way, it actually frees up your visual to just like if you’re listening to a podcast passively, or music, or you’re having a phone call actively. [You can] still engage in the world with your eyes, our most powerful sense and let audio give us some other capabilities that complement that. If that makes sense.

Alan: Yeah. So let’s put this in perspective. You guys made a pair of sunglasses, that speakers built into them. Pretty awesome. The sound is amazing, like what you would expect from Bose. Now, not only do you have the sound just stereo, but you also have the ability to make it spatial, correct?

Michael: Yes. The frames are just one of three devices that support Bose AR at the moment. The QC35-IIs that are the most popular ones. Every time you pass a business class on an airplane, everybody’s wearing them. Those support Bose AR as well, provided they were purchased after November of last year, 2018. Same thing with the new 700 series we announced a couple of months ago. I actually got the pleasure of announcing this on stage at AWE — Augmented World Expo. They’re called the Noise Canceling 700 series. They are a new super-premium tier of noise-canceling headphones that’s sitting alongside the QC35s. All of these devices have a little sensor bundle in them that’s on the right side of the frames, and that consists of an accelerometer, a gyroscope, and a magnetometer. And in that way, we have an SDK for Android, an SDK for iOS, and then also an SDK for Unity, which you can use to deploy cross-platform that will allow you to interpret and read data from the sensors to do things like recognize gestures. For all three platforms, we have native gestures, support for of course, head nod. So if you’re nodding your head, yes. Shake, negative. So we’ve changed the word from — sorry — nod to affirmative and shake to negative, just to sort of future-proof it a little bit with an intense system. But the idea is, if you want to make an application that does something when somebody shakes their head, or you prompt them to shake their head or not their head, and something happens, you can do that.

And then also there’s input, which on frames you double tap on the right. Same thing with QC35s and on the 700 series, you touch and hold, because there’s a capacitive touch panel on that device. And then in terms of spatial sound, to answer your question, there’s a magnetometer on these devices. So you can understand directionally with some magnetic declination if somebody is facing north, south, east, west. You can also do arbitrary directions. So, for example, there’s an app called Bose Radar. And if you have a Bose AR-enabled device, you can download that for either the Google Play store or the Apple App Store. And that if you open that up, there’s a beachscape scene that I’d like to talk about. So if you press play it and you close your eyes, you will hear a beach scene in front of you. But if you look left, you will hear the beach scene in your right here. And if you look right, you’ll hear the beach scene in your left.

Alan: That’s so cool.

Michael: So it’ll kind of route the sound around you based on where you were initially looking — not based on like the direction of the world, where you were initially looking — and keep it there. So you could hear seagulls out on the left side, etc.

Alan: That’s positional sound, right?

Michael: Yeah, that’s like spatial sound that’s rooted in a position.

Alan: Very cool. And then I guess it starts when, whatever direction you’re looking, that’s when it starts?

Michael: Well that’s an option. That’s an option. You don’t have to do it that way. But that’s an option. Yeah.

Alan: I don’t know if you’ve tried to Magic Leap. I assume you have.

Michael: Yeah.

Alan: They can have spatial audio built into those. And one of the demos they do is this ball of light is 10 feet away from you on the floor, and the sound is coming from 10 feet away from you on the floor. Is that something that is going to be available through these Bose glasses?

Michael: Absolutely. Yeah. So there’s a number of ways to tackle that. The advantage that something like a Magic Leap or even an Oculus Quest has is that it’s tracking you with cameras. We don’t have any cameras on our devices. And so it’s very easy to present that sound accurately when there’s an object attached to it, right? That you can look at and see the distance, and therefore so can the computer, which is generating that object. It’s kind of native. The way that you can do it with Bose AR, if you’re a developer, is within Unity, you can actually do that same thing. You can create a visual scene and attach sound to an object that’s at a certain distance, and then present that to a user, because you know the rough direction that a person is looking. The ways to overcome the 3DoF versus 6DoF thing — where you can move forward in space and have it recognize that — there’s two main ways that we’ve discovered so far. And again, this is a third-party platform, so I’m expecting we’ll discover new ways for people to do this with people working with pedometers. What if I can track somebody, step forward and other ways of doing camera lists, six degrees of freedom tracking? But here are the two that we found so far. One is you’re outside, you use the phones’ GPS with the magnetometer from a Bose AR device, and in that way, you can know where in the world they are, and also in what direction they’re looking. And using just those two heuristics, I could see that someone’s looking at a restaurant — and there is actually an app called Navigator that does this now, you download it for the Apple App Store — but you can double tap and it will pull in using Yelp’s API information about the restaurant you’re looking at, and say “three stars with 500 people,” and you’ve got to make a decision about whether or not to eat there.

So that’s one way to understand where something is in space. There’s another app that uses that technique to do specialized audio tours. As you walk up to a place, you’ll hear a ping from a specific location, and you can decide if you want to enter that audio experience. So that’s cool. There’s a lot of stuff we’re doing to enable developers to build spatial silent discos. You could walk up to it, have music fade in, that sort of thing. And then the other way pertains more to indoor position. So we’ve got some of our developer advocates on my team experimenting with beacons and things like that. But if you have no infrastructure, you can always default to something like the Vuforia or a ARKit or ARCore with your phone out and the camera pointed at the ground for plane detection, and then you can actually walk forward and around the space and then it can also understand where you’re looking relative to that. And there’s actually an app I’d recommend downloading called Traverse, which is a really wonderful music experience where you can — for example, with Elvis — arrange the band around you and then walks through and around a performance. You can hear Elvis’s voice like a ghost next to you, and then move behind him, and there’s the person playing the drums. And you can actually go around a virtual space and listen spatially to it, using ARKit to support the positioning of the headset.

Alan: Oh, my God. I can see this for museums, for public tours or walking tours.

Michael: Absolutely.

Alan: I think it’s great that this is available on these two headphones and one pair of glasses. But I can imagine that, through software, you’re gonna be able to enable people to have these types of experiences across any Bose device eventually, because if you take away the magnetometer and accelerometer, you can actually just run it off your phone.

Michael: There’s a couple of things about Bose’s commitment to this platform. So we’ve already committed to over a million devices in-market that are Bose AR-enabled by the end of this year. I think we’ve already basically hit that. We’ve also started putting them in every wearable we made. The three wearables are the three most recent wearables we came out with. The third thing is, you could default to the phone. But what’s interesting is we know a person is wearing this on their head, and that’s something interesting and unique. If you combine it with the capabilities of the phone, you can actually understand where somebody is looking, for example, and you can understand a lot of other things as well, by the fact that it’s head-mounted.

Another thing I’d just say about the platform, briefly, is these are devices people are using every day anyway. So if I were to make a pitch to developers, the difference between this and something like a Magic Leap is number one, you didn’t purchase it just for XR. You purchased it and you’re using it every day anyway. And then when you build an app for it, it’s not that somebody has to pick up a device like a Magic Leap and put it on your head — by the way, I love Magic Leap. There are just different qualities, to it, right? — You’re probably already wearing your Bose device. And if you download an app, that has some utility for you. Those are capabilities. It’s not as friction ball as, “oh, let me go get my device and put it on my head to do this specific thing,” if that makes sense.

Alan: Nobody wants to buy something for a very niche thing. And I have a Magic Leap; we’ve got them in the office here, and they get used very rarely, when developers are either making something for them or we’re doing demos for people. But it’s not something you pick up and put on and walk around the office with. It just doesn’t.

Michael: I think that’s the way the world’s going. It might be generational. It might be just a few years of habit. I’m not trying to say that that’s not viable as a form factor. But there are some convenience aspects to what Bose is doing that, I think, are relevant for developers, who we want to interest in building third-party applications, if that makes sense.

Alan: Absolutely. Let’s look at this from a business standpoint; what can brands start doing to leverage these technologies?

Michael: That’s a question we are answering in various ways internally, and trying to answer with partners. Hopefully you’ll see some of those answers come to market later this year. But there’s any number of ways to tackle these things when it comes to brands. We’re working with a number of existing application providers to build Bose AR-enabled features that make sense. For example, a partner of ours is Golfshot, and Golfshot is a popular application for golfers. And there’s a Bose AR-enabled feature that, let’s say you’re on the course with a pair of framed sunglasses. You can actually get contextual advice about where on that green — based on where you’re looking — you should be hitting the ball and with what. Little quality-of-life improvement features are one aspect to existing established branded apps. There’s also obviously marketing and promotional opportunities. Spatial sound itself can just transport you very quickly. You just close your eyes and you’re in the middle of some scene of your favourite superhero movie, for example. Or whatever the case may be.

Another thing that we’ve done is we’ve put out something called a creator tool. This is something that feeds into our Bose Radar app — which does the soundscape that I mentioned on the beach — and we actually do… oh, my gosh. I don’t want to butcher his name, that would be terrible, but I think it’s BJ the Chicago Kid — has some experiences in Bose Radar of his music laid out spatially around you. And we are working with brands on delivering more experiences, many of which will be musical, and some of which will just be artistic and immersive-audio-based. But the Bose Radar app is fed into by a tool which exists on the web. We’re doing private invites right now and that’s also available at developer.bose.com. And that’s going to be a kind of Wiziwig tool that allows brands to create experiences with spatial sound and some gesture recognizers, and also use GPS to do location-based and spatial sound experiences. So there’s a number of channels that we’re working on now to engage with partners. And if you are a brand that’s interested in this, just reach out to me or head to our web site.

Alan: Awesome. So what can we expect in the future? And I’m going to throw this out there, because I saw — I shouldn’t say I saw — I heard a pair of headphones called NuraLoop at CES this year, and they were personalized headphones that… they had some spiel… but man, they they sounded amazing. And there’s not been much development as far as R&D or real change in headphones and a long, long time. And it sounds like you guys are really pushing the limit. So what’s next on the on the radar? That you can talk about, obviously. Is there something coming that’s going to take it to that next level?

Michael: There’s always things coming. We have a future wearables that will be coming out that are Bose AR-enabled. I think what businesses will need to know is that we’re really committed to creating a viable, large-target platform, highlighting our partners that work with us and our channels. And we have an app called Bose Connect that as over 14-million installs worldwide. We’re shipping our XR headsets everywhere in the world. That’s something very few — if anyone else — can claim in this industry. And I would just say, there’s really exciting things on the horizon — new capabilities, et cetera. But I also want to reassure people that this is a platform that can be built on that is future-proof. And what we’re really trying to get to now, the analog that makes sense, is we’re kind of with either Web 1.0 or the early app store for iOS — whatever you want to call it — but capabilities got added to the Web. Certainly, people were able to develop better applications as processors got better for mobile. But the core capabilities are the content. So what we really want to do, what we’re committed to doing, is working with third-party developers, small and large. You don’t have to be a big brand. You can be a a single person. We’re trying to make platform self-service and easy and free, because the value to us is our customers find a use out of Bose AR-enabled applications, and they come back to them and they use them. And that is a win/win for us. So there’s a nice synergy in our business model for companies, small dev shops, large brands, to come and work with us because the content is what I think folks who own Bose AR-enabled devices can look forward to. And that’s what we really need to bootstrap. In addition to, obviously, future capabilities, better refinement of the platform as we go along.

Alan: Amazing, there’s so much coming, I don’t even know what to ask! It’s like you guys have figured it all out.

Michael: Not at all; it’s a process.

Alan: It is a process! But I mean, you’ve been down this road before. You’ve been down the process from, “we have an idea and couple of nerds in a lab,” to “hey, look, this is a product and it’s in the market now.”

Michael: It’s what I look for. Yeah. It’d be boring otherwise.

Alan: Building things for the world is pretty exciting, and I feel like we’re in this renaissance moment of technology where it’s unleashing untold possibilities for humanity. Let’s put our educator’s hat on for a second. How do you think the Bose technology for spatial audio — or Bose AR — how do you think it can be used for training or education?

Michael: We are actually already talking to a number of interested parties on workforce training and repair enablement scenarios. So the same sort of scenarios that you’ve heard talked about with augmented reality, we think have some potential uses with frames. Let’s say, large warehouse rollouts with a maybe a safety glass version or something like that, where you can get audio cues, and your eyes aren’t distracted by a screen. You’re doing your job, but something goes wrong in one corner of the warehouse. And you hear a ping spatially where that might be. Things like that that can enable quality-of-life improvements for workers, while leveraging the fact that there’s not a screen to not distract from what they’re doing. There’s something to putting something in front of somebody’s eyeballs that’s just always going to take your attention. Right? So we think that there’s a lot of workforce-enablement stuff that can be done with Bose AR-enabled features within existing applications, and then maybe dedicated applications for things like I just mentioned, that’s new. Or even ones we haven’t come up with yet. In addition to that, there’s there’s a whole host of different potential opportunities. We’ve obviously, like you mentioned at the top, have lots of interest from audio tour providers. Well, there’s lots of old-school headsets with cassette tapes that are still out there for various stores. That’s a low hanging fruit.

Alan: I used to be a DJ. [record scratch]

Michael: Oh! Did you?

Alan: Yeah, for 20 years.

Michael: Well, that’s exciting.

Alan: Yeah. Have you ever seen the Emulator, the big see-through touchscreen DJ controller?

Michael: No! That sounds like–

Alan: Type up “Emulator DJ.”.

Michael: OK. Yeah.

Alan: I invented this giant see-through glass touchscreen.

Michael: Woah! That was you?

Alan: Yeah.

Michael: I see this, and it’s all… wow.

Alan: Yeah. It was a MIDI controller. We actually worked with lighting controllers. We worked with video, audio. Oh, ton of big brands. We brought this to Coachella one year. We made a thing called dream experience, where we took — Heineken branded it — and one of those buttons was synth, one was bass, one was high hats, whatever. And we made it so that you could, no matter what button you pressed, it always was in key. But we made this really, really cool thing. People were making their own remixes and emailing it to themselves.

Michael: That is awesome.

Alan: I love me some audio.

Michael: We did an experiment with Bose AR at Coachella this past year, just to see what sorts of things were viable at, like, a music festival setting. And I think you’re going to start to see some of the fruits of those experiments in the future. It was kind of exciting.

Alan: Did you work with Sam Schoonover and his team there?

Michael: You know, that was somebody on my team that took on that. I don’t know. But maybe.

Alan: I think we need to come up with something crazy for next year, and we’ll all go to Coachella. We’ll make it a thing.

Michael: Oh, man. I’m sold.

Alan: We’re gonna get everybody at Coachella wearing the frames.

Michael: Yes! I mean, it’s perfect. Like a silent disco.

Alan: It’s so perfect. Honestly. All right. We’re gonna make that happen.

Michael: Awesome. Sounds like fun.

Alan: I love it. And they already have a silent disco.

Michael: Yes, I know. I’ve seen some of these. But seamless, just walking up to it and walking away; that to me is something I’d like to see realized.

Alan: Yeah. It would be really cool.

Michael: There’s a lot of hard tech under the hood that would need to work, and Wi-Fi that doesn’t suck at a festival. So there’s also challenges.

Alan: But we’re gonna have 5G. It’s gonna be a thing.

Michael: There you go! Problem: solved.

Alan: We’re already working with all the telecos; we’re gonna bring 5G, we can drop it in there. We got this.

Michael: That would be amazing. Yeah. If there’s no congestion problems, which I–.

Alan: That’s the promise of 5G, is getting rid of the bandwidth problem.

Michael: Yeah, I thought it was the ping problem, or the latency problem. If it gets the bandwidth problem, awesome.

Alan: It’s three things. It’s bandwidth, latency, and also capacity of the network.

Michael: But can it make me dinner? That’s really the question.

Alan: The answer is absolutely. Uber Eats delivers.

Michael: Awesome. What a world, yes.

Alan: What a world. So listen;d we have plans now. We’re gonna go to Coachella. We’re gonna make sure everybody’s got the frames. We’re gonna have a silent disco. I think there’s a huge potential for augmented reality as it pertains to audio, and I think Bose is perfectly situated to take advantage of that and also bring quality audio to the world.

Michael: Yay! Thank you. I agree.

Alan: What is one problem in the world that you think can be solved with XR Technologies?

Michael: I believe in XR as the empathy machine. I think that it can literally put you into the shoes of someone experiencing the world from a different perspective. And in that way, it’s almost not even empathy. It’s almost sympathy. Like, I was wading through a crowd as a 4’3″-tall person and I actually experienced what that was like. I think that sort of concept of experientially being able to put yourself into someone else’s situation is something that all forms of XR can and will continue to do, even on accident. Like every time I play a game and things are sized differently; that’s the size thing. But it could also be scenarios. “Oh, I was in a scenario where a bunch of people were bullying me. And how did I handle that?” I think for people who struggle with being able to empathize with others in different situations, VR and AR have the ability to give us that new perspective. I think that’s one of them. Very many exciting things about XR. I could go on a number of different ways. I think education, therapy, recovery, the way we work, remote meetings, collaboration, etc.. I guess I wanted to highlight the empathy machine aspect of it here.

Alan: You know who quoted that VR is the ultimate empathy machine?

Michael: Who? Was it you?

Alan: It was not. It was Chris Milk.

Michael: Milk. I’ve got to give him credit next time.

Alan: Yeah.

Michael: Did he coin that phrase, though? Or did he just give a talk on it?

Alan: I’m pretty sure he coined it; look at the date.

Michael: 2017.

Alan: Yeah. This has been really wonderful. Thank you so much for taking the time. And I am really looking forward to Coachella next year.

Michael: Yes. Let’s keep the conversation going.

Alan: Coming up on the XR for Business Podcast, today we’re speaking with Lance Anderson, founder and CEO of Lance-AR, a consulting and services company for enterprise AR space, focused on helping organizations scale deployment. We’ll be learning about the challenges and learnings from his experience. All that and more on the XR for Business Podcast. Lance, welcome to the show.

Lance: Hey, great, thanks for having me on.

Alan: My absolute pleasure. It’s very exciting to meet somebody as passionate as you are about bringing augmented reality to the enterprise. But before we start, explain how you got here and what is it you do for customers?

Lance: Sure. So I’m coming from — let’s just round it down, let’s call it 15 years — in the enterprise space selling software and services and automation, things like that. Ended up at Vuzix in 2015 and had a great run with those guys. Late 2018 I left Vuzix and started Lance-AR, because I was just frustrated. Frustrated with the lack of companies deploying augmented reality at scale. Everybody talks about the dizzying ROIs that are out there to get, and all the wonderful things and advantages that this technology brings. Yet no one was deploying at scale and I had this unique position at Vuzix — because there are so few hardware providers — that we were able to see thousands of pilots and POCs, in all different regions and different use cases. And we just saw so many of those either fail, sputter, or just kind of evaporate. So I wanted to take all that knowledge and bring it to the enterprise space and see if we could turn some things around. That’s why Lance-AR came about. And really what we do now is we connect enterprise users, AR hardware manufacturers and AR software providers, the problem solvers. We connect them all in an agnostic way, and try to make sure that these folks are set up in the right way for success, that they have a strategy for achieving success and then for taking success and moving it into what I would call scale deployment. So success could be a five unit pilot, but I don’t consider it success until it’s 500 units or a 1,000 units rolling to the company. So that’s in essence, what we do.

Alan: That’s amazing. My first thought when you were talking about the challenges and pitfalls of getting caught in what they call “pilot purgatory” would be if you had to kind of focus on the five main things or six main things, what are those main challenges that make it so difficult to go from pilot to scale?

Lance: Everybody’s at fault, frankly. So I’ve done a lot of sales and marketing in my day. The marketers in our industry are at fault. Promising future worlds today that just aren’t quite possible. There’s fault in the hardware manufacturers.

Alan: We’ve got to call out Microsoft on making videos that people will go, “We want that!”

Lance: It was Microsoft, SAP did one in 2014.

Alan: Everybody’s been making these beautifully Hollywood produced videos on “Look at what you can do with AR!” And then they put the glasses on and are like, “Well, why is the view cut off?” They’re like, “Oh, yeah. Well, about that…”

Lance: Not really. Not really. Well, almost. Use your imagination.

Alan: “Why is it getting hot on my head?” You’re like, “Ah, well, you know…”

Lance: Yeah, yeah. And I look at it like it’s like back in the day. You’ve even got shysters selling tonics, “solve every problem” tonics out of the back of their car. And yet there are real solutions out there, that are solving problems and driving value.

Alan: And I think we’re starting to see that where companies that have been at this a long time, like Vuzix and the newer companies as well, like the providers that are creating the software layers. Hololens 2, it’s been hyped and hyped and hyped. And we’re really excited, because it really is driving value in enterprise. Maybe not at scale yet, which is– that’s what we’re here to talk about. But what are some of the sticking points?

Lance: Let’s break it down to this: enterprise. We’re talking about enterprise deployments here. This isn’t SAS. These clients are not buying SAS. A lot of people are selling the SAS. This isn’t set it and forget it. Sell me one pilot, sell me one license, a pair of glasses, and then I’ll take it from here and deploy a thousand units. There is a dichotomy of what’s being sold. Most people are talking to the C-suite and they’re selling digital transformation. Transformational AR, the new way of working. But they’re also getting budget and getting paid solving problem-specific ROI for operation. Those two are dichotomous. So they sell five units, five licenses. “Here’s my platform license. Here’s the hardware. We solved your problem. We delivered ROI for these five users.” And it’s like hands in the air, “Good luck, god bless.” And they’re expecting these organizations — these large enterprise organizations — to take those five units and proliferate it throughout their business and turn that into 5,000. And that’s really where Lance-AR comes in. And that’s where we saw a massive gap. It’s really in the services side. So one of the things we brought out — we actually brought it out at AWE this year and really leaned into it at the EWTS show this fall — was what we call our process engineering services, aftermarket sales, right? So what we found was the service providers and the harder providers were selling– they weren’t selling success. They were selling the start. Which is these pilots and all that. We come in after the fact, and we bring in the knowledge/expertise, the engineering knowledge/expertise for manufacturing, or logistics, or whatever it might be. That also has the AR experience. And we work with these clients to say, “OK, you got your first process onto this new platform. So what about your other 999 processes? How do we prioritize them? How do we take care of the back end that will make these a reality?” Some of these processes are easy to move into a head-worn AR space. Some of them require all kinds of data connectivity to siloed data in your organization, and they will require other projects to be done just before we can do this. So we try to look at all that, help them through this and start them on this longer term — not long term, but longer term — iterative transitional process. I hate the word disruption and frankly, most people in business hate the word disruption. No one wants their operation disrupted. They want to transform.

Alan: What did you call that, because I think this is– we need to emphasize this. “The iterative–“

Lance: It’s the iterative transformation or the iterative deployment of augmented reality/virtual reality within your business organization.

Alan: I think the keyword there being “iterative.” People think you’re going to just buy this SAS software, install it, and it works perfectly forever. They’re missing the part about where you have to make the content for it. And you’ll have to make the content for one job role, it’s going to be different than another one. Now, there’s going to be overlaps, but it’s knowing where those overlaps are where you can take pieces from the other one and bring them in. I think what you’re doing is very smart, because we’re also seeing the same thing where we’re focused kind of on the training side of things. But if you make one training module, it does not translate to every role in the company. Maybe there’s overlap, maybe can you re-use the graphics or the interactions, but every role within a company has its own distinct training algorithms, and same with when you’re going through digital transformation of things using AR. Pick-n-pack is not the same as driving a forklift.

Lance: Exactly right. And training is a good example. I’d like to get back to that in a minute. But before, just to finish this first thought out, another area that I think our software providers are really missing, is the fact that you can’t sell something that is just completely new into an enterprise organization effectively. That enterprise is running today. That factory is open. It has to run. It has to churn out tires, cars, parts, whatever it is. Disrupting that, stopping that, removing all of their — or a huge chunk of their — existing processes and putting this one in, it’s just not going to happen. That’s not the way business works, it’s too much of a risk. There’s too much of a fiduciary risk and operations risk and all that stuff. And I’d say one of our clients — LogistiVIEW, they’re in the logistic space — and originally they were going after new greenfield systems. The ROI was there their technology could save millions of dollars, yet it wasn’t getting traction. What they learned was we have to exist within this existing ecosystem of these warehouses, and we changed their tagline to “change everything without changing anything.” And what that means is, they developed their brand new AR AI computer vision software to work with antiquated AS400 green screen systems that are the reality of how these manufacturing and logistic plants are operate, and created that interface in that at filter — I guess is probably a better way to put it — and merger so that these companies don’t have to change their core backend systems to use this new technology. And now that they’re starting to use this new technology, it’s these organizations themselves that are raising their hands and saying, “Hey, wait a minute, could we use it over here? Could we add it over here, now that we’re connected? Wow. Look at all the great stuff we can do.” And logistics business has exploded recently due to this change. And I think they’re a fantastic example of what’s been going wrong in this industry, which was here’s our great new technology. It’s so awesome, Mr. Enterprise User, that you should change all your backend systems, and come over and do things our way. That’s just not the way of the world. And we’re in that transition right now.

Alan: I think you nailed it with “change everything without changing anything.” That is just a brilliant tagline. And if you think about it from an enterprise standpoint, that changing anything in a line, unless it’s going to create massive value in the 10, 20, 30 percent improvement range, it’s risky. I think augmented reality and virtual reality and these technologies now, they do drive that kind of warranted rollout. But then how do you do that in a way that doesn’t disrupt? And I think you nailed it with kind of synchronizing with legacy systems, even though very difficult to do. You’re taking cutting edge things that are run on cloud and edge with antiquated systems that are buried in servers on-prem, and trying to marry that together. It’s interesting. And I love your point about selling this stuff is not SAS. And so many startups that I see — pretty much everyone — it’s a SAS play that they’re working with, and it’s very difficult when the content doesn’t exist for the roles that you’re looking to work on.

Lance: Content is key. So let’s go back to your training example, because I think it’s a brilliant one. So most training, you were seeing the majority of that is in the VR space. Makes perfect sense. Great opportunity for it. I love training, because training departments have budgets — A. They — B — they are generally looking for new technology and new ways to train their workforce. And C, they look for mobile training, getting it out of the classroom, making it more realistic, situational training, and all that. As you know, there’s a significant content creation play there. But what what I also see is–

Alan: I know, right?

Lance: Well, think about that, yeah. You know, you know all too well.

Alan: There’s a reason we started our own accelerator to bring the whole community together. We see this– look, there’s a lot of content providers in the world making amazing things. But fast forward three years, there won’t be nearly enough content creators to satisfy the needs of any of these companies at scale.

Lance: Well, it’s the same problem, Alan. So think about it. So there’s two things that need to be done. So creating net new content in this new way is simple. There’s actually better ways to do it now. But companies have most of everything they have is not net new content. It’s old content that has to be changed, and moved, and morphed. And who owns the process? Who owns the updating of the process? Is it the training group? Is it the operations group? Is it– do we even know? It’s half the problem. So–

Alan: We’re working with a client now and we said, “OK, so we’re gonna train your employees in this role. And do you have a manual?” And they gave us the manual, but it was the instruction manual of the computer that they work on. It was like written in DOS 2.0.

Lance: Love it.

Alan: I was like, “OK, so this is nice. So where’s the manual you give to the staff?” and they’re like, “That’s it.” It’s like, oh my God, you can’t read this thing. It’s impossible.

Lance: Right. Sprinkle in a little tribal knowledge on top of that, that isn’t written down anywhere. All this kind of stuff.

Alan: Exactly.

Lance: But so think about this. So whatever content you do create in the VR space for training, alright? Very few people have thought about the investment that you make there. What percentage of that could the worker take with them on a pair of AR glasses? Oh, now wait a minute. So there’s training that you have in their classrooms. Let’s– I’m going to give you a simple number. So one third of it is, you have that training one time, you get it, you got it. Good. It’s in your head, you move forward with it. Another 30 percent, gosh, maybe you don’t use it everyday. You don’t use it every week. And it would be great if while I was on the job after training, where I could just click on something and see a quick video or get a quick little reminder. Refresher training, let’s call it little telementor on your shoulder. And then there’s 30 percent of training that you’re just never going to get right. And you really need — in the field — to be taken through step one, step two, step three, step four. But the content that you guys create on the VR side, that investment — and we’re talking to the C level and the B level here — the investment you make there can trickle down. And move into your AR and your worker on the floor experience, if you’re going to give them some type of mobile way to consume them, then let’s let those workers feed back into the system. If there’s a part they’re working on that there is no video for, there is no training for. Well, maybe they could film point of view themselves and walk people through the training of it. And have this system that starts to work within itself. And the whole thing is connected. It’s a much bigger investment. It’s much bigger than just the hardware you purchase with the SAS that you purchase. It’s a mindset of how we’re going to capture data, create content, always update that content and keep this thing moving forward. It’s just not as a static thing that everybody thinks it is.

Alan: Absolutely. It’s multifaceted, but I think there’s also the ability in the last, I would say 24 months, 360 content, for example, you had to stitch every scene together and it was thousands of dollars a minute. I can buy a camera now for 500 bucks. It shoots better than we were shooting three years ago and it stitches on my phone. And I can literally make a quick training thing on my phone and publish it to a VR headset in an hour. So you’ve got that kind of low-end side of things, where companies can start to create their own content. Then you’ve got higher-end things where maybe you want to have full hands on training of something. You need to bring in a machine or in location, and that sort of thing. But as this range of content starts to be made, there’s gonna start to be similarities. And we’re not seeing it yet, because not enough people are working on it. But there’s gonna be similarities, where if I do a fire safety warehouse training, turns out that will work for pretty much any warehouse, I can transfer it. And so being able to transfer the knowledge from one company to another is also something that nobody is looking at yet.

Lance: I agree. And so a lot of folks are selling to the actual end user, but why not sell to the provider? So if I’m a provider of, let’s say, conveyor technology for a warehouse, I should be providing and updating all that training material that can be consumed either through VR or AR. But that’s my responsibility, not the employer’s responsibility to keep up with your changes and your manuals and all that kind of stuff. And if we can create a little environment where individuals could tap into that knowledge base, that would be great.

Alan: Well, the problem with that is you need to make sure that everybody’s synchronized, because if my company bought Oculus Go headsets for training and then my supplier comes along, goes, “Hey, we just made this training in VR, but it only works on the HTC Vive.” you’re like “Oh, OK.” There’s no standardization and all VR is not made equally, as we know. Or AR, for that matter. And there’s going to be a huge range of quality types and compatibility issues and all this, so–

Lance: Alan, standardization is not on the table for the next three to five years. We will get there, because if this technology is going to mature and become ubiquitous — like most of us think it will — we will get to standardization. We will get to commonalities that make all this simple because the clients and the users will demand it. They will demand that simplicity. They will demand that interoperability. But this war isn’t done yet. And so what we tell clients is — actually I’m glad you brought this up, it’s a great segue — one of the next biggest hurdles is companies trying to decide on one physical platform that they’re going to go forward with. And that means a brand. Is it VR, is it AR, is it a brand? And even for the software, we’re going to choose this one software provider. That’s not going to get us there.

Alan: Obviously. I mean, come on.

Lance: It’s not going to get us there. Yeah, I know. Right.

Alan: 1990’s calling, they want their business model back.

Lance: [laughs] Exactly. So what we try to impart through Lance-AR is we talked about the iterative process improvements and process engineering that we do. We also have an iterative model that helps companies go from “Let’s vet this idea, breed innovation department” into “This comes out, let’s go get budget and funding and KPI agreements.” Everybody forgets to do that. Let’s make sure the C level and the IT and HR and operations and everybody is very clear on what they would agree is success or not. And then we agree on what we’ll do if we are successful before we start. And if you don’t do that, don’t start. Go spend your money on– I don’t know, take everybody out to a ballgame. You’re better off getting value out of that. But you do that and then iterate. And it’s a circular process. And while your company is taking the one good idea they decided on and moving that into operations, your IT department should be looking at the next round of physical hardware that’s coming in. So you’re not waiting for that. You just kind of keep these circles going and–

Alan: Wouldn’t it be great if there was a consultant or somebody you could just hire, that would just keep you abreast of all this and work with your IT teams to just keep you on top of this? Wouldn’t that be amazing?

Lance: That would be amazing. I don’t know, I’m scratching my head. I think I know some guy that might be able to help with that.

Alan: I’m going to Google it here. I think it’s Lance, lance-ar.com.

Lance: That’s a great place to start. That’s a great place to start. You know, but this stuff isn’t easy, Alan, and that’s what it is.

Alan: It’s not easy! You and I’ve been studying this shit for years and it’s complicated, because every day a new headset comes out and every day a new platform comes out.

Lance: Yep.

Alan: The way I liken this — and I’ve said it before in the podcast — is how do you disrupt an industry constantly and consistently disrupting itself?

Lance: Yeah, it’s– well, you have to plan for this technology to continue and consistently iterate. So what you deploy– and remember, in enterprise, they’d like to let me buy this piece of conveyor, run it for the next 20 years. Sorry, that’s not where this is going. And so companies need to change. They need to change their mantra and understand. That’s why actually one of the things we’re coming out with — and I guess I can show this — is we’re coming out with Lance-AR will be providing leasing terms, for leasing for hardware, leasing for software, leasing for applications. We also provide a deployment services, provisioning, warranty service, and things like that, because that’s how companies want to buy, especially when they want to protect themselves from missing the next great tech that’s coming next. But that’s a side note. We can do that on a subsequent– we’ll do that next year, when that’s actually in the market for us. And there’s other things we’re doing too, Alan. I don’t want to share everything right now, but we are going to provide the world with an agnostic hardware validation, applicability, and use case affirmation site. We want to have one area where everybody can come and start to understand what these technologies can do. I hate, hate, hate when people ask me, “Lance, what’s the best AR headset on the market?” It’s impossible.

Alan: I can tell you that. I know the answer to that.

Lance: Yeah? What’s that?

Alan: You ready? It’s the one that matches your needs and budget.

Lance: Amen.

Alan: Is that the right answer?

Lance: Do you know how much they hate that answer? Do you know how much they hate that answer?

Alan: They *hate* that answer! “Why can’t I just buy one headset and do it all?”

Lance: It’s like, what a copout. What a copout answer, right? So we’re gonna provide something that allows people to kind of self-segment themselves. “My name is Joe. I work in Europe. I’m doing manufacturing, I’m trying to do this, that, and the other thing,” and we’re gonna get you down to a smaller selection and also let you know what’s coming next. So we’re looking at that kind of stuff. And then we talked about content creation. That’s a big issue, people.

Alan: We spent an enormous amount of time– well, I spent an enormous amount of time on LinkedIn, building a community, becoming friends with all sorts of content providers all over the world, amazing people doing incredible things. And we’ve kept a database of all of them. And so I think we have a pretty good advantage in the fact that we have access to content providers all around the world at all different levels of quality in different fields. VR, AR, MR, volumetric capture, spatial audio, you name it. And I think this is really going to be– you mentioned right at the beginning. Content is one of those things where it’s constant, it’s never ending. And so how do you harness the power of the entire XR community to service the needs of these customers? As this becomes — like you said — everybody is going to want this. As soon as they realize that that training that used to take us two weeks, and we had to fly everybody in, now we can send them a headset and they’re trained before they even step foot on the floor. Hello? This is going to be a thing.

Lance: It’s amazing. And you also just struck on something there where the XR community is starting to build all this stuff for the users. Let’s define the word user. So there’s users. There’s the CEO of Fortune 500 Company X, that we’re considering a user because he or she is writing the check. Users are the people who wear these devices and actually do real work everyday, and don’t just push emails back and forth. Those folks. And this is another pet peeve of mine. And it’s more than a pet peeve. It’s a–

Alan: Those guys. Who needs buy-in from the people actually use them? Psh!

Lance: “Whatever. Here, use this.” This is– well, at least not in the US and Europe. That’s not how we operate. And that’s not how our workers operate. That actually is a little bit different in China and some of the Asian countries. And they’re actually getting pull-through. There’s a discussion there, and we don’t have time to get into it today. But my point is this for the user is and I want to talk about efficacy and stickiness of this technology. We all know see-what-I-see. Everybody’s heard about it. Telepresence, telementoring, tele remote support, whatever you want to call it. And we all talk about this being the number one use case for AR headsets today. It’s not sticky. That’s the problem. In most use cases, it is a once a day, once a week use case. That’s just not enough. And the problem is, when people then go ahead and try to turn it on that one day a week, connectivity. Gosh, exactly how did I enter my password? And what button do I press and how do I do it? So the UX is a big problem, user interface. I was talking with Audi, who were doing– they were using VR. And they want to use it in their dealerships. And here’s the deal. When someone walks into a dealership, they’re there to buy a car, not use VR. And if you want them to have this really cool VR experience and all that kind of stuff, you’ve got about two minutes, maybe three minutes of their attention span. You can’t spend five minutes training them how to enjoy that two minute experience. It’s gotta be intuitive. It has to be natural. And what is natural today? Well, that’s changing. And for us in the VR/AR headset space, let’s look at what else is going on. Voice is everywhere. Let’s use voice. Hand gesture control, hand using hand gestures. What is it. Google Pixel came out. So, yeah, we’re gonna enable some gestures and it’s super limited and all that stuff. But whatever, they see it, they see its coming. I was in my friend’s BMW the other day, and he was just swinging his hand around, changing the radio station, using gesture control.

Alan: Yeah, I actually got to try the the Ultrahaptics thing on the weekend and you basically goes in VR. And I reached out– I was playing tic-tac-toe with an avatar, and I reached out and it felt like I could feel it in midair or I could feel like I was touching something. But it was it was almost like a minor electric shock. Like, you know, when you lick a battery, that kind of feeling. It was really just– it was a weird sensation. I don’t know. It wasn’t comfortable for me, but they’re trying to make it so that when midair, you just reach out, you feel something and you turn it like in a car, you just kind of reach out. But it’s like, okay, well, that’s called a knob and it’s right there below my hand. What do I need it in 3D space for?

Lance: Alan, it’s the same thing as we’re talking up before. Like the “change everything without changing anything” concept of our new technology needs to be able to work with old data systems. Well, our new technology, the way the human being who wears it interfaces with it needs to jive with their current experiences. Swiping, we’re all using swipe on our phones and our iPads.

Alan: Only on Tinder.

Lance: [laughs] But if you can use that with a pair of smart glasses when you expect to use it, when I want to move a menu or something like that. Wow. Then it just becomes natural. We’re all talking to our Echos and our Amazon and all this kind of stuff, for good or bad. I want to talk to my device. I should be able to do it. We have to look back. Our UX needs to look back before it looks forward. I guess it’s really me.

Alan: But I agree with you 100 percent. And two things that came up this week were the original Hololens interactions, where we had the kind of clicky thing and point click, and it was amazing. We’ve done hundreds, maybe thousands of demos on the Hololens. And one thing that I always watched was that anybody over 30 had trouble with that, learning that little mechanism of pointing your finger up and then flipping it down. — What do they call it? I can’t remember, anyway. — But it was natural. They just reach out and like they would reach out in real life and touch things. And the new Hololens 2 interactions are all kind of around that real gesture base. They learned anybody– any of their actual customers are trying to poke at it in midair. They’re like, wait a second, this is not working. But the interactions with your hands are going to be very close to being naturally part of reaching out, reaching and grabbing a hologram. And it’s gonna be very exciting. And we’re almost there.

Lance: We’re gonna get there. We’re gonna get there, Alan. We are.

Alan: The Quest hand tracking is coming in January and the Hololens 2. Even though there was an article today saying that’s shipping. That article was misleading, it said we are taking your orders now.

Lance: I put it this way. There is so much incredibly valuable, useful stuff that can be done today with the technology we have today, physical, with the software that exists today, with the UI that exists today. Being able to use an RGB camera to give myself a thumbs up as a confirmation. I don’t care what language you speak. I don’t care where you’re from. That’s simple. It’s simple and it’s effective and it works. And the more we use the technology that is available today. The more the money is going to flow in, and support businesses that are– they’re on the brink. A lot of these software folks are on the brink, or they’re using investor dollars. And if we don’t help them and pay for what they’re doing today, they won’t innovate for tomorrow. And our innovation will actually take a hit. We won’t innovate as fast enough if we’re just trying to stay alive. And on the software side that’s very, very true. On the hardware side that’s very true. Hardware companies need to be very honest with what they’re doing. I thought RealWear did a great job of that. They unabashedly said we are designed to be worn with a hardhat for the field worker. If you want to use our technology anywhere else, good luck, god bless. Enjoy it. We’ll try to help you a little bit, but that’s what it was designed for. And that’s why those guys sold more headsets in North America and Europe than anyone else. They had focus.

Alan: They had focus, and it turns out they went the most simple route. And sometimes we’re overcomplicating this stuff. But I’m going to end on this quote that you just quoted, and I think it’s a great way to to wrap this up. “Let’s use the technology of today to pay for the innovation of tomorrow.”

Lance: You got it. AR for today. We call it the now term, right? Not for the distant future. There’s a lot of AR solutions that impact your current business cycles that can be iteratively expanded throughout your organization if you plan correctly. If you really take this industry for what it is right now and understand it, there’s a lot of success that can be had. And we at Lance-AR would love to be your partner in helping you. And I really thank you for your time, Alan.

Alan: It’s been my pleasure. Thank you so much, everybody. This has been the XR for Business Podcast with your host, Alan Smithson, and my guest, Lance Anderson of Lance-AR. You can visit them at lance-ar.com.

Alan: Hey, everyone, it’s Alan Smithson here with the XR for Business Podcast. Today, we’re speaking with Daniel Blair, founder and CEO of a Canadian VR company called Bit Space Development. We’ll be discussing how virtual reality is revolutionizing industrial training and why it’s vitally important to define your key performance indicators to release you and your customers from the Pilot POC Purgatory. All that and more on the XR for Business Podcast.

With that, I want to welcome my good friend Dan to the show. Welcome to the show, Dan.

Daniel: Hey, thanks for having me.

Alan: It’s my absolute pleasure. Let’s get into what you guys are doin; making serious purposes with VR and AR. What does that mean?

Daniel: Basically, what that means is we utilize immersive technologies to create games. But those games are used for training, education, and really serious purposes. We aren’t generally building applications that are going to be sold on Steam or sold on the Oculus store. But what we’re building are tools that integrate with clients infrastructure to help augment their workflow or create a safer workplace.

Alan: I know you guys have done a ton of things. One of them was a hand tool training simulator. Maybe walk us through what are these things, and how are people using them?

Daniel: For sure. Some of our most recent deployments include exactly what you’re talking about, the power tools simulator, which we created with a provincial organization here. That tool utilizes the room-scale six degrees of freedom tracking of any of the open VR-capable headsets, to put new entrants and kids on job sites and teach them about safe operation of power tools. And that can range from anything from a drill or a hammer drill or a circular saw. But we put some really interesting tools in there, like concrete saws — which would be extremely dangerous for a new entrant to use in real life.

Alan: I actually know all about that, cement saws. When I was a kid, my dad was grinding some bricks with a grinding wheel and the wheel shattered and cut both his legs wide open. And I remember as a kid, taking him to the hospital and them having to sew up right down to the bone. I mean, this was a real problem. I know this firsthand. This is a very, very unsafe tool if used incorrectly.

Daniel: Yeah. And the worst part of building these applications are the shock value photos that my clients will send me. I’ll wake up in the morning and they’ll say, “hey, this is a good example of why to learn about the safe operation of these tools.” And they’ll send me a photo of something similar to what happened to your dad, which is super unfortunate. And additionally to that, we’ve done a lot of work in the welding space, and on the more promotional side, our most recent deployment is called Level Up VR, which we developed with the USAF Workers of Tomorrow, an organization that promotes safe work sites and safe work practices for both employers and employees for youth. And that tool actually won an Impact Marketing Award for the use of the virtual reality tool in the campaign that was created to raise awareness. So we see both the marketing side and the education side.

Alan: That’s amazing. Safe working is something that we need to market to. Training and education and learning is really competing with Hollywood movies, triple-A games and social media. And you guys are finding a way to kind of take the best of those and bring them together. So what are you guys doing in terms of gamification, and what are what are you seeing resonate with people?

Daniel: So a lot of what we do gets integrated into classroom experiences, and the engagement rates and the actual enjoyment — because I would consider both enjoying something and being engaged in something slightly different — we found that in our measurement that it is definitely increasing the awareness and the engagement side, through the use of virtual reality. So one of our most recent excursions was into the north, for an application that we call Try the Trades, which was with our partner, Manitoba Construction Sector Council and Trade Up Manitoba, which is our provincial sector council for the construction industry and their awareness organization. So they’re technically the same company, but they have different teams. And what we did is we took a couple pelican cases full of Pico Goblin headsets and some virtual reality learning experiences into the classrooms in northern Manitoba communities — and to put it into perspective, just how far away these communities are for listeners in different parts of the world; to drive from Winnipeg to one of the closest major cities up north, which is called Thompson, is eight hours of straight driving on a basically straight road — so these communities are quite far apart. And we visited about 40 different communities and surveyed the kids as they were actually taking these experiences, because these are kids in grades five, six, seven, eight, all the way up to grade 12. And kids tend to not be super-engaged in classroom activities and the whole educational aspect of learning about the skilled trades. And when we expose them to these trades in virtual reality, we found that 98 percent of them were engaged in this, and enjoying the experience.

Alan: What was that, 98 percent?

Daniel: Yeah, that was 98 percent.

Alan: How are you testing that against baseline?

Daniel: The company that we’re working with, they do classroom activities, and so they’re already asking the kids, they’re already measuring the engagement; already actually looking into these metrics. How are these kids engaged in the workshops? And usually it’ll be more of a hands-on activity or a video or slideshow presentation, stuff like that. The introduction of virtual reality into this increased it from basically non-engagement all the way up to 98 percent.

Alan: That’s incredible. That alone, having learners engaged in learning, is one of the main reasons why VR is the tool that is going to revolutionize education and training.

Daniel: Yeah, well, especially when the metric that they’re using to actually find out if it’s performing as well as it should be is the engagement. And we can show definitively that the technology has increased its engagement. That shows that the actual use of the technology is more than beneficial — it’s solving multiple problems for them. It’s not just making it more engaging. It is exposing these kids to potential careers. It’s basically ticking off all the boxes that they look for in an engagement, but also increasing the actual enjoyment of the kids in that experience.

Alan: Incredible. So what other things have you doing? Because I know you did some stuff in enterprise training and stuff like that. What have you done in that space?

Daniel: Yes. On our enterprise side, a lot of our clients are really focused around site orientations and site-specific training. We do a lot of work with steel mills. There’s a local one here that’s quite large, that has facilities across North America. And we recently deployed a pilot into their melt shop to give new workers, contractors, etc., an idea of what to be aware of on that job site. And I personally had been in a steel mill before, but when they took me through the mill, I was quite blown away by how super dangerous everything actually is.

Alan: Steel is not that safe.

Daniel: Yeah, obviously. But it’s like, once you go in there, you’re like, “man. This is like a gigantic furnace that’s just melting metal all day long. And they they turned on with explosives.” So like everything about that space — like, everything — is a sharp metal object. Everything around it could probably give you tetanus. I find that, like, when I enter some of these sites, as I’ve been doing this for so many years now, I find that I’m maybe less shocked by this. But it’s kind of crazy that when you think about how I develop basically video games for a living, and yet here I am standing on top of this gigantic building, or in a crane, or in a steel mill taking 360 photos or 360 video or even just scanning the space to create a job site content. But, you know, I get put on these sites. I totally understand why the tool is going to be effective. So the steel mill application, as soon as I saw that thing getting turned on, is like, “all right, I understand why we need to put people in here, virtually.” There’s no way that you can really mentally prepare someone for the whole process. I mean, there’s literally buckets of molten steel being poured into the molds and stuff like that all over the place there. And that’s just one building. These facilities have up to six buildings on their compounds. Additionally, in the enterprise side, one of our longest clients is the Manitoba Heavy Construction Association, and with heavy construction, we’ve spent a lot of time developing out a course called Road Builder Safety Training Systems — RSTS — and that is a full certificate-level course delivered by Manitoba Heavy Construction that is completely delivered through virtual reality. There are 16 modules to that course with an in-app assessment. There are electives, there are requirement courses, but that entire thing is both deployed and delivered through virtual reality. So that is taken into communities, that’s run out of their facility. People working in the heavy construction industry, you get to see all kinds of job sites and learn about the content as opposed to just absorbing that content through a textbook. But they are placed on the job sites.

Alan: Incredible. How many people would you say have gone through that experience, and what kind of data are you collecting about each learner?

Daniel: So and that’s that’s actually a really good segue into one of the things I’ve really wanted to talk about, which is the key performance indicators. So when I talk about the road builder safety training systems course, that’s one of the ones that we developed early on in the years at Bit Space. And although it has been very effective and lots and lots of people have gone through it — thousands of people have been trained in it — we don’t actually collect enough data to know if, like, how that one is being successful. When I talk about 98 percent increased engagement in our Try of the Trades northern expeditions, that’s a good example of where we’ve started to collect proper data. Bit Space was founded five years ago, and our first projects were developed using Google Cardboard or the DKII. We didn’t have the luxury of the six degrees of freedom. We didn’t even have the luxury of delivery methods to send — with a new Oculus ISV program — the ability to send APKs to a client’s device. We weren’t able to do that. We had to manually install all of this onto devices. And one of the biggest challenges is when clients wanted to deploy these solutions to their job sites. They often have network connectivity issues. And you and I have been through all kinds of network connectivity issues over the last couple attempts at recording.

Alan: It’s never a problem of network connectivity, it’s just a problem of -no- connectivity. Just getting us on this podcast was a challenge. We’re talking about audio.

Daniel: Yeah, and I’m in the capital city of my province. There’s around a million people living around here. So we have good enough Internet. But when you get up north, there is basically no Internet. Depending on the town that you’re in. There are some towns where they’ve got fair enough Internet, but because we don’t have that network connectivity, we aren’t able to collect real-time analytics. And because our clients aren’t regularly connecting the headsets to a network connection, it’s also difficult for us to get a data dump. So we rely off of the metrics that are supplied to us by the client, how many people took it? How many people passed? Etc. But I don’t feel that what we actually planned out in that one was… I mean, although the application solved the problem and it has been quite successful, we don’t have, like, granular metrics to see how can it grow? How can it improve? So one of the next steps on that project would be to figure out, how do we actually measure that? So when we deploy these applications, we look for all kinds of stuff. We look for, did the user look in the right direction? Did they activate all the hotspots? How fast did they get through the experience? Because if you get through too fast, there’s a chance that they weren’t actually reading the content. Did they activate the hotspot? Do they open up a hotspot and then close it right away to activate it? Or do they actually keep it open a long enough to read the content that’s in there? How many failed attempts were there in the embedded quizzes? All of those things are good metrics for checking whether the user is actually progressing and hopefully retaining and absorbing the knowledge within the course content, but that only addresses the learning experiences.

When we are doing deployment and we’re looking at actually doing a marketing engagement, I kind of break it out to a few different segments. So for marketing engagements, we look at metrics like, how can we possibly increase your sales? Are more people going to your page or more people go into your organization? And sometimes organizations that we’re working with aren’t necessarily selling something, but they’re trying to market themselves to promote the organization as a whole. So for Safe Workers of Tomorrow, for example, when we were promoting safe work through Level Up, really the biggest metric is, how many people are checking out this game? How many people are coming to the event? How many people are signing up for the contest, etc? That’s an easy metric for a short-term campaign, but you’ve got to understand that not everyone wants to play in VR, and not everybody is going to play it all the way through, and not everyone’s gonna see every level. And so it is, at its bare minimum, we are looking at, can we get more people to come over to the booth?

On the tool side, that’s where things are starting to get really interesting. With the commercial and enterprise adoption of virtual reality increasing — and I’m sure no one could possibly stand against that statement — over the last five years, the actual pickup of the technology by commercial enterprise organizations, I’m finding, is just dwarfing the year before each year. And what I’m finding is that there’s more and more interest in tools and workflow augmentation. You want to create something and make it the flattest possible. So how do you do that? You want to create a piece of software that visualizes this and it has to be as perfect as possible. How do we run the algorithms on the actual infrastructure that’s being put up and see that through a Hololens or see that in VR? And I’m finding that that’s where the real adoption is at the moment. It isn’t difficult to sell a company on the idea of using virtual reality training at this point, and we have the metrics to be able to track that. But when when a client comes to us and they start telling us of their problems… I kind of break it into a few different categories. There’s three that I look at and there’s a secret fourth one. The main category is learning experiences. So they want to train someone for something. One of the categories is tools and augmentation. They want to build something that’s going to make their workflow easier; they want to streamline something. They want to promote themselves; they want to create a marketing experience. And then the fourth secret category is just, they want to make a game. And I find that that doesn’t happen much with us, because we are in the B2B space. I don’t get a lot of people that come to me and say, “I want to build a cool game,” although I wouldn’t turn someone away. It doesn’t generally fit within our target market at the moment.

The metrics for each of those are going to be very specific. I’m not going to track how many people are coming out to an event, or how well is this thing promoting you if it’s an educational experience, and I’m not going to necessarily track how many people are learning something. It’s an internal tool because there’s probably nothing to actually learn. But the most difficult category to actually track the performance on is the tools, because we need to know what is the problem that that company is actually trying to solve and that seems to be the biggest challenge right now, is that companies don’t actually necessarily understand the problem they’re trying to solve. And then once we’ve identified that problem, there’s often resistance from the people that currently work there into implementing new technologies.

Alan: Maybe expand on that. Because I’ve heard this before on other podcasts, interviews where the problem isn’t so much that you’re getting corporate buy in. Maybe the CEO says, “hey, we’re gonna do this.” The training manager is like, “yeah, we want this.” And then when it gets down to boots on the ground, there’s a bit of trepidation and more pushback.

Daniel: Yeah. So that could almost be considered one of your metrics of success. Your actual internal adoption. I find that it isn’t necessarily difficult to sell at the corporate level. You can get the buy in from the C level employees. You can get buy in from the business owner. That’s not usually challenging because they’re usually trying to innovate for their company. They want the latest and greatest in the company. What I do find is moderately challenging is getting people that do the job. So the types of companies that we work with, generally there’s the C level, there is the training manager, etc. etc. And we can get through that process and build the advisory committee and actually figure out what problem is that we’re going to solve. And by the time we get to that point, we look at, all right, well, how do we implement this? Usually it is at the actual worker level that there is the resistance. Either people perceive it as new work or unnecessary work and they don’t necessarily understand the value of spatial computing — which, I don’t blame them. I think that if my job was to do a certain task at a company and I did it for 45 years and it’s just always been the way it is, it might be daunting to implement new technology. Now, I’m also the founder of a virtual reality company, so I’m a little bit biased towards the the whole aspect of spatial computing. And clearly I am also biased towards adopting new technologies. But I find that definitely the friction comes from the actual workers. And you can usually get past it if you start to actually speak their language and you show them how it actually enhances the experience. A good example for that: we have a piece of software that it’s actually internal piece of software. We didn’t build it for a client. It was started out as a prototype. And it now is something that we’re polishing up and that is called Flagger Safety. And a flagger is the gatekeeper to a construction site. They’re the people that stand out in front of the construction on the road and they usually have a sign or some sort of high-visibility vest or jumpsuit, and they’ll stop and release traffic when the trucks need to drive out onto the road. And one of the first games that we ever built was for flagger training. But it wasn’t a VR game. It was just a mobile game. And I hated it. It was one of the first things that we were ever actually contracted to build. And I’m just critical of my old work. So I went back to it and I decided I hated it and thought it would be cooler in VR. And I mean, I’m not wrong. It is much cooler in VR. But now we have people talking about actually adopting that technology. So how do we roll that out to those companies? And what I find right now — and this is a very relevant example — is the trainers, the people are actually running those classes, they’re used to doing the classroom portion and then going out into the parking lot and doing that hands-on piece. But it’s not a real hands-on piece. It’s just them in a car being stopped and released in a parking lot by the class that they just taught. And so what this technology allows us to do is it allows us to emulate an actual road. So we have emergency vehicles and AI behind the cars that allows different generation of the road and different situations to arise that couldn’t happen in a parking lot or on a job site. And the trainer in this particular pilot spent a lot of time talking about, “oh, well, now we have to describe this and that.” It wasn’t until I started describing it more as, “no, I don’t want to add anymore instruction to the experience. I want it to be as true to what you just taught.” So understanding that from the adoption side, that we don’t have to increase the workload of the people actually delivering the training or actually implementing the technology, if we show how it just purely augments the work that they’re already doing. And on the training side, they don’t have to teach more. They just have to make sure that the experience that they’re implementing is true to what they’re teaching, in regards to the the legislation and the process and all that kind of stuff. So once we actually like crack through that surface of resistance, it generally gets past it. But then you have to prove yourself and you can only prove yourself if you understand the metrics that you are trying to collect.

So for this sort of situation, we would be tracking retention and we would be tracking. Are you actually absorbing that content and how good are you doing it at the flagger training? We track your hand signals, etc., so we’ll be looking at once you’ve been doing it a few times in practice mode, how quickly are you picking up these proper signals and how effective are you at stopping and releasing traffic? And that would be a pretty good metric to get back to that student. And that also shows that the software is working. You’re retaining that that information. Sometimes it’s difficult to get to the point of data collection because of the whole resistance side of things.

Alan: So here’s a question that’s come up quite a bit, including at MetaVRse here. And one of the questions that that we struggle with and everybody seems to be struggling with, is how do you, when you meet a client, and they say we want to train for X position or role; how do you then elicit the right content? Because some of them just have a training manual. They’re like, “here, here’s our training manual: go.” And some of them have all of their information in different parts. How do you capture all the information that goes into this, and how long does that take?

Daniel: I’ve had it both sides of the spectrum on that. I’ve had clients where they just give us the orientation manuals and say, “turn this into VR.” And I’ve had clients who are super engaged, have all kinds of content and are totally willing to supply everything you need and help you interpret it, because I am not an expert on pretty much any of this stuff. Basically, any of the stuff that I am creating the experiences for, my expertise lies in spatial computing and interactive digital media. I’m not a a real Lyft driver. I am not a flagger. I’m not a confined space technician, whatever. I find that the most successful projects that we’ve been on — both in regards to figuring out what are those metrics and also to actually gathering the content and understanding it — have what we like to put together; an industry committee. That committee is usually built up of… if it’s an industry association that’s putting on the project through a research initiative or something, usually it’s built up of of relevant parties. So companies within the industry that would be working with us on this. If it’s of an application for a single company, usually that committee is built up of internal entities; so, trainers, etc. Human resources know the people that would be responsible for the content. And on the most successful projects, usually what we do — and we’ve got some processes internally in regards to what spreadsheets we use and stuff to gather that content — we have an entire phase built into the project that is just for resource-gathering, requirement-gathering, processing the content that’s sent to us.

Now, we have had successful projects where they just gave us the orientation. But that only is going to be successful if the scope of that project is to create an orientation. I don’t think that it is reasonable for a client to expect that they’re going to send over just a manual for a piece of machinery and that they’ll just suddenly have a virtual reality simulator. And if people are finding that clients are coming along that are like that, those are probably not going to be good success stories in the end.

Alan: *Run away!*

Daniel: Yeah, I don’t necessarily recommend that. I mean, again, everyone will have their own experiences and other people have their own preferences. Now, the most success that we’ve had on projects are projects where the clients have allowed us to come and experience the training that they offer. So I have been trained on flagging, working in confined spaces, driving aerial lifts. In fact, just last Friday, a couple of my team members were up 40 feet in the air on aerial lifts for a project that we have in the works at the moment. It is important that the project management level, the business development level, the project lead level at -least- that you are able to actually experience the training that they’re currently offering. So that way you actually understand, at least at a basic level, what you’re creating the experience about. But also so you see how they’re implementing that at the moment. Again, this is more for like training and the educational side in regards to user requirements gathering for tools. That’s a longer process, a little bit more integrated with the knowledge experts in the organization, and it’s more of an ongoing process. But regarding the training side of things, we we like to build out that committee simply because we are able to actually iterate on ideas with them. We’re able to gather the content from them, layout a bit of a plan, and then make adjustments based off of what they are recommending. And it took us a few times to fail at a couple of projects to understand what was really giving us success. But the number one key we found is by actually engaging the knowledge experts in the organization — which also in turn sometimes has a positive effect on the actual engagement with the resistance from the people on the ground actually doing the job — if you’re engaging those people from the beginning, so they’re able to have a voice in what you’re building? That seems to really help with adoption within the organization.

Alan: So I have a bunch of questions. My brain is just like -poof-. When you make these experiences, let’s say, for a company, do they ever want to offset the costs through licensing this to other companies? How does that work? Who owns the content? And do they want to make that available?

Daniel: Yeah. So that’s a complicated question/answer. A lot of our clients come to us because we’ve developed frameworks which allow them to have that cost-saving. So our number one products, we have a 360 photo/video tool called VR Safety that allows us to rapidly build and deploy the 360-degree-based applications. And that allows us to really keep the costs down. They’re really just paying for the photography content insertion, none of the actual development. And in that kind of situation, I always allow them to own their content because we own the framework. On the room-scale side, that’s where it gets a little bit more complicated because we do have frameworks — we have a framework called CSS — and CSS handles a lot of the stuff like LMS integration, and we have our own physics, our own tooling to actually like use the tools. I mean, there are situations where a client may want to create content, but often we are doing the R&D upfront for the tools development. So most of the room-scale experiences that we create are built off of our own technology and just customized for our clients. So we do have the ability to resell; to reskin and re-use. Which generally is not a problem for our clients. If a client is bringing us on to build a simulator for something ultra-specific — like, their technology — in that situation, they would likely own it. Let’s say they built a tractor and they want us to create a simulator for that tractor. We’re not going to relicense their tractor as a simulator. That would be definitely negotiated at the sales level.

Alan: Tractor Crusher VR!

Daniel: We spend a lot of time building out asset packs that are modular and easy to deploy. So like we have our own warehouse, our own farm, for example, because we have a lot of agriculture, a lot of manufacturing, a lot of construction clients. So we have parks like 3D Worlds that our clients can use for their experiences that are pre-made, which definitely offsets the cost. But because we have those scenes, we do do a lot of fun playing around. So we have been playing with the whole idea of like, can I shoot zombies in this barn? because sometimes–

Alan: Tractor crusher!

Daniel: Yeah, exactly. I got into this because I enjoy the technology and I like making video games. So often, we look at the content and we see if there’s something fun that can be done with that. And it usually is an internal game jam-style thing. But we have released a few fun things.

Alan: but, the question is, Dan; do you guys make a bonus level in the training that’s hidden, if you hit a certain point level, it unlocks a zombie shooter from wherever you are?

Daniel: That’s a good idea. We haven’t done that yet, but we’ve we’ve definitely talked about it.

Alan: If you if you happen to hit this one button combination of button, zombies come at you.

Daniel: Yeah, well, it’s like a very specific situation. You’re in the barn and you grab this piece and you put it in the bucket over there and then, yeah,.

Alan: And all of a sudden, your hands turn into guns and there are zombies everywhere.

Daniel: Exactly. Yeah. You open the tool box, and there was a gun and in there; now you have to defend yourself. Yeah. We haven’t done that yet. I am actually a big proponent to actually being able to hurt yourself in VR.

Alan: I agree.

Daniel: With our power tools simulators one of–

Alan: Have you tried the haptic gloves yet?

Daniel: I’ve tried a few different haptic gloves. I’m not a huge fan of most of them, but–

Alan: I’ve tried the HaptX gloves and they were–

Daniel: Those are the ones that I’ve tried.

Alan: They were great except for the form factor.

Daniel: Yeah. That’s where they’ve started to become good. Now I don’t think any of them have the gloves emulate pain, which is probably a good thing.

Alan: Shock more than pain.

Daniel: But like, one of the things that my clients often talk to me about is that they like to have the idea of shock value in the experience. People learn from that. They see this pipe fall off the roof, and the guy wasn’t wearing his hard hat. Look at him! And it’s a little gruesome, but it’s super common in the construction manufacturing industries. People learn from other people’s injuries. And the whole idea of allowing you to, say, put your hand under the circular saw. And I like the idea of you try to cut off your hand in VR, and sure, we could disable that controller. Now, you only have one hand. Because that would be a situation that you could do in real life. I like the idea of being able to do all the things in a real experience that I can in the VR experience. So if there’s a thing on the table, I better be able to pick it up. I should be able to throw it across the room. I should be able to hurt myself with it. Because sure, if you put a young crowd in an experience, they probably gonna be distracted by that and then probably take it kind of funny. But like in an actual training environment, what better way to teach someone to wear their hardhat than by having a pipe fall off the roof on them?

Alan: Well, Daniel, this has been really enlightening. I could just talk about this stuff forever. Where can people find more information about Bit Space?

Daniel: So the best place to find us is on our website, bitspacedevelopment.com. Or BSDEV.ca for short. You can also find us on Twitter at Bit Space Develop.

Alan: Amazing. Well, I thank you so much. I ask one last question, and I would love your answer on this. What problem in the world do you want to see solved using XR Technologies?

Daniel: So my answer to that — and you’re actually aware of my answer — my biggest problem that I want to see solved in the world is the democratization of the content that is being developed and delivered to everyone. So I want for children in remote communities, rural communities — whether that’s northern Canada or anywhere — to be able to access high-quality educational experiences using the technology that we have available to us. I’m working towards that already, through deploying headsets with my partner organizations into northern communities and rural communities. But one of the infrastructure problems is the Internet. But that’s going to get better. And I want to see that, through XR technologies, that the quality and quantity of educational experiences and content to be greatly increased to these communities.

Alan: That is, as you know, also our mission to democratize education globally by 2040 using XR and spatial computing. And that’s one of the reasons why I asked you about the licensing, because building these scenarios, these training systems are for now very expensive and they will get lower in cost and then more people will be able to make them. But for now, when people are investing hundreds of thousands of dollars to build a simulator or training exercise in virtual and augmented reality, being able to relicense it and kind of scale that to other components is really kind of the backbone of the MetaVRse platform that we’re building. So, you know, that’s one of the questions I wanted to ask. And you answered it perfectly.

Daniel: I mean, that’s why we’re so aligned and why we’re good friends.

Alan: Coming up next on the XR for Business Podcast, we have Sam Schoon over from Goldenvoice and Coachella, my favorite music festival in the world. We’re going to be talking about augmented reality spaceships, augmented reality portals, bringing video to life in a AR and El Pollo Loco. All that and more coming up next on the XR for Business Podcast.

Sam, welcome to the show.

Sam: Hi. Thanks for having me.

Alan: It’s my absolute pleasure, man. As you know — and as people on the show who know because I’ve mentioned it before — Coachella is one of my absolute favorite music festivals. And having been a deejay for 20 years myself, I’ve been to a few. Coachella is just this magical place. So I’m really excited to unlock two of my favorite things — music festivals and XR — with you on the show. So, thank you so much.

Sam: Yeah, absolutely. Me as well. I think a lot of people out there would agree with you.

Alan: Yeah, man. So tell me, how did you end up working with Coachella and what have you done before and how did you get there? Let’s just get into it.

Sam: Previous to this job, I was doing a whole assortment of different things in the music industry, and I guess the technology industry as well. I was a freelance website developer, and had also been curating music and had developed a playlist curation application. And then alongside that, I was promoting with various promoters in San Diego and Los Angeles and touring shows. And that eventually — that and a music blog and I was doing at the time — introduced me to the guy who started Splash House, which is a smaller music festival in Palm Springs. And through him, I met the Goldenvoice team and I got involved at Goldenvoice Digital, and in a roundabout way, ended up focusing entirely on innovation just for Coachella.

Alan: What a dream job for somebody like… “here, your job is to focus on innovation, make really cool things that nobody’s done in the world, for the most impressive festivals in the world.”

Sam: Yeah, sure. I mean, it’s a lot of fun. It’s fun to be able to focus on new things every day. And we have like just such an incredible team at Goldenvoice, the people who have been doing Coachella for the past 20 years are still involved and still loving it. And they’re really the reason why this job even exists, because they appreciate innovation and they understand its place and our future. And and they understand that innovating and experimenting and sometimes failing, but always trying is a part of what makes things great and stand the test of time. Coachella is in a unique situation, where it’s a successful music festival and it’s a successful business, so we have the ability to spend money on experiences like that, while not every festival out there is so lucky.

Alan: Yeah. And you guys — well, “you guys,” I think it was before you even got there — but Coachella is no stranger to virtual and augmented reality. I remember in, oh man, it must be 2015/16, Coachella livestreamed 360 content to VR headsets and I believe it was pushing to the — it was! — it was the Samsung GearyVR at the time. I remember watching one of one of the shows from there and thinking, “oh man, I’m literally like getting crazy FOMO.”

Sam: Yeah, you’re right. It was kind of our first foray actually into, like, I guess what we would call the VR industry. I think as a lot of us have learned, those 360 music streaming experiences aren’t super compelling. And I just think the live music experience is so incredible that they haven’t come close to replicating that quite yet. But nonetheless, there was a lot of great learnings. I think it was really fun and also important to us from a branding perspective to be amongst the first live events even doing something like that. And it was also a fun addition to the YouTube livestream, which is a really important experience for us and the fans.

Alan: I think there is a value to this. Still, the first experience I ever saw in VR was the Beck concert by Chris Milk. And I think people did the 360 video and then they kind of got away from it, but I think it still has value in the fact that being able to be in places where you can’t go — you can’t stand next to the artist onstage at Coachella, you can’t be on stage, you can’t fly over the crowd — there’s certain things like that where I think there’s still gonna be a value in capturing that content. And I think the next thing would be how do we capture it volumetrically? But it’s crazy. But another thing that in 2016, 2017, you guys did an AR [experience], The Box. For anyone who doesn’t know, when you get the tickets for a Coachella, it comes in this beautiful box with your wristbands, your tickets. It’s like a treasure chest of awesome. And one of the years, the box came with a full AR app that brought it all the life. How did that come along?

Sam: I think usually when the Welcome Box lands, it’s like a really exciting time for the fans. And so we always like to think of experiences that can allude to programs and initiatives that we’re working on for that year that we can, like, announce and promote to people during that time. And I think just the idea of… that year, we recreated like a lot of historic Coachella art pieces and a new fun, interesting way. And then when you scanned the Coachella box, it was like this little miniature version of Coachella with some historical art pieces and some art pieces from that year. Everything was all lit up and glowing and sparkling and zoom your phone really far, I think it was the first time that those 2D triggers really were being seen by the public. It was just a good opportunity for us to do something that excited people, and hopefully generated some user content.

Alan: [There was] all sorts of stuff around, it was pretty awesome. So last year in 20… I guess this year, 2019, you guys stepped it up in a big way with augmented reality. You want to talk about the… I just got to talk about the Spaceship, man. It was crazy.

Sam: Yeah. It was really fun. I think a little bit of context and background; We at some point in the future — I don’t think anybody really knows when — but we’re gonna work very closely with artists to help them develop XR content for their performances. A very important part of an artist’s performance that I think a lot of people don’t think about is the stage from which they’re performing on. And that stage introduces a lot of confines and restrictions as to what the artists can do, and how the fan is going to view the show. We’re not ready. I don’t think artists are ready to incorporate that content into their performances. I think it’s a little bit cost-prohibitive. But what we could do is start to scope out what it looks like to build XR experiences around a music festival stage. That was kind of the point of the activation that we did this year — I would say this last year too, but it’s still 2019 — last year we worked with a vendor called Portals XR, and we equipped the music festival stage with AR for the first time. We chose the Sahara tent, which is a stage that holds some of the most visually-impactful production at the entire festival. It’s where we look to book a lot of EDM and hip hop acts, and I think there is kind of a younger demo there. And we figured that perhaps–

Alan: That stage is amazing, I got to see David Guetta on that stage. He was awesome.

Sam: A lot of dance music and hip hop have played that festival stage since that music really got re-popularized in the early teens. So what we did was, they ingested a bunch of stage renderings from our stage design vendor and created a virtual replica of that stage. And we used the screens as markers to activate the content. And then we designed a bunch of different space-themed 3D elements and position them inside the tent. So some of those elements were positioned universally for all users — which means that everyone saw them in the same location based on where you were scanning the screen from — and then some AR positioned locally. And there were elements that were kind of duplicated above the heads of each user. The content we designed was three different phases. The first was space objects; there was like a sun that was kind of centrally located in the middle of the tent, with various planets orbiting around it. And then the next phase was more focused around manmade objects. And there is a space station and asteroids and of course, like this gigantic, almost life-size space shuttle that came out of the middle of the tent, it would just fly back and forth throughout it.

We also did a 3D rendering and animation of this astronaut art installation that we had on site this year that was called Overview Effect. And the last phase was another animation of an art installation called HIPO — that stands for Hazardous Inter-Planetary Object — it was this artist group that’s been at Coachella three times, and it’s essentially a bunch of people dressed up as hippos, and they attempt to build the various structures on-site. And this year was like a really discombobulated and disjointed spacecraft. We animated it flying around the tent with hippos hanging off it and crashing into things. We wanted to have three phases because we wanted there to be something different for people each time they came back. And these experiences only happened in between artists’ sets. So it wasn’t happening while artists were playing, because we don’t want to interfere with artists’ shows and we also really don’t want to try and enable or inspire people to be using their phones during artists’ performances. I don’t think they want it. Truthfully, I’m not really not convinced that people want to experience things through their phones.

Alan: They might want to capture a segment and throw it on Instagram. And that’s about it.

Sam: Exactly. Exactly. So we’re trying to stay away from that, for at least these first few years until we gather some more learnings.

Alan: Do you think it will change when it goes to head-worn? Because if I’m wearing a pair of glasses and can still dance and see my friends and party, but the stage is in three dimensions all around me, that’s different than holding up a six-inch phone or whatever it is, and trying to look through a screen.

Sam: 100 percent agree.

Alan: And the great thing about what you guys did there is there’s lots of time in between acts. You’ve got maybe half an hour or 40 minutes in between Jacked on each stage. So that gives you this beautiful window of time to experiment.

Sam: Totally. That was exactly the idea.

Alan: How did you get people to do it? Did you put things up on the screen?

Sam: We have a lot of different marketing channels. We were talking about it on socials, on-site. We were sending mobile messages. We have very, very high penetration of people who are using the Coachella application on-site, and we can send messages to them based on where they are. So we sent a lot of messages to people as they walking into the Sahara tent with instructions on how to use the experience. And I think that’s where we’ve got a lot of people.

Alan: It’s super, super cool. I really regret not getting to Coachella this year.

Sam: We should have had you come and DJ, Alan.

Alan: I actually DJ’ed for Heiniken House a few years ago. We brought the Emulator there and we built — because, along the lines of technology, Heineken being one of the sponsors that year (I think every year pretty much) — they brought the emulator in, and instead of letting the DJs play on it, which is cool, they let the audience play on it and try and make their own mixes. We turned it into a thing called the Remix-perience. It allowed anybody to walk up, and it was all these buttons with 32 buttons on it, and didn’t matter what button or combination you pressed. One row was vocals. One was synths. One was bass. One was drums. And you could just make your own thing. So basically, it was a big MIDI controller for Ableton in the backend.

Sam: That’s very cool.

Alan: Super cool. We had a lot of fun too. To mix of Coachella was awesome.

Sam: Yeah, very much so.

Alan: We were staying in the Heineken… not the Heineken House on-site, but they actually rent a giant house, and we’re staying there and we went to a party next door and it was Skrillex, his place that he rented.

Sam: Yes, I think I was actually at that party, funny enough.

Alan: There was all kind of industry people.

Sam: Yeah. Yeah.

Alan: So much fun. So what is something that you kind of have seen in the last six months since Coachella that you’re like, “wow, we’ve got to try that.” What’s something that’s wowed you? Because I mean, you’re creating “wow.” What wows you?

Yeah, sure. I mean, this industry and this field is so exciting, because there’s so much happening at all times. I think, off the top of my head, a few things that are exciting are when I think of a lot of the progress that has been made around the cloud, and the ability to create point clouds and renderings of 3D objects to build AR experiences on top of, that are, like, three-dimensional. That technology is now a lot easier. We’ve seen Snapchat introduce the capability with land markers and I think there’s a lot of players in the space that are doing some really exciting things, enabling people to capture the point clouds with just their phone cameras and making those 3-D maps small enough for a file size that we can deploy it on-site at an event. We’re always worried about connectivity. If you’ve been to Coachella you know it’s not always easy to get a signal. So those point clouds that are small enough to be able to deliver to people on-site is important stuff. I think a lot of the engines that are enabling people to overlay AR content onto videos and like live videos, I think all that is really, really interesting.

Alan: You’ve got to meet my friend Luke from Geni.

Sam: Yeah, I know Luke.

Alan: You know Luke? Awesome.

Sam: Yeah, yeah.

Alan: Luke’s a good friend. So, yeah. That’s exactly what they do, is overly AR on top of videos. Moving videos.

Sam: Yeah, I know.

Alan: It’s not an easy problem to solve, actually.

Sam: No, not at all. I think that creates some interesting opportunities for artists to capture content — live content –, with AR elements on top of that, whether that relates to a show or something in one of their studios or whatever it may be.

Alan: Because everybody watches music videos on YouTube these days. So even having a little symbol at the bottom, saying “point your phone at this symbol,” and maybe it’s just a bar code or something. But being able to use your phone — because let’s be honest, everybody sits there with their phone watching TV, like it’s just a thing — if you’ve already got your phone in your hand, why not point it at the TV and see three-dimensional things coming out of the TV screen at home? At a concert that’s different, you want to be fully there and present with your friends. But sitting at home watching a YouTube video, it would be pretty awesome to have Eminem step out and be in your living room.

Sam: For sure. I totally agree. I think the last thing I’ll add to that list is just the decreased cost of producing experiences like this, I think, will enable us to deploy more, and offer them to some of our brand partners as well.

Alan: And I don’t know if it’s been done or it’s been in the works, but I want to see a volumetric capture stage, or just a volumetric capture rig setup for a brand, where people can basically get a 30-second selfie of them volumetrically, and then push that out and send an AR selfie from Coachella with all their friends.

Sam: I think that would be really awesome. As soon as you find a way to make that somewhat affordable, you let me know.

Alan: We’ll talk offline. I have a few solutions to that.

Sam: OK, great.

Alan: I mean, let’s be honest: it’s pretty badass to be able to do a volumetric selfie.

Sam: Yeah, for sure it is. I think it’s also the ability to deploy or distribute that selfie in a way that keeps it volumetric and as an AR asset is also important.

Alan: Yeah, we just invested in a platform that will allow you to do that on Web. Completely on Web. That’ll be launched next year. But yeah, we’ll talk. Super fun. What else have you seen that you’re just like “man, we got to have that?” I know we can’t talk about what’s coming up next this year or next year, but let’s dig in to see what excites you. What have you seen? Have you tried Magic Leap?

Sam: I have tried the Magic Leap, yeah. And Nreal.

Alan: The Nreal ones are great.

Sam: A few of the others. Yeah, they are. I would love to do some sort of activation on-site, almost like a silent disco with–

Alan: Silent disco? What?

Sam: Yeah. It would be fun. The only issue is that there is a lot of operational difficulties in terms of distributing those glasses, the cost of those glasses. Getting someone to pay for it and such. But I think something like that will be very possible. And sometime in the next few years. That’ll be fun. I think also it’s interesting. That is really exciting me is the innovation happening around UX and UI for AR experiences, and what the UX/UI overlay on top of a camera for people who are experiencing an AR world of sorts will look like.

Alan: Have you seen the new Snapchat glasses?

Sam: I have not.

Alan: So version 3… and Snapchat, listen; I think Snapchat is gonna be the sleeper. You’ve got Magic Leap, you’ve got Nreal, you’ve got HoloLens, you’ve got all these companies. But Snapchat, their new glasses, just do what they did before, they take a video, but in post-production. So you stream the video to your phone and then you can add digital content on it after the fact and then post it as if it was in the real world while you were making the video. That’s gonna be super cool.

Sam: That is gonna be super cool. I agree with you that there’s the sleeper. I feel like they’ve kind of just pivoted a little bit and are working actively towards becoming this AR platform of the future, and kind of really focusing on that. Right?

Alan: Well, if you think about it, my guess is — and I could be wrong on this, but I don’t think so — Snapchat is the biggest user of augmented reality in the world. Hands down. They do about a trillion stops a year and a huge number of those, proportionately, I think it’s something like 90 percent of Snapchat users have used the AR function in the last week. It’s nuts. And they don’t use the word “AR” at all. They just use the lens, so people that are using ARE are not even thinking about it as AR, which is fine. That’s great.

Sam: Yeah, I think that’s really important, when it comes to how as business owners, how we position these types of experiences. I think there’s a lot of people who tend to use the industry jargon, which is kind of unapproachable to the end consumer. We did some surveys last year and we found out that the majority of people — we were just surveying people inside the Sahara tent — asking them a few quick questions about AR, and the majority people have no idea what that is. So I think sometimes we tend to use industry jargon in our public-facing promotions, because we want people to think that we’re forward-thinking and cutting-edge, when in reality, we could probably do a lot better for engagement and for just involving people in the program if we built more of a story around it, and didn’t use those types of words. Like Snapchat does; they’re like, “space filters,” and they’re creating experiences that are AR, but people don’t think of it like that. And so theirs is a little bit more approachable to them. And I think that’s really important.

Alan: And I think one of the things that even location-based VR, for example, one of the things that I realized was amazing in Dubai was this place called VR Park. And they took regular HTC Vive Games, which only need a 10×10 space. And if you look at it, it’s not very sexy. It’s two sensors and the headset. But what it did was they put a whole physical set around it. So when you walked into the thing, you were in a bank. It was the John Wick game. So you walked into this bank and it was all built like a facade. And then you went into a bank vault and like all the drawers were scattered everywhere. Then you put on the VR headset and you’re kind of in that realm. And I thought that was a really good way to prepare people emotionally and psychologically for the experience. The Void is the opposite of that, where they’ve built everything into the experience, where they’ve got scent machines and haptics and things you can touch. But it’s all digital mixed with the kind of physical that you can’t see. And I don’t know if you’ve ever been to The Void, but if you take your heads off, it’s pretty uninspiring. It’s just like, wood walls, there’s nothing there. It totally breaks your presence.

Sam: Totally. I did the IMAX experience that was around — I don’t know if it’s still around in L.A. — who would you recommend, on that note? Void or Sandbox, which is the more compelling experience? Have you tried them both?

Alan: Which one?

Sam: The Void or the Sandbox VR?

Alan: I haven’t tried Sandbox’s. I’ve done the Void. How’s Sandbox?

Sam: I haven’t done it yet. That’s why I was asking you, is it worthwhile?

Alan: The Void is amazing. If I were you guys, I would even just make a deal with the Void to have a Void system setup at Coachella, for 20 bucks a person the whole weekend, because it is an amazing experience, and you can share with multiple people.

Sam: Interesting.

Alan: It would take nothing to build on site. I don’t think.

Sam: Because it’s really just a box, isn’t it?

Alan: What they did — and I think why Sandbox is gonna be successful — is because they didn’t go for these giant free-room spaces. They took a 2,500 square foot space and made it through redirected walking. So you feel like you’re in this infinite space moving around and interacting with things, but you’re really in a small room with a door.

Sam: Yeah, that’s interesting. It is wise to keep the square footage down because ultimately those businesses are also real estate businesses too.

Alan: 100 percent. It comes down to number of people you can get through per hour. So it’s throughput times the square footage, and that’s how you get your revenue model. So having a big footprint is not in your best interest as a location-based entertainment experience.

Sam: Yeah. That same throughput is how we predict experiences like that at Coachella. We had a big projection-mapped dome experience that HP was the brand partner on. And you know, we’re thinking about that experience. We’re constantly measuring throughput. How many people are gonna see it? How many hours is the festival open? What’s the line going to be like? All those things are really important metrics when we consider those physical activation experiences.

Alan: It’s absolutely true. And I think one of the things that Coachella does really well is spread it out so that there’s adventure in every corner. Even if you just look at the map of Coachella; it’s vast, like walking from one end of the festival to the other is like 40 minutes. It’s a really amazing experience to be in such a big place. But at night, you’ve got the silent disco times. You’ve got, what is it, seven stages? Six stages?

Sam: Yeah, seven stages.

Alan: Food vendors everywhere. And one of the stages is like a nightclub. You walk in, it’s the middle of the day in…

Sam: Yuma Tent!

Alan: Oh, my God. It’s so amazing walking in. It’s totally blacked out. Laser lights, smoke. You feel like it’s like 5:00 in the morning. You’re jammin out. You walk outside, it’s sunny. It’s like noon. Crazy.

Sam: Yuma tent was cool. Yuma tent came around before, like, the house and techno revolution even hit America and it’s been just chugging along ever since. It’s a fan favorite for sure.

Alan: Yeah. My buddy does the lighting there. Steve Lieberman, he does a lot of the lighting for that specific tent.

Sam: Very cool.

Alan: He does like all stage designs for monster festivals and stuff. So it’s pretty exciting stuff.

Sam: The lighting in that tent alone is incredible.

Alan: It really is.

Sam: How far can you take club lighting and put it in the context of music festival?

Alan: Apparently pretty far.

Sam: Yeah, very far!

Alan: I’m looking at some of the new stages coming out of EDC and like just the big festivals and man, every year there’s a new type of light. This year there’s one that’s like a really, really tight, thin beam on a moving head. When you have a hundred of them coming out of the stage, it’s just, “wow, that’s incredible.”.

Sam: Yeah. They really start blending the lines between lights and lasers and the functionality of both. It’s pretty, pretty awesome.

Alan: It really is. And that’s really a form of of virtual and augmented reality. You’re augmenting the whole space. A good lighting designer not only kind of has this front facing, “here’s all of the things,” but a lot of it… like, for example, what’s the tent called? The big one with the DJs?

Sam: Sahara.

Alan: Sahara tent. There’s lights all over the tent. Above you, behind you, around you. It just makes you feel like you’re in something bigger than just a stage with an artist in front. It’s all enveloping your senses.

Sam: Immersive, I think, is the word we like to use.

Alan: That is the word!It is. And now I have a question. Have you guys ever thought about using scent machines as part of the stage show?

Sam: You know, it might have been proposed at some point. I don’t work around stage production or artist production. That’s much more well-equipped colleagues of mine. I’m sure they’ve proposed it at some point.

Alan: So the thing with AR, you’ve got glasses — Nreal, Magic Leap — we go to these glasses. But really it comes down to anything at scale right now. It’s the device in everybody’s pocket. It’s the little magic window of your phone. But it’s predicted, and I think we’re on track, that over 2-billion smartphones will be AR enabled by the end of this year.

Sam: I sure hope so. That is the focus of our mobile AR strategy at Coachella: Smartphones.

Alan: So let me ask you a question. And this goes beyond the actual festiva;. How do you then engage people that aren’t at the festival to participate somehow? Because, like, I can’t always be there, but I would love to participate. So how do you see that happening?

Sam: I think that part of that has to come with volumetric experiences. And I think part of it has to come with enabling artists to deploy AR content that they might own through the mobile application. Because we have more people download the application than even attend the festival. So there’s a lot of people like yourself who download the application, and they want to know about Coachella, what’s happening, and what’s new. What we’re tinkering with — and there’s a lot of artists now who have created AR content for their brand or their music releases, whether it’s a phase filter or a portal of some sort — when you go onto artists’ pages on the app, you can see various links out to their social platforms; to music with our partner, YouTube Music. And, you know, one day there will be a place where you can see AR content that they’ve created and want to deploy at Coachella or either people to take pictures with on-site or for people who are at home watching the YouTube livestream, to deploy into their coffee table.

Alan: Cannot wait! I’m so excited. How many employees does Coachella have for that one festival?

Thousands and thousands. I don’t know an exact number, but the staff for Coachella, it goes up and down over the course of the year, depending upon the season. But come January, there’s a lot of people that start working full time on the festival all the way through the end of April. And so it balloons from January through April, and then the month of April when you have a lot of the temporary but very important staff on site like security guards and stage managers and the people who are building the stages. You know, it gets to thousands and thousands of people.

Alan: Have you guys ever thought about using VR as a training mechanism for those thousands of people? Something as simple as putting them in an experience where they just get to kind of wander around from point to point, so that people that are maybe new to the festival who don’t know where everything is, they can familiarize themselves with not only the safety and security, but also where things are now so that they’re more helpful on on-site.

Yeah, sure. I think it’s an interesting concept. There’s also just at this time, a cost/benefit analysis that we have to run. You know, if we’re gonna give them a virtual tour of Coachella, what does it cost to create that virtual space of Coachella? How else are we leveraging that asset or utilizing it in other programs? These are just kind of the questions that we have to ask ourselves. But I think as the tech to produce and just deploy those things gets cheaper, it’s definitely something that we would look at, especially when it comes to jobs that might be a little risky or unsafe to practice or training and giving people the ability to do that in a virtual space would be important and safer.

Alan: I think also we’ve been talking about this on the show repeatedly, but one VR headset can train multiple people. You could provide training to 100, 200 people with one headset. It doesn’t have to be one headset per person. So I think there’s definitely, for the unsafe and risky, but also just general understanding of where things are before people come on site. Because thousands of employees, you want to make sure they all have a baseline of knowledge of things. And with VR, you can actually start to test that as well, and then test their proficiency. And not so much test them as just make sure they’re prepared.

Sam: Absolutely. Especially when it comes down to a lot of times, the security guards are the front line from the fans perspective. They likely will not talk to one Goldenvoice staff member their entire time at Coachella, but they talk to security guards all the time, asking them where things are, where to find things, where the entrance or exit is. And those security guard are great for that reason. And it would probably be more beneficial if they knew where specific things were that sometimes they might not know the answer to. So it would be useful from a training perspective, and it would also be useful for a fan perspective, if they could get an idea before they enter the festival site, kind of get a virtual tour of the festival site — without giving away anything, of course.

Alan: Let’s talk about it further off line, because I think this is something that intrigues me. How do we train thousands of people quickly and bring them up to a certain level of proficiency and then reuse those assets for a different way? And one of the things that we keep telling our customers is, look, if you’re going to build like a virtual whatever, maybe it’s a machine and you bring in your CAD data and you train somebody on the machine. Well, that same 3D data that we just spent, maybe $50,000 taking it from CAD to putting it into 3D and then putting it into VR. Well, that same thing, that same asset, can be used in a AR. It can be used on your Web site. It can be used for training, can be used for marketing. I think a lot of companies see it as just a cost center, like, “oh, this is going to cost a lot of money.” But if you, like you said, re-use and recycle this material throughout the organization, you actually end up spreading out the cost quite a bit and getting more value and benefit from it.

Sam: Yeah, I absolutely agree. Should definitely have that conversation.

Alan: We shall. Awesome. What else do you want to talk about? Is there anything else that you want to talk about? To share before we wrap this up?

Sam: You know, I think maybe just kind of hype — and I know that kind of purpose of this podcast is to kind of help inform and inspire people to use XR — and I think there’s a lot of incredible advice out there around the technology and its use cases in a business context. But I think what a lot of people don’t talk about enough is just that we should always be thinking about ways in which we can tell a story and create a program that I think is more relatable and fits in to… it has to obviously fit into the brand, but, you know, you can also think about how that fits into the story of consumers who use your products or services. There was a really great example. One of my favorite business use cases was El Pollo Loco did this mural activation. Did you see anything about it?

Alan: I didn’t actually dig into it, but I did see that it was there. It basically hold your phone up to I think was a painting on a wall or something, wasn’t it?

Sam: Yeah. It was in honor of Hispanic Heritage Month and El Pollo Loco celebrated Mexican heritage and a lot of their customers by bringing five different murals to life in L.A. And there was also like a real-world aspect to their initiative where they donated some of their storefronts as a place for real-life murals to take place.

Alan: Super cool.

Sam: I thought that was just such a great story. That’s super relatable. And if you’re a person who has no idea anything about AR or even what that means, it’s still something that is going to inspire you to pick up the phone and give it a try. And I think that’s an example of a great success in this space.

Alan: I love things that bring a wider education or social aspect to it like that, bringing a focus to Hispanic heritage. It’s really wonderful. And for anybody who’s flying into L.A., El Pollo Loco is within a block of the airport. It’s always my first up. Those dollar chicken things are great. And then In and Out Burger. Man, that’s like my L.A. staple.

Sam: Where is In And Out’s AR experience, man?

Alan: It doesn’t seem like a brand fit. To be honest.

Sam: They’re definitely not a brand fit. They have five things on the menu for the entire lifetime of the company.

Alan: No, probably not. What is one problem in the world that you want to see solved using XR technologies?

Sam: I think that XR’s power to inspire empathy in certain situations is really strong. So I don’t necessarily have one specific problem, but I think that people who can use VR to view the planet from above, or experience a day in the life of someone who lives in a favela, or use AR to better understand issues or problems that are plaguing society around the world. The use of that technology will inspire more people to get involved with these issues, and that’s kind of a sum result that I’m excited to experience.

Alan: Hey, you’re listening to the XR for Business Podcast with your host, Alan Smithson. In this episode coming up is Kevin Williams. He is the out-of-home location-based entertainment expert, and he’s what’s coming up next. We’re going to talk about Disney vision, the 90s, immersive entertainment, dream craft, driving go-karts in augmented reality, Great Wolf Lodge and magical wands. All that and much more coming up on the XR for Business Podcast. Founder of the DNA conference and publisher of the ever-mindblowing Stinger Report and my guest today, Kevin Williams. Thank you so much for joining me on the show.

Kevin: Thank you, Alan, a real pleasure to be here. The check’s in the post.

Alan: It’s my absolute pleasure. You don’t know this, but you’re one of my very first mentors in this entire industry. You were the first person I reached out to and you were so gracious with helping me understand this world of VR and AR before anybody really caught on to this. That was back in 2014, and I’ll never forget it. So thank you for being there for me.

Kevin: Oh, thank you for remembering. Our industry only grows by the new people that you can introduce to it.

Alan: And with that, I want to make a challenge to everybody in the industry who owns some sort of VR or AR device — and I am included in this. It’s easy for us to not remember the journey and excitement of our first few times of trying these technologies. I implore everybody and make a challenge to everybody that owns a device — or many devices, in our case — in the next seven days, to put it on as many heads as possible; to get those reactions, to re-energize yourself to the fact that wow, this technology is revolutionary, it is mind-blowing. And we have it sitting in our backpacks, sitting on our desks, sitting in our labs. Let’s show everybody.

Kevin: Well, that’s part of the reason why I’m so passionate about augmented reality and virtual reality being used in out-of-home entertainment. We can get a lot more heads in it, rather than it just sitting on a shelf in the development studio.

Alan: I couldn’t agree more. I had the opportunity to meet with Dream Craft Attractions on the weekend, and oh my goodness, they’ve even solved the problem of hygiene! How do you put people in those masks without having to sterilize all of the devices? So they came up with this ingenious plastic helmet. Like, so smart. And then the VR headsets lower down.

Kevin: It’s interesting; you talk about how long this industry has been going. I was just having a conversation. You do understand that that two-part liner system is actually based on the original idea that Walt Disney’s Imagineerium had for their Disney-bution system.

Alan: “Disney-bution system!”

Kevin: So, Disneyvision was the system that was its Epcot in the 90s. That’s where a lot of people first heard about virtual reality in the theme park sector. And because Disney at the time was trying to work out which was the best way to get people into virtual reality — and this technology is clunky, was using CRTs — they came up with a two-part system where there was a liner that you put on first, and then the head-mounted display component clipped into that liner when you go to the right, standing in the queue line. As they say, nothing is new; it’s just the wrappers that change. Here we are, 2018-2019, and the same principle is being used by these guys. And it’s obviously at the Lions Gate theme park attraction in Asia.

Alan: So I got to ask this, Kevin; you are literally the well of knowledge for all things location-based entertainment. You’ve been hosting the Stinger report for many years now?

Kevin: 25, now.

Alan: 25 years. Walk us through where the single reporters come from, what your first episode was, what you were covering, and then kind of walk us through — maybe by five-year blocks or decades, even — where we’ve come from there?

Kevin: I’ve always been a fan of immersive entertainment, since I opened both in the arcade industry. That’s really back in the 80s. I got sucked into video amusements. It was a hard drug, and a hard taskmaster. And then when I had to start earning a living, I built upon… I had been a reviewer in my spare time, of the early microcomputer video games. I’ve got into reviewing and evaluating arcade machines. And that’s how I got sucked into that sector. Without boring your listeners to death, the fundamental Stinger Report is, I have always been writing in the trade magazines — I’m an appalling writer — but my English teacher taught me the only way that I can improve my English is by constantly exercising the muscle. I’ve been writing for a lot of times, and I had been writing up until — the Stinger Report was released in the 90s — I’ve been writing a lot of the trade magazines that existed. I’ve been also writing some consumer games mags. And I noticed that my writing was being censored quite heavily, regarding “the dirt,” as I like to call it; the interesting stuff. Like I just imparted there, the reason why it’s interesting to look at what Dream Craft operated, but also to use the lens of history to see how it has evolved, and how we got from A to B.

Alan: Basically what you’re saying, Kevin, is you’re calling people’s bullshit.

Kevin: No. That’s unfair, because one man’s bullshit is another man’s caviar. I am not God. I do not have all the answers. I make mistakes like everybody else, and it’s unfair for me to say I am right and you are wrong. What I try and do is collect enough information. I was taught in college that the only way that you could try and get to the basics of any problem is by collecting enough facts, or enough information that you can treat as facts. And so, I love history. I am a super-nerd, and I also like playing detective. I like tracing the money in many of these projects. For example, we’re just finishing a Stinger Report where we’re talking about the developments of a brand new theory of augmented reality systems being deployed in a facility. It’s not a new idea. It’s just taking an older idea and utilizing new technology. That’s fundamentally what we have in the out-of-home entertainment sector. Nothing’s changed from the carnival, from the theme park. Walt Disney back in 1955 recognized everything that we’re doing in the current modern out-of-home entertainment industry. It’s just we’re applying the same metrics with new technology. So to your point, I don’t call bullshit. I just follow the lines.

Alan: And you’ve been following these lines for 25 years. What’s so dramatically different now? I look at the VR and AR industry as kind of the boy who cried wolf. We’ve been screaming how great VR is for so many years. Nobody gives a shit anymore, and rightfully so. Myself included, we’ve been marketing this as a revolutionary technology for everything from teeth brightening to Ginsu knives.

Kevin: Yes, I’m waiting for it to do my laundry. They keep on promising.

Alan: So what are the real things that are making a difference? What have you seen recently that you’re like, “holy crap. We have rounded a corner. This is a different time?”

Kevin: I work in the immersive entertainment industry. I don’t work in the VR industry. I don’t work in the augmented reality industry, in the CAVE industry, in the 3D projection mapping industry. I work in immersive. And what’s happened is connectivity, digital entertainment and interactivity have become understandable, controllable and repeatable to the point — courtesy of the consumer game, mobile phones, courtesy of digital entertainment and simulation and training — and all of this technology has now switched together., and certain dreams that we’ve had in the theme park industry are now achievable with the magic of the current technology. It’s achievable. I’m not saying what’s being successful; it’s achievable.

Alan: Give us an example.

Kevin: We’ve always wanted to be able to know when a member of the audience wants to go left, rather than right, in a digital attraction and take the audience along with them. So if you ride Indiana Jones and the Temple of Doom attraction, there’s this fake steering wheel on the ride that makes people think they’re steering the experience. But really, it’s a toss of a coin whether you go right to the temple or left through a waterfall. Now, with interactivity — with tracking, web entertainment, with gamification — we can now have the audience do what they want to do. And that makes a big difference because they can do what they want to do, they can come back again and again, and it changes each time, and we get repeat visitation and our prices go up.

Alan: It’s kind of like going to a video arcade. So we have a couple of them here. We’ve got Playdium and we’ve got the Rec Room, and you go there and you play some racing games, right? You sit down with some friends and you’re racing, and that’s fun. But then you step outside and then you’ve got a go-kart.

Kevin: Yeah.

Alan: And it’s a different visceral experience, driving a go-kart with your friends.

Kevin: Physicality.

Alan: There’s a physicality. There’s a bit of danger there. Which of the attractions that you’ve seen recently have kind of giving you that feeling like, “wow, I am I’m on a dragon,” or “I’m racing a motorbike?” What gives somebody that rush, that isn’t the physical footprint of an actual go-kart track, because that is expensive. A roller coaster is expensive to build. How can we deliver that in a digital means that is convincing enough? Or what have you seen that is?

Kevin: So in the go-karts we see companies like Meleap with their Hado Kart system, where you actually feel that you’re in Mario [Kart]. So I’m sitting in a normal go-kart, and I think environment. But when I put on the HoloLens headset, I see in front of me the bombs, coins, scores of the competitors. So that was an addition. So that, Alan, is the addition of technology to take a mundane experience and take it to a new level.

Alan: Hold on Kevin, did you just say, “I put on a HoloLens and I drive an actual go-kart and I get to go pick up coins and stuff?”

Kevin: Correct.

Alan: I want one, where can I try this?

Kevin: Japan at the moment, and hopefully it’ll be at the IL show. But there is another company that has developed it one stage further. There’s an issue here in our industry that we have a concern about putting head-mounted displays and glasses on people’s heads if you’re dealing with thousands of guests. We now have two companies that developed a version of that where rather than using augmented reality, they use 3D projection mapping, and they’re actually projecting onto the surface of the go-cart course. The coins, the power-ups, boosters, the big stuff.

Alan: That’s incredible.

Kevin: This is immersion. This is what’s really thrilling me, Alan, that we’re seeing these kinds of applications. And this is going back to everybody thought they’d be wearing AR glasses while driving their car to get the heads-up display. Now all we do is we just project onto the windshield. That’s the equivalent of making it really simple, stupid.

Alan: We’ve been overthinking this stuff.

Kevin: Yes! We have been overthinking it! And we have been overthinking what the level of immersion some people want. Do you want to have a head-mounted display, or would you rather have the images projected onto the surface you can interact with? I’ve been looking at this augmented reality climbing wall, and it’s seamless, and it’s compelling. And the other nice thing about it is people standing around the climbing wall can see the experience that the individual’s having, where sadly, with some augmented reality and virtual reality experiences, all you’re looking at is some fool with a head mount on.

Alan: That’s not that exciting until you fall down.

Kevin: Yeah, exactly. It’s that aspect of, what are you trying to achieve? Is it to be fun, or are you trying to sell technology? And a lot of my work as a consultant is trying to get companies, investors and developers to look at what we’re really here for, which is to create compelling immersive entertainment environments.

Alan: I’m going to take it back just a little bit, because honestly, you nailed it when you said “fun.” That’s really all people want, to have fun; when they’re watching movies, when listening to music.

Kevin: They want to have fun with their friends and family. Only people like me go to these entertainment facilities on their own. 80 percent of people who walk through the doors of family entertainment centers, urban entertainment centers, bar and club, hospitality sites, theme parks, casinos, visitor attractions, and retail-atainment are going there in groups. And if they’re not going in there in groups, they’re using social media to show their friends they’re having a good time.

Alan: I think we’re reaching this point — and I think this is a great segment — because we’re reaching a point in time where let’s call it the next 10 years. I don’t know if it’s five, 10, whatever, but we’re going to really wear glasses in our daily lives. They’ll game-ify and fun-ify our lives, and we’ll be able to have different representations of ourselves to the world, and this mass consumerism that we’ve built our entire economic systems around — perhaps we can scale it back a bit, and just enjoy the experiences with other people, and do things digitally rather than physically and kind of slow the expansion of our minings and physical objects?

Kevin: So it’s a fun domain. Even though I firmly wear an out-of-home entertainment hat, I also have to wear a futurist’s hat, which is, I have to keep up-to-date with technology. And one of the things that I’ve noticed is technology saturation and overload. So one of the things that companies are now talking about is how do they ease back on the technology and make the experience more personable? And I’ve noticed that it’s getting more and more that we’re trying to go for a frictionless experience. You’ve noticed now that we don’t want to put our hands in our pocket to pull out change or notes. We want to be able to just tap our phone and pay for small items — or even medium-sized items — with frictionless. We’re prepared to give away some of our, shall we say, freedoms — I don’t mean social freedoms, but I just mean control freedoms day to day life — for a simpler, more compelling experience. And so you’ll be seeing in the theme park industry the removal of the paper ticket, and the appearance of the wrist band. By giving away a little bit of my freedom by having that wrist band. That means that I don’t have to carry a key to my lockers. I don’t have to have a key to my door. I don’t have to have my wallet on me when I want to buy a burger. And I don’t have to stand in the queue for three hours to get to the front of the ride.

Alan: So I have children. And one of the places we’ve taken them is a place called Great Wolf Lodge.

Kevin: Oh, yes. Did they lock in their wands?

Alan: They have figured it out, man. Every kid gets — every person — gets a wristband. Then you can go where you want in this giant hotel that’s a million square feet. It’s got a water park the size of any major water park. And you’d never have to leave for the three days you’re there, and your kids are safe running around with a wristband because they can buy anything they want, of course.

Kevin: So the wristband gives you the security that you know your kids, if they even migrate out of the coverage of that wristband, alarms go off. Number two, you can go to any member of staff and ask where they are. Number three, they feel empowered, children, because they’re now grown-ups, because you let them off the leash. You haven’t wrapped them in bubble wrap and won’t let them run away. You are allowing them to be themselves. And depending on which venue you went to, there is a fantastic wand game that was created, and the kids get it and the parents are beginning to get it. It’s an equivalent of, before Pokemon Go was Pokemon Go, these guys at Great Wolf created a really fun experience. And it’s so fun that the adults get into it. It’s usually — for those I haven’t seen it — it’s RFID wands. But when you do a special motion near certain game terminals, if you do your magic movement correctly, then it opens up a narrative and you try to learn all the special moves to create points. And in some cases, people are going back again and again to that experience. And it’s not high-tech by any means. It’s showing its age. But when a game works, and — remember this word — when it’s fun, they’ll keep on coming back.

Alan: Wow. I mean, that’s the snippet. When it works and it’s fun, people will come back for more.

Kevin: That’ll be on my gravestone. The fundamentals are, we’re at that point — I spend all my time tracking the motions of technology and investments and entertainment — and we’re at that point now where we’ve been saturated with virtual reality and even a little bit of augmented reality. We’re now getting to the when the rubber meets the road moments in our industry. In my particular part of the industry.

Alan: So what attractions in virtual and augmented reality have you seen that you think, “wow, this has staying power?” I mean, for me, the first one comes to mind is The Void. They’ve got all different experiences. Each one is completely unique. They’re multiplayer. I get to play with my friends. They’re not inexpensive. They have a monetization strategy and they don’t take a lot of footprint in a venue.

Kevin: So, for the audience that is not familiar with this, we’re talking about arena-scale VR. This is putting a backpack on and traversing through an environments. The Void is different compared to companies like Zero Latency, who just have the backpack, and multiple players involved in game narrative. The Void has gone down the path of trying to create virtual environments — hyper realities, they like to call it — where you put the backpack on, you put the head-mounted display, and then you’re pushed into an environment, and something that you’re going to see in our industry in the next couple of years is a lot of intellectual property — movies, television, fantasy experiences — being turned into arena-scale entertainment experiences, where you and your friends go through this experience that they will recognize from the movie. Our friends at The Void started with Ghostbusters and are creating really compelling Ghostbusters experiences.

Alan: The Ghostbusters experience blew my mind and changed my life.

Kevin: That smell of marshmallow.

Alan: Oh my god, the smell of marshmallows. That was it. I was sold. OK, Void. Take my money. I’m in.

Kevin: And then when they did Star Wars, for those people that have done the Star Wars one, where you’re playing a rebel, infiltrating a base, pretending to be Stormtroopers; it was the smell of the ash and the volcanic pumice that sucks a lot of people in, the feeling of the heat.

Alan: Crazy — the scent. I keep telling people–

Kevin: And then we’ve Wreck-It Ralph. The smell of the cookies and the sweets. So one of the things you don’t understand is the physicality. I used that phrase earlier on. Virtual reality is okay, but it don’t have that level of physicality, be it olfactory smell. Audio is spatial sound. Decent graphics, vibrating thralls and seats. If you don’t have that added juice, then you have nothing. That’s a big difference between what we do in the immersive entertainment industry and what you’re doing in the consumer industry. It’s different to the VR experience you get in our industry.

Alan: So Kevin, this is exactly why location-based entertainment will always have the most powerful experiences, because one, I can’t afford to have a complete motion simulator in my house with scent machines and all of this craziness. Not to say that I don’t want it, but I can’t afford it.

Kevin: Yeah. If you could, you would.

Alan: But it’s not reasonable to think about that. But I can go to a place, pay 25 bucks and I can go and experience the most mind-blowing VR in the world. Now, you mentioned feeling haptics, spatial audio, graphics scent. As many of the listeners know, my passion is education and training, and I feel that education and learning is really competing with Hollywood movies, Triple A games, and of course, social media. So how do you then take the best of those three worlds and this out-of-home entertainment experience, and apply that to learning things? How do we give learners the ability to fully, viscerally learn something in a way that means something to them, and also challenges them to be the best at what they do?

Kevin: Well, many of your listeners might not be familiar, but I come from a military simulation background, so I got sucked into military besome back in the early 90s because that was the only place that had the technology — the graphical processing technology — to create the high-level of engagement we wanted to achieve in the theme park industry. And so we called it the soul beating the swords into plowshares, taking the latest flight simulator computer systems and flight motion-based systems and creating Star Tours. That’s the kind of lineage. And so we are still stealing from the training industry, and putting that type of technology into our entertainment facilities’ next generation. I just did a presentation here in Mountain View for Technology Summit and they were talking about the latest CAVEs — computer augmented virtual environments — that allow you to walk into a projected box where you are literally dropped into the virtual experience. No need for a head-mounted display. No need 3D glasses, because you’re pushing the latest 8K projections onto every surface around me, including the floor that I’m standing on. And that is the kind of visceral emotion that we’re getting at the moment. And to your point, one day you’re running a virtual reality arcade facility. The next day, possibly when you have a downturn, you’re running experientials; you’re running virtual tours. We have a client at the moment that’s done a fantastic job with National Geographic to create an immersive and compelling virtual tour of unique locations around the world. So you have hundreds of people with head-mounted displays, sitting in an auditorium, going on a virtual field trip. That is the future. If we can create compelling immersive entertainment, then we can create a compelling immersive training.

Alan: We have to fix this problem, because we’re about to enter a phase of humanity, of exponential growth in everything we do, and every job will change — and change rapidly. IBM is estimating 120 million people need to be re-skilled, retrained and upskilled, due to AI robotics and automation, only in the next three years.

Kevin: And IBM always goes for a low number. So if they’re low-balling this, just imagine what the reality is going to be.

Alan: I can’t even imagine; we’re going to run into a problem. There’s a deficit of 7-million trade workers a year in the US and that’s just the US. Kids don’t want to [grow up to] be trade workers. This is a well-documented fact.

Kevin: I try not to generalize, but I know that the majority of kids have seen their peers making easy money and easy lifestyles, and want to get their share of that. I understand that. But I also meet a lot of creative individuals that want to get into the industries that I work into, or want to get into the industries that are associated with it. So we need to kill the gatekeepers, open up the libraries, and improve the teaching tools.

Alan: One hundred percent, couldn’t have said it better myself. So speaking of learning and learning fast, one of the ways that I learn faster than anything is going to conferences. And you mentioned two things. You mentioned your modeling and simulation, or military simulations. There’s a conference coming up in Orlando called ITSEC. And it’s the world’s largest modeling simulation and training event. And then the second one is the IAAPA, the Global Association for the Attractions Industry. I believe that’s also in Orlando, actually.

Kevin: Same exhibition facility. It’s a weird feeling; at the end of IAAPA, I then walk outside slightly, adjust my tie, change my lanyard, then walk back into the show and it’s changed into simulation. And in some cases, we have exhibitors at the theme park show who also come from the military simulation and training side. You know, companies like D-Box. They make the motion seats, your cinemas. They also make motion seats for some of the latest virtual reality immersive attractions like Virtual Rabbids. But they also make the motion systems for your Abrahams tank training.

Alan: It’s kind of crazy. Orlando’s this little hub where you have attractions — Disney and Universal and all these companies. Then you’ve got NASA making and launching space shuttles, and then you’ve got all the branches of the military.

Kevin: And then you’ve also got all of the computer graphics companies, Lockheed Martin and I think ES has still got their operations out there. The history of Florida and Orlando especially, and how it is married to entertainment, technology, space and military is an interesting one, but that would take a long time.

Alan: That’s another podcast all in itself. And you know what we’ll do?

Kevin: That’s all on its own.

Alan: We’ll get John Cunningham and we’ll get some of the people from UCF and Lockheed Martin.

Kevin: Oh, yeah.

Alan: We’ll get them out. We’ll have a joint podcast. We’ll see if we can do an Orlando based-podcast, maybe from ITSEC and IAAPA. It’d be interesting.

Kevin: Some of your listeners may not know that I’m an ex-Walt Disney Imagineer. And so I love the history of what Disney sets out to do with this theme park business. And it’s interesting to find out that even military mission and military business has had tentacles into the Disney decision to open up in Orlando.

Alan: That’s incredible. Oh, my goodness. Wow. Kevin, it is always a pleasure to speak with you, to learn from you. This is a question that I think you’re uniquely qualified to answer. What problem in the world do you want to see solved using XR technologies?

Kevin: XR technologies? Stupidity.

Alan: OK… Explain.

Kevin: I would like people to be able to use the latest technology to get more information quicker so they understand situations better.

Alan: All right.

Kevin: So I was always taught by my parents to be situationally aware; don’t just walk into a place. Understand where you, why you’re there. It’s important to be able to just… what happens when the fire alarms go? Do you know where the exits are? Just simple things like that are really useful. It’s situational awareness. It’s not just knowing the layout of the building that you’re sitting in, but also the reason why certain things are the way they are. And so a lot of people like to use the Internet to grab information quickly. But only having a little bit of the information gives you no real pictures. As my dad always said, “too little information is worse than too much.” And I’m a little concerned now because we have limited information available to our fingertips really quickly. We treat that as gospel. And the whole point about XR technologies, hopefully it can give us even more information, but simply presented to us. So rather than just knowing that when I ask Siri what the weather is today, Siri tells me that it’s going to be sunny and raining, a decent XR version of that would be able to show you places where I’m walking today. The possibilities of changeability, and also little understanding of do I need a coat or an umbrella for the rest?

Alan: Yeah, I think in the case of when we wear glasses all the time, less is more.

Kevin: There you go. Incumbant technology. I’ve got this funny feeling, with the price drop in projection technology and the new tracking technology, that we may not be walking around with little pieces of plastic and glass in our pockets in the future. It may be the other way round, where we are walking around and the screens are following us.

Alan: Explain.

Kevin: Projection mapping. Just think if you had automated projection systems in a space.

Alan: We have projection mapping now. We even have a company…

Kevin: EyeClick?

Alan: No. It’s like a camera-based system that allows you to projection map on anything pretty easily.

Kevin: Oh, you mean castAR, those guys?

Alan: No, it’s not AR.

Kevin: Tri-Fi’s the version where you ever–

Alan: Lightform, Lightform!

Kevin: Oh yes. Well, yes, you have that. But sadly, you still have to wear it, don’t you?

Alan: What I’m saying is if you hit a LightForm everywhere, with a projector attached to it on… let’s say you walking down the street and I could turn a wall or just a standard pedestrian wall into anything. The thing is, we have these technologies now to do–

Kevin: Yes we do.

Alan: –insanely amazing things, and yet we don’t do it. I live in Toronto, and maybe other places — Montreal has done a very good job at projection mapping, and some other cities — but it’s almost like, we’re missing out on this very simple way to communicate messages and I think maybe the reason why it’s not exploded as it is because commercial entities tried to make it commercial rather than art.

Kevin: Exactly.

Alan: And art is something that’s visceral. And then we can all buy into. Ads are like, yeah, OK, great. Show me something cool.

Kevin: So one of the best 3D projection mapped environments that I’ve ever been in was for an art exhibit. The Linked to MONIA. And it was beautiful, compelling and it was visceral. And that’s it; no Coca-Cola or Pepsi or KFC are going to fund that. They just want to be able to say “eat Coke” and stick it on the side of the wall. “Drink KFC” and stick on the wall and to be compelling. We have to look beyond the technology and look at what we can deliver. And then what you invigorate and excite people with the opportunities of what you deliver, that’s when it gets driven. So when I say I expect every service to be turned into a screen, I don’t see us wearing a headband or contact lenses. I actually get the feeling that maybe the light sockets in the future will not just be an illumination device, but it also have a little Pico projector in there and it will track you when you walk into the room. And if you look at the wall, you make the hand gesture. It will project a lovely 8K display of that. And it will do everything that my phone can do and more.

Alan: That’s insane.

Kevin: But that’s that’s what people want. They don’t want to have to put on a cardboard box.

Alan: It may be practical in closed spaces like museums; public spaces, maybe not.

Kevin: Alan! I work in the out-of-home entertainment industry!

Alan: So places where you can control it. So if you’re a Disney… oh I get it now. Oh, shit. Oh, yeah. Cool. Why don’t we do that now? I don’t get it. What the hell?

Kevin: It’s expensive. It’s expensive.

Alan: Yeah, for sure.

Kevin: Oh, the 8K projection systems. So we’re working on a couple of projects that are based on CAVE technology, Computer Augmented Virtual Environments, and they’re using the latest projectors 8K and 4K max projectors. And it’s expensive to fill that whole environment. The price is coming down. But to answer your question about why technologists aren’t jumping on projection mapping is much more. It’s not just the reason about the content. It’s not just the reason about application. It’s also about where you put your resources. One of the largest manufacturers of projectors is also a very large manufacturer of digital displays of OLED and LED displays going to mobile phones and into the laptops. That would be essential. But you could also say the same of Sony. You could also say the say of HTC. You know, there are companies that have to marshal their resources with the Tokyo Olympics coming up next year. You’re going to be seeing a lot of projection systems — the latest projections — and you can see a lot of 8K projections. First Olympics that will be broadcast 8K. Now, there’s not many PLACES around–

Alan: That’s insane.

Kevin: Yeah, this is totally insane, especially what you saw at CES this year. There’s not many places in the consumer sector where you can have an 8K screen outside.

Alan: I think the highlight of my CES — besides the crazy helicopter — there was like a rolling 4K display. It rolled out of a box. It’s nuts. I don’t think I saw anything 8K — or very few anyway.

Kevin: Oh, yeah. There are a couple. There are a couple of the super display systems. And you know, you can always spot them because they’re the ones where people are grilling meat on the boxes, as these things get HOT. And you can see the big cables going into that. But these aren’t really considered for consumer at the moment. These are being looked at as commercial display systems. And so I think most people will get to see the 8K presentation when they go to their local cinema and they get to see the latest projection system pushing out the Olympic experience. Again, horses for courses and it’s content driving this. I wouldn’t be surprised that the interest that the Olympics next year generates in this kind of high quality visuals will encourage people in our sector. But there’s one thing to also understand about pushing out high-quality visuals. Not always a success. We’ve seen the problems that the high def screens have caused with production quality; makeup has become much more dangerous. Warts and zits. Zooming in on people’s faces are all issues that need to be avoided. The higher the quality doesn’t mean always the better image.

Alan: Indeed, indeed. Well, Kevin. This has been an amazing conversation. We could probably talk about this forever. Where can people find you? Where where can people learn more about what you’re doing?

Kevin: I’m always on Facebook, always on Twitter, always will. Linkedin: look up Kevin Williams of KWP and you should hunt me down. If you want to send us an email it’s kwp@thestingerreport.com, that will get me wherever I am, if you want to get onto the subscription list of the Stinger Reports. Just send me an email with subscription on it. I’ll make sure that you receive it. We write a lot of articles for the trade pubs. I also have a column in VR Focus that I’m going to be starting up again and I hope to have completed by the end of the year with our co-author Michael Mascioni, a sequel to a previous book. In 2013-14, we launched the first book, The Immersive Frontier, and a sequel to that is coming out at the beginning of next year, that goes into the details of the immersive opportunities and out-of-home entertainment, and also is looking a little bit towards the future. We like a little bit of crystal ball.

He also talks about The Rogue Initiative and SingularityNET!

Alan: Welcome to the XR for Business Podcast with your host, Alan Smithson. Today’s guest is Hrish Lotlikar from the Rogue Initiative, SuperWorld app, and SingularityNET. Hrish is the co-founder and chief business development officer for the Rogue Initiative, a Los Angeles based entertainment company composed of award winning entertainment industry professionals, including alumni from Amblin Entertainment, Pixar, DreamWorks Animation, Disney, Activision and they are creating new original feature films, television, AAA cinematic interactive VR, and gaming content. He’s also the co-founder of SuperWorld — superworldapp.com — which is Foursquare meets Pokemon Go meets Monopoly in the real world, building a community in AR, powered by the blockchain. They’ve built an AR real estate marketplace, ad marketplace on the blockchain, which also acts as a social AR app, allowing users to personalize their real world by adding anything, anywhere in augmented reality with photos, videos, texts, and 3D objects, and share those experiences with their followers. He’s also an advisor of SingularityNET, a decentralized marketplace for AI algorithms allowing companies, organizations, and developers to buy and sell AI at scale. Previously to this, he was in venture capital, but he got better. If you want to learn more about Hrish’s initiatives, you can go to the Rogue Initiative, which is therogueinitiative.com, SuperWorld, which is superworldapp.com, and SingularityNET, which is singularitynet.io.

Hrish, welcome to the show, my friend.

Hrish: Hey, thanks so much for having me, Alan. I appreciate it. Looking forward to having this conversation.

Alan: Oh, absolute pleasure. You do a lot in this space. And the first time we met was at– I think it’s now called Global World Summit. But it was called– what was it called before?

Hrish: The VR/AR Conference?

Alan: Yeah.The VR/AR Association Conference. But let’s unpack these amazing initiatives that you’re doing. Let’s start with the one that’s Rogue.

Hrish: Yeah.

Alan: Tell us about it.

Hrish: Sure, yeah. So, Rogue Initiative we started back in late 2015. My co-founders, Pete Blumel and Cathy Twigg. The goal of the Rogue Initiative was looking at the convergence of linear, Hollywood, traditional entertainment and interactive entertainment. And how could we — from the ground up — create new original properties that brought those forms of entertainment together? Because there is a confluence of technology and Silicon Valley in Hollywood that was coming together. And how do we how do we kind of leverage that, to create new original content that goes across all of those medium? So building and developing a new story that starts on the feature film side and then organically moves to interactive all the way through TV, through all the way to amusement park rides and toys. So building franchises from the ground up, bringing in top Hollywood talent and interactive talent, and knowing from the foundations of creating that content, that we’re building it to go across all those mediums. And that’s the kind of high level vision of the Rogue Initiative.

Alan: Very cool. So let’s move on to SuperWorld app. Let’s talk about that. What is that about?

Hrish: So SuperWorld, I co-founded with Max Woon. Max co-founded Xfire and sold it to Viacom, and he’s been involved in several other companies at the very foundational level. Even in the VR/AR side with Sliver, and he’s been involved in toonstar, and SKIT, and Phizzle. And we got together because we saw Pokemon Go become the fastest company to hit a billion dollars in revenue, and just the growth and excitement around location based AR and putting kind of gamification on that, and bringing in a big license brand. And we thought if we can build the next Pokemon Go, wouldn’t it be great to build a place where the next thousand Pokemon Gos get built on? And that’s kind of the vision behind SuperWorld. It’s an augmented reality platform, where users and brands can create AR around them and put anything around them anywhere. And then that would be characterized as kind of like Pokemon Go meets Foursquare, right? Pokemon Go is putting digital objects around you anywhere, Foursquare’s the data elements of that. And we have a big data strategy at SuperWorld. And then the third part of SuperWorld is Monopoly. So how do you basically sell or buy the world? And if you buy the world, or buy parts of the world — we’re selling the whole world in 100 meter by 100 meter plots of land — you get a share of any of the XR commerce that happens on the land that you own. And we built that on the Etherium blockchain. So each plot of land is a non-fungible token, that once bought can be repriced to whatever you want. So it’s a unique digital asset. We’re getting people buying the world, and so the analogy is back to 2009, with Bitcoin launching and there’s a finite amount of it, or domain names back in ’95, if you had the opportunity to buy a really cool domain name. And so that’s kind of the excitement around SuperWorld.

Alan: So what properties of you.

Hrish: But so far I’ve bought a few select properties around the world, just places that I have nostalgic kind of interest in, historical places. I think I have a piece of the Taj Mahal, and the pyramids in Egypt, and some places in Manhattan, but I definitely want to keep a lot of stuff for our users to buy. So I didn’t buy too many, but we kind of see it as as a way for people to buy things around their interests. So back to what I was interested in, there’s other people that are interested in sports. There’s a lot of people who come in and buy a lot of sports stadiums. Other people buy downtown. Some people buy their apartment, or where they live, or where they once lived. So it’s kind of interesting when you think about the XR world, the digital land around you, there’s different reasonings that people have to buy things. So it’s kind of fun to watch that.

Alan: It’s pretty cool. I’m actually just buying something right now. [laughs]

Hrish: [laughs] Awesome. And remember, what’s really cool about this is when you buy a property — it’s .1 ether, so about twenty five bucks or so right now — is you can reprice it for whatever you want. So if you’re like, “This is a valuable property,” you could say “Hey, that’s 500K now.” And so what’s cool about this, is now you have 500K of real world dollar property in SuperWorld, so you’re not just a user, you’re like a stakeholder.

Alan: Cool. I have to buy some etherium and bitcoins to do this.

Hrish: Yeah, yeah. You have to transfer some ether to your account.

Alan: All right. I have to go to in– this is going to be more than I can do just on the phone here.

Hrish: [laughs]

Alan: I’ll figure it out. Awesome. Well, I’m definitely going to go buy a block of land, because why not? What land should I buy? I feel like the Monopoly is when you got me, I was like “I’m in!”

Hrish: Yeah.

Alan: I’m going to buy my property!

Hrish: [laughs] You know, what’s funny is that I haven’t seen anyone just buy one. When you buy one and you get your head around what we’re trying to build, it’s very hard to buy just one because, you’ll probably.

Alan: I’m going to make a suggestion on the app.

Hrish: Yeah?

Alan: When you click the spot to buy, the picture comes up over the spot. So I can’t really see what spot it is.

Hrish: Yeah, you can adjust the screen if you’re on your mouse, if you’re on your laptop or even on your phone, you can kind of move it up and down. So you’ll be able to kind of adjust that. But you’re right, it does do that sometimes. So it’s something we’ve got to– yeah, definitely. If you adjust screen, you’ll be able to see it. But the UX/UI is definitely one of the things we’re working on improving.

Alan: I love it. I’m buying this spot right here. Awesome. I got the perfect spot! I’m not telling anybody where it is! But you’ll have to–

Hrish: Until you own it. Until you own it. Then you’ll be telling everyone you own that spot.

Alan: Yeah! I own it! Pretty cool.

Hrish: That’s what’s still going on, is people talk about it naturally.

Alan: So yeah, let’s talk about how businesses can start to kind of utilize this new idea of owning virtual space.

Hrish: There is a lot of use cases for businesses as we think about the XR space around us. I think what’s wonderful about the medium is, you see through the success of Pokemon Go that there are people willing to — at this point, lift up their mobile phone — but definitely in the future with AR glasses coming around the corner, look around them and access contextual data. The way we think about it, — back to Pokemon Go for brands — it could be a brand like Coca-Cola or Nike who says, “Hey, why don’t you walk around your city or go around your city, and find all the rare Nike shoes that we have around the city.” And all of those shoes are interactive pieces of content. So you can collect points or play a game or all of that stuff is possible. But it also can be educational. It could be that I’m in my apartment, and I want to learn how to bake some cookies, I click on a button and I see Betty Crocker making cookies next to me.

Alan: Interesting. It’s really exciting.

Hrish: It is a very different way of thinking about building a social platform. And that’s what’s kind of exciting about it, is thinking about how XR can be applied to a decentralized type platform. I think decentralized media is a concept that is going to become more and more important, as we see issues with other more centralized forms of media and curation of content, and news and other things. And so we’re really trying to build SuperWorld and leverage the power of XR, but do it in a way that takes into account people’s privacy, takes in account data sharing, and it’s very permission[-based]. So that’s kind of all parts of this vision, that we think about when we think about the XR world around us. We don’t want to create a world where you’re being bombarded with data and information that you don’t want, you can turn it all off if you want, but you can also kind of in a very permission way bring in XR type experiences into your environment that you want. That’s all part of the vision that we’re going towards in SuperWorld.

Alan: So how will it work when people want to create experiences? Then will you have like a set of agencies or studios that you work with?

Hrish: Yeah. So that’s a good point. So currently what we’re doing is working with brands that we’re engaging with at SuperWorld. But ultimately we would like to bring in other agencies and other developers on the AR creation side into a marketplace where AR developers, individuals or companies can work with brands and be able to create those experiences. At the end of the day, what we would love to do is create an environment where brands and developers can showcase their AR to users that want to experience at AR and XR in all of its forms — whether it’s brands or influencers or even just their friends — on the platform. So at this stage, yeah, we’re kind of working on creating all the AR ourselves, but ultimately we’d like to transition that to more of a marketplace model.

Alan: Yeah, that makes sense. So, there is one more company on the list of your incredible companies here. SingularityNET.io, what’s that all about?

Hrish: Yeah, so SingularityNET.io is a company founded by Dr. Ben Goertzel, who is one of the top AI researchers in the world, well known for his role as chief scientist at Hanson Robotics as well. Sofia — the humanoid robot, if you’ve seen her — SingularityNET is Sofia’s software and provides some of that software there. And so SingularityNET is an AI marketplace. It’s a decentralized marketplace for AI algorithms. And one of the things that we’re working on through SingularityNET — where I serve as an advisor — is another company called Area 51, which is a decentralized AI virtual avatar company. So, connecting virtual avatars to the decentralized AI in order to make virtual assistants, to make virtual influencers, to make virtual Hollywood characters, there’s a lot of different use cases for virtual avatars or virtual characters. And the point here is we’re connecting it all to a decentralized artificial intelligence as part of SingularityNET.

Alan: Let’s go back to Rogue Initiative for a minute. You guys are an entertainment company. What are the experiences or things that you’ve done so far that people could try?

Hrish: Sure. So we’ve launched Crowe: The Drowned Armory on Oculus and HTC. HTC is also one of our investors. We are in post-production with a cinematic VR experience called Agent Emmerson, which should be released very soon. Actually, we just got finished with that. So we’re working on getting it.

Alan: Is it volumetric or 360 video?

Hrish: It’s 360.

Alan: Right.

Hrish: Yeah.

Alan: And the Crowe one, is that– it’s available on Steam, is it?

Hrish: Yes.

Alan: Great.

Hrish: That’s right. It’s on Steam and Oculus.

Alan: Very cool. So those are the new ones coming up. When is it coming out, the new one?

Hrish: It should be out soon. I don’t have exact dates on it. We just got wrapped up on it, and we announced it a while back. We had some delays in post-production. So that just got finished. So we should have that, I’d say, out in the next few months. We [were] planning on having it out earlier this year, but we had some delays. The other thing that we’re working on Rogue is a production with Michael Bay, the action director, which has been announced. But we’ll have more announcements soon. And that’s that’s going to be according to our model of building franchises that go across interactive and linear production.

Alan: Very cool. That’s pretty exciting. In one of my earlier interviews today, we were talking about how Hollywood studios are starting to make these five to six minute experiences to enhance the moviegoers’ experience. So you go to the movies and watch the movie, then after the movie you can get in VR and experience the movie as well.

Hrish: Yeah.

Alan: It’s– I think it’s really interesting.

Hrish: It’s going to be going beyond just a marketing vehicle, where people can experience aspects of a movie. And I think we’re going to move towards fully interactive entertainment, and that’s going to be very exciting. So I’m looking forward to that. I know me personally would definitely enjoy an experience where I have a lot more agency in entertainment. I’m very excited about the future of that. But yeah, currently, it’s also a really great marketing accompaniment to any kind of linear entertainment on the feature film side.

Alan: Yes. Did you see the one they did with– I think it was South By Southwest. It was a huge one where you jumped out of a helicopter in VR and it was crazy.

Hrish: Was that this year?

Alan: Yeah, it was the Amazon Prime show, Jack Something Or Other.

Hrish: OK. No, I didn’t see that.

Alan: It was crazy, you have to look it up. I’ll out it in the show notes. It was nuts. You literally went on a– what’s the thing when you slide down the rope?

Hrish: Rappelling?

Alan: Rappelling, yeah. It was like, you were rappelling across this vast thing in VR. You’re in VR on a physical– it was nuts! Like, who thought this up?

Hrish: Crazy. I missed you at South By this year. I didn’t see.

Alan: Yeah. I actually wasn’t at South By this year, I didn’t go. I really wish I had been there, to be honest. It was just a timing thing. I double-booked myself. I didn’t realize.

Hrish: Ok. Yeah, there’s always so much– I think GDC is going on at the same time. So it’s noise.

Alan: Yeah. Oh well. Next year, I’ll be there. I was a judge for the South By Southwest Awards this year.

Hrish: Oh really? Oh, that’s right! I think I remember seeing that. That’s so cool. I’m sure you saw a lot of good stuff.

Alan: Well, I was the judge for AR or virtual and augmented reality and also blockchain. So I saw a ton of blockchain companies, and a lot of them were working in the kind of logistics and tracking where your food comes from and that sort of thing. And I thought that was really cool.

Hrish: Wow. That’s– that is. Yeah, there’s so much innovation going on around that.

Alan: Let me ask you a question. What’s EastLabs?

Hrish: EastLabs is an early stage accelerator that I founded about eight years ago in Ukraine. The premise there is the region in Ukraine and Belarus and Russia graduates some of the best and brightest technology programmers and developers and designers. And the workforce over there — as you know — is pretty amazing. And the top people end up working in outsourcing for Facebook and Google and other top tech companies in Silicon Valley. The ones that get to San Francisco, start Facebook and Google and WhatsApp and the top tech companies. And so I started EastLabs with two other partners, Eveline Buchatskiy and Olga Belkova. Evelin ended up running TechStars in Boston and now runs a venture capital fund called One Way Ventures, funding immigrant entrepreneurs, and Olga’s in parliament now in Ukraine. But we got backed by one of the biggest investors in the region, Victor Pinchuk, and his EastOne Group, which is a large investor over there. And basically the goal was, is how do we fund these awesome technologists, these programmers, how do we get them together and build world class companies that originate in Ukraine and then move their front office to the US or Asia or wherever, whatever market they’re targeting and keep their back office in that part of the world? Which is where it should be, because they’re so good. And that’s what we did. We invested in about 35 companies in Eastern Europe, mainly in Ukraine. We sold one company, and two or three are still doing very well and thriving. But most of all, a lot of the founders that we invested in went on to start second or third companies that have gotten funded by top theses in Silicon Valley and gotten pretty well-known. So we kind of helped build the ecosystem over there, and we’re really proud of that. Yeah, so EastLabs was kind of one of the originators of the Ukrainian technology ecosystem.

Alan: That’s incredible. It’s really interesting, because I do see a lot of talent coming out of the Eastern Bloc and the talent is there. The cost to develop things is a lot less. It’s up there in talent for sure.

Hrish: Yeah. The Soviet system had a big emphasis on science and technology and mathematics. And I think they graduate thousands and thousands of a very high level programmers every year. It’s an awesome place to find engineering talent, for sure.

Alan: Indeed. On that note, what are one thing that you would want listeners to kind of think about in each of the companies? Rogue Initiative, what do you want people to think about?

Hrish: So, for Rogue Initiative, I’d love people to imagine what they would think of as an entertainment franchise. What do they think of when it comes to XR as the ideal way to to experience entertainment? The way that it’s happening right now is a mix of interactive and passive, and I think we all have our own personal opinions about what kind of things that we want. But I think ultimately what’s really great is the XR medium allows entertainment to really evolve from what we think of now, and to what it will be in the future. Imagine watching a movie on your coffee table in AR, right? Or imagine playing a game around you that is part of the movie. And some of that stuff you can see in Call of Duty and other console games that have been around for years. But I think we’re going to see a real evolution in terms of entertainment. And so I think that as we all imagine what we would want in entertainment, those are the kinds of things that we think about at Rogue Initiative. Those are the things that we’re creating on the entertainment sites. It’s a lot of fun to think about that, but that would be my take away there.

Alan: Amazing. So what would the takeaway be then for SuperWorld?

Hrish: The interesting thing is, that it being a platform where XR in all of its forms in terms of our vision, where we imagine a place that you can really kind of access, not only games or kind of Pokémon Go-esque type experiences, but also one day be able to experience other things like education or more enterprise applications. I think the takeaway there is that all of this in the XR world is is still very formative. I’d say it’s very– the way that it’s being built is piecemeal by brands, and brands have apps or brands are using WebAR. All of these different forms of AR are kind of out there. But I think the take away is, is how do we create an environment, where we can create a place where all of these things can live. And as users, we can kind of experience those things again, in an environment that’s very permissioned, where we’re not being overloaded by AR, and it’s very curated. And that’s kind of some of the things that we think about at SuperWorld is, as we are building an AR world in an AR platform, how would we build that if we could kind of build the ideal platform? And part of that is the decentralization. So I would say go and buy some real estate and and help us build SuperWorld. And that’s the point, is when you buy some real estate, now you’re a stakeholder on the platform. You know, eventually we plan on giving owners rights or privileges on the platform. And we want to build it with kind of everyone involved. And so that’s the back to the decentralized kind of approach there.

Alan: Awesome. And finally, SingularityNET.

Hrish: SingularityNET, we’ve been around with Ben, creating decentralized AI and again, my involvement in the SingularityNET came from my interests in AI And I’ve known Ben for a while. And we think that AI and decentralized AI really has a place in SuperWorld. And as we’re thinking about virtual avatars connected to decentralized AI, the benefit here is, you look around at other virtual assistants or other assistants like Siri or Alexa or others on the market. You’re kind of freely providing your data to those assistants that and they are mining that data. And we think that if we can kind of build this in a way where the data that is used by these assistants is– you’re being compensated for that data. And so there’s an exchange of data for her payment. And then also having that data and that information be processed by in a decentralized fashion also has benefits for us as users, because we aren’t feeling like the information that we’re providing is to a centralized source that’s controlled by one authority. And so, again, SingularityNET being decentralized, utilizing decentralized algorithms and then back to XR and how we’re interacting with those XR avatars. There’s a lot of benefits to that decentralized AI infrastructure. And so that’s kind of the thing I would say I would say, is the takeaway is, how is your data being used currently? And is there a better way to have an AI virtual assistant experience, where you’re having all your own privacy and and your data that you’re providing accounted for. And you’re monetizing that data as well, so I would say that that’s the takeaway, and some of the things that we’re thinking about there at SingularityBET and Area 51.

Alan: Really incredible stuff. I can’t wait to see what you guys dream up for these, in terms of kind of real use cases as it expands and as the platform expands and more users come on board and brands start to kind of flex what’s possible, it can be really interesting.

Hrish: Yeah, yeah. Ben Goertzel, who’s the head of SingularityNET, and also involved in Area 51. He’s been working on AI and for 20+ years, and is one of the leaders in the field. So it’s a pleasure to be able to have him and others like Cassio Pennachin, his longtime partner and co-founder. We’re kind of thinking about how do you bring in AI into the XR world. And I’m honored to be able to help them and provide my insights on that.

Alan: Really awesome. Well, I want to thank you again, Hrish, for taking the time out of your busy schedule. This has been great.

Hrish: Yeah. Thanks so much. I really appreciate it.

Alan: Thank you so much.

Hrish: Thanks, man. Looking forward to seeing you soon.

Hey there, it’s Alan Smithson with the XR for Business Podcast. And today’s episode is a very special recap of a conference that I just spent two days at, called the Ritossa Family Office Summit. This is a gathering of elite family offices, a total of 600 prominent business owners, sheiks, royal families, private investment companies, and international business people, getting together to discuss the future of investing. Now, to put it in perspective, the people that attend this represent about $4.5-trillion in investable wealth. And this conference is the world’s largest and most exclusive gathering of elite family office decision makers.

This year’s topic was “East Meets West”, and the theme of Dubai summit will act as a bridge between Middle East families and their European, Asian, US, and Latin American counterparts. This was an amazing experience for us. We were there as a vendor. We were the only company there bringing virtual and augmented reality to these people. And the interest level around virtual and augmented reality was insane. People were asking all sorts of questions, “How long is this going to take? What is the roadmap now? Who’s using it? What companies are doing it? How can we involve our company portfolios in this?”

And really, we came at this from a training standpoint. Virtual and augmented reality training is the most effective, efficient training solutions we’ve ever created as humans. Everything from being able to track where the user’s looking, to their biometrics, their heart rate, all of these things combined create what we are hoping will be the future of all education and training. And at MetaVRse, what we’re really focusing on now is building out a platform marketplace to help businesses navigate the technology, figure out what technology works best for the needs of their employees.

Because as we enter into this kind of age of exponential growth, what we’re seeing now is a massive change in how we work. Over the next three years alone, IBM estimates that over 120 million people will need to be reskilled and retrained due to AI and automation. And from a strictly monetizable standpoint, PWC — the global conglomerate — they’ve just earmarked $3-billion to reskill, upskill, and retrain their staff.

AI and robotics and automation are coming faster than we can possibly think about. And virtual and augmented reality give us this kind of unique perspective as to how we can train people in a way that is easier, faster, more efficient. And I think we’re going to need that as we enter into exponential growth.

Back to the Dubai summit. First of all, I want to say a huge thank you to Anthony Ritossa — the host of the summit — who brought together these incredible people. It was under the patronage of His Highness, Sheikh Ahmed Al Maktoum, the ruler and prime minister of Dubai, and the ruling family. And it was really amazing to meet their chief investment officer, Mohammed Al Ali — who actually today is being knighted in London — and he is the CEO and advisor of their International Investments Enterprise. We met with Adam, the judge from the private office of His Highness, Sheikh Hamdan bin Mohammed Al Nahyan. We met with Faris, and his team from the office of Sheikh Sultan Bin Abdullah Al Qasimi.Qasimi.

And all of these sheikhs represent family offices from different parts of the UAE. You have Dubai, you have Sharjah, you have Abu Dhabi, and all of these different emirates. There’s investments where they’re looking not just to invest in oil and gas and these things, they’re really looking towards investing in world changing things. Education is on the top of mind of everybody right now because as an investor, if you own several companies, you realize already that there is a skills shortage.

In America alone, there’s about a 6 million person skills shortage in skilled trades. So things like plumbing, HVAC, electrical, all of these things. Kids, it turns out, don’t want to be in these types of things anymore. They really want to be YouTube influencers. And actually, a study was recently released where they studied 3,000 kids in America and 3,000 kids in China. And they told them, “Just simply rank these seven jobs.” And the seven jobs were– in America, the number one job was YouTube influencer. The number seven job was astronaut scientist. And in China, the list was actually completely flipped.

So if you look at our priorization of learning, it’s more important for people to be on social media than it is to learn truly transformational skillsets, and I think we need to take what we’re learning with virtual and augmented reality — and even things in entertainment — and apply these to our new learning procedures. If you look at education as competing with Hollywood movies, blockbuster AAA video games, and social media, these have teams of people designed around just making these things addictive.

Netflix has AI algorithms that give you better shows to watch. What we need to do is really take all of this knowledge of AI and machine learning, and apply it to learning. And that’s really what we’re hoping to do with MetaVRse. Some of the other people that we met this year at the Ritossa summit were just incredible. Sheila Driscoll, the founder of Driscoll– or I guess founding family of Driscoll’s Berries. I don’t know if you’ve eaten their raspberries, but I have. They’re delicious. But she was on a panel talking about giving back, and philanthropy.

And all of these people are looking at investments that not only serve their wallet — because once you have enough money, you have enough money, you don’t need that — what they’re looking for is investments that make positive change in the world. Some of the panel discussions were around artificial intelligence and machine based learning. Why are people invested in it? And what we realized is that there’s a lot of misunderstanding going on with that. And one of these things are that people just don’t understand. So they need to– there’s a lot of education that needs to be done around. What are these technologies? How do they– how are they interrelated? AI, and machine learning, and computer vision, and virtual and augmented reality, and mixed reality, and IOT sensors, and cloud computing, and edge computing, and quantum computers. All of these things are interconnected, they’re intertwined. And we’re seeing a convergence of technologies.

And really, being able to talk to these philanthropy arms of these massive investment companies, you start to realize that they’re getting bombarded with people in blockchain, and cryptocoins, and these types of things. There’s tons of presentations on investible digital assets. “What’s to come in 2019,” with Nick Ayton from Chainstarter Ventures. One of the other things was interactive roundtables, and art as an investment asset class, building global businesses in partnership with family offices, investing in blockchain, machine learning, and artificial intelligence.

I went to that one — the roundtable on artificial intelligence — and the question came up around the table, was “When will artificial intelligence replace bankers?” And everybody had their different answers: 2030, 2040. And the real answer that I gave is, “as soon as possible.”. And it’s not that people don’t want bankers, it’s that as soon as you have an algorithm that takes out the emotion of banking and does the job more efficiently than a human, this is where AI becomes a replacement for what we do. And if you look at how many jobs are in the financial services sector, and how many jobs are already changing around quants and around artificial intelligence algorithms, it’s really going to be revolutionary.

Some of the other things that we saw there at the Rotossa Summit, this one really got me, I love this one. This is “Buckle your seat belt. What options do families have for insurance against market volatility?” Having President Trump and China at this trade war leaves a lot of uncertainty for the world. And we are in a time of volatile markets, and really being able to invest financially secure investments against real estate or against other assets. It was really a great eye opener on what are the insurances that investors are taking, to make sure that market volatility does not affect their returns.

One of the panel sessions was on blockchain and business delivering real world benefits. And we’re talking about how blockchain can be used for medical records, it can be used for education records. In fact, one of the things that we’re building as part of our platform marketplace is a blockchain component that allows you to have an immutable transcript of your record. So if you take a course at work, or you take a course on Coursera, or you take a degree at Harvard, or a microdegree in Udacity, these can be locked into a blockchain and really secure there. So that’s a great use case there.

I know it’s being used a lot in shipping, in logistics, being able to track where your food comes from, and where everything is sourced from ethically. One of the the panels that I really, really enjoyed was “Philanthropy, impact, and social responsibility investment opportunities.” And this one was big for me, because on the panel was Justin Rockefeller from the Rockefeller family. And here’s a descendant of one of the wealthiest people on the planet to ever live in humanity, and talking about how their family wealth is being preserved and reinvested, and how they have a moral obligation to invest in philanthropy and impact and social investments.

And it really resonated with me, because everybody there has the ability to fund all sorts of philanthropy efforts. And it was really wonderful to understand how these people invest, how they think, and more so, what is important to them from a standpoint of their long term visions and their long term dynasties, I guess is the right word. So what is it about their dynasty that they want to be remembered by and listen, making a lot of money is easy, easier for people that have it. Making more money is easy, but making money while doing good in the world, I think is going to be the new way of doing business. And I’m really excited for it.

One of the things, my purpose in life is to inspire and educate future leaders to think and act in a socially, economically, and environmentally sustainable way. And by being networked with these wonderful people at the Ritossa Summit, and having deep conversations around the ways we can use virtual/augmented/mixed reality technologies combined with the other technologies — AI, blockchain — combining these to serve humanity and especially from our side, from the eyes of learning, and really creating education. I’m going to throw this out here, because our mission — and we’ll be announcing this outside of the podcast soon — but our mission at MetaVRse is to democratize education globally by 2040, using spatial technologies.

And we believe that as these technologies become more mature and more ubiquitous, the future of learning isn’t going to be looking at a YouTube screen. It’s going to be looking at a YouTube screen, it’s can be listening to a podcast, it’s going to be doing something in spatial computing. All of it combines to create a learning environment, where each individual learner can learn the best possible way for them. And being able to incorporate data like eye tracking and biometrics and head pose and hand tracking, we’ll be able to deliver learning at a scale and efficiency never, ever thought of in human history. So we’re really excited about building that future.

With that, I want to just say a huge thank you again to Vanessa Eriksson from the Ritossa Summit, and also to Sir Anthony Ritossa for the invite to this incredible gathering. And I can’t wait to the next one, in Riyadh. So thank you again. And thank you guys for listening. This has been the XR for Business Podcast with your host, Alan Smithson. Oh, one more thing, if you haven’t subscribed to the podcast, hit the subscribe button, so you get all the updates and also you can sign up for our email newsletter, we email out once a week some news on the industry, at xrforbusiness.io.

Alan: Thank you for joining the XR for Business Podcast with your host, Alan Smithson, today’s guest is the one and only Dean Takahashi, the lead writer for VentureBeat. He’s been a tech journalist for more than 28 years, and he’s covered games for a twenty one of those years. He’s authored two books: Opening the XBox, and The XBox 360 Uncloaked. He organizes the annual GamesBeat and GamesBeat Summit conferences. To learn more, you can visit games beat dot com or venture beat dot com.

Dean, welcome to the show, my friend.

Dean: Thank you. And thank you for having me.

Alan: It’s my absolute pleasure. We had the distinct opportunity to meet at AWE this year for a very short amount of time. I think we rode the escalator down? But I’ve been a big fan of yours for a long time. I read the articles that you write, and they’re very insightful. They’re very factual. I’m just very honored to have you on the show. So, thank you very much.

Dean: Thank you. Nice, and happy to hear.

Alan: How did you start… first of all, I guess you’ve been in the games world for a long time. How did you kind of pivot over to VentureBeat, and what is VentureBeat? Let’s let’s unpack what VentureBeat is, for people that may or may not know?

Dean: Yeah, I was sort of a traditional newspaper and magazine journalist for a long time, and then, when the web came along and people started podcasting and blogging, I looked around and felt like it was less of a risk to go try something new than it was to stay at a newspaper. I was at the San Jose newspaper at the time. So about 11 years ago, I joined VentureBeat, and it had been started two years earlier by Matt Marshall, who was a venture capital writer for the Mercury News and an early blogger as well. And so, we were a tech news blog and competed at the time with likes of GIGO, and TechCrunch. They have been either… gone away, or they they’ve been acquired by larger companies. So we’re still one of the last, larger independent tech blogs.

And then within that, when I joined about eleven years ago, we started GamesBeat as well, as sort of a subsection that focused on games. At the very beginning, we were sort of a startup and venture capital site. But now we pretty much cover the gamut of tech news and game news. And then, our particular vertical focuses are artificial intelligence on the tech side, and then the whole game sector. And then, I guess as far as getting into VR and AR, I’ve really followed the news. I remember seeing the Oculus guys — Palmer Luckey and Nate Mitchell and Brendan (Iribe) over at one of their CES tables in the early years, well before they were acquired. I think I even tried to get an interview with John Carmack, like, the day after he did a demo at E3. The next day, he was gone. So I was on the hunt kind of early. Never quite the absolute first person to dive into VR.

Alan: But very close. You’ve seen it from pre-DK1 days — where [it was] probably a cobbled-together a collection of flat screens, wires, and duct tape — and what it is today, where you have real consumer-grade virtual reality that’s not even connected to computers. You’ve seen a lot over the years. You’ve written countless articles on virtual and augmented reality. Is there anything that you may have written about before that you couldn’t have predicted, that has happened already?

Dean: I didn’t really anticipate that Enterprise was actually going to take off as well as it has. It was always sort of there as something that might be a market someday. I expected, like everybody else, that consumer VR was going to catch on. Wasn’t sure how big it would be, but it would catch on first, and then all of the other markets that people were talking about would fall. It sort of seems like t slower-than-expected acceptance of consumer VR in reality has sort of paved the way for bigger opportunities on the enterprise side. I think there were people early on, like the folks at Sixth Sense who have the hand controllers. They were talking about there are a wide variety of things you can do with these hand controllers for VR. It didn’t seem like their main efforts. They really wanted to have success in games, in VR or in other kinds of consumer VR apps. It so happened that that was slow to take off and they started pivoting and looking around for other things they could do. They found medical companies that were more interested in how precise those hand controllers could be, so they started doing demos, like a virtual catheter insertion and other kinds of medical training demos.

Alan: And it’s interesting that you say that, because I actually did the Sixth Sense demo a couple years ago, of the catheter thing. And that was with controllers. Then this past weekend, I tried the HaptX gloves. Have you had a chance to try those?

Dean: I’ve tried some haptics gloves. Which ones in particular?

Alan: “HaptX.”H-A-P-T-X, the ones that have air–

Dean: I’ve trained theirs, but I haven’t tried that particular demo.

Alan: deprecatingOh, the one I tried was just incredible. This was a surgical demo where I reached out and I could touch the patient, and I could pick things up. And, wow. Being able to physically pick things up in VR, it adds a whole new element. It was really incredible.

Dean: Yeah. Certainly.

Alan: I did a presentation last week and there one of the slides I put up shows the growth of the whole XR industry, and consumer was leading the way. And then, as of 2019 — by the end of this year — they’ll kind of cross. And consumer will keep growing, but enterprise is growing much, much faster; 30 percent faster than consumer. Is that what you’re seeing across the board?

Dean: Yeah, I think. I mean, it sort of makes more sense to me that, as long as the prices for the headsets are lingering up pretty high — like the Cosmos from HTC, the brand new one, it’ll be an $800 purchase. And even the Oculus Quest is at $400, and they seem to be the $200 Oculus Go. They’re not getting good enough for the consumer price points to get traction. And so the enthusiasts are buying a lot of these headsets now, but there’s a limited market and limited appetite. Once you get down towards where the consoles used to be — like a $100 or $200 prices — and the opportunity becomes much better. And so, yeah, if we have these $400-$1,000 prices on these headsets, who’s going to buy them, right? Well, I guess if you look at who’s going to save money with these headsets, then that’s a more interesting equation for all the enterprises. If they’re going to spend… I think there’s a hospital in Los Angeles that was spending $400,000 a year training doctors on how to how to spot particular problems with young babies who were having seizures, and one of the VR companies created the simulation to do this in VR, and to train the doctors and to have things in it, like parents who were panicking and screaming at the doctor while they’re trying to figure out what’s going on with the kid. And it turns out these these are very effective, and they can save that particular — just one — hospital, hundreds of thousands of dollars a year in training expenses, because you’re not now dedicating veteran surgeons and doctors to do this kind of training work. Instead, you can do so much of it in VR. And I think that was sort of reinforced at Oculus Connect 6, when Johnson and Johnson announced that they were going to try to roll this kind of training out to doctors around the world.

Alan: Covering the so-called “venture beat,” you’re also seeing investments going into this; we’re already starting to see some early investments in AR and VR that are… well, failing. We just saw medha and Blippar and the most recent one, which was… well, even ODG. There’s been a number of kind of false starts with this technology. And it seems to me that timing is a big issue. What are your thoughts around timing of this industry? You’ve been covering it since the very, very beginning. If you were to put your investor hat on and put money into something, where would you invest your money now?

Dean: I defer that question to a bit later. But I think first that is sort of talking about what’s happened. We had predictions that we were going to see a gap of disappointment for a few years. John Riccitiello — the CEO of Unity — was one of the first to point out that there was going to be this great sort of gold rush of people who were going to overhype VR and its potential, and then we’re going to see this gap of a disappointment where the early reality didn’t match up with the hype and a lot of people were going to bail on it. And that tends to happen in almost every industry; every tech industry in particular. But I guess the question is always whether the platform in question gets enough traction in order to survive that gap of disappointment, and to go on. And just as platforms had to plan for this, I think also a lot of the developers have to as well — the game developers — and the venture capital funds. There were a number of venture capital funds that came out with a specific focus on VR, and VR games in particular, and they’re pivoting elsewhere as well, because they are not seeing the returns that they had hoped for. Boost VC would be one of those, I think.

And I think that some of the companies that I’ve seen doing pivoting include Playful, founded by Paul Bettner — they made Lucky’s Tale game for the Oculus Rift. It was the flagship title that the Oculus Rift launched with, and it did well enough there, but Playful saw enough writing on the wall, where they raised a lot of money during the good times and they didn’t spend it all. They got sort of ready for–

Alan: The other writing on the wall.

Dean: Right. Yeah. And they also then adapted Lucky’s Tale into a game called Super Lucky’s Tale that ran as a regular, traditional 2D screen, 3D graphics title on the XBox One. And then they spread to other platforms, like the Nintendo Switch is coming shortly. So so they invested all this money in creating a new intellectual property for virtual reality, and it made as big a splash as it could with just a few million units in the market at the time, and if not even that. Then they repurposed that IP and put it into things that had 50-million-installed base. That’s generating more money for them. And it’s a smart way to invest in VR, is when you’re not completely reliant on the VR revenues. The shadows were adaptable to other 2D screens. That was great. And those guys are still alive today. And they were they raised another $23-million round.

Talk about pivoting, though; they’re not talking anymore about doing a lot of flagship VR titles. They’re saying those are still happening, but they are moving towards the backburner, and they are creating more traditional titles in the meantime, again, getting ready for a slower burn.

Alan: I think that’s a really wise approach. But you’ve got companies like Blippar, who raised $110-million, and their last round was something like $30-million. And they burned through that in four months. How do you burn through $30-million in four months? I just… I can’t even!

Dean: That’s crazy.

Alan: I think pragmatism — being able to take the money that you raise and make it last — I think a lot of companies, a lot of startups anyway, raise money… I went to this talk the other day, and this guy was telling me, “oh, we raised $10-million,” or whatever, and he goes, “we spent half a million dollars in the first day, on furniture and stuff for the office. Looking back at the money we burned on dumb stuff, we could have been so much more successful if we had not.” Because once a VC hands over the money, they’re not leaning over your shoulder saying, “what’d you spend it on?” They’re saying, “run your company as effectively as possible.” And I don’t know that buying half a million dollars in furniture is the best use of funds. But I think people need to be pragmatic with their funding, and respect that every dollar counts, especially in emerging technologies.

Dean: And I think more critical are these more foundational companies, like Facebook and Valve and HTC. Now, what are they doing? Do they still believe in it? Are they putting their money where their mouth is still?

Alan: It seems like it.

Dean: That’s an interesting question.

Alan: It seems like it; it seems like they’re still investing. Facebook is still investing in Oculus, obviously. And there’s still lots going on in that. But we’re starting to see enterprise use cases pop up all over the place. I know you wrote an article on PTC and GlobalFoundries using AR to transform chip manufacturing. These enterprise use cases which are driving real ROI — I mean, if you listen to any of the episodes on this podcast — it really drives home the fact that things like training are driving real ROI. Things like remote capture assistance, and being able to use AR to overlay instructional manuals on top of things, decreasing the time to train for people. These are real measurable ROI components, and they’re really driving this industry forward. If companies raise money now — the end of 2019/2020 — I think it’s the perfect time, because we’re only just starting to see these real ROI-driven things come out. And once that starts to catch steam, every company in the world is going to have to have an exit strategy. If they don’t, then they’ll just get left behind like they did in the days of the web.

Dean: Getting back to the platform owners, I think if you look at HTC and some of the things that they’ve done… you know, they did an eye-tracking version of the HTC Vive here.

Alan: The VIVE Pro Eye.

Dean: Yeah. And the question is, why would they do that? Right? If the consumer market isn’t exactly demanding that? That would be useful for things like advertising, to see if the user actually looks at an advertisment that is in a VR app. That’s very consumer-oriented. But they really did that more for the enterprise market and training. Right? If you can confirm to the companies that’s doing the training that the user looked at something, saw it, and grasped it or understood it — or completely skipped it — then you have a much better idea of whether your your training is working. So it’s actual feedback that’s necessary for this training. It’s an expensive technology. It makes the Pro Eye more expensive than the other HTC offerings for sure. But they’re doing it because they realize where the money is right now.

Alan: I think Oculus is rolling out Oculus for Business. Or is it Oculus Enterprise? Or… it’s Oculus for Business.

Dean: Oculus for Business, yes.

Alan: HTC’s got their enterprise division. Hololens is all in on enterprise. And then even Magic Leap, I’ve heard rumors that they’re going to be introducing an enterprise division, or an enterprise something. So a lot of people got in and said, “hey, we’re gonna make games,” and then, “maybe we should make training simulators or something like that.” I think there’s been this shift… you’ve seen waves of these new technologies come and go, and become established. What, in your opinion, is a timeline looking to have ubiquitous AR or VR, pervasive in the world?

Dean: I think if we look back at something like the iPhone/smartphone in general, and look at those app stores and how they developed, we would see that games led the way. And very fairly — six, seven years in or so — I was looking at a lot of analytics reports and they were saying that 80 percent of the revenue of the app store was game, and half of the usage was games. And I think the thing that really got traction and really took off with users with games. And that allowed the platforms to just continually expand with new things for consumers to embrace. You always need some kind of lead horse, you know, a lead application — or a killer application — that’s going to take off in it. And this case with VR, starting in 2016, everybody thought it would be games again. And we have something like Beat Saber, which had more than a million downloads. But it’s not quite the same way; it’s happening in such a large sort of growth curve now that you can make that same comparison. It’s good for VR to look for all these other different applications. I think training will be big. I think the hazards of enterprise include… there are some companies out there that are really big fish, and you can spend a lot of time going for them, but sometimes they don’t bite. And if they don’t bite, then you’ve spent all of this time and effort customizing some kind of application for them, and they’re not enthusiastic. You don’t hear that happening too much. I think I hear that, when there are big efforts to come up with a good enterprise app for training purposes, then that works well. I think it just is a longer sales cycle.

Alan: One of the other business use cases that I’ve seen that starting to catch traction is interactive ad formats, where you can try on a pair of glasses, using face filters and stuff like that to try and glasses or makeup. I know L’Oreal purchased a company that was doing face filters for makeup so you could try and lipsticks and eyeshadows, that sort of thing. The ability to use the device that’s in everybody’s hand — if we take a step back, that’s still considered AR. I think that’s one of the killer use cases. I know if you go to Walmart.com/Lego and then click “see it in action,” you can actually, just directly from the website, you can project a Lego set on your table. It sounds really awesome, and it is — it’s really fun and exciting — but what it really gets down to it is they’ve shown the increased sales by 25-150 percent using just web-based interactive tools. They’ve doubled and tripled sales conversions. So, mobile phone-based AR is not to be forgotten about either. Even though we’re talking about glasses and headsets, sometimes the lowest-hanging fruit is… there.

Dean: I think there’s also some lessons in this. Some of the companies trying to go out too early — castAR is a good example of that. Jeri Ellsworth and Rick Johnson started that over at Bell. Bell decided to go with Steam VR and VR, instead of AR. And so they spun it out as a company called Technical Illusions, which then became castAR. They had a pretty good Kickstarter campaign that raised some — a lot — of money to do a consumer AR game platform, consumer application platform. They did that. Then the VCs came in for the next round and said, “hey, why don’t we just totally repurpose some of this plan for the enterprise?” And it was a pivot that represented a lot of the good thinking that we’ve been thinking about and talking about here. But, you know, their particular solution did not resonate as well with others in the enterprise space. They raised $15-million. They tried to raise more. They expanded greatly. They hired a lot of people. They ran out of money. So then, they went bankrupt. Jeri Ellsworth went back and, with some other employees, bought it out of bankruptcy. And just last week, they started a new Kickstarter to return to the technology — the AR platform — to tabletop games; digital games and AR. And so that’s a case study, I guess, in how things can go the opposite direction at some sort of conventional wisdom.

Alan: When venture capital gets involved, they can skew or sway the entrepreneur’s direction. It sounds like Ellsworth and their team were really focused on games. And to take a team that is really passionate about games and pivot them to enterprise? That doesn’t seem like a recipe for success to me.

Dean: Yeah. And you know, she was fairly open about saying that she’s being very careful about any particular deals that investors approach her with now, and that she thinks it’s a good thing that she remains CEO for this venture, and the previous venture,.

Alan: I agree. It’s interesting. Until a company as real scale… re:Work is kind of replacing their CEO right before the IPO and stuff. But until a company has reached a level of maturity where they’re making recurring revenues and they’re growing and they have a solid ecosystem and everything, I think it’s a real disservice to the company for the venture capitalists to either replace the CEO or try to direct the CEO in a different way. And we see it time and time again. You see these companies… like Jaunt, for example. Here’s a prime example. Jaunt was a content studio and a camera maker. Then they got rid of the camera and they said, “we’re gonna make a content platform.” Then they got rid of the content platform. “We’re going to make volumetric capture of people.” And recently they just got bought by Verizon. But I mean, they raised $100-million; Verizon probably bought them for pennies on the dollar. There’s a company that pivoted six or seven times with investors’ money.

Dean: Exactly.

Alan: I actually wrote an essay on why Blippar failed. And Blippar raised an enormous amount of money on a huge valuation. But they — in my opinion, from what I read — they were trying to boil the ocean. They were trying to be a computer vision company, and an AR company, and a marketing agency, and a dozen different things to a dozen different people. That’s just very difficult when you’re dealing with huge problems like computer vision and 3D object recognition. That one problem is very hard to solve. They’re trying to solve that on top of another dozen things, and none of them were making any money.

Dean: And I think the VR companies out there are probably quite familiar with the problem that the VCs in Silicon Valley often behave like the people on the HBO show “Silicon Valley.” Just ridiculous outcomes.

Alan: “I need billionaire doors. They don’t open up like billionaire doors!” [laughs] But that show is so close to reality. It’s crazy.

Dean: Yeah.

Alan: I’ve spent a lot of time in the valley, as you have. And you’re looking at it like, “wow, you can actually nail the personas of the people in this show.” It’s wild. There’s starting to be this shift away from venture capital; for one, venture capital companies in general are not returning anywhere near the returns that they once were 20 years ago. And so there’s there’s that, but also, family wealth offices — family offices who provide the capital, so endowments and family offices that provide the capital to venture capital companies — they’re starting to say, “you know what? Rather than pay the 5 percent management fee, why don’t we just invest ourselves?” And so you’re starting to see family offices acting like like venture capital funds. And then, of course, a year or two years ago, you had this kind of crazy blockchain crypto space where everybody and their brother was doing an ICO, and you billions of dollars being raised from nothing. And obviously that crashed and burned. I think VC is not the only funding source in town anymore. And that’s really changing the landscape a bit.

Dean: I think, in the case of VR — to go back to the funding — that comes from the platform owners, and Facebook in particular. And, you know, Mark Zuckerberg was on stage, saying that he still believes in VR as the next computing platform and that they’re investing in it because they feel like they’re in the early days of the P.C., and just see how how big that became. They think that this is going to be this big. And I think Zuckerberg at one point said they invested $250-million in a lot of the early applications, and they’re going to invest another $2-million. And he announced that they recently crossed over $100-million in sales in the Oculus store. Well, if you put $500-million in, and you get $100-million in revenues out… that’s not a win, right? That is an indication of just how much work there is to do here. And while it is encouraging to see that $100-million, a company like Facebook has to just really stay in this for the long haul, beyond the point where it seems like the market has jumped the shark and VCs have all left, other investors cited, “we’re going to stay away from this.” A lot of developers, early developers, have dropped out and have gone elsewhere. But Facebook has to stay the course. And so far, it seems like they are spinning up these things like Oculus for Business. And so my hat’s off to them for that kind of investment. And if I were to compare to something like a similar opportunity, it was back in the beginning of the XBox when Bill Gates was looking at this. He had the gigantic operating system business. He had a monopoly with Office. And here he was trying to enter the video game business with the XBox back in 2000. And they lost something like a billion dollars per year in that first four years. They lost about $4-billion on the original XBox.

Alan: Wow.

Dean: You flash forward from that to 19 years later, and every quarter now, they’re generating something like a couple of billion dollars in revenue from the XBox. Vision, right? It took someone like Bill Gates to say, “hey, you know what? I got the billions of dollars, I’ve got a lot of cash. And, you know, this might not turn out in the long term. I think I’m right that I should stay the course in this investment.” And it turns out that he had the most foresight out of anybody from those days, that this was going to be a great thing. And now, to this day, I think it remains Microsoft’s best pivot ever.

Alan: Have you been to the Microsoft campus? It’s funny because you go there and there’s 50 buildings, they all at the exact same. There are three storey gray buildings. There’s no and then you get the XBox building, and it stands out like this totally different building. And you walk in. It’s totally different. It’s not your drab, beige Windows building, or Microsoft Word. And then you go into this building and it’s like it’s just alive. And there’s games and people. It’s just neat how they built a subculture within the Microsoft culture. And it’s almost like they had to kind of keep them separated. And if you look at the buildings the way they’re designed, that is a separate building. It’s a separate entity. It’s a separate everything. And I think they really made a long bet, but it’s obviously paid off. And I think Facebook betting on VR is going to pay off. I don’t know about Magic Leap yet. As long as they can keep their $4-billion raised — or whatever they are up to now — as long as they can keep developing as fast as possible, but keep their powder dry for the long term, they’ll do fine.

Dean: Yeah

Alan: But companies that are raising… like, Blippar raised $130-million or whatever it was. I mean, it’s crazy to see how much money is being tossed into some of these things. It blows my mind.

Dean: I think that it really comes down to how you define your investment horizon.

Alan: Yes, exactly!

If you’re a Blippar investor — or you’re the Blippar CEO — and you say five years: in five years, you can get all your money back and more, right? Uh–.

Alan: Dean, I think you nailed it here, because setting proper expectations for your investors, I think, is essential. Now, more than ever, because there are things that will deliver 10x, 100x value in a very short amount of time — two, three, four years. AI is already delivering value beyond anybody’s wildest imaginations. But certain things take time. You’ve got to build the ecosystem. You’ve got to build the product. It’s no longer a technology problem. We have technologies that create real value in enterprise. It’s an adoption problem. You have to factor in the fact that selling this stuff is hard. You go to a company and say, “hey, you’re going to increase your training time by 50 percent.” They’re like, “yeah, we’ll try next year.” Somebody who’s getting into this and just raising capital and going and making promises to investors that can’t be kept. I think that’s the key is just… and trust me, I’m guilty of it. I think everybody who’s ever raised money is guilty of it, because every investor wants to see that beautiful hockey stick growth. But at the end of the day, that hockey stick comes over a 10 year period. It doesn’t come in a year or two.

We’ve had a great conversation around investment and we’ve had a conversation on games and the enterprise and VR. What do you think is the next big thing around the corner? Let’s look out five years. Do you think Apple is going to come out with their glasses in the next five years?

Dean: Yes, I definitely think that’s going to happen. There were some hints that they had something ready to go with the last the press event. But for some reason, they didn’t flip the on switch and didn’t announce it. And I think they’re also running into the same problem that everybody else is; that you can do a lot of good engineering here, but you can’t rush some of these technologies that are very fundamental. Can’t rush Moore’s Law.It proceeds on its own pace and it has to wait for actual inventions to happen. And so while they would, I’m sure, have liked to do it a lot sooner, I think the notion of doing lightweight glasses that fit on your head and wirelessly connect to your phone or cloud? I think that technology is on the cusp. It is not not quite here yet. You know, throwing in a lot of processing power that’s necessary on those glasses that it’s going to be a lot of work still. And when you look at people who are sort of loading up a lot of technology into these headsets they’re down a couple of headsets, and they’re done. So, you think Apple Apple would do this? I think they also see that what they have to do has to reach the mass market, and they don’t necessarily want to start with something that’s going to be a niche product.

Alan: I couldn’t agree more. And I think, if watching Apple’s previous releases is an indication, they’re going to build the ecosystem with ARKit and let people develop on the phones. They’re going to make sure that the device that they ship is rock-solid and ready to go. And of course, I think it’s going to run wireless to your phones. Your phone will be the compute power, but the glasses are there. But I also thought it was going to be maybe 2024-25. I think the date might be 2022-23 release. So, we’ll see.

So, what problem in the world do you want to see solved using XR technologies.

Dean: Well I suppose everybody answers that they want to see the Star Trek Holodeck. Right? I want to see that happen too.

Alan: we’re getting close!

Dean: We sort of got these hints of the technology that is going to be really good with the hand tracking that Facebook showed at Oculus Connect 6. I tried that demo out, but my hand kept going through all of the objects in space that I was touching or trying to grab. And I really do want to have that actual force feedback tell me that that’s the object; I don’t have to move my fingers any more, or any further. I think that’s another big hurdle for VR solve. And if they solve it, then we can move forward. Hand tracking is a kind of universal input system. And then get rid of the controllers and like Zuckerberg said, then we’re left with basically just a headset. It’s no wires or straps. No things in your hands. And that will make the technology so much more accessible to everybody. And we can start bringing in all kinds of applications.

Alan: It’s so true. And I think even if you look at the Hololens, they’re pioneering work in handwriting as well. And then Ultrahaptics and Leap Motion coming together, creating that virtual hand tracking meets virtual manipulation of the air: ultrasonics. I think we’ve only scratched the surface on the UX of how we communicate with the computers in the era of spatial computing. So it’s going to be exciting.

Alan: Hey everyone, it’s Alan here, with the XR for Business Podcast. Today, we’re speaking with Kathryn Bloxham from Reuters Events brand, XR Intelligence, about their amazing business conference, VRX happening in San Francisco, December 12th and 13th. I will be speaking at that conference on the transformation of learning with XR. We will also be discussing the findings of their 2019 XR industry report. All that and more, on the XR for Business Podcast.

Welcome to the show, Kathryn. How are you today?

Kathryn: Hi, I’m great, thanks. How are you doing?

Alan: I’m so amazing. I’m really excited for a number of things. One, your industry report is the quintessential report on what the industry is actually looking forward to in 2020 and beyond. I’m going to be speaking at your VRX conference — we’ll talk about that, and all the great things — and you also host a number of really informational webinars. So we’ll get into that. But let’s talk about you and how did you end up being in where you are right now?

Kathryn: Yeah, so I work for XR Intelligence, which was actually recently acquired by Thomson Reuters under the new Reuters Events brand, which is very exciting. We speak to people throughout the entire year about the trends, challenges, solutions, and opportunities that they see in virtual, augmented, and mixed reality. So primarily our audience are end users of the technology. So it started mostly as people in gaming a few years ago and the entertainment side, and gradually is actually getting more and more focused on enterprise customers. And then we also put together various types of content throughout the year. So we do the webinars, industry surveys and reports, as well as three events throughout the year across the US and Europe. And that really allows our contacts to keep their eye on the progress of the industry and make informed business decisions about investing in immersive technologies.

Alan: Seems to be the perfect jam for the XR for Business Podcast, as our mission here is to inspire and educate business leaders to invest in XR technologies. So having said that, what are some of the findings of this industry report you guys did?

Kathryn: Yes. So it was really interesting. We’ve done it for the past few years. and this year we managed to get around 750 people take part. And there was some really interesting patterns that emerged when we looked at the 2019 survey compared with the 2018 survey. So this year, for example, the hardware, software and third party content creators to XR have seen much stronger growth in the enterprise side of that business, compared to growth in the consumer sector over the past 12 months. So I guess that’s kind of in line with people moving towards the money as people are seeing a lot more money in the enterprise side. And that’s kind of reflected in the fact that consumer adoption hasn’t been as much as people would have expected it to be at this stage. So growth is accelerating for enterprise applications, particularly maybe surprisingly in VR. So in 2018, 38 percent said that they were seeing strong or very strong growth in VR for enterprise and this rose to 46 percent in this year’s survey. So it kind of reflects the demand trends with enterprise end users seeing strong ROI. And then 93 percent of the enterprise users said that VR had had a positive impact on their business and 88 percent said the same for AR and MR.

Alan: So 93 percent said VR is having a strong impact?

Kathryn: Yes. You do kind of have to take the results with a pinch of salt, because we send our survey out to people that already know us, who have already — I guess — said that they are interested in VR and AR, by following and subscribing to us. But of all of the people that we surveyed, yeah, 93 percent of them said that VR had a really positive impact and was showing kind of ROI. And then 88 percent for the AR/MR side.

Alan: That’s incredible. I mean, even if you take it with a pinch of salt, take 10 percent off, that’s 83 and 78. That’s still amazing positive response to this technology. And I think you can’t ignore the fact that VR can train people faster than anything we’ve ever created.

Kathryn: Yeah.

Alan: It’s conducive to what we’re doing as well.

Kathryn: And I really hear this in my phone calls as well. So part of the kind of– I have to touch base with the industry throughout the year, in order to put together the events and put together the content. And the vast majority of enterprise users that we speak to say that they’re at least considering investing more into XR in the next few years. So everyone’s at different stages. Some people are seeing fantastic value already. Some are working in teams to move from the pilot schemes and move these into something that they can push forward and really start to see across their organizations. And some of them are really just starting to hear about XR and dip their toes in.

Alan: What are some of the companies that you’ve seen that are doing the most things? What are companies doing, what are they doing with this?

Kathryn: Yeah. So I guess in terms of application area, product design and prototyping is kind of the most common area of usage for enterprise. So another stat from the survey is that 96 percent were deploying VR to help with some kind of product design prototyping. And then there was also– a lot of these companies are using it in various different areas. So over 90 percent were using it for workforce and project collaboration, around 90 percent for educational learning, around 90 percent again for training and worker guidance, and then sales and marketing or external communication and manufacturing were 80 percent of those companies, over 80 percent of those companies were using for those applications. So there are kind of really varied applications, and that’s specific to the VR, all of those. AR/MR was being used, I guess less frequently across the board. And the most likely application was in sales and marketing. So we saw that there was a general feeling from many that AR and MR will start to speed up in terms of adoption across different use cases. And partly this is because it’s a shorter leap from phone and tablet towards AR and MR. But where the companies were saying that they had seen the most value, was these kind of high quality VR training experiences and educational learning experiences, because it is so, so immersive and different to anything that they’d had before.

Alan: Yeah, it’s transformational for sure. I know you guys host a lot of webinars. What are some of the– what are the webinars that have been kind of those ones where everybody signs up? Like what are the key ones?

Kathryn: So, I mean, this year I ran a series of six webinars. And to be honest, the one that absolutely everybody signed up to was just, what is the state of the market? I think there are still huge questions around what’s happening with adoption, what’s happening with hardware, what’s happening with software, what are the challenges still? So I think the fact that everyone– the market is a little bit fragmented, still. And there are major questions around user experience and usability. And a big question that I get from a lot of people is, “OK, we understand how all of this technology works, but we’re not quite sure how that’s going to fit into our legacy systems within our business,” or “We’re not quite sure why the current hardware or software that we’re being introduced to by vendors, if that’s going to be relevant in five years time, for example.” So I think price is something that people have seen coming down. The level that the technology is that– the functions that it can do, the quality, all of that is going up. But also there is this kind of sticking point, where people are not quite sure at what stage is right for them to invest. Is that quality? Is it? Is it good enough to do the job, or should I wait for something that’s kind of all-encompassing, not just a point solution, something that I can really integrate into my business? So, “stay off the market” is just a huge– there are lots of questions there, and lots of discussions. I also ran some other webinars in specific growth areas. So along with my research, there was– healthcare was a massive growth area, design of visualization was a massive growth area, training was a massive one. Retail and consumer was a big one as well. And all of those are actually going to be reflected in the seminars that we have at the conference in December, as well. So we’ve got some really interesting speakers talking about those different growth areas, and how they’re kind of using AR and VR to get value within their businesses across different functions and across different industries.

Alan: Okay. So let’s let’s dive into that, because you opened the door for me and I’m diving in. Who are some of the speakers? Let’s go through who are the speakers coming this year? I know I’m one of them, but people know me. So let’s talk about who else is gonna be there.

Kathryn: Yes. So, I mean, we’ve got a couple of big players everyone’s really interested to see. So we’ve got an update from HTC and Oculus on what’s the state of the hardware. So obviously, everyone’s always really interested to understand what’s going on there. And then we look at different verticals. So this event is what we would call an ecosystem event, so it’s all-encompassing, everyone in the XR world, be it entertainment, gaming, enterprise, investment. It’s all kind of coming together and looking at different applications and different ways of using this technology, but primarily to bring businesses ROI. So how do we implement these technologies and look at them more in a long term sense. So we’ve got companies from healthcare such as Bayer, we’ve got consumer companies such as Nivea and L’Oreal, then we’ve got aerospace like Lockheed Martin–

Alan: Yeah, I noticed you have Shelley [Peterson]. I had dinner with Shelley recently. She’s awesome.

Kathryn: Oh, yeah, she’s great. She’s so enthusiastic, and she knows her stuff.

Alan: She definitely does. If you Google “Lockheed Martin Hololens”, there’s a picture of some people wearing a Hololens in a NASA shuttle training simulator, and she’s there in the picture. It’s an iconic photo of use of XR.

Kathryn: It’s good, yeah. She’s– I mean, she’s just a great ambassador in general, because she really knows her stuff. She’s one of those people that is really happy to– a lot of companies have this thing, where they’re scared to show their figures, and scared to show the data around. How much money this has saved us, or how much this has improved our process, all of those things. And she’s one of those people that’s willing to share those, because we are in a stage of the– I guess, in a stage of the industry where nobody is quite sure the best route to go down. We’ve got some idea, but sharing those statistics is something that we’re really kind of encouraging our speakers to do this year.

Alan: Yeah, it’s– I’m looking at– I’m just scrolling down the list here, and it feels like I’m scrolling down the list of my friends. [laughs] You’ve got Tipatat [Chennavasin] from the VR Fund. You’ve got Anne McKinnon from The Boolean, and also of VR Days. Vinay Narayan, he’s one of our mentors at XR Ignite. Oh man. It’s just everybody who’s anybody. Ted Schilowitz from Paramount. Terry Schussler from Deutsche Telekom, another one of our mentors.

Kathryn: Yeah.

Alan: This is a conference that you don’t wanna miss. Stephanie Llamas from SuperData. Oh man, it’s– Amy Lameyer from WXR Fund, they run the Women’s XR Fund. Bob Fine from the Virtual Reality Health Care Alliance. Wow. Amy Peck. It’s a really great– oh, you even have Walter Greenleaf, medical expert. Wow. This is gonna be a great conference. I’m really excited for it.

Kathryn: Yeah, we’re excited as well. I think we’ve got a really good mix of kind of VR/AR experts and companies that are so enthusiastic. They’re — again — all at different levels of implementing this technology. For example, Fern [Nibauer-Cohen], who is from Penn Medicine and she’s speaking. They’ve trialed all sorts of things around improving patient experience or providing their patients with a bit more insight into what their treatment will be like. And this is all using immersive technologies. But she admits we’re not 100 percent there yet. We want to attend this conference as well, to find out what other people are doing and how they’re getting the best results from using this technology.

Alan: It comes down to– and I noticed a couple of years ago when I used to go to these conferences, it was all about what we could do. “Imagine what we could do in VR. We could do this, and we could do this.” And that was great. And then it kind of inspired people to go and try and do those things. And now it’s less around what we could do and it’s more around “This is what has been done. This is what we’ve done. These are the learnings that we’ve made, and this is the benefit that we found.” So it’s really an exciting time to watch an industry go from, “Hey, we have this thing that barely works. And we could do all these things with it,” to “We’ve done these things. And it works.”

Kathryn: Yeah. And I do think you need a bit of both, because we’ve got some speakers, Ted, for example, at Paramount. He can see where this is going in 10 years time. He knows what it’s gonna be like walking around as a consumer. We consume so much information per day, we go through our phones so we can see loads of information. We walk around around. There’s lots of different ways that we can kind of interact with things. And sometimes technology’s involved, sometimes it isn’t. And that’s that kind of head down, head up approach. At the moment we’re head down on our phones. But I guess that people that can see where this is going is saying, “no, everything’s gonna be head up, we’re gonna be fully immersed. We’re going to be able to interact with our space.” But there is a lot of work to be done to get there. And those kind of case study examples where, “Well, this is what we tried. This is what worked, and didn’t work. This is the money that we saved, or this is what we’d like to improve. And these were all of the different aspects of either the technology or the process that we went through.” Those are the really important things from actually getting to that ideal future that everyone in this space is kind of foreseeing.

Alan: Absolutely. I think it’s one of those things that because we’re so early in this — and I say “early” because there’s still so much ways to go — but people are willing to share their failures. And I think this is the key. And one of the reasons I started this podcast was to ask people what did you do wrong? What can people learn from, so they don’t have to make those mistakes? Because I think this is really one of those times where things are happening fast. People are breaking stuff on a daily basis. And if you’re not breaking stuff, you’re not really pushing the limits. And a lot of things that we did years ago — like 360 video stuff — is now kind of coming around full circle and saying, “Oh, well, 360 video is good for training, and we don’t have to fully CG render everything. It can be just filmed.” And I think it’s one of those learning things that you kind of have to go through. But if you can learn a little bit before you do it, rather than make those mistakes, if you can save a little bit of time not making those mistakes, it’s invaluable.

Kathryn: And I mean, I won’t say the company — because I don’t want to jinx my chances of getting them as a speaker — but I was speaking to a large retailer — just last week, actually — and I was asking them, what do you see as being the ideal future for you with VR and AR? And they were saying, “Well, we’d love to have a virtual shopping experience, where somebody can either look at a browser or put on a headset and they’re in our store. And they can go around and they can look objects and they can see the price. They can view the information, they can put them in that basket.” And all of those things add up. The difference between online shopping and going to the store is that you don’t find out a lot about the product. You don’t get to touch it. All of those human things that are kind of missing. The shopping industry is really interesting one, because a lot of things are changing in terms of the experience. And I think one thing that some of these large retailers are seeing is, “Well, actually, everything’s online now, but we can bring in some of that experience again and we can really provide a good experience for our customers and help them make informed decisions. And they can still do from the home and they can still click ‘buy’ on their basket. And it will come to them super quick, super easy. And they haven’t missed out on learning about all of those different products and walking around the store and things like that.” So that was really interesting one.

Alan: I think retailers need to stop thinking in terms of recreating a store, and think in terms of recreating an experience or a feeling that you want your brand to be associated with. Because a lot of– I’ve seen a lot of retail stuff and it’s like, “Here’s a grocery store in VR.” You know what? I don’t want to go to a real grocery store. Why the hell would you recreate it in VR? Why not put me on a seaside where I can look at the fish market, and choose my fish on a seaside fish market? Or I can go to a ranch and kind of in a ranch theme and buy my steaks or whatever? Why are we re-creating a physical store where you have neon lighting and really bad music, with aisle upon aisle of the same thing I can walk down to the store? And I don’t want to do that either, I get my groceries delivered now. So I think retailers need to think outside the box and think, “OK, what is the experience that I can give that will give people a really, really powerful experience?” When you look at something like the Samsung store in New York and their building kind of all over, you can’t even buy things in the store. It’s just an experience center. I think the Nike’s making one. People are starting to realize that people are going to buy online. That’s fine. They can order it. It’s going to come to their house. But what can we give people that that makes them feel viscerally connected to the brand? And VR can deliver that in ways that you can’t do in real world. You can create a brand experience where you’re on Mars and your brand is associated with going to Mars. That’s not something you can do in real life.

Kathryn: Definitely. And actually, one of our speakers on day one at the VRX Conference, Anne [Stephens] from AP InBev. She’s going to be doing a talk around what is the AR future. So she’s talking about how brands are moving away from “You can buy products and this is it,” because everyone these days does look and compare products. It can’t just be “These are the different products and these are the different prices.” But it also has to be “Why am I loyal to this brand? Why do I associate a positive thing going on in my life?” or “How is this brand going to enhance my life and make me feel better?” And she’s looking at how the first person perspective. So in this case, a person wearing an AR headset, for example. How do they interact with things — physically and psychologically — in their day to day lives? And how can they actually improve their offering in future based around that research? So they’re actually doing quite a bit of research into that. There’s gonna be loads of interesting discussions about different approaches. There’s other things going on. 5G, AI, machine learning, which all have different applications within businesses. And all of them — to be honest at this stage — are really open discussions. But there are a few companies that are making really good steps in the right direction and kind of leading the way.

Alan: Wow. I can’t wait. I’m just so excited. This week is the VR/AR Global Summit. And I’m speaking of that. But then it’s a different audience. I think your audience is going to be more of industry. It sounds like there’s a lot of people from industry looking for answers on how they utilize these technologies. I’m really, really excited to learn from all of these amazing speakers. What else do you want people to know about the new XR Intelligence?

Kathryn: Yes. So, XR Intelligence was kind of a natural step for us. So with our Reuters acquisition, so now that we’re Reuters Events, we thought this is a perfect time. We’re going to have to rebrand, anyway. And all of the discussions I’ve been having with people, VR Intelligence was just about outdated. It’s not that we didn’t cover VR/AR/MR content before. It’s just that everyone is kind of looking at all different aspects of this technology. XR is the all-encompassing, I guess word — is it a word? kind of — for this industry. And XR just resonated a lot better with some of the amazing companies that are doing work in AR and MR in this space. So we still see it as a very inclusive industry. There are lots of people sharing different ideas. There’s plenty of startups. We actually have a pitch fest going on this year, which is something that we haven’t had before. We’ve kind of always had senior level speakers from giant brands. And this year we’re like, “No, we really want to help the startup and let the startups have a way to be involved as well.” So we’re introducing a pitch fest. And yes, it’s really gonna be–

Alan: Exciting.

Kathryn: Yeah, it’s gonna to be a great event, and it’s gonna be lots of demos on the floor, big speakers in the room. And those smaller companies doing really innovative things involved as well.

Alan: Super exciting. Oh my goodness. We– I’m going to put a shameless plug in here. We have our own accelerator, XR Ignite. And we’ll be making some some connections with our startups through the accelerator, to come and be at your pitch.

Kathryn: Yeah. Great. Thank you so much. Yeah. Try and get them involved. Can’t wait.

Alan: Of course we will. That’s the whole point. The whole point of starting the accelerator and community hub was to foster the growth of the entire industry, because what we realized is that in the next three to five years, every company in the world will have a VR and AR strategy. They will use it for training, they’ll use it for retail, they’ll use it for marketing, they’ll use it for sales, design, whatever it is, they will be using VR and AR in the next three to five years. And if that’s the case — and I fully believe it will be — then we’re going to have a very big shortage of qualified developers and studios and startups, if we don’t start fostering the growth of the industry together right now. And that’s why XR Intelligence and VRX are such an important part of growing this ecosystem. So thank you for that.

Kathryn: Thank you very much. Yeah. I mean, just on that point, I was going to say I don’t think it’s just a feeling anymore, that this will be a real thing within all businesses in five years. There is evidence, some colloquial evidence, evidence written down from surveys and reports and people providing data on this. It is coming, but it’s coming in different leaps and bounds, and in different forms. But, yeah, I definitely agree with you that we don’t want there to be a skills gap or we don’t want there to be a lack of the right content. And that’s what all of these kind of conferences and reports are for, so that people understand what’s going on, where the gaps are to exploit, but also how they can kind of make the most of this movement.

Alan: That seems like a really great mission and goal to have for XR Intelligence, a Reuters Events company. So, what problem in the world do you want to see solved using XR technologies?

Kathryn: Oh. I would love to see that XR can– I would like to see it being used in a diversity context. So I would like XR to be used positively, in a way that would improve the quality of life for people, whether it’s an aging population that that doesn’t have much access anymore to getting out on about. Whether it’s building homes through a mixture of 3D printing and XR and visualization and all of these things, I think it would be fantastic if we can use these technologies to enhance the quality of life for people.

Yes, someone has — Dominic Collins from Darabase, who is building an AR digital permissions platform to ensure the AR marketing ecosystem is fair and equitable for everyone.

Alan: Hey, everyone. Alan Smithson here, and today we’re speaking with Dominic Collins, CEO and co-founder of Darabase Ltd., a global platform that is managing and monetizing AR permissions on the physical world. All that and more, on the XR for Business Podcast.

Dominic, welcome to the show.

Dominic: Thank you, Alan. I’m delighted to be here.

Alan: We did an event about six months ago — with our law firm in Toronto, Fasken — and we did this kind of “VR and AR through the legal lens” event with the VR/AR Association in Toronto. And what we realized was there’s this kind of massive problem that if you’re putting augmented reality over top of the physical world, who owns that data? Who’s responsible for it? I think the first case study that we’ve seen of this is Burger King lighting McDonald’s advertisements on fire in AR. This is going to be a really interesting space. And now with Snapchat putting world lenses on buildings. So this is what you do. What do you– walk us through, what it is Darabase does, and how it’s solving this problem?

Dominic: Yeah. So you’re absolutely right. You know, since we started the company about a year ago, there’s so much that has happened to, I suppose, add further grist to our mill, that our service and services like this are required. We kind of see ourselves, I suppose, as the permission layer between the spatial web and the physical world. A lot of– it’s amazing how many big companies now are kind of what I call the immersive lasagna that kind of — whether it be Magic Leap’s Magicverse or the real world index and Facebook — you kind of got these great slides with these, you know, loads of layers with the physical world, or the digital twin, and infrastructure, and all these things that sit on top. But as you say, it doesn’t really feel that the permission of the real-world physical property owner is taken into consideration. Our insight, I suppose — and my background is more conditional and working in marketing — is that where media and platforms have really thrived historically — and when they’ve really kind of accelerated in terms of growth and adoption — has been where all of the axes engaged and rewarded appropriately. And from a digital perspective, there’s never been a time where permission and privacy and consent had more of the spotlight. So Darabase, essentially it is — at its simplest form — an AR database, hence “Darabase”, but we have a global database of permissions where physical property owner — whether that be a big iconic building, whether that be a retailer — is able to register in a kind of technology platform-agnostic way, so this one will work across all the different AR clouds or platforms or whatever you want to call them, that they can register what appears on their property. Now we’re talking commercial content. We’re not saying that we’re trying to govern and be a police force for editorial content. But if someone was to put commercial content or advertising on a building, then we believe that the physical property owner should have a say. That’s a far more scalable and appropriate mechanic, that other companies would have taken a different route. Other companies are creating AR twins of the world and then selling those for a tenth or an eighth or whatever. We think that actually long term, even shorter, it just makes a lot more sense that if I own this iconic building in the middle of New York, that actually I should have a say over what content gets served on it. And if it’s commercial, then I should get a cut, the same way that I can do a deal right now with a company that puts billboards on the side of buildings. I give them the consent, they put it up, they manage it on my behalf, and I get a check at the end of every month. And that’s basically what Darabase does in its simplest form.

Alan: So I think in order for this to be effective, you kind of have a two-prong sales approach. You have to get the property owners on board and permissions that way. But you also need to get the AR platforms. And I would think that Facebook, Snapchat, maybe Apple, those the main ones. But you kind of need to get all of them, really, in order for this to be effective, correct?

Dominic: Yes and no. So we’re certainly starting out with working with a lot of very large property owners, who both see the risk and they also see the opportunity. And for them, this is a — for lack of a better term — but a bit of a no-brainer. You know, they can register their properties for free, and they can allow it to be monetized and even go down to the level of picking the IP categories in terms of what type of content will appear on the building. They can also, if the retailers have their own content, through Darabase they can be certain of their own promotions. So yes, the property owners kind of create the marketplace, if you want to think of it that way. In terms of who’s on the flip side of that marketplace, actually– we’re about to launch our first SDK and that’s– we think of it much more at a Unity level, than necessarily as an Apple or a Google level. Through Darabase’s SDK, you’ll be able to essentially kind of plugin monetization to your world facing our app, which is much more contextual to the location while being uninterruptive. And that will work across all of those platforms. Now, there’s also other conversations that we’re having — and I can’t go into a lot of detail on those, as most of them are under NDA — but certainly there are very large platforms, who are creating toolsets for brands and agencies who are saying “immersive is core to the future of our business, and we’re investing heavily in the space.” And actually world-facing lenses are probably more interesting long term than self-facing, which there’s been some famous ones for brands like Taco Bell and whatever, but actually the ability to serve commercial content for the mixed reality way on the world is kind of more– has more scope, let’s say. But that’s absolutely, they want to ensure that where brands do that, consents and permissions have been given. From the conversations that we’re having, that’s what we’re building is not a solution that those companies are looking to build themselves. The property companies themselves certainly want to be able to have one place to register. And so we’re building this as a setting in a platform-agnostic way, so that you can call against the Darabase platform to work out what permissions there are, where you can serve content based on the device location in real-time. And yes, that will work across all of the major platforms.

Alan: So you’re really going kind of the route of AR, meaning kind of Apple and Google foundation.

Dominic: Oh, yeah. So I mean our foundation’s great, because it kind of straddles both. Right now, this is a mobile play. We know from just in the last few days how the rumor mill can swing wildly between years, let alone months. I fully expect– and I’ve been working in immersive, I ran Jaunt VR outside of the US previously. And so I have been kind of immersed myself in this space for a number of years. And I’m a firm believer that this fourth conclusive wave of immersive will increasingly replace mobile. But for now, and for the years coming up — or several months coming up — mobile is the major play. Facebook had over a billion users now in AR in the last year. So right now, it’s all about supporting the major players, the major platforms through the mobile lens. But as in when we see kind of scale, I suppose consumer-facing consumer-targeting HMDs, then we’ll look to support those too. But that’s a lot of work outside by now. So that’s on the policy for us for the moment.

Alan: It’s going to come, but it’s going to take a few years. So everybody be patient, and the device that’s in your hand is the magic window to the world right now. Before you were working on Darabase, you have some pretty interesting experience in the VR and AR space, and then before that, in telecom. You want to just talk a bit about how you kind of ended up at Darabase?

Dominic: Yeah, sure. So I spent most of my career, I suppose, working in large organizations, helping them be more digital. That’s when digital existed kind of way back when. I worked in magazines — before the Internet was really a thing, and when people still bought magazines — and I used to land in Esquire magazine in the UK and various bits and bobs. I then went into digital, when that first started. I was in a European start-up a little while, and then I ran Digital Sky, as well as then ran a couple of companies for Orange, France Telecom, and then worked in a company called EE, which is the largest telco, helped to launch that brand with the launch of 4G in the space, as well as being chief marketing officer for a big finance company called Legal and General. So basically spent a lot of my career kind of riding the wave of change through various industries, starting with advertising in magazines and kind of finishing off on the front of the beach in tech. And what I kind of realized when I got to working in the finance side — and having done that for a number of years — and applied what I’d learned in one industry and applying it to the next, was that actually whilst I spent most of my time helping big companies be more digital, it might be more fun to help digital companies be more big. I’ve just done a big deal with WPP, did a big agency review and so on, and was lucky enough to be invited to go to on what they call the West Coast Tour, where they take 14-15 CMOs from across the world, and you got on the bus, — you know, get into SFA, you get on a bus, you go see Jack Dorsey — that’s for a couple of hours, and you get on a bus and you go in a driverless car for a bit. And it’s amazing networking opportunity. And because you’ve got a billion+ worth of ad revenue in the room, the people that you get to meet and evaluate are significant senior and give you a lot of their time, which is a real privilege. And the last company that I met was a company called Jaunt. And John had just raised a seed round. So they had $100-million at that point, from the likes of Highland, and Redpoints, and Disney, and Skye, and China Media Capital, and a bunch of others. And they were this relatively small company in Palo Alto, just thinking about renting a studio in LA. And kind of long story short, I then kind of joined them as the first guy outside of California, and helped to grow that business and launched the international business and then also ran the joint venture in China. And kind of had an amazing time, both from a VR perspective, and then — as you probably know — going into AR, we made some changes towards the end of last year. It’s kind of been the focus back down. Mike wants more of an AR business. And as you may have seen, that was recently– the technology and IP was acquired by Verizon. So, yeah, so I spent that kind of the last four or five years in this kind of an immersive bubble. And it was during that time that I really started thinking about putting my kind of traditional marketing media clout back on, about actually if this was really going to be big, and if this was going to be the main way that we will see additional content that– for sure, some of it is just gonna be floating in front of a building and it’s just my inbox, and it has no relevance or persistence in that location. Some of it’s going to be editorial. And I can probably take a picture of Buckingham Palace and draw a love heart, and send it to my folks in Santa Monica and say “Love, from London.” That’s absolutely fine. But in my mind, if you want to put a Lion King from Disney ad on top of Buckingham Palace — which was a recent landmark, this campaign — then my argument would be, you need the permission of the royal palaces. And if they didn’t get that permission, then they should get paid, because you’re making a direct correlation between the IP of a palace and the IP of a king.

Alan: It’s interesting that you say that, but like you’re playing devil’s advocate here. There are no legal precedents around this. Nobody’s really paying attention to it, other than us. So what happens if–? How do you enforce this? How does it become something that the property owners go, “We need to have this?”

Dominic: I think I got two answers. First answer is around “is there a legal precedent?” Now, that depends on how you see legal precedence. If you see legal precedence, as in, has something gone to court specifically about AR — like Candy Labs or Niantic — and has that been tested in court? And how much precedence is that specific to AR content of a commercial nature being served on the physical location? You’re absolutely right, there’s very little. Though, let’s be honest. It’s going to come. We want to be able to create a platform which helps to — I use a term probably a little bit carelessly, but — kind of clean that up, ahead of any regulation coming out or self-regulation coming out. But the other way of looking at it is actually “is there existing precedence?” Is there existing law and regulation that should be, or is easily applied to what we’re doing? And I’ve heard people say before — and look, we’re not trying to be the police force, we’re trying to be a company that empowers this, not polices it. We want to be able to create a service, which means that this grows, not diminishes — but I’ve heard people say before it doesn’t really exist, it’s only on the screen. So let’s say it’s The Lion King, the lion’s not really on Buckingham Palace, it is only on the screen. You wouldn’t otherwise see it. But in my mind, that’s no different to me taking a video of Buckingham Palace, and then photoshopping a lion on it and putting it into a TV ad. That’s only on the screen, too. And yet, you could not do that. You could not use the IP of Buckingham Palace in that way, because that’s an established modus operandi. The other way of looking at is actually, is there already regulation that is kind of applied to another media, which is extremely close? And we’re not picking up the phone to the royal palace, or picking up the phone to Snapchat and say, “Hey, you guys should stop doing this, we’re Darabase.” Quite the opposite. What we’re looking to do is try and create alternative iconic locations in that market, where you can do this and everyone’s super happy, and the brand can do it with confidence and brand safety. Which is then the second part of the answer, which is why should anyone care if there’s no law, then does anyone even need doorways? My answer to that is, well, we’ve got this thing — as you probably heard — called GDPR, which is having gotten impact more globally as well. And there’s a bunch of stuff that GDPR kind of puts into place in law, that actually everyone or certainly all the good actors were doing anyway. You know, people were doing double opt-in email before, because it’s the right thing to do.

Alan: I have to say something and I think I speak for the world. The GDPR thing is great, except for now every single website I go into, I have to accept cookies and I can’t even visit the website if I don’t accept them. This is a stupid law and it’s pissed me off. On every website, I have extra things now. It’s dumb.

Dominic: I agree. And actually what all that happens is there’s an extra click, because no one then goes in and manages their cookies anyway. And actually the next level of it, it’s gonna be even worse because they’re now saying is that actually you need to give people the ability much more proactively, to be able to look at the different types of consents they’ve given and split it out. So, yeah, I’m not saying that I’m here as a proponent of GDPR. I agree on a personal level.

Alan: I had to call it out, because it’s one of those things. I only have one venue for my outlet, it’s this podcast, so I’ve got to call things out sometimes. I don’t want to accept your cookies. Piss off. Let me just see this stuff.

Dominic: …you got it off your chest now? I should never have mentioned GDPR. That should have been in my briefing notes.

Alan: [laughs]

Dominic: Anyway. So the second thing is that, I believe having been a marketer myself for many years, that the vast majority of brands — and I come back to Burger King — for the vast majority of brands, want to make sure that they are not doing anything to erode the significant money that they spent building my brand equity. But that’s seen as doing the right thing. I know– I speak to major agency groups where they say, “Look, it’s actually in our terms of business that we sign with our brand clients, that we will not book anything that is not permission-based. That’s not to say whatever we’re going to be it’s not illegal, but let’s not book something that’s not permission-based.” Yes, there will be a few guerrilla tactics. And personally I think what’s genius, actually, about the Burger King “Burn the ads” campaign — burning McDonald’s ads and so on — what I think it’s absolute genius about is and I think the AR industry genuinely can learn from this, is that– we live in a bit of a bubble, but everyone in our bubble and a lot of people beyond know about this stuff. But actually, it happened to Brazil, as far as I’m aware. Certainly wasn’t in North America and Europe or whatever, it was a relatively small campaign in Brazil. And what was actually the campaign was the YouTube video they created about some quite good looking people doing this thing on their phone. So I’d love to see the data that said, how many people actually did the experience inside of the BK app and actually got a free Whopper.

Alan: A person said they’d given a 5,000 free Whoppers.

Dominic: 50,000. Okay. And versus how many people looked at YouTube.

Alan: Millions.

Dominic: Exactly. This is the learning that actually, the vast majority of that campaign was completely permissioned, because it was just watching a YouTube video. So as I said before, we’re saying that this is really applying to where commercial content is specifically being sort of on a location. And where, if you wanted to– So let’s take The Shard, for example, a big iconic building in London. Well, The Shard has not done anything about thinking about that this is even an issue, or registering it or thinking about the IP or trademark of that building or how it might affect digital media. Well, none of that has happened. People can very happily start putting content on The Shard in AR. And the number of people that are going to see that is going to grow and grow as we hope and trust over time. Now, as soon as The Shard, however, goes, “You know what? We’ve kind of recognized the fact that this is now a thing, and we see that there’s an opportunity. And actually, we do allow AR content to be served on the building, but we want to be able to frequency cap it, and we want to be able to make sure that’s the kind of content we want to get on there. We kind of expect to get paid, because if you wanted to film a TV series or whatever in the building, then you go through our film department, and we get paid and we get permits. Normal, normal stuff. And we’re going to make it super simple. We’re going to use this company called Darabase, but we’d like you to use them. And we’re going to– and by the way, when you do that, you know that you’ve been given that permission. We’re going to get a cut of the campaign revenue or a fee or whatever, to allow you to put your content on our iconic and trademarked location.” Now the vast majority of brands will go, “Okay, cool. I can super simply do it now.” But it takes a very different type of brand to go, “You know what? Stuff that. I’m still going to put my content on your property. I don’t care. You’ve done all of this thing, I’m still going to stick it on your property. Screw you.” The vast majority brands will not do that. And we believe that the vast majority of brands that actually really take this medium seriously and come into scale, they’re going to want to know that it’s permission-based. And that’s the same with the publishers as well. You know, we’re working with a couple of large publishers, kind of building them like a private property network, so that they know that– there’s one — again, it’s under NDA, but — global youth-focused brand and sports-focused brand. They want to be able to meet and reach that audience using what we call GeoAR — world facing AR — in locations where their audience are out, going to a club, or going to sporting events, or whatever. And they’ve got a big campaign with a shoe manufacturer, that they can start to introduce location-based AR as part of that campaign. The only reason that they’re now doing that with us is because they know that the proxy network that we’re putting together for them with these big property owners in these iconic locations is permission-based, and that they can go to their brands and say — just like all the other media — that you’re buying from us. This is high quality, high reach, trackable, and all parties are engaged in the process.

Alan: I think you’re on to something for sure. And the first time you kind of explained to me the business model, it seemed so obvious, only because we had had this kind of legal lens meeting with Fasken and VR/AR Association, it was one of those, we just you start to kind of question these things. Well, who does own the digital space? And Magic Leap’s got their Magicverse that they’re building, you know, multi-layer kind of universe of digital content on top of the real world. And you start to go, “Wow, there’s so much data floating around from IoT sensors, smartphones, to sensors from cars and buses and lights and everything.” Being able to transform that digital layer, people aren’t thinking about it now, because the window to the world is through a small six-inch phone or tablet. But when it goes to glasses, and we’re able to kind of really fully unleash spatial computing on the world, this is going to be something that you guys will be well established on. I love the fact that you’re probably three years ahead of everything right now.

Dominic: Yeah. I mean, that’s one of the conversations we have most often with investors, is one of timing. Are we too early? Are we too late? I think we’re certainly not too late. And actually I don’t think we’re too early.

Alan: No, I think the timing’s actually very perfect. And I’ll tell you why. Over the last five years, tons and tons of money went into VR, $100-million+ went into Jaunt, ODG. There’s been Plepler. There’s been a number of spectacular raises and failures because people are trying to blaze a path. Well, the good thing is Apple and Google and Facebook and Snapchat are all putting billions of dollars behind this. I think 2020 is gonna be this spectacular year where developers start to really dig into what the ARKit and ARCore capabilities truly are. And I think there’s so many things; we are only scratching the surface. We’re talking about this last night. We’re talking about things that are going to come in ten years from now. We can’t even possibly imagine. It’s not fathomable for us. And I think you are right at the precipice of permissions-based on a phone, and then you’ll be well established when it comes time to transfer that to glasses. And my guess is that’s going to be five years from now before we have ubiquitous glasses. So I’m going to kick my prediction of AR glasses out to 2025. But Darabase seems like it’s perfectly positioned to capture the mobile phone market — which is in the billions of devices — and then be perfectly situated for when it moves to glasses.

Dominic: Yeah. Thank you for the vote of confidence. And as you say, even with mobile — depending on whose research you believe — that the AR advertising [market] is somewhere between 9 and 19 billion, or whatever it is. So, you know, this is a significant market. I think you’re right. What excites me, and what gives me a lot of confidence, is just the amount of underlying technology and enablement that is being built into operating systems. Qualcomm chips, devices, camera technology. We have a great relationship with Scape, for example; the Scapes and the 6D.ais, and all of this super-exciting underlying functionality, which is making it ever easier for super smart and creative app developers — and actually WebAR developers, too — to be able to make some amazing experiences. We just want to be there with them so that they can achieve a higher CPM, they can serve commercial content in a really nice and smooth way into those experiences, and the knowledge that they’re doing it in the right way and that everyone’s engaged and they’ve got a good stream of high-quality advertising and the inventory to put it on. And I think one thing that we really focus on — because as you know, there’s so much going on in the space and you can be so many different things — we try hard every day just to be very true to what it is that we’re building and not to kind of get pulled into “oh, we could do this or that or the other.” There are so many companies in this space. We just want to be this kind of glue — the permission glue — the permission layer that works with everybody else in order to make this a fantastic medium for the future.

Alan: I think it’s gonna be spectacular. And I think being able to give brands the confidence, knowing that they’re doing things legally above board, regardless of wherever the law ends up being. If you guys are already anticipating the best-case scenario, brands can confidently know that their advertising in the right way and then also giving property owners the ability to monetize on the likeness of their buildings. It kind of legitimizes it. It’s almost like when cryptocoins were launched, everybody and the brother launched an ICO or whatever, ITO — they did all different names for them — and we saw the kind of rise and crash of that. But it’s only when there’s regulation involved do we really start to see a maturity and real value created of an industry. And I think AR and VR, this industry, is growing slower than people thought. But it’s growing in a practical, more pragmatic way that is responsible. And I love the fact that our industry is thinking about things like ethics, securities, permissions. These types of things are really important, not just, “hey, let’s just make a ton of money.” I think all of us — everybody on this podcast that I’ve had as a guest, anyway — is looking at this in the long term. Like, this is the next 10 years. This is the future of computing and we can’t screw it up. I think you’re on to something really amazing and I want to thank you for sharing that.

Dominic: Not at all. And thank you for all the great work that you do, because you’re one of the few people at the center of the community, and the more of a community we are, the more successful we’ll be.

Alan: Well, since you mentioned community, I’m going to put a plug for XR Ignite. We’re really focused on XR Ignite as a three-pronged approach now. We want to build that community, like you said, and we want to have that community hub where people can help each other and share. So there’s the community hub aspect. Then we want to take companies that are ready to grow and have the accelerator. And then we also want to be able to fund them so that we can help them through sales and marketing and these things, but also capital if they need. So XR Ignite’s starting as a community hub, accelerator, and fund, and you can set up XRignite.com. Thank you for letting me interject that. I think building that community is important and we had UploadVR was kind of the center of VR when it started and it kind of imploded a bit, but we want to pick up that slack and really just make a comfortable, safe place for people to share and that sort of thing. What problem in the world do you want to see solved using XR technologies?

Dominic: So one thing that we think about may be surprising, when we get to a bigger scale, we’d love to have more direct impacts on this. But, it’s homelessness. Because we are specifically linked to property, we’re specifically linked to how property owners can monetize further their asset, and whether you’re in Venice Beach or you’re in the center of London, I think there’s never been a worse time as than it is now for homelessness, and it affects a lot of people. So I think that actually — I hope — that, as we look up from our mobile screens, which can be very blinkering, and we start to look through an AR lens on our face, I hope that we see more than just the digital content in our lives; I hope that we see more broadly, see the world around us in a more informed and more augmented light. And that includes some of the societal issues that we have around us. So I would hope that, directly through Darabase, in the future and more broadly, things like homelessness can through digital inclusion that all of our society can be more on a level.

Alan: So I’m going to throw a challenge. What percentage of your sales are gonna be dedicated to solving this problem?

Dominic: And I’m gonna dodge the challenge, and say I don’t know what number! [laughs] I mean, it would be unfair on myself and my current investors to just pick a number out of the air. Yeah, but we approached this not to make a ton of money — though that may be a byproduct — but genuinely to try and make sure that this space is one that is a positive for the future of our world as it significantly changes in an ever-accelerating way. I’m sure you and many of your listeners will have seen the hyper-reality video and we know the guy that directs it back here in London. None of us want to live in that world, and we hope that Darabase can be–

Alan: For people listening, look up “Hyper-Reality” on YouTube. Oh my god. It’s like, if shit goes wrong, this is what happens.

Dominic: Exactly. So Darabase exists to try to 1) avoid that, as well as 2) to be a force for good. We’re a company that’s a year old. We’ve got a long journey ahead of us. We’re excited about our journey and we will do our best to make this a better place to live.

Alan: Welcome to the XR for Business Podcast. Today’s show, we interview Jordan Lawver, head of mixed reality at Trimble. They’ve got a number of different solutions for the construction worker that leverage the Microsoft Hololens 2, the XR10, which is their new wonderful hardhat based augmented reality/mixed reality headset. So all that coming up. And more on the XR for Business Podcast.

Hey, everyone. My name’s Alan Smithson. Today, we’re speaking with Jordan Lawver. Jordan, welcome to the show, my friend.

Jordan: Hey, Alan, good morning. Thanks for having me.

Alan: Oh, it’s my absolute pleasure. I’m really excited. And I wish this was show and tell, because what do you have sitting right on your desk right now?

Jordan: So you just let the cat out the bag. We’ve got an XR10, sitting here right in front of me. And I promise it’s not the only one in the world. We’re starting to ramp these guys up and get them ready to go out onto a job site near you.

Alan: What is the XR10?

Jordan: So I imagine that most people that listen to your podcast are pretty familiar with the Hololens 2, that Microsoft has announced that they plan to start shipping later this year. So what we did is, is we hopped on board with Microsoft kind of from the start, maybe mid last year. And we wanted to find a way that we could take the Hololens 2, and adapt it for use out in kind of safety controlled environment. Our focus is on construction, but of course, there’s many mixed reality customers out there in oil and gas, and manufacturing, and other kinds of heavy industries that require PPE — Personal Protective Equipment — when they’re out on the site. So whether that’s safety glass, or hardhat protection, or chin straps, or earmuffs, we wanted to make an integration that took the Hololens 2 and all of its capabilities, and made it able to work with folks out in those industries. So we essentially OEMed the Hololens 2 components from Microsoft and we bolted it into a new form factor that slides down on top of kind of an industry-standard hardhat, and still enables you to use your over your hearing protection, chin straps, all that other type of gear that people need to keep them safe out on the site.

Alan: We have HL2 + PPE = XR10.

Jordan: Yeah, exactly. Yeah. It’s not our first go at this. We actually made a hardhat attachment for the first Hololens. You know, we weren’t there on the ground level from release — like we are at this time — but Hololens 1 came out, and a bunch of people ran with it and said “OK, what can actually use this for?” And as you know, most of the use cases that emerged were very enterprise-focused. And in many of those heavy industries that I mentioned, we were creating software from day one, first for architects with our SketchUp viewer app, but then moving out onto onsite construction with our Trimble Connect app. And we realized very quickly that we just weren’t going to sell any software, because no one could take a Hololens 1 and fit it under a hardhat out on the site. So at that time, we worked with Microsoft, and we basically built clips that would retrofit an off-the-shelf Hololens 1 up into a hardhat. And it sold like hotcakes, people were all over it. And then when Alex Kipman showed us Hololens 2 sometime last year, we quickly realized that because the new form factor — with them moving some of the device to the back of the head — there was just not going to be any way to retrofit a hardhat over top of it. It was just– there too much interference between the hardhat and the Hololens 2. So that was kind of where the decision was made to go full OEM integration on it.

Alan: For those people listening: Hololens, everybody gets it, it’s a mixed reality headset. You can see basically three-dimensional computing. It also has cameras in the front that detect where you are. How are people using this? Like, why would somebody buy this and go down to the trouble of putting a Hololens into a hardhat, and what are the productivity components to it?

Jordan: So I’ll speak to construction, which I guess is where most of my expertise is. Out on the construction site, you’ve seen a bit of a revolution over the last decade or two of BIM — Building Information Modeling — which started with CAD, Autodesk and AutoCAD and Trimble’s got a lot of authoring tools as well. Architects kind of spearheaded it and then it started moving into general contractors and even into the subtrades of modeling what it is they’re going to do, before they actually go out and do it. And in modern days, you have not only the CAD, but all the embedded information in that CAD, where you can click on a steel beam and it’ll tell you when is this due for install? Who’s in charge of it? How long is it? How much did it cost? What are the material components of it? So you have an industry — and construction is not the only one like this — that has undergone or is undergoing a digital transformation, and essentially creating digital twins of what it is they’re going to build before they do.

But still to this day, despite that investment in that kind of initial data creation, there’s this huge data disconnect in 3D, from building a 3D digital twin, going out on a construction site and building physical 3D. But somewhere in between, you walk in on a job site and you’ve got guys holding up 2D paper plans and iPads. There’s a lot getting lost in translation. There’s a lot of rework. Construction is, like, notoriously over budget, over time in almost every project. So that’s really what we’re out to solve by kind of combining those two worlds, using a mixed reality device like the XR10 to essentially be a wormhole between those two 3D worlds, so that you can walk out on-site, collaborate with others and literally see what it is you’re building as you build it.

Alan: The rework problem is a multi-billion dollar problem. We actually have an investment in a small startup that’s looking at overlaying the models on top of the real world. Very similar. But you guys have built a suite of tools around mixed reality. So you’ve got Trimble Connect, SketchUp Viewer, Connected Mine — which I assume is from mining — Trimble Sitevision and Trimble PULSE remote expert. You want to walk us through each of those solutions?

Jordan: Yeah, sure. So some of them touch on different industries, but they all play off that exact same idea of connecting all this digital content that’s being authored or are gathered, out to the real world. So SketchUp Viewer is the design phase of buildings and construction. It’s for your architects and your owners as they’re designing something and iterating through a design, so that they can better understand what it is that each is designing. You know, this has been done in VR for years and years and years, but mixed reality is kind of adding a new component. The ability to actually, you know, let’s say you’re retrofitting a bathroom, being able to go out on the existing bathroom and overlay what it’s going to look like for a customer. The Trimble Connect solution is then kind of that next step in the process. It’s being used by general contractors, plumbers, electricians, HVAC installers to actually go out on-site and monitor the construction as it’s going in, and then ensure that things are going in correctly after they’re done.

We’ve actually worked a little bit– it’s not on our website, but we’ve worked a little bit on the facility management side as well, which is kind of a third piece to that puzzle, which is the operations side. So that’s for the guy 30 years later walking into that operating building, and being able to see this hot water tank is due for repair in the next two months, not only having that information in some SQR database hidden away somewhere, but actually being able to wear a device and see it heads-up on top of that hot water tank. SiteVision is a really interesting one. That’s something that Trimble — believe it or not — we have been developing SiteVision since 1997. Go on YouTube if you don’t believe it. We, like many others, recognize that Hololens isn’t the ideal tool for — or really, any mixed reality heads-up display — isn’t the ideal tool for outdoor use, mostly just because of the sun washing out the sensors and the display.

And so we developed SiteVision, which is a tablet integrated with really Trimble’s bread and butter, which is high precision GPS technology. So if you’re a surveyor or a heavy civil contractor or a utility worker, and you have GIS data or buried utility data, you can walk out on site and see where it is in augmented reality overlaid on the real world to about centimeter level precision. It’s pretty incredible what these GPS receivers can do. The Connected Mine application, I actually used to work on in my last job. It’s really the same concept as what we’re doing in construction. You know, the whole push in the mining industry is getting people out of the mine. It’s an unsafe environment. And so mines, they set up shop for 100 years on a single open pit. So they have the ability to put a bunch of fixed cost investment in the technology for that mine. And many of the leading mines, they are essentially mapping in real-time — using radar and LiDAR and drones and photos — a real digital twin of the mine. And so mixed reality is allowing them to remotely — you could have an office in Toronto — remotely monitoring a mine in South Africa, sitting at their desk but wearing a device.

So that’s what Connected Mine does. And it’s not only overlaying the 3D CAD that that laser scanned at the mine, but also all the stockpile volumes and the movement of ore through the mine, and all of that kind of IoT information coming off of the different sensors. And then last but not least, the PULSE application, it’s built off of a field service application called Trimble Pulse that we have. And it’s essentially a remote expert solution. So if you have workers out in the field repairing electrical transmission towers or whatever it might be, giving them the ability through their phone to essentially call back home and have an expert back in the office — which are becoming kind of few and far between, many of them are retiring — so you essentially have that expert back in the office able to beam out to 100 different guys to help them, only when they need it.

Alan: That is a really complete suite of tools and they’re kind of across everything from the design phase or when you’re planning a project right through to servicing a project years later. What are some of the, I guess, improvements? What can people expect using the XR10 with Trimble Connect and these types of things? What are some of the results that people are getting? How do you measure that over what they’re currently using?

Jordan: Depending on the use case, there is– it’s easier or harder to quantify that return on investment. In the SketchUp world, on the architectural side, it’s a little more of a qualitative tool, right? There’s a ton of value in it, but it’s a little harder to map the value of having an owner and an architect on the same page. You can go downstream and recognize like, “OK, well we can show that X percentage of rework has been avoided, because the architect and the owner were on the same page about what the architect was designing and what the owner was expecting from the start, which a year later saved us from having to rip out his penthouse suite and redo it.” That’s a little bit longer of an ROI to map out. There is a great example I used for the Trimble Connect app, and it’s easy for me to talk about, because it’s such a closer return on investment.

We Trimble actually just built another building here on our Denver campus. And during the construction, we actually went out with a lot of our technology and kind of used it on the site. And so we went out with a general contractor and the HVAC sub, and it was right after the structural steel had been installed — so basically the decks and the columns and the beams were up — and we essentially took their BIM model of the HVAC and we walked the floor to essentially do as-built comparisons. We’re comparing the digital HVAC to the real world installed steel. And within about five minutes we found, I think, three or four different spots where the steel guys had gone off their plan a little bit. They had installed little support kickers, probably a completely necessary change, but they hadn’t essentially synched it back to what’s known as the coordinated model, that all these different subcontractors share to ensure that their puzzles are kind of fitting together. And because the steel guys hadn’t mapped that back — which is a very, very common thing — the HVAC guys were in the process of prefabricating all of those HVAC components somewhere in the Pacific Northwest.

And so they were expecting delivery about a week later for components that they were now realizing weren’t going to fit. And so without Hololens, those components would’ve just shown up and they would have had to either hack away to make them fit — which could’ve then had downstream impact on the plumber and the electrician — or they would have had a bunch of guys standing around not able to work while they wait for new components to come in. And so then that’s even more of a snowball effect. Through Hololens, they were able to very easily see that issue like right from the start. Like within five minutes they pulled it out of there, and they marked it up right in the Trimble Connect application. They sent what’s called a to-do up to their factory in the Pacific Northwest saying, hey, the steel guys made some changes. We need to make some changes as well, to ensure that the new HVAC routes around these structural components that they added. They made the change right there, and that was it. The components that they received the next week all fit, and they completely avoided that massive issue.

Alan: That’s amazing. So this was a test for you guys. You guys weren’t even expecting to do this, but you saw the error– not error, but the changes that needed to be done, and we’re able to annotate that directly back to the main designer, I guess, the main BIM model. That is gonna be more– I can’t imagine that in five years from now, any building will be built without that, it doesn’t make any sense.

Jordan: [chuckles] I sure hope so. It’s what we’re out here preaching. I think what we really need to do a great job of doing this time around — that we didn’t hone in on too much with Hololens 1 — is really mapping that quantitative value, because ultimately that’s what gets people to buy it. And speaking with the general contractor after that happened, you know, in full disclosure, we weren’t even out there doing it for real. We were out there doing a photoshoot that day for the first generation Hololens. And they were like “we might as well do it for real” and just happened to find all these issues. We asked the GC after the fact and they said that finding that potential rework before it happened saved them about $12,000. That was five minutes that more than paid for– that paid for an XR10 and seven years of a TCH license.

Alan: [laughs] When you put it like that, I guess. One error that you find will pay for itself 10 times over. That’s amazing.

Jordan: Yeah, exactly. It makes me think that I should be charging like a quarter of a million dollars for an XR10.

Alan: Well–

Jordan: I promise you I won’t.

Alan: The thing is, I’ve put this crazy number out there, I said “Virtual/augmented/mixed reality is going to create a trillion dollars in value in the next 10 years.” Now, if you think about it practically with solutions like Trimble Connect and Connected Mine and just the stuff you guys are doing, just in the money that you’re able to save customers in — just call it one specific aspect and that’s rework — over the next five years, just in your company alone, that could be in the hundreds of millions, if not billions of dollars in savings, just in one company. So you can imagine this, times all the companies in the world, times warehouses and sales and training. And if you factor in every type of way this technology can be used, I think that trillion dollars in value created by XR is probably closer to the five to seven-year mark. Because it’s just so– people are thinking in terms of how many headsets we’re going to sell. But like exactly what you said, the headsets, call it $10,000. Well, you’re saving that in one small area immediately. So the value created over the lifetime of five years of this headset is gonna be in the millions of dollars.

Jordan: Yeah. And fortunately, the XR10’s half of that, it’s under $5,000. So you’re under the cost of the Hololens 1. And it’s a much more capable device this time around. So it’s pretty impressive. I very much agree with you. I don’t know about the trillion-dollar, maybe, I don’t– I haven’t tried to run the numbers. But the way I think about it is the Internet was like a great unifier for the world, right? Like you had all these people, billions of people spread across the world, all with their own independent knowledge on billions of different topics, from how do you cook curry, to how do you build a house. And the Internet gave a platform to connect those people together, and all that knowledge together. When I think of XR technology to a lot of people, it’s still kind of seems like a gimmick. But once we get the mindshare out there of what the technology really is, I think they’ll come around. Because what it really is is you have all of this data which is properly connected, human to human through the Internet, but it’s not properly connected, human to world.

Jordan: And so that’s what AR is going to give you the ability to do, is to take all that information that is relevant on the real world and actually show it on the real world, rather than having some kind of middle man that is your phone or a tablet overlay or a piece of paper. I did a talk a couple of months ago and my first slide was a picture of a wormhole from Stephen Hawking’s book and kind of doing that relation to a wormhole. I also every once in a while use an analogy to Stranger Things — if you’re familiar with the show — and the idea of there being this kind of Underworld. It’s in the same X, Y, Z, and T, but you can’t see it, it’s in this fifth dimension and there being kind this portal that connects the two worlds together. That’s essentially all an AR device is, it’s a portal of connecting that kind of fifth dimension of a data world. In some cases, your five, six, seven D and connecting it out to the real world.

Alan: Even going to get more interesting as we start to have a lot more sensors in the world. They’re estimating billions of sensors being in everything. And construction is one of the easiest use cases to put sensors in. It’s fixed cost, sensors are low. You want to know how much water is going through a pipe at any given point in the pipe, how much gas is going through, how much airflow. These sensors are inexpensive, but collecting the data is great. But really we’re collecting so much data that it’s kind of useless, it’s overwhelming. Nobody can really deal with that. So using AI to make sense of the data and then using XR to project the data in ways that is relevant and contextual to what we need is very important.

Jordan: Yeah, I agree. Construction sites are actually a little tricky to set sensors up on. You know, like an open-pit mine is actually very easy, because — like I said — it gets open and they carve it for 150 years. Construction sites because they change so often. It’s a little bit difficult to get infrastructure that’s not going to immediately get blocked by a piece of drywall or something, right? What’s interesting about a solution like Hololens is, today most of the work that’s been done is, how can we take data that already exists and then use the Hololens to visualize it? But I think that’s only one part of a bigger story. And I think that in the very near future, we’re going to start exploring how Hololens can actually collect the data as it goes. So not only can it show you a ton of information, but it can collect it as it goes, as well. So that example that I use of our guys up on the construction site and being able to see that design versus as-built clash, there’s no reason why a Hololens couldn’t use artificial intelligence and machine learning to tell you that by itself, right?

Jordan: And if that’s the case, then you don’t have to rely on the human anymore to be able to identify that issue. Rather, you could have– you could put a cheap little occipital sensor on every single person’s hardhat — rather than everyone wearing Hololens — and walk around. And it’s the exact same concept as what Elon Musk is trying to do with the Tesla, or any of these folks out there doing autonomous vehicles. You have vehicles that are not only using a map and knowledge to kind of navigate themselves, but they’re also sending information back to it at all times. It’s like, “Oh, this business went out of business, send that back to Google Maps.” And so it’s this kind of constant data cycle.

And I think you’ll start to see the exact same thing out on the construction site. It could be as simple as like we’re developing a solution internally right now through our labor and equipment management group. It’s all about workplace safety and making sure you know where people are on site. And a Hololens and through spatial anchors and that world mesh can tell you at any given time where people are on your construction site, just from that outside-in tracking. And then it could use the camera to see Joe over there is not wearing a safety vest. And send a note back to the office and say, “Hey, Joe’s not wearing a safety vest out there.”.

Alan: Yeah. Or maybe just send a quick message to Joe, say, “Hey, Joe, you forgot your safety vest.”

Jordan: Yeah, exactly.

Alan: Yeah. The possibilities are endless. I mean, one of the early use cases of the Hololens was for the elevator company Thyssenkrupp. They are able to take a process that takes six, seven hours of measuring the stairs, and they just walk up the stairs with the Hololens because it’s able to capture a cloud map very quickly. And it went from six hours of collecting data with a tape measure to literally minutes. So, really cool.

Jordan: Yeah, we’ve worked pretty closely with the Thyssenkrupp guys. We actually had them here in our office at one point last year during a workshop with our developers, and they’ve done some amazing work over there. There’s definitely some good code that got shared that week.

Alan: Amazing. Amazing. And that’s what I think is very unique about the XR industry, is people are so collaborative. I wonder if that’s going to change in the future. But for now, it seems like everybody’s just willing to help each other, which is wonderful.

Jordan: Yeah, yeah, absolutely.

Alan: So speaking of helping people in the world, what is one problem in the world that you want to see solved using XR technologies?

Jordan: So I’ll hone in on construction again, because those are the big problems I’m trying to solve right now. But there is a really big concern in the construction industry right now, around the next generation coming in. You have a lot of very old knowledge that is retiring and a new crop of folks coming in that aren’t quite as educated, that knowledge transfer isn’t coming through. And just not enough people are going into the trades, to be frank. And so I hope that XR will kind of do two things. One is I hope it will let the younger class think construction’s cool. I grew up plumbing new homes with my dad, and now I’m obviously on the tech side of it. But, you know, I still think fondly back to that time spent with my dad. It’s a good hard day’s work. And there’s a lot of value in construction and a lot of folks to see it as dirty gross work. And I’m hoping that through technology, we can start to attract some of this fresher crop into the industry.

And I think in addition to that, it’s not only using it for the allure factor, bringing people in, but it’s also going to make their lives easier and make it so that they can do their jobs better through technology, in the same way that having a phone in your pocket has made our lives easier every day, having a mixed reality device attached to your hardhat should make your construction life easier, and allow you to go home earlier and get a job done better and just be a more efficient worker, and make more money and really have a good livelihood through construction.

Alan: Thank you for joining the XR for Business Podcast with your host Alan Smithson. Today’s guest is Greg Demchak from Bentley Systems. Greg has been designing and driving the development of immersive digital simulation for architecture, engineering, and construction markets for the last 20 years. Educated as an architect, he transitioned to software design after completing a degree in design computation at MIT. He went on to become a senior user experience designer for the Autodesk Revit product, product manager for SYNCHRO 4D software platform — now owned by Bentley Systems — and currently leads the mixed reality team for Bentley Systems. He’s been pushing the envelope of this technology and software for the Microsoft Hololens, and recently built an app for the global launch event of the next generation Hololens 2. To learn more about the work that Greg and his team at Bentley are doing, visit bentley.com. Greg, welcome to the show.

Greg: Thanks, Alan. How’s it going?

Alan: It’s going fantastic. I wanted to say thank you so much for taking the time to join us here. And let’s kind of unpack the work that you do at Bentley Systems. From a 10,000 foot view, what do you guys do?

Greg: Yeah. So Bentley Systems — just to frame that — is a global software company focused on engineering and infrastructure, architecture, and construction software. So it’s– we basically produce software for the built environment. So anything from bridge design, to high-rise construction, to infrastructure that needs to be modeled. And it’s a platform that serves that industry across the board.

Alan: Well, that’s a big industry, considering there’s the equivalent of Manhattan, the size of Manhattan being built every single month somewhere in the world. So you work with large infrastructure projects, building skyscrapers, bridges, infrastructure. How does XR fit into that?

Greg: It’s a good question. So the way we see XR fitting into this is– and you’ll see this term, it’s really becoming — I think — quite popular now in the industry, is this idea of the digital twin. And what started out as 2D drafting and then sort of evolved into 3D models, and then this idea of building information modeling is evolving into this idea of the digital twin, which is that any given building or asset or a piece of infrastructure can have a parallel digital representation of itself as a 3D model, and then also now as a 4D model, which is to say that the model evolves and changes through time, just like the physical building. And the XR piece is a really cool way to basically bridge that digital and physical space in a kind of a natural way. So that’s where we are developing on top of the Hololens platform. It’s basically a way to take those digital assets, and then render those assets as digital artifacts or 3D models or information in the context of the physical space. So that’s had the opportunity. These buildings, these infrastructure assets are evolving and changing over time. And you can basically render digital parts of that through the Hololens and see a mixed reality view of the world.

Alan: So, for example, you’ve got a– let’s just use a building, a skyscraper, you’re building a building, you’ve got the Revit models or the BIM models or the CAD models. So let’s just first of all — for people that maybe don’t understand what those mean — what are those three terms mean and how are they being converted into XR technologies?

Greg: I’ll just start with that idea. Like the building information model and that could be any 3D model. And it’s not just Revit, it could be a Bentley product, could be Tekla product, could be from any 3D CAD system, even something as simple as SketchUp, if people are aware of that. It’s a 3D model which has got dimensions and shape and size and color, and then these models have information or metadata embedded in it. So objects now know like, is it at door, is it a window, is it a chair, is it a beam? And so we can take those objects that are modeled in a CAD system and pull them into a head-mounted display — the Microsoft Hololens — and see those 3D models align with your physical space. Imagine you’re walking through a building and you want to see — in this case, we focus on construction — the next two weeks of construction that you have coming. You put on the Hololens and see that digital model projected into physical space, versus looking at that on a computer screen or referencing construction documents in a paper format. So it’s really about bringing those 3D models into the physical space.

Alan: What’s the benefit of that? I’ve got my blueprints and I’m building the building. What does that afford users of this? What’s the benefit to putting this into, let’s say, a Hololens or similar headset? Why would anybody want to do that?

Greg: So like what we’ve seen with like a lot of our customers, it’s the ability to basically see those models, that content in the context of real scale. So it’s immersive. The interaction patterns, too, are way more simple. Instead of having to learn a mouse or a keyboard or spin around a model, at least with the Hololens — and also I think this touches on VR too — you can basically– you put the headset on and the user interface is basically your head. You move around, you look around, and then you see the model just by moving your head and your gaze throughout the space. And then another thing that’s kind of cool about the next version of Hololens 2 — which we can probably get into — is all the interaction patterns are just by using your hands. So you reach out and grab things, controls, models, and it’s all just near interaction with your hands. And there’s not a lot of learning to do when it comes to like typical CAD systems.

Alan: People get their CAD models in. Is there an automatic converter or– I’ve got my BIM models, my building information models, I’ve got my CAD. What do I do?

Greg: Well, there’s a lot of ways to do it. I mean, a lot of people just– anything you can get into Unity, you can basically get into VR or mixed reality experience, unless they’re like custom one-off apps. And that’s how we started, in just prototyping. But that basically led us to realize we could build a generic pipeline. So we’ve built a technology stock on the cloud on top of Azure, basically, that lets you import geometry models into our platform — called Synchro, which is this 4D construction animation tool — and then automatically we create a web endpoint that the Hololens can connect to, and then pull that geometry down. So you literally just log in into the server, and the port information and a 3D filter and then we can send that model geometry into the Hololens. We tried to lower the bar of entry, to make it as easy for people to get into it as possible. But of course, if you want to if you want to just like hack and get into it, any 3D asset you can load into Unity would basically allow you to build apps for this platform or Hololens.

Alan: So I would assume — and then maybe I’m wrong here — but I would assume this is very much experimental, or still at the very beginning phases. Are you starting to see customers use this on job sites as part of their daily workflow, or is this still kind of experimental? Where are we on the timeline?

Greg: So I think we’re still in that early experimental phase. We got involved with the early days with Microsoft through a series of hackathons that Microsoft, they went around the country basically and introduced the [Hololens] V1. And that was like two and a half, three years ago. And at that point, they had zero users, right? They were trying to connect with developers and sort of that hacker culture. We got involved in a hackathon in Boston back then. And I think what’s interesting about this is back then I brought a customer from a from Duke Energy — one of our users — and we brought their models, their content, their 4D kind of simulation. And at that point, we were just using FBX and sort of animating content that way through export. But we got real signal from the user that there is value here, and they started using that app and testing it in context. But it wasn’t– I wouldn’t say it was fully adopted, but we had a lot of early adopters that helped guide our experience and our feature set, and where we were taking the application. And this was sort of in the nuclear space. It was in heavy infrastructure projects, large tunnels. And we also piloted it with a lot of high-rise construction projects too, just to test it.

So I think that was good. And then a lot of that feedback went back to Microsoft, to help inform where the next generation headset was going. And I think largely they tried to address a lot of those issues, issues that we were seeing in the field, that would prevent that kind of widespread adoption. So comfort, ease of use, field of view, processing power, those kind of things. So I think they’ve made a lot of improvement in security. The fact that it can integrate with a hardhat or not, was also another big win, obviously, in the construction space.

Alan: It feels like Microsoft really did it right, where they came out with a device that was very functional. And then instead of just having a bunch of hardware designers design the next one, they actually listened to the customers and said, “What are the limitations?” And I’m assuming they probably all got the same– everybody’s saying “It’s really heavy on my nose. Crushing my face.” [chuckles]

Greg: Yeah, yeah, I know. I’ve done hundreds of demos, and I’m sure you have too, you know what it’s like. And it’s crazy too, because now having the Hololens 2, it’s almost painful to go back to give a demo on 1.

Alan: We actually sold our Hololens 1’s, we got rid of them. It’s just like, every time I put it on I get a headache. And it wasn’t the optics, it was the weight of the thing, and it’s funny because some– the other day I was explaining to somebody and they said, “Oh, by the way, there’s a headstrap inside the box.”

Greg: Oh, yeah! [laughs]

Alan: I was like, “Oh man, I feel dumb right now.” [laughs]

Greg: So a lot of changes with that. So, yeah, the fact that it was so front-heavy, it would weigh down on your nose. Most people were always complaining about the narrow field of view, all these kind of things, the way you put it on. The interaction pattern, by the way — the air tap thing — how many times if you give a demo, and like you’re just trying to teach someone how to tap these holograms?

Alan: I did a talk the other day, and explained it that anybody over 30 struggles with that air tap. They poke at it, they reach for it. They just try to do anything but the actual air tap. And then you give it to a kid, anybody under 30 and you say, “Here’s the interaction,” you show them once. And boom boom, they got it. They’ve got their hands in there, they’re rotating things. They just figure it out immediately. So you’ve been kind of working with this for a couple of years. You’ve figured out Microsoft Hololens, we can import these models. Where’s the ROI being driven from this? Why would I take the time to put this in a Hololens, stand in a construction site, put this on my head? Like, where are people– how would people use this, and where are they using it?

Greg: For me, this goes back to like the source date. I think the first step is what’s the ROI in making any 3D model? In the construction space this has been this evolution, right? Like we have had to go from evolving from 2D drawings — which goes way back, like hundreds of years — to then 3D modeling, which is with like plywood and chipboard and wood and whatever. That’s like the way you would build a 3D model is like you’d literally just cut it out of wood or foam core or something like this. And then eventually you could do 3D printing, right? You could 3D print from a CAD model and have a physical 3D print to look at. But that always kind of predicated on the fact that you’re building a 3D model. So like the real question I think is like what’s that initial value proposition of the 3D model? And I think it’s– this is my belief, I think that anytime you make a mockup, a 3D model, a simulation prototype, it lets everyone understand what your intent is and then provide feedback and basically interrogate the mockup, and drive towards a better product in the end.

And manufacturing AR space has been working in that kind of space for a long time. And then the architecture construction industry is kind of slowly been picking this up in the last 15, 20 years. So what I see is that investment in the 3D model, and then what we also bring is the fourth dimension, which is the construction schedules, it’s construction animation over time. I think the value that the 4D animation gives to a construction team is they can see into their future, like what’s going to happen. And it means that by looking in the future, they can identify risk and try and prevent problems from happening in a potential future. So it’s a way to kind of immerse yourself in a digital construction workflow, to just understand what’s coming next, what’s in your future. And then we’ve basically enabled all that content that you can author in these CAD systems — like Synchro and Revit whatnot, 3D modeling systems — and just carry that out into an immersive perspective experience with the Hololens. And then going a bit further than just like a VR experience, you can actually go and position those models in a room instead of doing a 3D print. Basically, sometimes I refer this as like you’re printing the model with light with the Hololens. That’s like a print of pixels in light and we can animate that model. And so you could never do–

Alan: Hard to animate a printed physical model. You can’t.

Greg: Exactly. There’s no way to animate a physical 3D print made of plastic. So for one, that gives you that, full kind of immersive simulation. The other thing I’ve seen customers think is quite interesting, is to be kind of standing in context and see that hologram lined up with your physical space. I think that gets really interesting what it means to see that CAD model as an overlay, that you can interact with and it gives you like X-ray vision. So that’s kind of like pre-construction planning and kind of pre-simulation. Another situation we’re looking at is– OK, during construction, what if we start scanning the construction sequence as it occurs and produce a photogrammetry mesh, and then we could load that mesh back into the Hololens later for an operations and maintenance user. And if you think about that, now you’re going beyond just the CAD model rendering in context, but like a photogrammetically accurate mesh capture. And then you really have kind of an x-ray opportune vision of the world.

Alan: I would think also being able to look at models on the desktop — so kind of God view — brings people together and you can look at these things animations, but then when you bring it into the actual building, overlay the plans, I would think that by overlaying let’s say, for example, you’re in a building its initial phases and you could overlay, “OK, this is what where the HVAC system is going to go.” and it’s like a one-to-one from the blueprints. And then when somebody using the scanning capabilities of a third party scanner — or even the Hololens itself — you could look for anomalies in the millimeter range. So if the HVAC system happens to be off by a couple millimeters, then maybe it’s auto-flagged. Is that something– is that kind of the idea with this?

Greg: I don’t know if we can get to auto-detection or not. That’s a good use case, or that has to be processed later, and then sort of like–

Alan: Or maybe you can annotate on it, let’s say the HVAC system’s here. But there’s the plumbing, it’s running through where the HVAC system supposed to be in. Because I know rework is a huge problem in the construction industry. It’s a multi billion dollar problem every year. You build a part of a building, you put your HVAC system and then go, “Oh, the plumbing is supposed to go where that is.” and rip it all out and start over again.

Greg: That, we do support. So we have this tracking of issues in the device, so we can status objects as installed or not installed or defective. And then we can also take a photo and drop a note, so that then becomes something from the field, they can go back.

Alan: Now, does that go back and alter the blueprints at all, or annotate the blueprints. I guess?

Greg: It doesn’t go back into the blueprints directly, it goes back into the Synchro 4D, you can say like this digital twin. So it goes back to the database as a event in the timeline. So in fact, you can kind of– you can basically scrub backwards and forwards through the model, and see status progression as it takes place. So that’s actually really another interesting use case we’ve developed, is this ability to status work as completed as this goes in. So it’s like model based tracking, and completions versus just like a daily log written down on a piece of paper. And then what that leads to, when you basically– when you get to a model based tracking solution, then now you’ve got basically a historical record of work that was actually completed, observed, captured, recorded. And if you think about that, you can compare that against the schedule. You can use that to start issuing payment basically for work complete. So like digital audit trail, you could say.

Alan: Yeah, that’s really amazing. When you’re making these digital twins– especially in a new building, I guess you’re pulling them directly from architectural renderings and that sort of thing. How– what’s the conversion? What is the process to create a digital twin of a space? Although I’m on your website now, it says, “The process combined engineering data, reality data and IOT data. 2) Create a virtual experience using 3D and 4D. 3) Gain a deeper understanding of infrastructure assets.”

Greg: Yeah.

Alan: But I’m assuming there’s more to it. [laughs]

Greg: That’s– I mean, basically it’s– we can import from basically — like I said before — any kind of 3D model system. That becomes– that’s the 3D asset import. We can also import any schedule information from P6 or Microsoft Project, link those together. Then on the back-end we basically wrote this Unity converter, that takes all that geometry that gets imported into our SYNCHRO engine, that digital twin aggregator. And then we can basically pull out that content and render that inside of Unity. So we basically wrote a pipeline to go from 3D asset into Unity, and then render that into the Hololens.

Alan: How many active products are using Hololens right now? Is this just something that you’re kind of working with internally, and then saying to Duke Energy or one of the companies, “Hey, you want to give this try with us?” and it’s kind of like a partnership for R&D? Or is this something that you’re rolling out as “Hey, we’ve got this product and it’s part of our workflow now.” And what does that look like?

Greg: It’s early adopters. So usually it was construction companies that had– luckily they had some budget and some innovation money to spend and work with us. So typically they’d buy one or two Hololens. And then we would go do basically co-development, hackathon style work with those customers, and we’d build basically working prototypes with specific customers. But then we would take all the learning from those prototypes and this was like companies like Skanska, Balfour Beatty, Mortensen in the US, Tesla also in the US, I mentioned Duke Energy. And so they would sort of funnel in to our development pipeline, and then eventually that kind of aggregated and got us to the point where we felt like we could actually put an app out onto the Microsoft Store. So that was cool. We wanted make it real, you know. So we have an app. It was published to the Microsoft Store and worked with Hololens 1. So I think that was kind of our roadmap, a lot of iterative prototyping, but eventually leading towards a product that anyone who had a Hololens could download and make use of. Again, I think that was that early adopter stage. I think that there is that smaller group of people that were buying Hololens 1 and willing to kind of help us evolve that experience. And I think as we go into Hololens 2, it’ll just expand. That’s at least the hope.

Alan: Even though it’s early days, are you seeing ROI being generated from this, or is this just a better way to visualize? How are you measuring baseline without this, to with it?

Greg: It always comes back to the challenge of 3D or 4D versus paper, not paper or digital, not digital, because–

Alan: How do you prove it to somebody? It’s anecdotal. [chuckles]

Greg: Well, it’s so expensive. Like, you don’t have the luxury of big construction projects to go, “Let’s make one analog, and then let’s do another digital, and see what happens.” Like it’s such an expensive proposition. So usually when a company goes in, they’re just sort of like all in and they’re just going digital and they’re building 3D models and they’re requiring their subcontractors to deliver fully detailed fabrication models. And they just go for it, they deliver that project. I think what I’ve heard from an ROI perspective is, when you’re using these tools is kind of this idea of BIM building, information, modeling. You see reductions in rework. More efficient productivity in the field, better communication, which reduces errors in the field, more confidence in the schedule and the program, because you can see it in a digital way first.

I think all those benefits just sort of cascade into the use of the Hololens and mixed reality. I haven’t seen where you would go to Hololens, if you don’t already have kind of investment and a belief in that kind of digital information process first. It’s sort of the investment in building the 3D models and sort of that changing culture around project delivery. So I think it’s going to naturally kind of evolve, as more construction companies and architects continue to develop 3D assets and kind of keep building that digital twin, then the Hololens is just a natural extension of that process. I don’t know if I– it’s like without investing in all that 3D model, then you can’t– there’s not a clear way to get into the Hololens in the use cases we’re looking at.

Alan: Are there still companies not using 3D when building infrastructure?

Greg: Yeah, you’d be surprised.

Alan: I would be surprised. Like, how is that possible in 2019?

Greg: Yeah, exactly. There’s still a lot of construction that happens in old analog ways. It might still be digital, like 2D, using AutoCAD or MicroStation. And then 3D, it’s still evolving, especially construction is still emerging.

Alan: Well, it’s amazing that we’re still at the very beginning of just the digital transformation, I guess. Here we are, on Hololens and 3D and moving into AR and VR and mixed reality, and some people are still using paper and cardboard models of things.

Greg: Yeah, yeah.

Alan: Wow.

Greg: So yeah. Well, that’s– there’s definitely tiers in the market, I would say. So like, the customers that are adopting the Hololens and all this 3D, they’re generally tier 1 major contractors building huge big infrastructure jobs. So if it’s a new airport or if it’s a new bridge or tunnel, probably good chance there is 3D models there and there’s digital process in place. As you start to scale down, if it’s smaller scale, like residential, single family housing, probably you see less use of the 3D models.

Alan: Yeah, it’s interesting. My brother rolled out his paper blueprints — they’re building a house — and they rolled them all out yesterday. And it was all 2D. Which was great, but it’s one house, and I get that now. I see it’s going to take a minute to trickle down to those use cases, because of the cost. Over the last kind of five years, let’s say, are you seeing a dramatic decrease in the costs to develop 3D versus 2D, or is it still kind of expensive or…?

Greg: Well, the software is not expensive. I think the costs concern like training and kind of large process change within the organization.

Alan: Hmm. Interesting.

Greg: So like the cost is more like, what’s it cost to basically train a staff, an entire division, or upskill everybody? If you think about this, the software itself is actually– hasn’t really changed price in years, like in 15, 20 years. I think that’s real costs, and then maybe fear that if you implement something new that it won’t work. But that makes sense. Like the cost is not the software.

Alan: I said this on another podcast and I think it’s true. It’s, “This is no longer a technology problem. This is an adoption problem.”

Greg: Exactly. It’s a cultural problem. And in fact, the question like your ROI questions are really good. I was running a workshop a couple — maybe it was like a month or two ago — and it was based on this idea called “questions are the answers,” based on this book I read by this MIT author. He uses this technique called” questions are the answers.” We try and get people to only formulate questions and not answers. And then the question I had, I was basically saying “What is preventing the adoption of XR and Hololens and 3D in the market or in your workplace?” And then the questions that people wrote — instead of answers, they had to come up with questions — then the questions that came to the top were “How do I prove this to management?”, “How do I capture the value and prove there’s ROI?” or “How do I convince management?” And it wasn’t like “Why is the technology not working?” or “How come this feature isn’t there?” It was all about– all the questions that came up were cultural. How do you prove ROI? How do you do present this to management to get total buy-in?

Alan: What are some of the things that you’ve found to help with that adoption? Because I think you have a unique insight into this, in that you’re actively working on this technology. You brought Duke Energy in, for example. How did that conversation go? Was it– did you find a champion within the company to back that or– what we’ve seen in doing a lot of these podcasts is that it comes down to having a champion within the organization, that’s high enough up that can kind of get buy-in from the C levels, because if you don’t have that buy-in, it ends up being a small POC and then dying.

Greg: I think that’s exactly right. I think I can validate that idea. Definitely sits. What I’m finding is when you find that champion, like the guy we had from Duke Energy, who was going to fly up to Boston in a week’s notice. And then he could go and– went back and got them to buy Hololens and implement it and drive that. So I’m finding is it’s– I think what’s helping with the adoption is to connect with like-minded, kind of spirited people who have this– they have this belief in it. And it’s like a partnership. Like, I don’t go out and spend a lot of time pitching it or trying to convince people of the value of it yet. It’s more like let’s connect with people in industry who also have this belief that there’s something there, and what can we discover together versus me trying to pitch it.

And so for me, it’s been a lot about that. It’s about finding people who are out there in the real world trying to do work. And if they think there’s something there, then I think there’s something there. And that starts a cycle. Even back to Microsoft, you know, they’re like the hardware provider. And then we’re building a software layer. Then there’s the actual real user. So I think that’s what’s been working. It’s like everything that we’ve done has been always with an actual customer and a use case in mind, and testing it in the real world. So it’s not abstract theoretical research. At least that’s how we’ve approached it.

Alan: Yeah, I think that’s the way we got to be looking at this. There’s obviously researchers doing great research on theoretical “Hey, what if…” scenarios. But I think practically wise, it’s “Yeah, what if we use this to save money?” [chuckles] “What if we use this to save lives and money?” That’s really the only question that matters at C suite. Amazing.

Greg: And that’s that challenge of like, how do you– I think this is an interesting software challenge I’d throw out there, maybe for anyone listening on the podcast. Because I don’t have an answer to that, it’s what I think I want to– would be fun to solve, which– it comes about that ROI question, right? Let’s say you’re using these great new tools, you’re building 3D models, you’re building 4D models. You’re going on the field and you’re solving problems. How do you easily, effectively, quickly capture that you’ve solved some kind of problem in a digital way without getting in the way? And then start to maybe capture that value somehow, right? Because I’ve seen a lot of cases where someone will be looking at a 4D model — which is the construction schedule animating — and a superintendent will go “Wait, that doesn’t make sense. That won’t work.” Or I’ve seen collisions of a huge piece of HVAC equipment, we’ll animate that thing coming into a building, and it will literally clash with the steel.

So imagine if if that piece of equipment had arrived on the site in real time and they lifted it with the hoist, it would have made a collision. And it’s like, you could have impacted the schedule by weeks. And that’s a lot of money, right? But how do you– whenever you’re simulating it it almost gets taken for granted. “Oh, it doesn’t work.” And you fix it, and you move on to the next task. And so it’s very easy to lose track of, I think, all those little moments where, well, maybe you did just save like a ton of money. I don’t know how you do it without some kind of quantum simulator, I don’t know. But if there is a way, that would be a really cool piece of tech to build.

Alan: Are you doing anything in the AI space as well?

Greg: Seems like everyone is, but practically I would say I haven’t got into that yet. There’s a lot of talk, lot of discussion, but we haven’t haven’t figured that one out yet. Obviously there’s a lot of information that is being collected, that we haven’t analyzed the results of all that. So that’s an interesting option, maybe. Maybe AI, if you started to compare almost like microchanges maybe people made in the 3D model, you could extract some value out of that.

Alan: Well, the thing is, you guys have access to enormous amounts of data. And when training AI algorithms to do whatever it is you you want to look for, the first thing is if you have the data and you guys have the data. So how do we apply this to maybe look in and determine, based on the different information that’s coming in? You could look at– is a supplier delay imminent or is there something on the worksite going to cause problems down the road? Really modeling out scenarios, I think, is the best use case of this technology — of AI anyways — modelling scenarios. I think that’s where it’s going to really become interesting, when you combine AI and an XR, when you can say, “hey, here’s the progression if we do this, and here’s the progression if we change this variable.” and the build times, build costs over a movable scale. So if you’ve got the Hololens on, you’re looking at a building construction site, and you grab the slider and you say “Day 2 is dig the hole, and day 150 is full buildings,” you got that slider. And based on changing different variables, then you can now look at that real time and say, “Hey, that 150 day completion time is now 200 days because of this, this and this.”

Greg: Yeah, definitely. All historical trends and construction data could be fit into the model and it could basically auto-generate a construction sequence for sure. And then the Hololens becomes just a way to kind of visually interrogate that and see it.

Alan: I’ve heard it mentioned that AI is the real driver of this technology and XR is really the visualization of the data. And it really it makes sense when you think of it that way, though. By the — I just read this morning — by 2030, there’ll be half a trillion sensors, IOT sensors around the world, in everything from your shoes to your light posts. How does a human, any human really make sense of that much data coming in? And the answer is you can’t. So how do you then apply smart algorithms to give you better data in a way that that us mere humans can understand?

Greg: I think that’s where things will definitely I think it’ll be interesting. Every time I’m in an Uber these days, I sort of am thinking about these cars, where they got like multiple smartphones pinned into the dashboard, then it’s just like the dashboard, and just like all of these kind of heads up ambient pieces of data feeding into the mind. And it’s like– it feels like that’s just– it’s this early hacked state, where eventually all those controls basically disappear, fade away. And they’re always maybe– it’s just on-demand information flowing into a pair of glasses or contact lenses, or whatever it ends up being. But essentially I feel like we’re already in this kind of augmented world, but it’s all kind of–

Alan: It’s ghetto.

Greg: Yeah, it’s ghetto, exactly. It’s super ghetto. Everything’s like hacked together, you know, it’s like–

Alan: Yeah, you’ve got like– the same thing is with like Uber Eats. You go to a restaurant and they’ve got like six iPads. It’s like “Really, you need six iPads to take orders?” Like, this is ridiculous. There’s cables everywhere, and it’s like, oh my god. I think you’re absolutely right. We went from brick phones — you know, those big-ass brick phones with a bag — to a tiny phone, to now smart phones. And that process took — I don’t know — twenty years, I guess? We’re kind of in brick phone phase of this technology, like in 10 years from now you’re going to look at the Hololens one and laugh at it and be like, Oh my god, I can’t believe we used to wear that ridiculous thing on our heads. And you’re going to look at the HTC Vive, because I have one of the Vive Pres, like the very first one. And I mean, like all the sensors are showing, and it’s a giant facemask looking scuba thing.

We’re gonna miniaturise that. And probably what it’ll do is AR and VR will probably just merge, and you’ll have a pair of glasses that has full 200 degrees of field of view and full occlusion. When you’re in VR mode, it just kind of darkens out the world and goes into VR mode. And in AR mode, it just lightens up the glasses and you can see the world around you. But like you said, and to quote, I believe it’s Sundar Pichai from Google, “The device, the very idea of the device is going to fade away.” So you’re not going to just hold up your phone every time you want check a message, it just will be intuitive.

It’s really interesting that Microsoft has spent so much time on the user interactions, being able to use your hands naturally. And I think we’re just at the beginning and you know, somebody said to me, how are we going to communicate with these devices? And I was like, I don’t know, man, maybe we’ll talk through it, maybe a wink at it. Maybe we’ll just think it. But the reality is, nobody really knows right now. And that’s– I think the excitement of it is that we’re at the precipice of the next computing platform and nobody really knows how to use it to its full potential, even close. So there’s so much opportunity here and so many problems and challenges within the industry to solve. So like, how do you solve the security issue when– you know, when somebody puts on your headset, can they start to be your avatar in a virtual world?

Greg: Yeah. That’s interesting. I think it’s– That is, I think, a really good point. It’s like such a wide open space. But that’s what makes it so interesting and so fun. And it’s also a space that’s been socialized, honestly, in like sci-fi films for a long time. Usually you seen it a film and there’s always holograms, but no one’s wearing anything on their head. You know, it’s just– there’s just a magical hologram. [laughs].

Alan: [laughs] It’s funny, one of our investors said, “When are we going to have holograms floating in the air?” I’m like, “Well, you know, we can do that now.” He goes, “No, without the glasses.” I’m like, “Uhhh… maybe never. You need these glasses.”

Greg: But it’s funny. It’s like this idea has been with the culture for a long time. You know, I always think back to like — I think it was Prometheus or something — where that drone is going. For me, I think about that, it’s like this great digital twin example of like drones flying through the alien cavern, doing real-time basically laser scanning and then producing a real-time holographic representation back in the command center. Like, that to me is super cool, like it was imagined in science fiction. But we’re actually getting to the point where that could almost be real, except you do have to wear the headset.

Alan: There’s nothing wrong with the headsets. That’s where everybody’s trying to get to this point where we don’t need headsets. But I think that’s really not reasonable.

Greg: No. And I’ll tell you what, too. With the Hololens 2 — I don’t know if you’ve experienced this yet, but I would love to show it to you if we ever get the chance — it supports multi-user, just like any other multi-user game. So when we when we did this launch in Barcelona, we had multiple– we had like four– I think it like 20 Hololens at some point all in session. We had to build an app even just to manage which devices were in and out of session, because everyone was sharing the same information at the same time. So, you know, we had three people in a room, and with the hand interaction it’s super cool. Everyone’s reaching in, and you can literally pick up holograms and pass them back and forth to one other. And they have this sense of like it’s really there. And if people missed the grab, it drops down, because we turned on gravity. It’s like, “Oh!” and you watch them look down, like they actually dropped an object and pick it back up. And the cool thing is, it’s like it’s shared experience. And I think that’s another cool thing with the Hololens. It’s like you’re still seeing your surroundings, you’re seeing the other people in the room, you’re all seeing the hologram at the same time. And it becomes this believable thing. You know, it’s literally changing your definition of reality.

Alan: My favorite is when people are in VR/AR and they they walk around digital objects, they move out of the way of something they could just walk through. [laughs]

Greg: Yeah, we saw people afraid to squeeze on the tower crane. Like, “No, no! Grab it, grab it!” And then they kind of hesitate.

Alan: “Am I going to break it?”

Greg: Yeah, yeah.

Alan: So I can ask one last question, Greg, because we’re running late here a bit. But what problem in the world do you want to see solved using XR technologies?

Greg: Hmm. I would like to just make information — this digital space that we live in — just become basically hands-free. I would like to see that evolution out of these phones people carry around, and just deliver information on time where you want it, when you need it. And in specifically in construction, it’s sort of like, just get all these digital assets to people in the most natural way possible. So that’s what I see as kind of like an evolution of how people understand buildings, architecture and sort of information in general. So I think I’m just along for that ride, evolving our understanding of a problem.

Alan: Yeah, I think there’s– being able to visualize things in different ways is really powerful. And I think these technologies really are going to unleash the human potential.

Greg: I hope so. Definitely.

Alan: Welcome to the XR for Business Podcast with your host, Alan Smithson. Today’s guest is David Sime, founder and technical director of Oncor Reality. With over 19 years of digital media experience, David delivers promotion and analysis at strategic, tactical, and operational levels. Disciplines include virtual reality, augmented reality, targeted online video, and strategic digital marketing across social media, mobile, pay-per-click, smart TV, and out-of-home mediums. David directs the multi-award winning digital media agency Oncor Video and now Oncor Reality. Based in London and Central Scotland, this multimedia team delivers results based in immersive media solutions across engineering, construction, hospitality, and luxury retail sectors all around the world. If you want to learn more about his company, it’s oncorreality.com.

David, welcome to the show, my friend.

David: Thank you for having me, Alan. Can I start paying you to introduce me in events? That sounded amazing, I’m really impressed by myself now.

Alan: Okay, let’s restart. *David Sime, here we go!*

David: [laughs]

Alan: No? Too much?

David: No, I think that–

Alan: I mean–

David: I think that’s just enough for me. Just enough. [chuckles]

Alan: [chuckles] We’ll sell you the whole state, but you’ll only need the edge.

David: [laughs]

Alan: Oh man.

David: I’ve been watching what you’ve been doing on LinkedIn for years, man. And it’s super impressive. I really, really enjoy watching all your travels and all the places that you go. I can only aspire to that kind of activity. But, hey, I’m doing my best.

Alan: Well, I can tell you that I can’t go on LinkedIn anymore without seeing your smiling face, so you must be doing something right.

David: I think I’m developing an addiction. That’s what I’m doing. [laughs]

Alan: It’s like crack.

David: I can’t seem to stay off. I managed to wean myself off Facebook. And then this came along, the specter or the methadone of the digital marketing world. And now here I am. But it’s great, because people are super friendly and a lot less rude than in any other channel.

Alan: It’s amazing, because you really have– I’ve only experienced maybe 10 people — out of 30,000 connections and millions of views — that I’ve had to block. And that’s really amazing. I think it’s because people know that if they do dumb shit on LinkedIn, I know where you work.

David: [laughs] Exactly. I mean, I’ve always said it’s the anonymity of social media that can be the problem, that makes people not behave themselves. LinkedIn, you are the representative of yourself, your business, everybody knows who you are, where you live. You just have to behave. Although some people still don’t. And it just seems ridiculous to me.

Alan: The great thing is you can click a button, and they disappear from existence.

David: [laughs] I know! Because you get people that ruminate and ruminate over this kind of stuff, “Oh, that person said that thing.” and they’re working on their response for the rest of the day. Me, I just click “block”. Enough said.

Alan: I give people two chances. I call them out. I say, “Listen, you’ve got a problem. You cannot post that dumb shit on my LinkedIn. You can either retract it and stay connected to our community, or you’ll be blocked.”

David: Or you’ll be blocked.

Alan: That’s it.

David: That’s it.

Alan: Yeah. Let’s move away from LinkedIn, because LinkedIn’s awesome, but it’s how we got connected. And I want to learn more about Oncor Reality. Tell me what is Oncor Reality.

David: Oncor Reality. Okay, phew. For the backstory. Okay, listen, I’ve been doing kind of communications and education-related stuff for the last couple of decades — actually, yeah, 20 years this year — I started off by doing standard marketing and I was lucky enough to work with some very technical people and web development stuff like that. So I helped them with marketing, they helped me with technical stuff. And I’ve developed– I’ve actually maintained most of those relationships to this very day. One of my best friends, in fact, Alan Thayer, who runs a company called Contact Online — Contact Digital now, actually — he still works with me. I still help him with marketing. He still helps me with digital. That was all good. But I was trying to help people with communicating with the world, on usually very low start-up budgets without getting ripped off by — at the time — things like directories, and conferences, and magazine advertising, and that kind of stuff that rarely works unless you got a huge budget, right? So I was trying to get them to use more sensible ways to get to more people cheaper. And then along comes this new-fangled fancy-dancy internet thing. And I’m like, “OK, well, this is perfect, because this means that somebody with a wee bedroom operation can actually reach anybody in the world, anybody can be a multinational.” So that’s why I started — for most instances — started working with these techie people — who had the help — to learn more about this Internet stuff. And I’ve run a few companies myself. I applied the same stuff to marketing, that kind of thing. What I observed was, people’s attention spans were going down and down and down. We were using analytics systems like Urchin, which was subsequently bought by Google and became Google Analytics. And you would get maybe 2 minutes, 1-2 minutes of attention span on a website, which at the time we thought, “Oh my God, that’s nothing!” That’s hardly any time at all, in comparison to magazines, you know? And then as time passed, it went down and down and down. The options online got more and more and more. The speed of connections got better and better.

Alan: It’s crazy, I just heard a stat today, that the average American sees between four and 10,000 pieces of digital content a day.

David: [laughs] This doesn’t surprise me. Hey, do you know of somebody’s attention span when they make a decision about a message online, like a website or whatever? Do you know how long it takes them to do?

Alan: My guess is in less than five seconds.

David: Oh, it’s less than five seconds. Let’s go down, slower than five seconds. What’s your next guess?

Alan: Two seconds?

David: No, no, slower than that. It’s less than a second. Fifty milliseconds.

Alan: Really?

David: 20th of a second.

Alan: Is it really?

David: Yep, absolutely. Has been for ages, it’s probably lower than that now.

Alan: You make a decision whether to stay or leave.

David: Yep.

Alan: We have less of an attention span than a goldfish.

David: We do. We absolutely do. About two seconds less.

Alan: Oh my god. XR — or virtual, augmented, and mixed reality — how are these taking back some of those attention spans?

David: Well, here’s how I got into it. I went from online stuff — blogs and things — to heavily image-based stuff as people’s attention spans went right down, so they weren’t reading very much. So then I started Oncor Video, because that was all about targeted strategic online video marketing, because if a picture speaks a thousand words, then a video speaks millions. And so it’s a really good way to get a lot of content across. But what was happening simultaneously, Alan, was that people’s expectations of interactivity and communication had changed; gone from this kind of one-way hierarchical thing where Coca-Cola says, “Drink Coke!” and we all go out and drink Coke — that was their slogan at one point — to we actually expect to have a reply. We expect our brands to do stuff for us. And this is started to affect the way people work. They expect their bosses to listen to them, not just tell them. And I figured this was going to be the next thing. It was going to affect people’s behavior online, that they would require interactivity to the point of immersivity. So if I’d moved from just reading stuff to watching stuff in a video, the next logical step would be being actually fully immersed in that content. And boy, was I ever right. This was a good tour. Get on for four years ago, I said, “Right, this video stuff’s been working great. But I think this is gonna be the next thing.” No. Selling video in Scotland — which is where I’m from — we’re quite a risk-averse nation. We don’t like paying for stuff, until we know exactly whether it’s going to work or not. So selling video was quite difficult.

Alan: Very similar to Canada. We’re a fast follow country. We want everything that the Americans are doing, with one-tenth the budget.

David: [laughs] Well, that’s basically Scotland versus London, in the UK. So I’ve got an office in London, and you find that they are the early adopters. And we do a lot of work with the Emirates and stuff, and they are really early adopters, but they are coming from a place of plenty. They don’t have any scarcity issues, or as many scarcity issues. So they can just have fun things and see whether or not it’s going to work. It doesn’t matter. Whereas up here — and maybe even in Canada — there’s more to lose. I can understand why they labor. But, see, that breaks down entirely when it comes to augmented and virtual reality. Everybody wants it. They want it, whether they know what the return on investment is going to be or not, whether they have an idea of how it’s going to benefit their business or not. It’s the shiniest shiny new thing ever. And I feel like I’ve gone from trying to sell healthy snacks, to selling freshly baked cakes in a room full of hungry people. They just all want some, it’s great. And I’m doing my best to try to convince everybody. “Okay, look, here’s what you need this for. Here’s why we’re doing it. Here’s your target audience. Here’s how much you’re investing. And here’s how we’re going to ensure a continuous return on investment for you.” and half the time they’re like, “Yeah, yeah, yeah. Just give me the shiny!” Which is fine. You know, that’s fine. I’ll go with that. But it’s meant that we get to do all sorts of things. You know, we’re getting.

Alan: All right. So let’s talk about that. Your website lists a number of different industries. You’ve got energy, construction, education, corporate, commercial. Let’s unpack that. What have you done or what are you doing in industry and energy, for example?

David: Right. Now, the energy sector is interesting, because it’s split up between traditional energy, fossil fuels and oil and stuff like that — and that’s big news in Scotland, there’s a lot of oil going on here, a lot of money there — to renewables, which is also big news here, because we’ve got a lot of wind — not so much sunshine — and a lot of waves. So there’s a lot of power being generated by these. And you would think that what these two bits of the industry would require would be completely the same. Or maybe completely different, where we are actually selling the same thing to them, but in different ways. So what we’re selling to the oil and gas industry is the live, remote, safe visits to places like oil platforms and high-risk places that are offshore. It means that we can send any number of people to these places. All we need is a 360 camera stay up there. They can do a lifesaving station, they can be guided around. We’ve even worked our way whereby that live 360 body has actually movement within it.

You can have avatars — virtual people — in there, you can have virtual objects and so forth, and see things coming alive. That means you don’t have to fly 15 people from all the corners of the globe to Scotland, and then give them an offshore safety training certificate, which is expensive and not fun. It’s going to be on the water in a helicopter — which isn’t very good — and then they get their insurance, and then you put them in a helicopter, and then you fly them to one oil platform. Now they don’t even have to leave their office. Bam, they’re in that oil platform with those other people, they go and have a wee confab about it. They come back, they move to another one. They can take in 5, 10, 15 different oil platforms in a single day. Savings there are huge. And the oil industry — oil and gas industry — are really interested in savings, because they’re not doing so well now. The prices have gone down. People are moving over to renewables. Qatar and places like that have actually done their best to artificially keep the prices down, to keep competition out from these renewables and so forth. That means that they need those cost savings. But when I’m selling this to renewables, I say to them, “Well, do you really want to be having people going in jets and flying around the world and leaving massive carbon footprints and unnecessary travel emissions, when you could just use this instead?” and they go for it on the carbon kick. So it benefits both of them in different ways, even though they’re the same industry and we’re selling them the same thing.

The next thing that we’re doing is that we are using drones to fly around buildings and take a– any drone operator anywhere in the world can just– we just tell them what to do. You go there, fly around this building, take photos from these angles. Send it back to us and we can fire you back a really, really accurate 3D model of that building. Now, the purpose of that is, we’re using it for solar energy installations. So basically there’s a dichotomy, there’s a divide between the people that invest in stuff and the people who care about the environment. Yeah, usually you just invest in stuff that makes you the most money. We’re trying to make caring for the environment make the most money. So what we do with these 3D models is that we tie in other information like the angle of the building, the orientation, the prevailing weather conditions in that part of the world, the longitude, the latitude, etc. And from that, we can actually calculate and even design these solar arrays on exactly how much power they will generate. Which means that we can say, “Okay, it’s going to cost you this much to put these solar panels, on these roofs, in this city. Here’s where you put them. Here’s how much it’ll cost you. Here’s how long it’ll take for this to generate enough power to pay you back for your investment. And here’s how much money you’ll make on your selling that power back to the people that live there at a reduced rate.” But it means that everybody’s happy, right? People are happy to have the panels and the risk, because they’re paying less for their power. The investors are happy, because they know exactly what bang they’re going to get for their buck, and when they’re gonna get return on their investment. The environment’s happy because we’re not using oil, coal, gas, etc for that purpose. Does that make sense?

Alan: A little bit. That “saving the environment” stuff; who really cares? Let’s be honest. I don’t think that the global climate change is a thing. I’m a denier.

David: Are you really?

Alan: No. [laughs] I watched the video of my friend, he’s a futurist. And today he had a post on LinkedIn. He’s like, “I met a guy who works for a big company, who is a legitimate denier.” And he goes, “By the time– I had an hour-long conversation with him, everything that he was saying was just a bunch of fake news. He was quoting a Time magazine article that was a fake.” And I’m like, “Guys, wake the [bleep] up! The world is on fire!”

David: [laughs] I know, right? Here’s the thing. I had a chat with somebody online and they were talking about “Oh, the plastic in the oceans, we should do something about it and clean it up!” You know, the usual kind of preachy stuff that they’re never going to actually do anything. And I said, well look, what you really need to do is, you need to make that plastic profitable. Because then the big corps will come in with the resources that they have, and they will literally and figuratively clean up that shit. You can turn that plastic into building materials or fuel or something like that, they’ll come in and they’ll get it done.

Alan: But what I saw recently that blew my mind was actually India is starting to use ground-up plastic in their roads. It turns out that it makes a great building material for roads. It’s resilient. It lasts longer than traditional concrete. And it doesn’t have the traditional cracks that concrete gets. So it’s actually a great building material for that. I mean, look, we have enough plastic on this planet to pave every road in the world over again.

David: We sure do. I mean, that’s it. You know when you go in like children’s play parks and stuff, you know that rubbery kind of material that they put there so that they don’t hurt themselves on concrete and spikes, the way we did when we were younger, you know?

Alan: I know. When we grew up, it was like “Go and hurt yourself. It’s OK. It’s part of growing up.”

David: Yeah. Yeah. “Here’s a ladder, it’s 50 meters high. You know, just try not to fall off.” But yeah, the stuff they got now, it’s all bouncy, these flakes. I don’t know the word. Anyway, that stuff’s made out of ground-up tires, and that’s been around for ages, right? Tire crumb, they call it. Because tires are a notoriously difficult thing to recycle. But that’s a really good thing to do with it. But you see, the road surface that they’re using in India, it doesn’t lose grip as it wears down. That’s the problem with using other materials; usually when they wear down, they get shiny and slick and they lose the grip. This stuff doesn’t, this is great.

Alan: You can re-use it. If you need to, you can pull it up, regrind it, put it back down. Plastic doesn’t ever go away. So it’s– if you have a million-year lifespan of a piece of plastic, you get a million-year life span of your road. Awesome.

David: Yeah. Yeah. That’s something you want to last for a million years. But I know they’re getting better at it all the time. Well, this is why I’m basically trying to do. I figured, OK, what’s an unlimited resource? All those poor buggers, photographers who bought into drones and were sold the dream. “Oh, yeah. You get drone, endless work will come in, and you’ll be laughing.” And most of them have got these things sitting on a shelf, gathering dust.

Alan: I mean, I actually was one of those people and I did the business model. I was like, “OK, we’re gonna have a drone company. We’re gonna do exclusive drone footage for high-end real estate, and all this.” And… yeah. We looked at it, and we were like, “These drones are dropping in price, and they fly themselves now. I don’t know about that.”

David: Exactly. And the thing is that there are some very– we’ve got a thing out in the UK — I don’t know if it’s spread out of the UK — called the Dronesafe Register. And you have to have a minimum level of qualification. You basically have to be a pilot practically, to run these things commercially now.

Alan: It actually makes sense. Let’s be honest, we don’t want people flying around with potential bombs on people’s heads, because if that falls in somebody’s head, that’s it, they’re done.

David: Oh, yeah, absolutely. And those things go so high now, and they go so fast. And then you’ve got things like you need to know about the flight path. You need to– so the guy that we’ve got in our team — oh, you’d love this guy — he’s ex-Royal Navy. He used to be a submariner, right? So in the Cold War, he was “Hunt for Red October” kind of stuff. Except his Scottish accent was legitimately meant to be in his submarine, because he wasn’t Russian.

Alan: [laughs]

David: And then he went and he was in charge of the coastguard in Scotland, like really, really high up in the Coast Guard. Anyway, he’s the guy who coordinates all of our global joint activities because he’s the guy you can phone up on Army base and go, we’re gonna fly a drone over here. And they say, “If we are, then what altitude and why are you doing this?” And he knows all the answers. He knows all the people. He’s just super good at coordinating that, predicting weather.

Alan: Let’s talk about that for a sec, because I have seen some of the stuff you guys do in terms of photogrammetry. So basically flying a drone over a space from multiple heights and flight paths, capturing photographs of, let’s say, an industrial building. And then from those, you’re able to create a point cloud map, a 3D model of that, which you can then import into VR. And you can now look at the building from all angles. Instead of climbing up the building, you just fly drone over, put it in VR and you can actually zoom right into all parts of the roof, and really give it a good inspection in the right amount of time, without having to climb the ladder, climb down, climb a ladder, climb down.

David: Yeah, absolutely. I mean, when we originally put this to the housing associations, it used to be hard to deal with community housing projects and that kind of stuff. We say to them, “Hey, we can predict all your solar stuff!” and they’re like, “Yeah, yeah, yeah. Can you tell us what condition our roofing tiles are in?” Because that’s a big issue for us. Because normally what they do is, they just put in all the roofing tiles in all the houses, and then they go, “Okay, this thing’s got roughly 10-year lifespan, so in 10 years’ time, we just take all off and replace it.” You don’t need to, everywhere. You may find that in some places it wears earlier, and in some places it’s sheltered. They can save — I’m talking a small housing association here in Scotland, which is a small country — they can save tens of millions of pounds in a single pass. And then they can take that money that they’ve saved, and apply it to other things. Like we’ve got a problem with fuel poverty here, mostly keeping places warm. [laughs] This is a problem, you know. I don’t think there’s as many air conditioning units in Scotland. And they can apply it to dealing with fuel poverty. And we can even, if you fire off an infrared camera onto the same drones — which is cheap, a lot cheaper than things like LiDAR and laser scanners and stuff — then we can share the heat egress from buildings, so we can say, “Oh, that one’s actually got some seriously bad insulation. That person’s spending way too much in their heating, they’re losing most of it to the sky.” We go in and get them insulation. That save them money, saves us money, everybody’s happy. I mean, the thing is, the technologies are meeting, it’s finding solutions for it. As you know from my background, I’m all about things like education and communication and stuff like that. So I tend not to think too hard about the tech. I tend to think, “Okay, here’s the tech. Here’s what it *could* do. Where’s the need? Where can we find people who could benefit from this?”

Alan: Well, let me ask you a question. What is, in your opinion– because you’ve been doing this all the while, you’ve done all sorts of different industries. Where are industries seeing the highest ROI?

David: Highest ROI is in– it’s definitely in an engineering and energy sector engineering. That’s where you get the most bang for your buck. But that’s because their outgoings are so massive. It’s not so much return, it’s savings. That’s where it really seems to benefit them, because they can actually save money on travel, they can save money in insurance, they can save money on other forms of energy generation, that kind of stuff. They can, for instance, see with an offshore oil platform — here’s another example of our user — you fly a drone around that thing once a month, and you check the structure of it, let’s say using laser scanners. And then you just come back the next month, and we see if it’s moved. If it’s moved, you’re in trouble, because this thing is like hundreds of thousands of tons of steel, where it’s being battered by North Sea waves and stuff like that constantly. If that thing even begins to shake, it’s going to start to fall to pieces. And the repair bills for that are going to be vast in civil engineering. So, yeah, so those kind of savings, this kind of pre-emptively working out whether damage is occurring, or pre-emptively working out whether you need to get in there and just fix something, once that frees a station team, it saves time. That’s where the real benefits are. But my God, are they interested in the remote meeting side of things, because that’s going to save them an absolute fortune. The lost man hours, the transportation, the corporate and social responsibility to reduce travel emissions, to stop flying people around in jets for pointless meetings. Have you ever met somebody who works for a big company that actually enjoys business travel?

Alan: When you’re 20, business travel’s amazing. But no, I can’t imagine anybody who says, “Yeah, I can’t wait to go fly anywhere without my family.” And it’s fun once you get there, you meet with your friends, and it’s great. But no, I don’t think anybody really truly enjoys that, especially– there’s certain things– you get on a plane, you fly across the world for a meeting, and then fly back. That’s just ridiculous. We do it all the time. Here’s what I think is even better, because let’s be honest, you’re getting on a plane, you’re flying across the world, and you’re sitting in a boardroom. If you’re gonna sit in a boardroom anyway, you may as well sit in a boardroom. Now, instead of sitting in a boardroom talking about an oil platform, why don’t we meet in VR in the actual oil platform, and have a meeting about the oil platform?

David: Exactly. And then you can get other stakeholders involved, you know? I mean, it doesn’t just have to be engineers talking to engineers, or financiers selling to financiers. If everybody can see what they’re actually talking about, be where the are, they really get an understanding of each other’s disciplines. As a teacher — the modern apprenticeship scheme have created some content on digital marketing for them. And they got me into teaching regularly. I like it, keeps me grounded because it’s the younger people, early stages of marketing and business and that kind of thing — and I get to tell them all the things that they should be doing, which frequently reminds me of the stuff I’m not doing. [laughs] “Do as I say, not as I do.” I mean, most of my anecdotes are when I’ve screwed up, by not doing the thing that I’m telling them do. But they– I always tell them, like you can only be effective in an organization if you understand truly what everybody else in the organization does. And the only way to do that is to get your hands dirty and get in there, you know? Work with them, talk to them. See how they do it, where they do it. But that’s not always possible, when everybody’s spread out geographically, and there’s risks in all cases there’s hazardous environments and that kind of stuff. In virtual reality, not a problem, Virtual reality, you can be right in there, doing it, talking with the people, seeing how they do it. Because it’s really hard to explain how CNC lathing works, or even what it is, but you only need to see it for five minutes to actually get a gist of it.

Alan: We actually work with a group and they’ve built several just very basic hands-on training. And you just do it, and then that skill is literally transferable. All the configurations are the exact same as you just did. It’s transferable, 1-to-1.

David: Absolutely. That’s the difference, right? Because now we’re getting into education. They call what you just described there lower learning. It’s experiential; it’s doing, learning from doing. I remember my background and my family background says engineers, going right back to Watts, like, *the* Watts, where the name for electrical watts came from.

Alan: Oh wow.

David: Yeah, I know, I know. I’m quite pleased with that one. But they more recently, they all went– my family got into teaching. My parents were both teachers and I seem to have been born with a bit of both, because I’m obsessed with education, I’m obsessed with engineering. And so I’ve been learning and learning and learning about these forms of education. I got myself a qualification as a further education lecturer a few years ago. And that’s kind of what got me into modern apprenticeship training and Google, the stuff I do with Google and the stuff I do Chartered’s chief marketing, which is all training based. And I can’t see any better way to learn — having interviewed loads of candidates and so forth — than better theory, better practice, better theory about practice. But I remember doing this lecture in front of Glasgow University’s greatest in the good of their academia. And it was the toughest audience I’ve ever had, because basically I was telling them was education is screwed. Education has gone so far in the direction of one too many pedagogical learning, like Peter the father figure teaching, the sage on the stage. Now it’s moving in the direction of guide on the side, rather than sage on the stage. Let people do stuff, just guide them. And now, with virtual reality, it’s going right back to what we used to do in the Palaeolithic on our gatherer ancestors. We’re– if you wanted to learn how to debark a tree or skin an animal, some dude would show you. [chuckles] And that’s how we learn, that’s how we evolved to learn. Don’t get me wrong, rote learning and pedagogical learning has its place, but the best way to do it is a combination. And it’s the kind of things that we’re learning to do aren’t skinning animals and debarking trees. It’s like how do you turn this dial so that this thing doesn’t blow up? And that’s a big deal. You want to get that right first time. [laughs]

Alan: That seems important.

David: Yeah, not blowing up or blowing off everybody around you. And similarly, if you’re operating a digger or an excavator, god, you could cause a lot of damage with one of those things, you know? I’d love to get the opportunity to cause a lot of damage with one of those things. But certainly it’s a lot cheaper, better and easier to train people in a safe environment, where they can get it nailed first time. And then when they’re in that situation again, they know what to do. We actually came up with something for — again, it was oil and gas industry, as you can see, it’s a big thing here, right? — if you’re on an oil platform and the alarms go off, you’re in trouble, right? So you wake up in your bunk, you look at your laminated thing on the wall that says, “here’s your nearest exit” or whatever. And maybe somebody showed you the day that you arrived, in nice sunny conditions. But now it’s nighttime, it’s driving wind and rain. There’s smoke, there’s fire, there’s people screaming, and it’s chaos. That laminated card that tells you where your nearest lifeboat is, isn’t going to be that much use.

But if you look at people in life or death situations, there was talk about their life flashing before their eyes. Well, there’s a reason for that, right? I’m obsessed with psychophysiology and psychology and stuff. Basically what’s happening is your brain is accessing all of the other panic experiences that it’s ever had and going, “How did you survive? Is there a relevant survival plan for the situation that we can use here?” and see if you instead of giving somebody a laminated card, you stick him in virtual reality and you say, “Right, alarms are going.” You can actually smell the fumes, using the olfactory stimulus. “You’ve got to get out. You got to find your way to this lifeboat in time. And OK, you did it right this time, but *this* time the oil derrick’s collapsed in front of you. You got to find another route.” Now, simultaneously, somebody also there is observing you, what you’re doing, how well you’re achieving it. And see the next time that really happens in real life, and your brain flashes through all the experiences, it knows what to do. And that is going to be much more useful in saving lives than some placard or group training day.

Alan: The more I learn about this and the more I listen to people, the more I learn. It just– a lot of this is anecdotal — or up until recently has been anecdotal — we think VR can give you real memories, like real people. OK. Great. Well, now we’re proving it. Now it’s actually being shown. And if this can save lives, that’s incredible. And saving money is great. Saving lives is really important.

David: Absolutely. Absolutely. Although you do tend to find– this is quite sad, really. But when we’re dealing with, again, you know, offshore oil and that kind of thing, we were talking to them about using a drone that can detect hydrocarbon clouds, you know, like gas loads of explosives, from a distance so that human beings don’t have to go into that situation. So they’re not at risk. And I thought, “Oh, that’s amazing. That’s great that this industry is interested in safeguarding its workers’ lives.” It’s not. [laughs]

Alan: No, it comes down to each workers’ life is worth $347,521.

David: Precisely. And if somebody gets caught for doing something bad, their share values drop and they can’t be having that. So that’s why they’re doing it. But that’s okay. I mean, if that’s how they are motivated, then fine. I mean, we’ll do the right thing and get paid to develop these things. But the reason so that we can actually do something good for the world, save lives.

Alan: The end of the day, companies, the way we’ve designed capitalism — and I think it will change over the next 10 years, to be honest — the way we’ve designed capitalism is we have one measure for success of a business, that is economic. My personal purpose is to inspire and educate future leaders to think and act in a way that’s socially, economically, and environmentally sustainable. That three-phase of this is really what I think is going to be how we manage this.

David: Yeah. No, I totally agree with you. There’s a book I read — there’s there’s a writer here. I really like, he does science fiction, and he does fiction; he’s called Ian Banks (when he is doing his fiction, he is called Ian Banks, when he’s doing his science fiction, he is Ian M. Banks, right?) — this was one of these weird crossover ones where it was a bit Sci-Fi-ish, but it wasn’t fully, and it was called “Transitions.” Basically, Ian Banks is a bit of a socialist, and he describes these guys that can — these people — who can transition from one dimension to another. And some of these dimensions are slightly more or slightly less advanced or slightly further into the future or further back, or whatever. But they’ve defined them — there’s this organization called The Concern, which, that’s their job. They move through these different dimensions, attempting to find patterns and right wrongs or avoid catastrophes, that kind of thing — but they’ve defined certain dimensions as being cruel or kind. And the ones that they define as being cruel are the ones where shareholder capital and limited companies has come into being as a means of growing organizations, because it inevitably ends up with profit being put before anything else, because your shareholders — most of the time — they really know are disconnected from the actual activities of the company, or what they’re connected to — usually by like a hedge fund manager or whatever — are, “how much money am I getting back on my investment?” That’s it. So I thought, a company has two choices. One of them is, “let’s put out an oil pipeline across Alaska: If we put it above ground, it disrupts caribou migratory pathways and cause mass extinction; if we put it under the ground, it won’t, but it’ll cost us more.” They’ll put it above the ground, because they’ve got to get the best return on investment. And there’s our problem. But there are ways around this, like ethical investment planning and so forth. And there are ethical investment charters, and groups, which only allow investment — or basically, highlight which companies do not qualify for this investment — and those ones, the ones that do qualify, are doing better. So even if you are to take it as, “it’s just money,” people are actually moving in that direction. They will get more investment if they are ethical. And I think that’s a good move.

Alan: What problem in the world do you want to see solved using XR technologies?

David: Lack of communication. We’ve become a very isolated, insular society through a lot of stuff that we’re talking about. There are people out there who don’t get to talk to other people, so they don’t have an understanding of them. They don’t get to see other bits of the world. So they don’t have an understanding of the world. Maybe they’ve got mobility difficulties. Maybe they got communication issues. We have the ability to take anyone from anywhere, *to* anywhere, regardless of their physical condition, regardless of their place in the world for the purposes of education, for the purposes of avoiding loneliness, and for the purposes of just learning and working together as a… we’re a communicative pack creature. You know, species, right? So we work best when we weren’t together. And I think that with 5G, with connectivity, with virtual reality, with full Multi-sensory, fully-immersive, experiential communication like this, that isn’t restricted geographically, and isn’t restricted by your financial and physical means, we have no reason not to communicate with each other, you know? That’s what I would like to see: us, as a species, connected together globally.

Alan: You’re listening to the XR for Business Podcast with your host, Alan Smithson. Today, we have two amazing guests, James Watson and Justin Parry from Immerse. Justin is the co-founder and chief operating officer and leads product strategy for Immerse. As a founder, he designed and led product development of the Immerse platform from scratch. He now oversees the delivery of all technology and VR content across the organization. Justin has 20 years experience creating and growing B2C and B2B products from startups to global organizations. He’s developed and launched online platforms, websites, mobile products across the world, and joined Immerse from his role as global director of the Internet Yellow Pages for Yell Group. Immerse Virtual Enterprise Platform enables enterprises to create scale and measure virtual reality training content and programs. The platform enables enterprises to look at training and assessment in a completely different way, providing the tools to help maximize human performance, resulting in a more engaged, better equipped and safer workforce. If you want to learn more, you can visit immerse.io.

Guys, welcome to the show.

Justin: Hello.

James: Thanks, Alan.

Alan: [laughs] Hey. So you guys are in beautiful, sunny, warm UK. How’s it going over there?

Justin: Well, it was very sunny until last week, actually, with the sort of slightly freakish weather that we’ve been having, but today is cold.

James: It’s British grey.

Justin: Yeah.

Alan: British grey. Oh, well, we’ll just assume it’s beautiful and sunny. So let’s get digging in here. I’ve had a chance to try out the Immerse platform. It’s really amazing. You’re completely immersed, and the demo that you guys did for us: We were inside of a submarine. We not only go into it, but interact with all the bits of the submarine and start to learn parts of, “how do I make some things work?” And the great thing about it is you guys were there every step of the way. But one of you was in VR, and the other one was on a tablet or a computer. Talk to us, just to how did Immerse come to be?

Justin: Well, we’ve been in the training space quite a long time. We weren’t initially in VR. We actually delivered our training applications via desktop, but they were always multi-user. So we would be tying together people from somewhere — maybe even Kazakhstan, some oil and gas training that we did — with trainers that may be in Iraq, or in the UK, or wherever that might be. And that was all done in a sort of virtual world. So it’s a little bit like the old Second Life, if people remember that. So it’s a powerful proposition, but it’s still a little bit difficult to sell. So with the advent of the headsets — or the latest generation of headsets, at least — we made the move into VR and a lot of services that we built there just kind of immediately made sense, and we got traction very quickly. We effectively then pivoted the whole company to be a full-on VR training platform. We rebuilt a lot of those services, especially for VR, because there was obviously some small itemization that we need to make. And so we find ourselves where we are today.

And just in terms what you said there, Alan, obviously that multi-user piece and being able to have people in the space together and in VR, but also in the browser, is still a big part of what we do. But we’ve broadened out from there as well, because obviously not all training requirements are going to be satisfied by that. So we target single player, we look at data, we look at the creation of that content, we look at integrating that with enterprise systems.

Alan: What are some of the examples? So obviously there’s a submarine one. Is that– was that a military client?

Justin: Yeah, that’s for a company called Kinetic. So basically in the UK, they’re a defense technology company, that work very closely with the armed services in the UK. And yeah, that’s working with them to create — as you experienced — an interactive submarine. There we’ve modeled a few parts of the submarine, actually, because the focus was on team-based training. So the idea is that you can have– obviously, a submarine isn’t run by a single person. So if you’re going to run those team-based training exercises, you need to account for a number of different roles. Some of those people will be using consoles with lots of buttons and joysticks and all those sorts of things. Others will be more communication based, so they’ll be telling other people what to do. There’ll be more manual tasks around operating equipment and machinery. And in order to run through the emergency operating procedures that you need to on a submarine scenario, you’ve got to join those things together. And so working with Kinetic, we brought that to life in across a few of those different procedures.

James: What we find, I guess, is from a different industry sectors where any sector that has some sort of procedural training, sort of health and safety, risk mitigation element to it, our technology is relevant and VR as a training tool is relevant. That’s an example in defence. And then we also are working within healthcare with GE Healthcare. So that’s looking at the ability to train radiologists on CT scanners. We’ve created a complete CT scanner in virtual reality, and the whole process can take up to an hour for a radiologist to go through in VR, which is an incredible level of detail. And so that has relevance because you can’t get access to CT scanners. So you can look at that in a– when the equipment is too hard to get access to, you don’t want to take that equipment offline, it’s relevant. And then we also work within the energy sector with Shell, where that’s looking at health and safety and risk mitigation. So any industry where there’s risk, if you can put someone in a virtual reality training environment, well, you’re re-creating that risk. But actually there is no risk to that individual. So sector wise, we go across any number of sectors. It’s really more the need of that sector that defines where virtual reality training on our platform is relevant. So it’s pretty broad is kind of the ultimate message from a sort of sectors that we work with.

Alan: Let’s talk about results just for a second here. So what was that point where you just went, “Oh my God, this is what we need to do next?” How did that precipitate?

Justin: There is the key thing. You can understand the minute you put a headset on yourself. I hadn’t experienced anything until the the early [Oculus] DK1. And the minute you put that on, you understand that you are interacting with these 3D environments in a way that was previously impossible. Presenting something on a 2D interface is effectively sort of abstracting it away from the manner in which you interact with that in real life. You are not actually picking that thing up. You’re using a mouse or you’re using the buttons on the keyboard to pick that thing up. And there’s all sorts of obviously nuance engaged in you genuinely interacting. So instead of having to create a complex input system — as I say, using a mouse or keyboard controls — you put the headset on, and you’re just there. And if it’s a nicely designed bit of VR, then the barrier to entry in terms of use and user experiences can be really low. So you don’t need to be a gamer, you don’t need to abstract away that interaction. It’s all there. And it’s like you’re interacting with the real world. As I say, if it’s well-designed. So I think that was the key thing that did it for us. And then we put some of the 3D scenarios that we’d already created into the hands of prospective customers. And the response from them was just so dramatically different. You know, they took the headset off — and everybody that now works in VR will see this all the time and that sort of sense of these people being blown away, and the whole potential for this medium opening up in front of them– we used to see it all the time. I think — to be quite honest — that was enough to encourage us to sort of make that leap. We didn’t do it straightaway. We got a couple of projects up and running. But I would say the kernel was in that sort of moment of realizing — both ourselves and seeing it in our customers — that this just changed the way in which you could interact with 3D.

Alan: Really is one of those things that you have to see it to believe it, or even just to buy into it. There’s been a lot of hype around VR and AR, and as an industry we’ve done a really good job at hyping the crap out of it. But when it comes down to it, until you put that headset on someone’s face, it’s very esoteric. It’s a very visceral experience, being in VR and doing that. So we’ll go back to the submarine for a second. But you have a group of people — maybe who’ve never worked together — who need to go and operate a multi-billion dollar submarine, putting them into a virtual space to get them used to interacting in that space. You can simulate the sounds. You can simulate the feeling of being there. You can simulate all of the actions that they’re going to take. And it builds real muscle memory. Where do you see the limit to this? Is there some things that don’t lend themselves to this?

Justin: To VR? Yeah, all the time. I mean, we take every single project that we work on because we– just to be clear, we build content on top of our platform as well, because obviously not all businesses have that resource internally. So we do do a fair bit of content creation, and we’ll take every project on its own terms. You know, it has to live or die on on its own business case. And very often it won’t stack up. It’s really as simple as that. I mean, I’m sure that even in the instances where we can make the business case stack up, I’m sure you could also you could still create a meaningful VR experience. But if it’s not going to move the dial within an organization, if it’s not going to do what it needs to do, ultimately in terms of ROI and impact on employee performance, then we’re not going to do it. We’re not going to recommend it.

James: I mean, we get a lot of inquiries around soft skills. “Can I train my sales force to deal better with difficult customers?” or “Can I train against unconscious bias?” or things like that. And I think there’s some validity to use VR for that. I think at the moment the challenges around the intelligence or the AI of the avatars you use and trying to avoid sort of that sort of odd feeling of looking at someone who doesn’t quite fit to what we expect from a human form. So there’s a lot of those discussions that come in at the moment, and I think they are going to take a little bit more development from a technology perspective to really make that more meaningful. Whereas if you think of the slightly more procedural focused training — so the ability to go on to an offshore oil platform and run through a health and safety process, that you have to take every two months to make sure you’re still got the right accreditation to operate that piece of equipment — that fits in a much more simplistic way. When we start getting into that sort of behavioral soft skills place, it’s more of a stretch. It’s not to say there aren’t some really good examples out there. It’s just pushing what VR is really good for at this stage of its development.

Justin: Yeah, and we are working on a project at the moment around soft skills, but reason we were happy to move forward with it — as James says, we’re not selling that proactively — but the project that we’re currently working on got green light on the understanding that it was a piece of research, it’s effectively R&D to see what is possible within the current technology available. And one of the things that we have found is that if you are looking to have a pretty realistic interaction with a non-human character, let’s say in the context of a sales conversation, the technology just isn’t there, from an AI perspective, from the kind of fluidity of the interaction and the experience. You can put something together that works, but it’s not going to be the thing that’s going to make a difference in terms of sales training. So I think it’s going to come, for sure. And there was some fantastic presentation, it was part of the keynote at 0C6 last week — which I was at — by Michael Abrash, who’s chief scientist at Oculus. He was talking about some of the things they’re looking at there, in terms of R&D. And they are really exciting around the representation of humans and so on. That, combined with advances in AI and speech recognition, all those kinds of things. We will get there, but we’re just a way off. And so we as a company are focused — as James says — when we go out to the market, we’re talking about things that are really about interacting with the sort of material world process, and so on.

Alan: As part of my trip last week to Orlando, I got to go to the University of Central Florida’s learning lab. It’s called LearnLive. And one of the things they showed me was, they had me talk to a 2D screen that was 3D images of school kids. And I started having conversations with them. And they started having conversations back to me in very, very human like ways. So I would ask one child, “What do you want to do today?” “Well, I don’t know. Like, maybe we should read a book.” And then I said to one kid, “Oh, I’m from Canada. Do you like maple syrup?” I mean, I’m trying to throw them curveballs. And the kid goes, “Well, my mom says it’s too sugary for me.” Like, it was just this moment where my mouth was open. I just couldn’t figure out what was going on. And what it turns out, it’s actually not AI driven. It’s actually puppeteered by a human. And they use a voice changer, so that there’s a human answering the questions, and they are able to pick which child to answer the questions from. So one person’s able to replicate five students’ attitudes.

Justin: Right, right.

Alan: And each student had a different attitude. It was just this kind of mindmelting– I thought it was AI. And I thought, “Oh my God, this is the future of AI. We’re here. We finally made it.”

Justin: Yeah, yeah.

Alan: Then they revealed the secret and I was like, “No!”

James & Justin: [laugh]

Alan: “Noooo!!!”

Justin: Old school skills.

Alan: [laughs] Yeah. But they’ve managed to make a platform that scales, so they can provide this teacher– it was for teacher training, to teach teachers how to deal with a classroom full of multi-personalities. So one kid is very goth and very dark and very smart. Then you have another kid who’s loud and just disruptive to the class. And how do you kind of manage that classroom dynamic?

Justin: Yeah.

Alan: It was really incredible. But I really thought it was AI, I was like, “Oh, we’ve reached the future!”

James & Justin: [laugh]

Alan: I think we’re not there yet. [laughs] So, yeah, you’re absolutely right. Being able to have intelligent conversations with AI agents. How long do you figure that’s going to take? Before it’s real, it feels right?

Justin: Well, I mean, I don’t know. I mean, going back to what Michael Abrash was saying, it was– we’re actually quite a long way off.

Alan: Yeah, I’m thinking 10 years.

Justin: Yeah. And he was talking in those terms and he was using a theory — the name which I can’t remember, it was something like Hof– Hofsteiner’s theory? — which is that everything takes longer than you think it’s gonna take, even taking into consideration that theory.

Alan: Hofstadter’s theory.

Justin: That’s the one.

Alan: “Everything is going to take longer, even if you take into account Hofstadter’s theory.”

Justin: Yes! Hofstadter’s theory, well done. Yeah, yeah, I couldn’t remember the name, but yeah.

Alan: It was a really great talk. If people are listening, if you haven’t watched the keynotes from Oculus Connect 6 — the 2019 version of Oculus’s big conference — the opening keynotes are just chock full of amazingness.

Justin: Yeah. Yeah. Agreed. I think it’s a way off. But the thing is, one of the things that we often try to do is just when we’re having conversations with customers, with market, we’re just trying to get people focused on where we are here and now. Because there’s so much power in what’s already out there. Particularly because the hardware is developing so quickly. We’re now at the point where we’ve got these untethered headsets and that are super lightweight and they don’t have all of the technical complexities or support complexities that went with the early model.

Alan: I’ve got my Oculus Quest sitting right in front of me.

Justin: Well, I mean, it’s a great bit of kit. And obviously it’s not the only untethered headset, but it’s the one that’s getting the most coverage. I mean, we’re just trying to get people focused on the here and now because–.

Alan: No, you’re absolutely right. So let’s talk about it here now, because I think it’s right. And to quote Ori Inbar, their technology people were always looking to the future, he goes, “But the technology we have right now is good enough for almost everything we want to do.”

Justin: Yeah.

Alan: So companies are already starting to roll this out. But are you finding this– because we’re finding this on this side is that companies are still stuck in that, “Hey, let’s pilot it. Let’s check and see. Let’s go slow.” when other companies are saying, “Hey, we’ve done the pilots, let’s go”. And they’re starting to scale it out. And then you run into different challenges like device management, security protocols, that sort of thing.

Justin: Yeah.

Alan: But what I’ve been preaching from the rooftops is: Start now, make some mistakes, get going. And so that when this really starts to take off — which is starting now — you’ll be ready to do it.

James: Yeah. We find there’s a mix, to be honest. And that mix has probably become more even over the past, I’d say six or eight months. So you’re right. There are still customers out there and thinking, “Well, I just want to tip my toe in, because I don’t want to overcommit, and just see how this technology might work for me. I’m still not quite sure about it.” but we are finding there’s a lot more large organizations out there, who are well and truly sort of through that POC phase. And indeed, some of the bigger organizations have done multiple POCs and they’re now a stage that you’re talking about, they’re like, “Well, actually, how do I make this in something meaningful, how do I actually push this out across a global organization, measure it, make it secure, integrate it with all my systems?” So there’s definitely been a shift. There are still plenty of people out there who want to do a POC. And you can understand why. We’re talking to one organization at the moment. And literally they just need to get the senior buy-in of their C-suite to go “Okay. I’ve tried it. It’s a relevant training exercise for our business. That’s really good. I get it. Let’s push this on.” So I think POC will always have a role with certain organizations, perhaps slightly more risk averse. But then there’s also a lot of guys out there who are beyond that stage, and are looking for something a little bit more sort of enterprise ready.

Justin: One of the things that can be a bit frustrating — it was there that start, hasn’t gone away — is in some instances the inability to self apply. And by that I mean, we’ve got a whole different suite of things we could show people in VR. But there’s times when we come up, we have a conversation with a customer when it doesn’t matter how many different things we show them in VR, they can’t apply it to their own business. And so therefore that forces you to have to build something specific for them. And I’m assuming at some point we will get beyond that, because one process — if it’s something simple, for instance, like pulling levers or turning dials, pressing buttons — you would just assume that people can understand how that can translate to their own industry. But it’s simply not the case in many instances. And I think that’s what leads you to those POCs is, “Well, yeah, that’s fine. I get that. But that’s not our process and that’s not our equipment or our machinery.” And it seems a bit–

Alan: Funny thing. It’s– even if it’s in the same industry, they’re like, “Well, that doesn’t work like our machine.” And you’re like, “Yes, but it could.”

Justin: Yeah.

Alan: “Just give us the CAD files and we’ll make it look/work like that.”

Justin: Yeah. And I kind of understand it. But at the same time, it seems to me that you introduce a step there, that doesn’t need to be there. And often that first step, that POC is — as James said — is just about a relatively sort of soft objective of getting buy-in. It’s not about hard data in that first instance.

Alan: Yeah, I think to put a quote there, it’s no longer about a technology problem. This is an adoption problem.

Justin: Yeah.

Alan: And we’re at the point where technology works. We’ve proven use cases. So let’s shift gears a little bit, because I really want to dig into– you mentioned earlier about these POCs, and onboarding companies, and some things working better than others. What are some of the ways you’re measuring success? What are the goals, key performance indicators ROIs? So how are you measuring those for a company like Shell, for example? What are the measurements around ROI?

Justin: It kind of depends — again — on the use case. In the case of Shell — which I can’t really talk too much about, we’re not allowed to — but it is in the assessment space, which in and of itself is a little bit different to training, oObviously. There are some hard metrics that need to come out of a piece of assessment, particularly if it’s related to some form of regulation. There you can capture potentially the sort of kilobits of data in a relatively straightforward manner, which is simply that text based output, “the user did this, user did XYZ and achieved this result,” which is the kind of stuff that often get pushed into a learning management system at the highest level. But at the same time, what we’re looking to offer alongside that kind of more straightforward learning objective output, is also the ability to record everything that that user did. So we built that in as a core platform functionality. All of the data that gets sent by the user– all of the data generated by the user in a session — which for us accounts to 30 messages per user per second — can effectively be stored as a sort of file and played back as if you were there the first time round. So it’s not a video, it’s a kind of interactive 360 degree data experience. That gives you something way beyond just those learning objectives. It gives you the absolute concrete proof that this person did this thing. It’s highly auditable, it sits as a file, it shows them — in six degrees of freedom — completing this piece of regulatory training. And then obviously out of that, there’s all sorts of potential insight that you can start to gather. And I think one of the things for us is that we often think about is, in many instances you can you can prove the ROI for those simple learning objectives. But there is more to be had there, there’s more to be discovered. And there are more ways in which you can define, firstly, the sort of the performance of the user. But secondly, the value of the training itself. But I would say we’re still on that journey ourselves as a company, being able to clearly highlight what can this data show us. And we can only really do that by building these experiences out with people, getting lots of users through them, and analyzing that data.

James: And in that, ROIs can be used quite broadly. But if you think about having it as an audit trail, and the ability to go back when something goes wrong, and the ability to go back and prove to an overarching governing body, yes, that person took that training, therefore we did the right thing to ensure we try to mitigate our risk. Well, that could be saving of hundreds of thousands, if not millions.

Justin: Yeah, for sure.

James: Just based on the ability to be able to capture that and demonstrate it. So it can be that, and then you can go the other way, where it’s a bit more as we’d expect ROI to play out. And say — for example — with the work we’ve done with DHL, which is creating VR training for cargo loading for warehouse workers, so the ability to stack a cargo container as efficiently as possible. So, you know, part of the ROI coming out of that is not just around “Okay, there are less gaps in that cargo container. Therefore, we’re shipping more cargo and making more profit from it.” Well, actually the ROI to them is also going through to “Well, by creating this VR training, our staff are actually more engaged, they’re in fact enjoying the training process. And ultimately that leads to increased staff retention.” So instead of the average tenure of those warehouse workers being 12 months, well, actually you can extend that out to 15 months. So suddenly–

Alan: And that is– you know what, that alone is a reason to start using this technology, that right there. Because we’re in a a time right now where more people are retiring than we are able to retrain and reskill for, especially in trades and skills that are hands-on or in warehouses. Most kids in America don’t want to work in a warehouse. They don’t want to work in a factory. They want to be YouTube influencers. Which is cool, but not everybody can be a YouTube influencer.

Justin: Yeah.

Alan: So being able to make the training fun, exciting. Are you starting to see or get requests for gamification of this experience as well?

Justin: Yeah. So the DHL experience actually does incorporate gamification because — as James said — it’s a box stacking exercise. And for a company like DHL, if they’ve got air in their planes, then it’s going to– it’s costing them. So they have to be super efficient with this stuff. There’s all sorts of different rules around how packages should be handled. Two things, actually: in order to make the experience more fun and turn it into almost a sort of Tetris-type experience, we introduced a point system, that had all kinds of multipliers based on you following these various rules.

Alan: I want to do it now. See? Like, this is how training should be in the world.

Justin: It’s fun.

Alan: People want to put it on, and try it, and do it.

James: Yeah.

Justin: Yeah. An interesting thing is that that gamification, it makes people want to do it, and they take the headset off and they want to have another go. And we see that all the time, particularly with DHL. But also the interesting thing is that the data that you’re generating out of that gamification, the point system gives you an insight into that learned performance, that previously wasn’t available, because they would just be doing this in a warehouse, manually stacking it. Somebody might be watching them and scoring them, but you wouldn’t get that level of insight into the different techniques that they used, and the different degree to which they were following the appropriate process. So it’s got to be a double win there, really.

James: And there’s also a big– there’s a global leaderboard associated with that as well, Alan, so–

Alan: Of course there is.

[laughs]

Somebody’s got to be first.

James: They’ll be competing against a colleague, and someone in New Orleans competing against someone in Manila. And suddenly there’s that little bit of competition, healthy competition, of course.

Alan: Oh, I love it. And I’m sure– I’m assuming you guys have some team stuff as well.

James: Yeah.

Justin: Yeah.

Alan: Team Manila’s crushing it!

James: Literally, it’s that. Yeah.

Justin: I was gonna just say– I’m going to add one more thing that’s shown ROI, because it’s such a hot topic in the space. Another example that we’ve got is with GE and the CT scanner work that we did. There, if you look at that’s a slight different use case for ROI, in that these CT scanners are incredibly expensive, obviously. We dug out a UK business case for a CT scanner recently, that saw that initial investment of the machinery at £1.8-million, in and of itself, which will give you obviously one training asset. And then on top of that, it’s circa £400,000 per year to maintain. You’ve got to have somewhere to house that scanner, which then involves protecting stuff against magnetic waves. So you can say there’s going to be like another million pounds in cost there. So in the first year alone, you’re looking at sort of 3 to 3.5 million pounds, just to get that CT scanner in place. And then on top of that, there’s all of the costs of obviously sending people to that specific site, locating them across the country or maybe even across the world. The cost of a trainer to be there in person, blahblahblah. All these things add up. And so in a single year, you can see that the cost of running a single site is going to be incredibly expensive. And in the instance of the training that we built for them it was it was very, very straightforward to to to put the business case for that together, because you are effectively– firstly, you’re removing the need for that physical hardware, but you’re also allowing an unlimited number of people to carry out this training at the same time.

Alan: So that’s a 5 to £8-million savings. So translate that into American dollars, you’re looking at 6 to 10, call it.

Justin: Yeah.

Alan: 6 to $10-million in savings. Now, what are the costs associated with that? So how much does it cost to build it? How much the cost to scale it, to get VR headsets on everybody’s head? Just ballpark. What is the ballpark cost for everything included, to deliver the same kind of level that you would be normally paying 6 to $10-million for?

Justin: Well, I mean, it’s going to depend on the number of users from a sort of hardware and it’s only in terms of our platform. So our platform works on a effectively a per user basis, which would be in line with most, you know, with standard SAS licensing, I guess, if you use that as a benchmark. And then obviously the hardware, if you were going to do something on a Quest, that’s coming in a £1,000 — or I think it’s $1,000 as well, isn’t it? — for the enterprise version of that. So how many users are you going to have there? So that’s a fairly simple sort of sum. And then in terms of the content creation, that will vary wildly. I’m not going to talk specifically about the costs for GE, but you can get– I mean, if we use a really broad range — as we would see it — in terms of the kinds of projects that we’ve done, they tend to span from somewhere between £50,000 to let’s say £500,000, depending on the complexity and the range and the depth of the content that you’re creating. So it’s a broad– it’s a very broad spectrum, indeed. And so it’s very difficult to sort of say categorically, and it is still relatively expensive. And those costs are coming down, because obviously people are getting creative with those– with the tools for creating that content. But I think once you add those numbers up, you’re still coming in at an order of magnitude lower than the cost that you outlined with the real world scanner.

James: Yeah. I mean–

Alan: Here, let’s just do the back of the napkin calculation here. You got a thousand employees, content half a million, call it a million, right? So you got a million. Then, hardware’s… thousand employees, call it a million dollars in hardware.

James & Justin: Yeah.

Alan: That’s giving one to everybody, which you’re not going to do anyway, because you don’t need that.

Justin: Yeah.

Alan: And then 1,000 licenses. So another call it million. So that’s three million total. This is me, back of the napkin really, really stretching here. It’s probably not even close to that.

Justin: Unless the [garbled] as well, that’s very minor with [garbled]

Alan: And these are dollars. So $3-million. And normally you’d be spending between 6 to 10. So, the ROI on that — just back of the napkin calculation — is dramatic. And that’s me bumping everything up. So really, this is an order of magnitude less.

Justin: Absolutely, yeah. And like I say, that’s a– in terms of the content creation, once it’s done, it can sit there. Obviously, you may need to do some–

James: But you could also argue that the CT scanner, once you bought it, it sits there. Okay, it becomes obsolete.

Justin: Yeah, yeah.

James: There’s a similar– it’s a similar–

Justin: Well, yes and no, because it’s a £400,000 cost to maintain every year. As well as the cost of the facilities–

Alan: Oh yeah. I didn’t even put that into the costs. [laughs]

Justin: Yeah. And then factor in the cost of the trainer–

James: Then our licensing is an annual thing as well. So it’s comparable. Not the cost of, as in how much, but it’s a comparable– there’s an ongoing piece–

Justin: Yes, but not to the same degree that’s–

James: Not to the same degree, because–

Justin: Just to have a dedicated room, for instance, that’s been properly kitted out, have the trainers–

James: Yeah.

Justin: Those costs are gonna really rack up after year one.

James: Yeah.

Alan: Absolutely. So if I’m looking at as– I’m taking a look at your website and you guys are helping companies build the content, but ultimately, they can start to build their own content as this takes off, and there’s more people in companies that have skillsets that include Unity and whatever. So is that the case where people will be able to build their own environments, build their own training, and then host it on your platform for scale?

Justin: Yeah, there’s– so the proposition that we have is an SDK that any Unity developer can use. We’ve tried to lower the barrier to entry there, so you don’t have to be a really, really experienced developer to get something pretty meaningful in place. We just sell that now. So you can get access to the SDK, and then once you’ve created your content now you can upload it to the platform, and then that enables you all the distribution, the integration, the data, and all that stuff. So, yeah, others can create, depends if you’ve got that in-house Unity resource at the moment. If not, we can do it for you, or we might push it out to an existing supplier. We don’t really mind. Our model is one of moving towards SAS business so we can create the content, but we would really like to create licences. On top of that, we’re just kicking off a project around what we call non-technical authoring, which isn’t really a particularly cool name for it, but it’s a functional one. And that is essentially allowing those trainers or those subject matter experts to take a source CAD model, and build an entire piece of training around that CAD model without having to do any development whatsoever. They do it all in VR. And we’ve been working that through for a year now with a big automotive. One of the big global automotive manufacturers is working out what the right processes for that are, what the right interactions are. We got to the point where we’ve had that sort of validated across three proof of concepts. And so we’re now ready to push that into a proper production mode. And we’re really excited because obviously that’s the big barrier in a way now, it’s “Well, how do I create content as quickly as possible?” And the more content for us as a platform provider that a customer can create, obviously, the more it’s gonna be used. And so that’s great for us. So we’re focusing really hard on those creation tools.

Alan: I think that’s the future of being able to allow customers to build their own content, because it’s great that you guys are able to help every customer now, when we’re in early days, but when every company wakes up to this and realizes the power of saving exponential costs on training — especially in expensive equipment — I think it’s going to be a race to– [chuckles] the problem that’s going to be one of a content shortage. And being able to allow companies to do that themselves is really key in the long term. What is the most important thing businesses can do right now to leverage the power of your platform?

James: I think a big thing they need to do is think about this as a sort of an ongoing program, and sort of move away from that one-off content approach, and just think about employing existing– the latest cool technology sets. It’s really approaching it like they’d approach any business challenge, right? It’s like, what is the challenge? What are you trying to achieve, and what is the strategy or the tactics I need to employ to achieve that? And so I think businesses should look at this as they do with anything else, and take that approach and move away a little bit from “Shiny new technology, let’s go do something fun!” and think about, “Well, how does this make a difference to our business? How do we deploy it? How do we integrate it? How do we measure it?” So it’s really taking that longer term view of implementing the technology, what it’s going to do and what it’s best at doing.

Alan: Is there anything else that you want people to know about Immerse, before we wrap up here? And I’ve got one more question for you. Is there anything else that we missed?

Justin: I don’t think so. I mean, anybody that’s out there that’s looking for a way to scale beyond those kind of smaller proof of concepts has got VR experiences scattered across their organization. That’s the problem that we’re looking to solve, and do that in a way that enables the data to be uniformly in a standardised manner, gathered, collected, and pushed through to those enterprise systems. So, yeah, I mean, we like to think– I think James already mentioned that we’re a bit of a sort of turning point in the market. We’re having that conversation with people now. We were head of the market up until maybe even about nine months ago. But things are changing. And so we know there are people out there with those problems, and we love to see ourselves as a solution to those. So, yeah, I mean, get in touch.

Alan: So my last question to both of you. And they can be separate. What problem in the world do you want to see solved using XR technologies?

James: I’ll go first.

Justin: OK.

James: I think it’s that passing on of knowledge. It’s a bit back to your point earlier, Alan, when you were saying people were retiring, that sort of knowledge drain. So my view is really you can kind of capture that within the use of VR. So if there’s that incredibly skilled trainer who ultimately retires and had a very, very niche ability to do a certain thing and teach a certain thing, well, you can then, in effect, codify that within the sort of VR environment. It’s like it’s the trainer that never retires. It’s keeping that knowledge, and that can even extend right through to incredible artistic skills. Perhaps there’s a certain way of making something, that is literally something that is not being passed on. And you can actually capture that, and you’ll be able to have that for anyone to go and look at at any point and actually reignite the interest in a certain sort of artistic format. So I think it’s preserving skills. And I think that’s probably the biggest sort of legacy I could see this technology bringing to the world at large.

Justin: James has got a good one there.

Alan: I know, it’s kind of hard to top that one. [laughs]

James: You could just say, “I agree with James.”

Justin: I have another one, but mine is a bit more personal, in that I currently travel three to four hours every day. So I live in Oxford, but I travel into London and it’s a nightmare. So I can see a point in the future where that could change entirely. We’re definitely not there yet, but allowing people to work together in a completely seamless way, remotely, so reducing the need for that travel, allowing people to have more flexible working lives, and much better work-life balance would be amazing for me. And obviously alongside that will come the fact that I’ve got a friend, a best friend who lives in Australia, and I’m not very good at talking on the phone or even on Skype. And so the fact that we could sort of meet up and play games together and be in a completely virtual space, and that I could feel I was there with him — as opposed to being there with like an avatar or some sort of cartoon version of him — would be pretty powerful, be a life changer, I think. Yeah, I mean, I think for me, it’s that idea that we can inhabit spaces with people that are in completely different places.

Alan: Yeah, it’s pretty cool and and even spaces that don’t exist. You can make them up. I know of one of the announcements at Facebook’s Oculus Connect 6 was their Horizon platform, which is very similar to VRChat or Altspace or some of these collaboration platforms, but allowing just end users to create virtual worlds. I think we’re going to be pushing towards the Ready Player One world, where you can go into any virtual world, meet up with your friends, and have some fun.

Justin: Yeah, I feel the same as you.

Alan: The stuff you guys are doing with training and assessment, I think, is the practical iterations of this that are going to drive the real long term value of virtual reality. Because if enterprises get onboard and people start to be in virtual spaces for work because they have to, that’s going to trickle down into consumer as well.

Justin: Yeah.

Alan: So with that, I got to reiterate a quote that you guys said, “VR creates the trainer that never retires.”

James: Yeah, it did start off as “the trainer and never dies.” And then we thought that was a bit macabre.

Alan: [laughs]

James: We changed it to “the trainer to never retires.”.

Alan: My name is Alan Smithson, your host for the XR for Business Podcast. Today’s guest is Christophe Mallet, co-founder of Somewhere Else. Somewhere Else Solutions is a London based innovation agency specialized in immersive technologies. He’s now exploring how to leverage immersive technology and artificial intelligence to deliver soft skills training that actually delivers behavioral change. The end goal is to make the workplace a better place for everyone. Throughout his careers, he has strived to bring together brilliant minds, makers and businesses to deliver impactful projects and solutions. He’s worked with a variety of global clients, including Adidas, Samsung, Ernst and Young, Save the Children, Sony, IKEA, KPMG, Nokia, and the list goes on. To learn more about Somewhere Else Solutions, you can visit them at somewhereelse.co.

Welcome to the show, Christophe, it’s a pleasure to have you here.

Christophe: Thanks, Alan. Thanks for having me. It’s good to be here.

Alan: You’ve been working in immersive technologies. Maybe kind of give listeners an understanding of what you’ve done at Somewhere Else, some of the projects you’ve done, and then we’ll dig into something really exciting after that.

Christophe: So I came from the world of mostly strategic consulting, digital and social, and the world of storytelling, kind of on my own time. And back in 2015, I met with a guy called Julien in a pub, and he showed me an experience: The Night Café, in which you enter a painting by Vincent Van Gogh. I don’t know if you’ve tried that one.

Alan: I have. So to paint a picture for people. They took Vincent Van Gogh’s painting and then made it fully spatial so you could walk around in the painting in VR. It was the night café and you could walk around and go and sit at the piano. And it was beautiful. Really, really beautiful.

Christophe: It was beautiful. It was very early. And my jaw dropped, because I saw a new way to tell stories. I was a bit bored of my previous job, so I decided to quit, and I started a studio with that guy — Julien — and another guy, Randy. And kind of alongside the market — the way the market has evolved since 2015 — is, the wow factor was big in the beginning, where a lot of things were done around entertainment and marketing. We worked on that with TV channels, we did an escape room in Paris, we did stuff for the climbing experience for Adidas. Champions seeking experiences for the UFR. And that’s honed our skills in what it means to tell a story in virtual reality, versus other mediums — such as cinema. And about two years ago, Accenture, BCG, McKinsey started publishing their reports about how immersive technologies should impact service design, visualization, training, and so on. And so suddenly, immersive tech started appearing in conversations at the boardroom level, which is what you need for any technology to be adopted. And so we started receiving inquiries in this area, and specifically in training. And so for the past, I would say 18 months to two years, we’ve been specializing on that and more specifically on the behavioral side of things and taking VR support what it really is, which is– you know, VR has been very focused on environments, and virtual realities are recreating the environment virtually. But your reality is also about the people who are part of that reality. And I think so far we’ve failed a little bit on creating virtually real humans. And the day we can interact with virtual humans in believable virtual environments, then you can start having simulations, social simulations where you can build experiences on demands and soft skills.

Alan: So to put things in perspective, what you’re saying is that everybody focused on making the environments look real or making the interactions, maybe it’s training, but you’d be training on a machine, or manufacturing, or a car, or a truck, or something like this. But what you’re saying is you’ve created training simulators to train on how to deal with people.

Christophe: Yes, the world of work is changing fast and automation, all of that, meaning that HR Department has a massive challenge now, which is to upskill/reskill massive portions of their workforces, who are already digital workforces. And to do that, the investment that they do is shifting away from knowledge — because the knowledge fits in your phone — into behavior. As a professional currency, your mindset is becoming more important than your skillset. Delivering soft skills training is super hard. You cannot learn empathy on a PowerPoint, right? But delivering face-to-face, role-play type training at scale is difficult. And so the question is, can we use virtual reality as a solution to have the best of both worlds? The experiential impact of face-to-face training, but on top of that, the scalability of digital learning formats.

Alan: I think now would be a great time to talk about a new program that you guys have developed, called Bodyswaps. What this program allows you to do is as, an HR professional, let’s say you have to deal with 100 employees. Every employee is different. Every person is different. And you’re gonna deal with different challenges that may– it’s really impossible to train for it. Maybe it’s an irate employee. Maybe it’s somebody who’s lethargic. You’re gonna have all these different scenarios, which– it’s very, very difficult to train somebody for these different scenarios in using current technologies. But what you’re saying is VR can then put you in a room with a lethargic employee. You can work through that. And then the Bodyswaps idea is that now you can sit in the position of that person that you just spoke to, and analyze your responses back to them and see what it feels like to be on the other side. And that is incredible. Maybe speak to that, and what you’re doing with Bodyswaps.

Christophe: Sure. Have you ever heard of a guy called Mel Slater?

Alan: Sorry, who is it?

Christophe: Mel Slater, does that ring a bell?

Alan: No.

Christophe: It’s kind of the European counterpart of Jeremy Bailenson from Stanford, when it comes to having done behavioral research in VR. So the Bodyswaps format is not something that we invented by any means. We looked at the research and [personal name] from the University of Barcelona is the first one who had this idea of, “What if I could swap body? What if I could be in someone else’s shoes, getting a new perspective on how I behave?” And the first experience that he created was about feeling empathy towards yourself, which is one of the main causes for depression, is your inability to feel empathy towards yourself. Until in his original experience, you were a woman. There was always a mirror to take ownership of the virtual body, and your task was to be nice, to console a young kid that was crying in front of you. You just have to talk to that kid. Now, because we knew you were going to try to be nice, whatever you said, the kid would progressively stop crying. That’s the first step. The second step was the experience. You would swap bodies, so you’d find yourself in the kid’s shoes, listen back to what you said to that kid. And basically the whole idea is, you would reflect on the fact that, “Wow, I showed empathy towards that kid. I said things that are really nice. And actually, I should have empathy for myself.” So you’re using self-reflection and self-awareness as a way to subconsciously impact behavior. We saw that their research — which is absolutely fascinating — and we scratched our head wondering, “Can we apply that for the world of work?” Will it make sense to listen back to yourself, when you are having a review, under-performing employee, when you’re pitching. when you’re dealing with someone who’s vulnerable or shut off, when trying to understand unconscious biases in the workplace, and so on. So that’s the scientific backbone to the format. Would you have it if I gave an example of how we’d use it?

Alan: Absolutely.

Christophe: So the very first one we built was actually not in corporate LND, it was in a higher education and we were contacted by a company called Sage. It’s a US company, actually. And Sage, they are a publishing company, so modern accounting software. Their publishing company, they’ve been basically selling libraries of books to universities for decades, they’ve started to sell videos as well. And they’re wondering whether VR is the next format for higher education. And so they contacted us, and asked us to find a value proposition where VR would make sense. And what we found is that if you’re studying to become a nurse in psychiatry, like in many types of studies, you’re going to spend a year in the classroom, learning all kinds of theoretical knowledge. And then after a year or so, you’re going to start being placed in hospitals. Problem is, in hospitals, there’s one supervisor for 20 or 30 students. The supervisor is already busy with patients. It might not be the same guy we can count. And so as a result, you have absolutely terrified and inexperienced 20 somethings running around the corridors of psychiatric hospitals, having conversations with schizophrenics and suicidal patients and so on. Those are not the kind of conversations that you want to mess up. There’s too much at stake.

And so the idea was, there’s this gap between the wall of the classroom and the real world. And we want you to practice to get that real-world experience in a safe way, without the danger or the real world. And so that’s why we built The Bodyswaps. It never replaces being in front of real patients, because for starters, AI is not there to have those conversations. But you can — hours after hours — see what it feels like to be talked at by yourself, to be reassured by yourself. And through self-reflection, you build the confidence so that when you arrive in the real world, you have 80 percent or 90 percent of what you should know. And obviously you can translate that for your leadership sales, and so on and so forth.

Alan: It’s incredible. For people listening, what is the next step for them to get engaged with you? Are you making this so that it’s scalable? So you have a certain number of scenarios, is this custom for each company? If a business says “I really want to start using VR for our HR to train these soft skills,” what is the process look like from your art?

Christophe: Well, the first thing I would say, Alan, is what is seen a little bit too much in immersive learning industry is VR studios thinking that they are also learning designers and also subject matter experts.

Alan: It’s like, “Just because you can make the VR doesn’t mean you can actually make it effective.”

Christophe: Exactly. It’s exactly that. And so you really need some kind of a dialogue at the same table as early as possible. You want subject matter experts. They only will know the area. You want a learning designer, his job is not to know VR, is not to know the subject, his job is like, “does that teach?” And that’s it. And obviously you need a client champion. It’s very rare that your entire client’s stakeholders are going to buy into VR. You’re always going to have someone who’s going to be your champion in their company. And you need that person to be at the table with you, because you need to educate that person. If you don’t have that dialogue, you either create beautiful VR that doesn’t teach, or you create an experience that teaches very well but actually doesn’t engage. Or even worse, you create something that does both, engages and teaches, but you don’t have any buy-in, because you didn’t manage your champion, so to speak. So to answer your question, at the moment, we don’t have a standardized library of scenarios. We would build scenarios together with our clients and there are different ways to do that. Either work in a standard way, which is at stake what we already have, the features we already have, the kind of graphics quality that we already have, and simply writes a scenario that fits into that learning format. That’s kind of the standard approach. So low involvement from the perspective of the client. The second one is completely bespoke. Let’s just have a chat, talk about what you want. You might want to bring in some new features, new analytics, the possibility to ask questions, to flag. There’s a lot of things that we can do, and I’ve seen the format shoot at both, together with what the client we work with wants. And the last level is partnership. You might have an IP. You might, for example, be a company that’s been doing face-to-face leadership training with actors for 20 years. And you’re looking at scaling up your business model through VR, in which case it’s more of a partnership. Let’s sit together and see if we can create a product you bringing to the table your learning design and your subject matter expertise, and us bringing to the table the VR expertise.

Alan: Love it. It’s really great. So let’s talk more about details, because it’s one thing just to be in VR and play a video game, and it’s another thing to be in VR for work. How are you seeing the companies address things like buying the gear? Because we work in a lot of companies. And one thing, they come to us and they’ll say, “Oh, you know, our CEO was at a tech conference and he said, ‘We need to get into VR.’ And so we’re calling you because we need to get in VR.” There’s no strategy. There’s no forethought. What do you say to companies that are just coming and saying we need to do something in VR? How do you end up getting to the right decision-makers, or how does somebody from a business standpoint find you?

Christophe: I mean, how to find this is reality of marketing strategy. But to your point, the most difficult aspects of implementing VR right now is moving from the POC to the deployments. I think what’s StrVR did with Walmart, and the scale of it — kind of like, you know, 17,000 headsets in 5,000 locations, the scale is what makes it really impressive. And our approach for that is– and indeed, you’re right. Some clients don’t necessarily see further than “Let’s do VR because we have a bit of a budget and it’s fun.” And so the answer we always have for that is having an agile mindset to this. So we always start with consultancy, which is, we take a short amount of time, a short amount of money as well, a small amount of money. So we don’t take too much risk and let’s make sure to discuss what it is you want and why you want it. You know, you’re going to interview end-users, you’re going to bring in subject matter experts, you’re going to do a UX design workshop, you’re going to do discovery/education workshop with some of their team, if need be. And at the end of that process, we know that you want what you want for the right reasons. We know how are you going to measure the success of your POC or pilot. And you know how much it costs. And what we do with clients is if you want to stop there — because you don’t have the money, or because it’s not the right time, or you don’t have the buy-in — you’re better off stopping there. If you want to work with someone else, you can work with someone else. Otherwise we’ll move forward. And then once you have created your prototype or your pilots, it’s very important to set aside a significant part of your budget for testing it out. The discussion about costs is an easy one to have. You know what your cost-benefit analysis of implementing something, the discussion about are you saving on logistical costs or downtime costs is an easy one to have. The difficult one is what Bertrand wrote [garbled], the “return on impossible.” It shouldn’t be only about costs. It should be about, you know, in a workplace poor soft skills create depression, anxiety, discrimination. And now we have a possibility — by changing perspective — to deliver behavioral change. So we have to measure what it means for your bottom line to go from someone who is depressed, or a manager who just is incapable of managing conflicts, to an able manager. It’s very, very hard to measure. And if you can measure that, then you look at buy-in for implementation. So there is a responsibility that often lands on the client-side to bring the resources to make sure that that is measured.

Alan: A lot of early days, virtual and augmented reality was — like you said at the very beginning — let’s just make something really cool and shiny, and we fell into that trap as well. We built VR photobooths and we built VR applications for fun. And I think we’ve kind of finally — at least we have — come out of this illusion of “Awesome, VR is great, we’re gonna use it for everything.” to “It *is* great, and it can be used for a lot of things. But let’s take a pragmatic approach and measure what it is we want to accomplish, and really measure that.” And that’s where the consulting comes in. And we do a lot of consulting, marketing, eCom, education, training. So I feel you when you say you can’t just dive into this thing. You have to really understand it. What are some of the metrics, I guess, that a business could measure? Because you mentioned what is it like to have employees that are depressed? And what are some of the metrics that you guys speak to when you’re presenting this to clients? What are some of the statistics that you’re using?

Christophe: One way to answer would be to ask how they’re measuring it right now, the way they’re doing it today. And when it comes to coaching or face-to-face training, a lot of time it’s what is being called a happy sheet. Do you know what that means, happy sheet?

Alan: No idea. But it sounds fun.

Christophe: Well, it is fun in a way. It is like, let’s say you going to do one-day leadership training, OK? Your tiny apartments or your boss are going to spend two grand for you to go on the run day course. And even the day you’re going to receive a happy sheet, which is literally you saying how happy you were with today.

Alan: Ah.

Christophe: And that is about it. And in many, many cases, you have met many massive organizations where the tracking of training is minimal. And the number one KPI for whether training was successful is not whether they were successful, but whether it was pleasant.

Alan: Ah, yeah, and pleasant versus success is not the same.

Christophe: It’s not the same. Exactly. In our case, what we want to measure is behavioral change, which is de facto quite difficult to map against hard financial KPIs. But to give you an idea, we had a student at UCL and she took the experience that I mentioned before — the psychiatric nurse one — and she ran its full sample of students at UCL here in London, so the MET Tech Society students. She had a qualitative interview right after the experience and a survey, and two weeks after she had another survey. So the timeline is a little bit short, of course, it should be like six weeks after. But the evolution of the self-reported engagement, self-reported memory of that experience is already a good indicator of the performance. And for you are two numbers that came out of this research that were quite interesting. Your first one is 90 percent of the participants thought that seeing themselves from a new perspective would help them reflect on their performance, which is already a plus. And the second one is 93 percent of participants said that they only tried the experience once. So that’s seven minutes. 92 percent said that they would like to try the expense again to improve their performance. So they were able to reflect. And so that’s the thing is that we are quite good judges of our own defaults, if we can get the perspective of someone else. For them to be able to say, “Hey, this is how I sound, and it is not okay for whatever reason, and I want to improve,” that’s levels of engagement that are unheard of. And there’s a couple of anecdotes from the general post interviews. This is one guy, for example, who said, “Well, I had to take care of my flatmate, who is really depressed. And the second I started talking, I heard myself falling into the trap of talking way too slowly and way too low, and having too many filler words.”

Alan: Oh, wow.

Christophe: So it builds that kind of filter of self-awareness that he applied to the real world. And that’s anecdotal evidence. If we could prove that at scale, I think we would have something very powerful.

Alan: So let me ask you a question then. How far away do you think, and how many more trials do you think will be required to kind of prove that? Are you maybe partnering with the university to find a way to get some real hard evidence around this? Because what I’m seeing with some other things — like STRIVR, for example, you mentioned — but the reason they were able to do that is because Wal-Mart did a pilot, and the results were unquestionable. They saw between 20 to 50 percent better retention rates. They saw shorter training times. So in the case of Wal-Mart, it actually made a lot of sense on paper. And so how do you now go from you’ve got this thing, you’re running a couple of trials. What is the next step to really nail down– go from anecdotal evidence to real empirical evidence?

Christophe: And the short answer for that is you’re exactly what STRIVR did. I think STRIVR, being headed by Jeremy Bailenson from Stanford, they have that mindset of having a hypothesis that something might work, and testing it out again and again and again to make sure that the hypothesis holds. And I think it’s the only way forward for us. We have contacted actually universities to try and scale up the kind of research that we already did, which is only academic validation of the learning format. On the other side of things, you want a business validation as well. So the clients that we’re talking with at the moment, we’re making sure that that cycle of testing and validation is built right into the pilot and that we go beyond the happy sheet.

Alan: That’s really incredible. You guys are onto something amazing. And I think it’s only a matter of time before you have those proof points. I think if you can partner with a university to get those proof points validated, then it’s only a matter of time before the next Wal-Mart comes along and rolls out your Bodyswaps solution at scale. And then a lot of companies — a lot, a lot of companies — are experimenting with VR and AR now. So a lot of headsets are floating around. From what I’ve heard, companies will buy 10,000 headsets and they’re just sitting around. So the more use cases like this that we can generate, I think it’s just going to really snowball. And I think virtual and augmented reality — from an industry standpoint — is really going to be driven from enterprise.

Christophe: I’m with you. I’m quite curious to also get your opinion. Obviously, the market has completely shifted from a consumer-driven market to an enterprise one, and with an enterprise you have vice industries, of course, and verticals. What do *you* see as being the kind of use case that is now fully validated and accepted by industry as a whole?

Alan: Sure. I think the easiest one right now is, is upskilling; being able to use not necessarily full mixed reality or virtual reality, but being able to wear heads-up display — almost like a Google Glass kind of thing — where you can pull up information as needed onsite, hands-free. I think another big, huge one is remote assistance or see-what-I-see assistance, where you’re working on something. You don’t know the answer, so you can either pull up the answer in your view or you can call somebody back at the head office. Maybe an expert, maybe it’s somebody who’s retired who’s just coming in. And one person with a lot of experience can now serve hundreds of people in the field that maybe don’t have as much experience. And being able to see what they’re seeing real-time and annotate on their vision, I think is one of the biggest use cases. Companies like STRIVR who are using 360 video as training, I think that is the lowest hanging fruit and it’s one of the biggest impacts from an investment standpoint, because it doesn’t require one hundred thousand or million dollars in investment. You’re talking maybe 10 to 20 thousand for your first modules. And as an enterprise, if you’re seeing 25 to 50 percent decreases in training times and 25 to 50 percent increases in retention rates, this is no longer “Should we do this?” this is “How do we do this as fast as possible across our enterprise?” And that’s what I’m seeing. And I think medical is the biggest use case of this. They’re using virtual reality for medical training almost everywhere now. Every single lab’s got a VR headset. Being able to look at MRIs, data in full three dimensions is just saving lives right now. And when you talk about return on investment, saving lives is probably the biggest return on investment we can do in this technology. I think we’re gonna see it in schools, eventually. It’s going to take some time. We’re working with some companies right now that are building K-12 curriculums. But it really comes in handy when you want to teach stuff that’s not math, learning times tables in your calculus, but learning how complex equations work. One thing that I did was I went in VR and I tried this thing where it took me on the difference between the carbon of a diamond versus the carbon of graphite. It’s the same molecule, but the way it’s stacked differently makes diamonds super hard and makes graphite– because it’s in sheets and they slide off. That’s why your pencil, as you’re writing leaves a stroke of black carbon. Until I’d seen it in that way in VR in full 3D spatial computing. I really didn’t get the concept, no matter how much I read about it. I think things like that, where you can train people in unsafe environments, being able to give people the sense of what it’s like to be trained in a mine is really key, because you’ll hire somebody from mining company and train them for six weeks, eight weeks, and then you send them underground to the mine, and realize that they have panic attacks and they can’t work underground. So being able to immerse them in a virtual space from the very beginning before you even hire them, will give you a good understanding of their mindset going into that. And I thought that was a really amazing use case, one that is not– compared to the savings, it does not cost a lot of money. You know, you’re talking maybe $10,000 just for the setup. And how much does it cost to train a new employee, to have them not be useful to you in the field?

Christophe: It’s a good analogy of the flight simulator. If you are still training pilots on real planes, it would be very, very dangerous.

Alan: You wouldn’t have very many planes. We wouldn’t have very many pilots!

Christophe: Yeah, but the value proposition of VR — of immersive learning in general — it’s not a new one, it’s just taking the flight simulator, except the cost of a flight simulator is upwards of a million pounds; now we’re talking Oculus Quest’s gonna be $400. So, by dividing something by two thousands, you’re kind of expanding the money to go into a lot more jobs. And the way we present that to clients who come in and ask about ways that we can do in training is just three value propositions that I think we all mentioned today. The first one is skills-based — so, anything that way you gonna use your hands. Excavators, fitting a door in a car. And he’s basically building psychological skills, building spatial memory of a particular task. And the academics there is, why do it in reality — with all the danger and the costs of reality — when we can do it virtually? That’s the first one. The second one, which you mentioned about the graphite and a diamonds is knowledge-based — so, knowledge bases where we learn about the world around us in three dimensions. When I spatialize content — when I make it interactive — I am improving the understanding of that content, and improving the retention. And as you said, it doesn’t apply to everything. It would make no sense to learn how to read in VR, because reading is two-dimensional by essence. But if you are learning about how a heart is working, for example, and I write a chapter about how the heart is working, I would not let you operate on me tomorrow, because that’s not how you work about a three-dimensional, beating object. The last proposition is behavior-based, and that’s the one we’re talked at the beginning about, the Bodyswaps. It is what happens when I put you in the body of… let’s say you’re a white man. What happens when I put you in the body of a woman? Or someone much older? Or a different race? Or someone with a handicap? What happens when, in that situation, I asked you to interact with other humans? and that’s the whole “return on impossible,” here. We’re not talking so much about costs. We’re talking about giving people a perspective that they simply never had before. You cannot even role-play that! This is something that is absolutely native to virtual reality. And I think that the moment in the behavior model, we are only scratching the surface. In the same way that when TV started, and they were doing radio shows on TV, and radio started doing theater plays on radio; I think, at the moment, we’re still there, when it comes to behavioral–

Alan: I agree.

Christophe: And we need to think, what happens to your behavior when you change scale; when you have superpowers, when you die, when you resuscitate people. It doesn’t have to stick to reality, too. There’s a lot of experiences at Stanford that have you driving or flying over a city as a helicopter pilot, or as Superman, in VR. It is going to change your altruistic behavior in real life, when it comes to helping out someone. I think we still have to map the subconscious impact of living beyond reality — in virtual reality — to give you those… almost like superpowers, in real life.

Alan: Have you tried the experience called Tree?

Christophe: No. No, no.

Alan: So there’s an experience that they made of the — I’ll put it in the show notes — but basically, you’re in the Amazon Forest, and when you first start the experience — before you even put the headset on — they give you a seed, a tree seed, and they put in your hand. You hold on to the tree seed, and then put on the headset. And you are a seed growing, and you grow out, around, and then you grow up, and your arms are actually moving the limbs of the tree. Your leaves start to sprout and you grew up to this be this big, huge tree, and you’re swaying in the wind. It’s really beautiful. And then all of a sudden in the distance, you see smoke.

Christophe: OK.

Alan: And basically, you are the tree that’s about to be cut down in the rainforest.

Christophe: Oh, wow.

Alan: They slash and burn all the trees around you and then they cut you down. It was mind-blowing. And it really made me feel this kind of connection to the trees in the forest. It wasn’t somebody telling me, “Hey, we gotta stop cutting down trees because of deforestation.” It was this intrinsic feeling of being part of the forest. And it was really beautiful. And I think this is something that we’ve only, — just like you said — scratched the very, very tip of the iceberg on. I’m really looking forward to it. One last question for you, Christophe: What problem in the world do you want to see solved using XR technologies?

Christophe: I want people to be able to become the best versions of themselves fast and without harming anyone else in the process. If I could put your presidents in a Bodyswaps experience, I would be quite curious what would happen.

Alan: Well, I would have to say that he’s not my president. I live in Canada.

Christophe: Fair enough. Good for you. [laughs]

Alan: Yes.

Christophe: I want to see a video of him trying the experience that you just described, as well.

Alan: Welcome to the XR for Business Podcast with your host, Alan Smithson. Today’s guest is Yan Simard, the CEO of Kognitiv Spark. He’s designed and led many innovative business ventures through his own startups. He also has extensive professional experience with companies such as CGI, Zaptap, Vision Coaching, AIS, Incite Wellness, Bell Canada, Industrial Alliance, and more. I’m just going to read this quick quote from Yan. “We believe that mixed and augmented reality, if used right, can not only allow frontline and field workers to stay relevant, but make them more crucial than ever before.” With that, I’d like to welcome Yan and it’s kognitivspark.com.

Yan, welcome to the show, my friend.

Yan: Thanks, Alan. It’s a pleasure to be here.

Alan: It’s my absolute pleasure to have you. And I can’t wait to dive in here. Maybe just give us a 10,000-foot view of Kognitiv Spark and the great work you guys are doing there.

Yan: So Kognitiv Spark, we do mixed reality communication technology to better provide support to our remote field workers. Our product is called RemoteSpark. It’s an application that has been optimized for the Microsoft Hololens platform. In a nutshell, what it does if you have a field worker that is facing a piece of equipment that stopped working and that worker doesn’t know what to do, that worker can put on the Hololens, start RemoteSpark, and communicate with — let’s say — an engineer at the head office that can help out. The engineer, through a computer, is able to see in real-time what the worker is seeing. They can talk to the person, but they can also provide 3D holographic guidance on top of things. So as an example, if they have a 3D CAD file, that could help the worker figure out what are the steps that need to be done to perform a repair, the expert can drag and drop that on the computer side of things, and the CAD file is going to show up as a 3D hologram in the field of view of the worker, so that the worker can perform the repair.

Alan: So if a field worker’s either in a factory or a warehouse and they’re looking at a machine, the machine breaks, why don’t they just pick up the phone?

Yan: Yeah. And while most of the time that’s what they do right now, the problem with phones — or even tablet-based chat systems, or phone-based ones — is that you have to hold something in your hand, so you can do the repair or do the process or the task that you have to do, at the same time as you’re getting the information and the knowledge. So it’s always a two-step process. With mixed reality, you can just do it all together at the same time. So they’re doing the work, they have their hands greasy and dirty, and they getting the knowledge at the same time. So it’s much more efficient. And also, there are many studies that show that in terms of knowledge retention, it’s about 80, 85 percent higher when you learn about a given task at the same time as you’re doing it with your hands.

Alan: If you look at this from an ROI standpoint, what is the investment to get started with Kognitiv Spark? Obviously you need a Hololens. So that’s, call it $3,500. And then what else do you need after that?

Yan: Yeah. So our software is a service one, and we have two offerings. One is on public cloud, the other one is on private cloud. Most of the time we sell the public cloud version of it. It’s a yearly fee of $6,000 a year — Canadian — to activate one Hololens unit. So you can have as many remote experts as you want on the computer, but our economic basis is the Hololens unit.

Alan: Great. And so somebody sends up, they pay their thing. What is the onboarding, I guess? How do people get started with this? Is it out-of-the-box, ready-to-go, or how does it work?

Yan: Yeah, when it comes to deploying with a customer, the technology side is very easy. Our application is available through the Microsoft Store and we can activate the licenses remotely. The ramp-up is really getting used to mixed reality in general, and then our app. So I would say our experience shows that typically the user is ready to go within 30 minutes. And I’m talking about somebody who has more experience whatsoever about mixed reality or the Hololens, to the point where they are comfortable enough to get in the field and try it out.

Alan: That’s fantastic. So now, do you got to go into the field as well and work with these people to get this up and running? Or is it just a software-as-a-service, buy it, and that’s it, you’re on your own?

Yan: We don’t have to go. We tend to like to go when we have a chance. And the reason why is that we’ve discovered that to make our customers successful in the long run, typically for a very hands-on, very involved at the beginning, helping them out, figure out their 3D holographic strategies and mixed reality strategies, and it sets them up on the right foot for future success. So we typically try to get involved, especially if a customer is doing a proof-of-concept with us, or something like that. We just get there on the ground whenever we can, or we’re just there supportive as well remotely. And then after that, they’re all set to scale and grow with us, which is great.

Alan: How many deployments have you done of this, or is this a new thing? When did you start doing this?

Yan: So we launched the alpha version of a RemoteSpark in the fall of 2017. I’m not going to disclose the number of active customers we have, but it’s tens of different customers in North America, Europe, and Asia. We tend to work with Fortune 500 companies, as well as some small and medium businesses. And the initial deployments we do are always proof-of-concepts or pilots. But there’s always that vision to scale to hundreds or thousands of units over a period of, I would say one to two years.

Alan: You’re perfectly timed and situated for that, because I’m assuming — and we’ll talk more about this in the podcast — that the benefits of using Kognitiv Spark over, let’s say, phoning it in or whatever like that, I think the benefits are probably quite measurable and quite substantial. How do you measure success for a company? How do you prove them the ROI?

Yan: Yeah. The ROI in our case is fairly easy. So customers buy our product for three reasons. The first one is they want to cut down on equipment downtime and that’s typically very quantifiable. And also you can train, translate that into dollars. Your typical industrial use case, any hour of downtime is going to cost thousands and tens of thousands of dollars. The other thing that we sell on is that when we’re saving experts, the trouble of travelling onsite to do troubleshooting. It also has a very direct impact on the bottom line. So we saved up your travel costs as well. But also that expert now has more time to devote to a high value add tasks such as helping people out, figure out what’s going on, instead of travelling. This one is less quantifiable. Companies have to take the industry 4.0 journey and get going. And they find that using RemoteSpark is kind of a great way to get started with mixed reality, with something that you can still sell to the CFO and to the procurement team and they will say, “OK. So that makes sense. It’s not only wishful thinking. There’s action an ROI right from the get-go.”

Alan: Great reasons to buy: 1, cutting down downtime, I mean, that one alone, if a machine’s down for a day — depending on the machine — but you’re talking in the tens of thousands, to hundreds of thousands, perhaps millions of dollars. And I know one of the customers or a couple of the customers that you have are in the defense and military sectors. These could be life or death scenarios. So definitely cutting the downtime to a fraction is a huge measurable ROI. And I think also it encourages brands and companies to really be pushing the limits. This technology’s not really that new anymore. We’ve been using– Hololens came out five years or four years ago. And so now it’s becoming mainstream. I almost feel that we’re getting to that point where if companies don’t use this technology, they are seen as laggards. Is that what you’re seeing in the field?

Yan: I think there’s a growing sense that they have to do something. And one of the things that we like to tell customers that are kind of hesitant that prefer sometimes to be smart followers, is that there’s a cost to not getting started now. And the cost of not getting started is to not be ready for when these things go mainstream. Because we have to think that the technology is now getting fairly mature. What is not mature is how it impacts the way people are running their businesses, how it changes a process that a worker is going in, day in, day out. So that takes time to figure out, and to be able to start now, I do a solid proof of concepts learned from them. It gets organizations ready for when the tide comes and when everybody will have to do it, because they will lose their competitive advantage if they don’t. So I think you’re right. There’s a growing awareness that you have to do it now.

Alan: Yeah, there’s a groundswell coming, and the interesting thing about the timing of this is that you’ve been working on this, you said you launched 2017 your alpha. And you’ve already got two years into this, and you guys have presumably made a lot of mistakes. Which we all do in technology, you build something, you go, “Oh, that didn’t work.” And having that experience of working with customers from the early days, I think is going to really position you guys quite comfortably as you move into this place. You’re looking at this from boots on the ground. You’re seeing companies start to work with it. We’re in Canada, so we’re a fast follow nation in general. We see America do something and then we wait. But being in candidates, it’s much more difficult to sell these concepts in. But you’ve managed to do that. What are your timelines around seeing mainstream adoption? Not in consumer, but in the industrial world? What do you think? We’re looking at timelines before this is in every company.

Yan: I think people will start hearing about that in pretty much any big industrial company within the next 12 to 18 months. And I think one of the triggers of that is the Hololens 2. I really believe that the form factor of that new device and its performance will make it interesting for more companies to deal with. Now, it’s not going to be at scale within that timeframe, don’t get me wrong, but it’s going to be that awareness phase, where the everyday industrial worker will be aware that some guys sometimes are just walking around with those weird glasses on their heads. And if you had another 12 to 18 months, that’s probably when it’s going to become just normal to see people with mixed reality glasses on their heads. Now, these are only the industrial world figures, so–

Alan: Yeah.

Yan: –consumer is going to take probably more time. And I don’t think there’s yet any compelling use case for that on the consumer side. On the industrial side it’s quite different.

Alan: So let’s say 2020 and 2021, the awareness starts to build, the groundswell is there, people start wearing these headsets. 2021, -22, -23, we start to see this kind of mainstream adoption within enterprise. And then 2023, kind of beyond is– nobody really can see out that far at this point. But look at 2023/4/5/6. That’s I think where it’ll trickle down to the consumer. Being in that enterprise, you’re working with military, you’re working with the fence, you’re working with industrial. One of the videos on your website really blew my mind. It was a huge room-sized centrifuge. You want to talk about how that’s being used?

Yan: Well, in that video, what we show showcases is our typical use case. So you have a very complex piece of equipment in that case. It’s the largest geotechnical centrifuge in Canada, which is in Newfoundland. So a massively-complex piece of equipment. The subject matter experts and the OEMs are all across the world, so some are in Germany and France and so on. So when that thing decides to not cooperate and breaks down, well, it can take weeks to get the right expert to address the problem. Now, with something like RemoteSpark, you can have the technician onsite wearing a Hololens, and you can have any subject matter expert anywhere in the world, even in other companies that are able to help them out in a timely fashion. It can take situations that would take weeks to address, and cut them down sometimes in a matter of hours.

Alan: I had a chance of speaking with Shelley Peterson from Lockheed Martin. And they’re using the Hololens almost in the exact same way: they put on the Hololens, they’re able to see step by step instructions with 3D objects overlaid over to the real world, and they’re able to have their hands free. Now, one of the things that she was saying that on their original trials, they actually reduced the time to do the task by 99 percent. And then they, obviously being a big company, they went “That doesn’t make sense.” So they ran the test again, and they ran it again and again. And the average was 85 percent reduction in times to completion of task. And if you think about it, if you’re assembling — let’s say, for example — a jet engine or a centrifuge, and you’re looking at it, and you’ve got a paper manual, and page by page you have to flip the page, look at the manual, go over, pick up the screw, put it in, lock the bolt in, go back to the page, check it off that you did it, next page. And so one by one, you can do that. And that takes a long time. But when you put on the Hololens, not only are you able to then get the instructions and fix it, but it’s also able to capture photos and videos of you doing that, for either future manuals or even just a record of the repair. You guys have that ability to capture that as well. How is that being used, that kind of expert capture?

Yan: Yeah, well, it’s used in many ways. It might be about producing artifacts to document an inspection. It can be sometimes if you want, we can dig a picture of the video of what the work is looking at, annotate that on the computer side of things, so the expert side. And then the annotated picture shows up in 3D at the other end. So it’s all about really empowering the worker to do the job right the first time, every time. And in the examples you gave — and I think that’s what we’re seeing as well — sometimes it’s about empowering a technician that just doesn’t have the knowledge on how to do a repair, to be able to do it. And I can give an example. We have a customer in the US. It’s a very large utility. They have a certain type of furnace. So it’s a blast furnace that is quite widely used in their business. And it breaks down quite often. The repair itself is not super complicated to do, but the people that know how to do it are not that many. So they built a CAD file and a 3D model, that has the embedded process on how to perform that repair. So if something goes wrong with that furnace, any technician that has access to a toolbox and is reasonably good with their hands, they can go there, follow the step-by-step animation, and do the repair. So, in that case, you were talking about the reduction on troubleshooting and on task performance. That’s where it comes from. It’s allowing the person that would not otherwise be able to do it, to do the job.

Alan: I think as we move into a time where more and more people are retiring from the workforce — the average workforces in their 50s now — and more and more experts are retiring, there’s got to be a way for us to capture that knowledge and then transfer it to younger generations. So I think this is a great way of doing that. What are some other ways that this technology is being used? Are there any companies that are using this in ways that you didn’t anticipate?

Yan: Yes, sure. We get all kinds of requests all the time. So we sell mostly in defense, aerospace, energy, utilities, oil, and gas, manufacturing, industrial engineering. So it’s a fairly broad field. But we may get requests every now and then, that are just outside of what we normally do. So our technology, as an example, is used to perform repairs in the Canadian Arctic, in very remote locations — that happen to have Internet connectivity. We’ve been approached as well for remote medicine, so how to help a nurse in Labrador assess a patient and help a patient, provide care with the help of an expert maybe in Toronto or somewhere down south. So there was another one that I mentioned. And actually this one that we’re building it with a partner, so using RemoteSpark, we’ll be able to allow workers in nuclear plants to be able to — when they go in the room that is exposed to radiation — be able to see a radiation cone coming out of a hole in the wall where radiation is coming from. So that helps a worker behave more safely, make sure that they do whatever they have to do with getting as little exposure as possible.

Alan: Is that a partnership with [Shachar] Weis? From Packet39?

Yan: No, sorry. This one is a partnership with Canadian Nuclear Labs.

Alan: Oh, because there’s a gentleman — I’m interviewing him later this afternoon — that has built a Hololens CONE OF RADIATION. So, I’ll make an introduction. [laughs] What are the odds that we get two people working on nuclear visualisations in one day?

Yan: Yeah, well, it’s one of those fields where there are plenty of very compelling use cases and where really worker safety, is at risk. So any chance we have to make it a little safer and a bit more efficient for workers is always worth it.

Alan: I’m going to switch directions a little bit here. What are some of the analytics you’re able to gather around this? So, for example, I’m fixing a machine. How do you measure before I use the Kognitiv Spark system, and after? What do you do from, like, an A/B testing, so that you can say to our customers, “we’ve improved your process by X percent?”

Yan: Yeah, we typically try to establish a baseline with all the customers we’re using, especially if they’re running a pilot where they have to demonstrate a certain KPI to be able to get further budget. The way we do it, we try to see if they have data in an ERP system or work order processing system of some kind. They may have an IOT platform as well, so we can connect with those platforms. As an example, if you have an ERP system that’s generating the work orders, it will typically include a component about time to resolution or completion time and so on. So we can connect to those systems. So then when the work order is open, the workers on-site, they will work harder and might be displayed in RemoteSpark. They do whatever they have to do and then they mark it complete. So in that case, it’s a very quick way of showing that for a certain category of tasks, if you run it a number of times, you’ll be able to demonstrate as a percentage what’s the improvement. And we kind of have to customize that each time we work with the customer. So sometimes they don’t have such a system, it’s more tracked in an Excel spreadsheet or things like that. But we’re always trying to make sure that we understand what we’re– what they’re trying to achieve. And again, it’s time to resolution, cutting down equipment downtime, cutting down on travel for experts. That’s our bread and butter, really.

Alan: Travel time’s a huge one as well. The first time I heard about this, this being used, they were explaining how a machine will go down and they’ll fly in two experts from Germany to fix this machine. It was a specific mining machine. And they say it takes two days for them to get there, machine’s down for a day before they even get there, then it takes two days to get there, then they spend a day repairing it, and then they fly back. And so the whole process is four days or five days. But three of those days is downtime for this machine. And they said every day of downtime is $150,000. And I mean, that’s– I’m assuming and certain in oil and gas and manufacturing and nuclear, that can range from tens of thousands of day to millions a day in downtime and productivity. Not to mention just the travel costs alone of flying two people from Germany. That’s in the tens of thousands of dollars, plus their time. So the cost savings in one downtime repair more than pay for your $6,000 a year license, plus $3,000 for the Hololens. So call it $10,000 with everything in — call it 20 — and you’re still way, way ahead with not having to travel one expert on location, is that correct? Your license is $6,000 a year, plus the Hololens of $3,000, so that’s 10. Plus another 10 days to set it all up. So call it $20,000 a year. If you look at that, it is a very small amount compared to even an hour of downtime on some machines.

Yan: Yeah, absolutely. One comment that we hear all the time from customers is they will tell us “If we use RemoteSpark once or twice in a year, it’s paid for many times.” So we’d like for our customers use it more often, but some are super happy to use it only once a month, because it’s just going to be a highly critical situation, or one of those situations where the costs are running so high that any way they can cut it down, it makes planning sense.

Alan: [chuckles] I mean, it just– when you do the dollar figuring out– and I think this is one of the problems with virtual and augmented reality, mixed reality over the last couple of years. It’s been this crazy hype cycle of, “Hey, look how cool this technology is. You can put the Hololens on. You can see a machine, and you can look at the holograms. Look how cool it is.” But nobody in business cares about how cool things are. That’s nice for a minute. They go, “That’s great.” But then when you start to say, “Oh, and by the way, it can save you tens of thousands of dollars a day. Every day you need this, is a day you’re gonna save $10,000.” And I think this is a wonderful way of positioning this technology. And the fact that companies like Boeing and Lockheed Martin, the fact that they’re realizing the benefits of it and not only realizing it, but also sharing it and allowing companies like Kognitiv Spark and you to come on podcasts like mine and writing articles, I think it’s really starting to make it– the awareness of this technology around the world is starting to take off. And it’s gonna be a matter of time before companies realize, first of all, the benefit. Second of all, if they don’t do it, they’re actually at a competitive disadvantage. What would you say to companies that are saying “We’re going to wait and see”? What do you tell companies when they want to push this investment down the road a bit?

Yan: Our message is always that if they want to be ready for when the market goes crazy with mixed reality, now is the time. It’s not just a widget you buy; you buy a technology that will change the way you are doing your work. It changes the way we run business. It’s the human element, really, and the process element that takes time to figure out, not the technology. So the sooner you can figure out what are those problems that you will be facing when you try to scale, the more equipped you will be when it’s time to do so.

Alan: Is there anything else you want to share, on the adoption side of things?

Yan: Yes. There’s one thing I’d like to share. There’s a reason why Kognitiv Spark is doing probably better than most when it comes to sales and revenue. Part of it is that we developed a product that works really well. But also we really took the time to understand what are our customers’ constraints. I’ll give an example. There are three reasons why people pick us, instead of some of the other options on the markets. So first of all, we are the only company that can do real 3D communication. So it’s not a 2D communication that includes 3D elements. So we’re still — as far as I know — the only company that can do that. The second is security. So we baked in security end-to-end right from the get-go. It’s not an afterthought. It is because customers told us right from the get-go, it’s got to be secure, otherwise I will not be able to make it past my CISO. And the third point is bandwidth.

Recently I asked our director of customer operations, “Can you tell me how many of our customers are dealing with bad or inconsistent bandwidth on the worksite?” She gathered data, and their response was 100 percent. So RemoteSpark is famous for being able to work on very bad bandwidth, like 256k. We can actually run calls at 128 sometimes. While the closest competitor we have are probably two megabytes a second. Well, on industrial sites, two megabytes a second is a luxury, it almost never happens. Because the place is full of metal equipment, there’s going to be dead zones and so on. So 100 percent of our customers deal with that. And we baked that in — again — right from the get-go. So we have to get out a lab environment — where we have ideal bandwidth and stable bandwidth — and get in the real world and see what people are facing. The mixed reality and the XR field as a whole, sometimes we have a tendency to just stay in our clean offices and not get in the field. I think that the field as a whole would gain a lot by just having different players talk to customers more often.

Alan: I think it’s interesting that when we build stuff in MetaVRse, we do the same thing. We have an iPhone 11 and the Samsung Galaxy 10, and we’ve got all the newest phones, and then we’ve got a collection of all of the phones back to iPhone 5 and 6, and we test them on different bandwidths. This is vital and you guys are focused on one device — being the Hololens — which technically uses a lot of bandwidth. But you guys have managed to make that a non-issue, which is wonderful. And I think you definitely nailed the three things. And it’s funny, because as you were talking about bandwidth, you cut out. [laughs] And so we have to deal with this, we have to deal with the fact that bandwidth comes and goes. And especially with a VR or an AR headset on your head, you run the risk of making people nauseous if you don’t do it properly. So I think that’s wonderful that you guys have thought of that. What is the most important thing that businesses can do right now to start leveraging the power of XR?

Yan: The most important thing to do is to just get started. Learn from it. When I mean get started is just not buying a few units and trying it out again in a lab environment. Get them to the field, get them in the hands of workers that are going to be the end-users and the adopters of that technology. And listen to them, listen to what they’re going to tell you. Being able to listen to those lessons learned early on is going to be what dictates the future success of XR initiatives in business, as far as I’m concerned.

Alan: Now, what is the best business case of all of the things that you’ve seen? What is the best business case, the one that drives the most value that you’ve seen in the last little bit?

Yan: There are many that are pretty good, and obviously I like ours a lot, because we have that clear ROI each time we’re using it. I think I would mention something that we did with the Royal Canadian Navy. We developed our offerings so we put RemoteSpark in a private cloud environment, so that if you have a navy ship at sea and you want to run a call between a mechanic doing some work inside the ship and the ship’s head engineer that is on the front deck, you’re able to run the call within the ship, even if you don’t have Internet connectivity at all. For me, the reason why I really like this one is that there is the time of resolution being able to — in that case — not have production downtime, might result in saving lives, might result in a better outcome for that ship as a whole. So I think there is that emotional component to that use case, even though really RemoteSpark is used in that setting the way we use it anywhere else,.

Alan: This technology is saving lives. That couldn’t be more important. My last question, Yan, is what problem in the world do you want to see solved using XR technologies?

Yan: Yeah, I can tell you a story about this one. We use that as inspiration here all of the time. We all have people in that we know — family or friends — that are an older generation of workers that maybe didn’t go to school as long, that are good at what they’re doing, they’re manual workers. But sometimes they feel left behind by technology. So digital transformation hasn’t impacted the way they’re doing the work. And now we live in a world where change is always faster, and more often and more disruptive. You know, whether it’s AI and disintermediation and automation, all those things, these people feel threatened. And what I’d like to see happening with mixed reality is that if we can empower those workers to not only stay relevant, but be even more relevant than before, just by getting them access to the right information and the right knowledge and the right experts at the right time in the right format, I think that we can serve millions, if not billions of people around the world with that technology. And it’s all about making a human shine. I don’t want to see AI shine. I want to see AI work for humans. And I think that’s what XR can do.

Alan: Amazing. Well, that is a wonderful way to wrap up this conversation. Yan, are there any last words that you want to share with the listeners?

Yan: Well, I’d like to thank you. I think it was a great chat. It’s an exciting field. We’ll see more and more companies do great things. So my advice and my last words are: feel free to experiment. Try things out, fail fast, and make it better. [chuckles]

Alan: Hey, everyone, it’s Alan Smithson here today. We’re speaking with Nick Cherukuri, founder of ThirdEye, about their all-in-one AR glasses hardware and software solution for enterprise in logistics, manufacturing, and engineering and how these tools are revolutionizing how we work. All coming up next on the XR for Business Podcast.

Welcome to the show, Nick.

Nick: Thanks, Alan. Glad to be on.

Alan: I’m really excited. You guys have a really original and awesome looking pair of glasses for the enterprise. Walk us through your X2 glasses and how are people using them? What makes them stand out from the competition? What’s the form factor? Just walk us through your solution.

Nick: Definitely. So just to provide some background about ThirdEye, while we may be a relatively new name in the commercial space, we have over 20 years of experience developing this technology for the United States Department of Defense. So that’s our origin story. And as you may know, the military, a lot of the technologies we use today have evolved from there, so for example, the Internet, GPS, even Siri for your iPhone originally came from SRI, which is right down the road from us in Princeton, developed there and Apple bought it off them. So the military has been a great incubator for these advanced technologies.

And augmented reality, it’s definitely considered the next major tech platform. So we’ve been developing a lot of AR hardware and software applications for the military. And a few– a couple of years ago, we decided to take some of our technical know-how, our leading engineers — we have state-of-the-art labs here in Princeton, New Jersey — and we decided to develop a commercial product. So we spun off into ThirdEye and we created– just this year, we– earlier this year, we released our X2 mixed reality glasses. So there’s just some high-level overview of the X2. We wanted to really address the customer concerns. We felt this was an optimal time to get into the commercial market. So we feel it’s too early for the consumer market right now, but the commercial AR market is definitely something that we are seeing a lot of traction happening.

So we wanted to develop a pair of glasses that really hit some of their needs. And some of the needs we heard were the glasses had to be entirely hands-free. For example, many workers, they have safety requirements, where they cannot have any wired packs. So you can’t have a wired processing pack or a wired battery pack. It needs to be all hands-free, compacted to one pair of glasses. So that was perhaps the most critical use case that we heard, that this is– you had to develop the glasses in a way that’s entirely hands-free. So we made our X2 glasses entirely hands-free at about nine ounces form factor. So it’s something that can be worn for a lengthy period of time. Another use case that we listened to was, it has to be attachable to a hardhat. So the glasses could be as advanced as you want, but if it can’t attach to a hardhat, or to a bumpcap, and meet some basic ANSI industrial certifications — ANSI Z87 — then it can’t be used in these industrial settings. So that’s something that we definitely incorporated into our glasses, to be attachable to a hardhat, and to a bumpcap.

Our glasses are Android-based, so it’s really easy to make access for upgrading to Android 9 soon, so we can take advantage of features like GPS, built-in. We have about a 42-degree field of view. So a binocular field of view is something we have seen customers prefer over a monocular field of view, because it’s less eyestrain. Binocular field of view is more natural to the human experience. We have two eyes, not one eye. So we wanted to develop a binocular pair of glasses, which we did. Our brightness level, we have about 300 nits of brightness in our optic system. So this can be used both indoors and outdoors, which is not the case for some other binocular glasses, which are more indoor products. So we wanted to develop our glass in a way that can be used both indoors and outdoors. It’s lightweight, it’s less than 10 ounces. So it’s something that– it’s easy to wear for a lengthy period of time without feeling any ergonomic issues. And we added some sensors like a built-in flashlight, a 30-megapixel camera. So if you’re running a remote help application for your field workers, you can stream really high-resolution content from your field worker point of view to a remote expert hundreds of miles away.

And we also have built-in SLAM. So SLAM stands for Simultaneous Localization And Mapping. We developed our own proprietary SLAM software that runs on our glasses that’s customized for hardware, so we can do inside out six-degrees-of-freedom tracking. We can do plane detection. So, for example, you could have a hologram of a 3D engine hovering in midair and the user could walk around it. So there are only a few glasses right now that are able to do highly accurate SLAM and our SLAM is accurate. It has about a one-inch drift accuracy and can be used both indoors and outdoors. So you can move your head around rapidly and the hologram will remain fixed in place. So SLAM is something that lets enterprises do more advanced applications, not just 2D AR screens, but you can actually interact with the real world. You can tag mixed reality content onto a giant machine, and leave the room and come back. And it’s still tagged on that location very accurately. So, for example, a worker could have step one, step two, step three, mapped out onto a factory floor, and be able to do that on a daily basis.

So it’s something that allows the glasses to actually interact with the real-world environment, which is where we see the cutting edge mixed reality software development happening for enterprise. So we’re really targeting the industrial, field services, manufacturing, and healthcare sectors. Those are our four main enterprise sectors and we are involved in a lot of other sectors. We have a lot of gaming and entertainment–

Alan: I’m sorry, Nick. What were the four? Industrial, field service…?

Nick: Industrial, field services, manufacturing, and healthcare. So I’d say those are the four. And we partner with many of the leading AR and mixed reality software companies, who have their applications running on our glasses. So we want to create as wide a developer ecosystem as possible. We don’t want to have a closed system, where we only have a few apps, or make it really tough for developers to develop applications. We want to have an open-source operating system, provide a lot of documentation. We have a Unity SDK. We have an Unreal engine SDK. It’s been fairly easy for developers to port applications or create apps on our glasses.

One last point — which is also important for a lot of our partners — is the price point. So we’re about $1,800 price point, which is roughly half the price of some of the other mixed reality binocular glasses out there. So we want to keep the price point as low as possible, and really help these enterprises and software companies deploy in scale. And we also offer leasing options. So that’s something where you can spread out the costs over a longer period of time. So those are some of the aspects on the technical side, software partner side, and pricing side, where we’re trying to accelerate some of these enterprise deployments.

And what we’re seeing is, whereas before it might have taken close to 12 months to escape a pilot purgatory into a larger deployment, now we’re seeing enterprises — because there have been success stories right now — deploy within three to six months. So from the initial testing phase and getting all the key players on board — from the innovation department to the business department — and then going to a larger-scale deployment. So I think right now, because there have been a lot of lessons learned from other companies as to what works well for these smartglass deployments and what doesn’t work well.

We definitely really try to incorporate a lot of the feedback and listen to the customer, for something as simple as built-in device management. That’s something that is absolutely critical for enterprise deployment, because you need a central IT person in the company being able to control a deployment of, say, 200 glasses. And that’s something that for a long time wasn’t integrated into the glasses directly. And that’s something we wanted to have built out of the box. So right out of the box, enterprise can scan a QR code and register the glasses into their central database. Also, there’s been a lot of lessons learned and we definitely wanted to listen, have an open mind, and listen to as much of the feedback as possible. And we think the enterprise market for the next five, six years will be the main push for these glasses to be sold in the consumer market a little later on. But enterprise market is seeing some tremendous ROI at the moment.

Alan: So you’ve talked about that, the glasses themselves, the software. Where would somebody begin? Like, what’s step 1 for a company that says, “OK, you know what? We see that there might be a value here.” How can they learn more?

Nick: Sure. So what we’re seeing in the enterprise space is they typically come at this from two aspects. One is they actually have a real issue they want to solve with these glasses. For example, training new workers. They might have an aging workforce. They need a hands-free system to effectively train new workers. And that’s something where a pair of our glasses, plus a software partner — like Atheer, Ubimax — can really help accelerate the training of the workforce.

Another way they come at this is their innovation department wants to see how AR could be used, that they might not have a specific use case, but they have some general idea about augmented reality, something that’s an up-and-coming technology, and it’s something that we want to incorporate in our enterprise. So for those, we take a look at what are their biggest issues at the moment, and what software plus what other glasses would work the best for their use case. And sometimes it’s not always binocular glasses, sometimes it could be a monocular pair of glasses. But typically, we have found that enterprises prefer a binocular field of view, because it’s less eyestrain on their workers and it feels more natural, there’s more applications that can be done on them.

But I think right now what we’re seeing is in nearly every industry, even really narrow ones like utilities or wastewater, that’s really specialized, AR software companies who are targeting each of these industries. So I think every industry right now has some augmented reality software that is really effectively targeting like industry-specific use cases. So what we try to do is we partner with a software company. So depending on what the enterprise is, if they’re a field service company, or telecommunications, or industrial, or a visually impaired group, then we partner with the software company that has the best software that deals with that use case.

So we’re seeing a proliferation of these AR enterprise software companies really expand right now. And what’s really great to see is they’re really– they’re not just making cool technology. They’re actually targeting a really specific enterprise use case. A lot of these companies have people who have come from those industries and are now starting these companies. So I think right now this enterprise space, at least, has a lot of software companies that are really targeting specific use cases in their industries they want to be in, and that makes it really valuable for a business to use their software, because it’s really targeted. So I think it’s definitely– that’s one reason why it’s taking off at the moment.

Alan: If you kind of put your futurist hat on, we’re talking about kind of enterprise augmented reality and mixed reality. When do you think — put your futurist hat on and your prediction hat — when do you think mass consumer adoption of this technology will occur, and when do you think Apple is going to come out with their glasses? Because this is going to change everything, when they come out with their glasses.

Nick: Definitely. And that’s a great question. And I think long term, that’s what everyone’s predicting is, this is going to replace your phone. And it’s just a matter of what technology has the right features to make consumers want to replace their phone with a pair of glasses. So what we see is there’s a couple of core challenges right now, that need to be addressed for consumer deployment. So, field of view is probably the biggest one. The natural human field of view is, I would say roughly around 210 degrees. And right now, the widest field of view glasses — that are in mass production — have between a 40 to 50, 55-degree field of view. I know there are some prototypes that have 70, 80, 90-degree field of view, but in actual mass production now, that’s the field of view that’s there. And I think for consumers, they would want a really wide field of view. As opposed to enterprise, where a narrower field of view helps achieve their ROI use case, so they don’t really need a massive field of view. But I think the field of view definitely needs to be increased, and every year it’s definitely being increased by some of these leading optics companies. And once that progresses closer to what feels like a natural human experience, I think that will really help propel this smartglass for consumer deployment.

Another important factor is the form factor. So I think for consumers, they want it to look like a cool pair of Ray-Bans or glasses. And even technical features like a battery, there needs to be way to reduce that in size. Right now, some of these consumer companies, they’re finding a way around that by having a wire that goes behind your ear to connect to your phone as a processing pack, and that’s the battery source. So that’s one way around it. But we think that consumers want it to be entirely hands-free, just like enterprises want their device to be hands-free. They don’t want to walk around with wired packs or anything, and they want it just to be a pair of nice, cool-looking Ray-Bans they can wear.

So I think the field of view, battery, and getting some of these sensors and processing down into a really tight, small form factor, all-in-one without any attached wires or processing packs is what’s needed to make this eventually replace your phone. But I think until then, there are going to be workarounds, such as using a wire pack or using your phone as a processing pack. And there may be some consumer uses with that use case, but I think that’s the eventual prediction for what’s needed to replace your phone.

Alan: You skirted around the timeline.

Nick: Sure, I did. [laughs]

Alan: [laughs] Nobody wants to put their name on this. [laughs]

Nick: That’s hard to predict right now. But I mean, there’s these great market studies — like from Goldman Sachs and these massive companies — that predict that, I think the next 10 years or so, the consumer– there’ll be roughly 25 million glasses sold and the consumer version will come out like within the next 10 years or so. So I think definitely within the next 10 years, we’ll see a standalone pair of glasses that– because everyone wants high-end mixed reality technology into a pair of Ray-Ban looking smart glasses, which right now isn’t electronically feasible. But who knows? In 10 years that could definitely happen. So it’s hard to predict for consumers.

Alan: But here’s the thing, and the reason I brought up Apple. It’s because they’re quietly building whatever they’re building. Nobody really knows. And there was this rumor that came a couple weeks ago that Apple’s releasing their AR glasses in 2020. I just– knowing the technology, I’ve been to research labs where they’re pushing out 70, 80 degrees field of view. And I’ve been to the research labs. I’ve seen the stuff that’s still in the lab and it’s still not even close, even though it’s remarkable. It’s not even close to being what we need for consumer. And I really have my reservations around Apple coming up with anything next year that will serve the needs of the mass consumer market.

Nick: Definitely. And I think from Apple’s perspective. I’m not sure if they want to connect to their iPhone, to use that as a processing pack for some of the glasses power. So I’m not sure what exactly– what approach they’re taking, but definitely to get the features that are– that everyone wants in these glasses, I think we’re still a long ways off, especially the field of view and to getting everything all-in-one to a really small form factor. That’s– there’s still some really critical features like battery, for example, that it’s going to take some time to reduce that in size.

Alan: What are some of the use cases that people are using right now that are generating the most ROI? Like, if I’m a procurement manager at a manufacturing facility, what can I do to wow my executive team by firing a couple of pairs of these glasses and starting right away? What’s the lowest hanging fruit that I can get immediate ROI, because that seems to be how these things are being unlocked. You do a pilot or a small thing, you show an amazing ROI, and then it unlocks the budget to roll this out at scale. So what is that?

Nick: I mean, there’s so many applications, but kind of the way we like to talk about it is just like computers have the Office Suite of Microsoft Word, Microsoft Excel, Microsoft PowerPoint that nearly every organization uses those applications. Similarly, for these smartglasses, there’s some overarching applications that we’re seeing are being really commonly used across industries. So that is remote assistance, so someone can see what you see. And it’s great for training new employees and providing remote help. Manufacturing checklist, QR code scanning. So if you’re in a warehouse or manufacturing center, getting step by step instructions overlaid for your specific task flow, or being able to scan QR codes with the glasses and get visual instructions. And then the other most common application is 3D twins and more mixed reality, where you have a 3D digital rendering of real-world objects. So for example, with mixed reality with SLAM, you can scan your environment into a 3D model and you can tag information, any information you want onto the real world, in this– using this virtual 3D model.

So those are the three applications that we’re seeing are being really commonly used. And I think what we envision — and based on the feedback we’re seeing is — those will kind of be the Microsoft Word/Excel/PowerPoint of AR mixed reality, where they’re just really commonly used across a lot of industries. And if you look at most of the AR software companies at the moment, most of them fall into one of those three application categories. And I think the reason is there’s such an immediate ROI it just makes so much common sense, where you’re hands-free, you don’t need to carry around a 50-page manual or use your hands. 80 percent of the global workforce use their hands while they work, so they need an entirely hands-free digital interface, while still being able to walk around and do their daily tasks. So I think those applications are seeing or having some tremendous ROI, we’re seeing close to a 40 percent savings in task time for some of these companies. And a lot of savings in training new workers. Worker safety. And you can really customize the task flow for your individual company needs. So let’s say those are the three most common applications and there’s really some really great AR software companies who are developing. That’s all four.

Alan: My last question for you, Nick. Because this has been really amazing, looking at ThirdEye’s technology, looking at your kind of overview of the marketplace, how people are using it. What is one problem in the world that you want to see solved using XR technologies?

Nick: So one personal preference of mine, and that’s the beauty of mixed reality is definitely in the healthcare space. We’re seeing some really tremendous real-world use cases. So there’s roughly a 200-million worldwide vision-impaired market, where people who can’t see properly or have some type of vision impairment. And with XR, they’re able to really change their lives. And with the addition of 5G and cellular chip directly built into glasses, they can walk around their daily lives using these glasses. And it really helps change their lives on a really personal level. These other use cases are great in terms of worker efficiency and proving KPIs. But from an actual impact in someone’s personal life on a daily basis, some of these healthcare applications — and specifically these vision-impaired community — using these mixed reality glasses is really helping change their lives in a positive way. I think so many times you hear of technology having a negative impact on the world. But I think with this XR technology and with these small streamlined glasses, we’re seeing some really positive and heartwarming use cases. And I think that’s great to see. And definitely healthcare space is a personal favorite of mine for some of these AR mixed reality glass deployments.

Alan: Well, thank you, Nick. Thank you for taking the time to join us. Where can people find out more information about ThirdEye?

Nick: Sure. So you can visit our website at thirdeyegen.com, follow us on social media. And if you ever want to reach out, just hit me up on LinkedIn or social media, and I’ll definitely try to respond. So we want to help expand this community and we go to a lot of the major trade shows. So you’ll probably see me there. And looking forward to continuing being in this space and seeing where it goes.

Alan: You’re listening to the XR for Business Podcast with your host, Alan Smithson. Today’s episode is with Mike Campbell, executive vice president of Augmented Reality Products at PTC. Mike leads the Vuforia product team, and is responsible for driving the product and technology strategy of PTC’s leading solutions for the development of augmented reality applications. You can learn more about the work they’re doing at ptc.com.

Mike, welcome to the show.

Mike: Hey, Alan, it’s great to be here. Thanks for having me.

Alan: It’s my absolute pleasure. I’ve been really, really looking forward to this, because I went to LiveWorx in… was it June?

Mike: June, yep.

Alan: My God. I had no idea, first of all, how big PTC was and how important Vuforia and your augmented reality strategy is going to be and is becoming to all sorts of different industries. I got to fix a tractor. I got to work on an ATV. I got to look in retail. Is there any industries that this won’t affect?

Mike: Well, PTC’s focus is really in the industrial enterprise domain. And I would say across all of the verticals there — heavy equipment, automotive, aerospace, medical devices — I mean, all of those places are ripe for transformation, thanks to the power of augmented reality.

Alan: It’s amazing. You even had a boat there.

Mike: We did, we did, yeah. One of our customers is Beneteau.

Alan: Yeah. So let’s start from the beginning here. What is PTC? What do you guys do? Where did it come from? Let’s start there.

Mike: Ok. So PTC is a billion-dollar plus software company headquartered in Boston, Massachusetts. We have been around for a long time and we got our start back in the late 80s, early 90s by revolutionizing the 3D solid modeling industry. Basically, we invented a better mousetrap that allowed companies to create products virtually in 3D much faster and more effectively than ever before. Fast forward from then, we not only have a 3D solid modeling CAD offering, we have a great offering used in engineering for lifecycle management. And about 10 years ago, we recognized the trend of the Internet of Things, this explosion of connectivity and ubiquity of sensors, and companies wanting to leverage that information so that they could create products and manufacture products and service products better. We invested pretty heavily at that time. And once we did that, we were thinking a lot about this idea of IOT and products broadcasting information about themselves in the form of digital data. And we were thinking about our 3D heritage and we recognized that augmented reality was a great way to unlock some of that digital data in the context of the physical world, where you do your work. And that’s really what got us into AR. I have been at PTC — as you said — for a long, long time. And I’ve been involved in our AR journey since the beginning and it’s been a fantastic ride.

Alan: Vuforia was an acquisition. Was that something that you guys made a decision to– can we build this in-house, or should we just acquire it? How did that come about?

Mike: So we were thinking about AR. We were taking a look at the different technologies that were out there. And, you know, there are certain elements of the AR puzzle that PTC is well-suited to address: an understanding of what goes on in the industrial enterprise, and the 3D digital context understanding, we have all of that. What we didn’t have at the time, though, was a rich, deep understanding of computer vision technology. So basically we went off and we acquired the world’s leader. We approached Qualcomm and were able to figure out a deal that allowed us to acquire that technology and — frankly, more importantly — all of the expertise that was working on that at Qualcomm at the time. And then basically around that built our offerings for industrial enterprises to really unlock the potential of AR in those kinds of settings.

Alan: I have no idea the details about this acquisition, but it seems to me like it was a pretty damn good idea to acquire Vuforia. And it’s really positioned you guys very well for things like see-what-I-see capture technology, so being able to look at something with a tablet or a headset and have somebody looking over your shoulder and being able to annotate on that. But also being able to hold up a tablet — or a Hololens or one of these devices — and it recognizes the image in 3D and allows you to annotate. Some of these things that were kind of esoteric a few years ago, you guys are really delivering and you’re delivering at scale now, which is really interesting.

Mike: That’s really the value of the combination of sort of this underlying industry-leading computer vision technology and the knowledge that PTC — because of our heritage and our domain expertise and our technology in the form of CAD, and PLM, and IOT — is really the fusion of all of those things that makes these amazing experiences — like the ones you saw it LiveWorx — possible. And what we’ve found is it’s that combination that is required in order to unlock this potential in the industrial space. If you show up to a– pick your favorite large industrial customer and you show up with a great computer vision SDK and Unity and you say, “listen, we can go build anything.” They say, “OK, that’s great.” And they go build something, but it doesn’t scale. And that’s really the key, if you’re gonna be successful in an industrial enterprise. They need scale. They need re-use. They need these approaches to work across a variety of different use cases and product configurations. And the complexity gets pretty mindblowing. And that’s the experience. That’s the expertise that PTC brings to the equation here. So I think it’s been a great combination so far, and I think we’ve got a bright future ahead, for sure.

Alan: There is so much to unpack with LiveWorx. It was kind of mind-blowing and it was the first time I really fully understand because a lot of people are using Vuforia for non-industrial applications, just making some AR things. I know we made AR business cards five years ago or four years ago, and we used Vuforia as the image recognition and trigger for it. But there’s got to be thousands upon thousands, maybe hundreds of thousands of people using this technology not for the industrial use cases. What is the percentage of Vuforia users in industry, versus marketing — let’s say — or other things?

Mike: Yeah, well, remember Vuforia is a brand for augmented reality offerings at PTC. And when you say “Vuforia”, I think you may be talking about Vuforia Engine. That’s the computer vision SDK that basically Qualcomm started and PTC has taken on. There are — you’re right — there are almost 700,000 developers that are taking advantage of that technology to build apps, to build apps for iOS and Android and various pieces of digital eyewear. And the use cases that they’re attacking are all over the place right there. They’re shopping, they’re gaming, they’re entertainment. Some of them are industrial, as well. Some of them might be product visualization, or other types of industrial apps that they’re building with computer vision.

On top of that library, though, PTC has then taken that technology and we’ve built purpose-built offerings for things like — as you said — you-see-what-I-see, or expert knowledge capture, or an offering that we call Vuforia Studio, which lets you leverage 3D CAD data you already have and present step-by-step instructions with animated 3D to make it very, very clear. I think that’s probably how you were able to replace those brake calipers at LiveWorx, right? You were using augmented 3D instructions. And what’s great about that is we’ve been able to make it super easy for our industrial customers to create these experiences at scale. As far as the answer to your question, it’s probably about 50-50 in terms of customers that are using the Vuforia computer vision SDK to go build all kinds of custom things. And the rest of them are really embracing these industrial enterprise use cases with purpose-built solutions that we’re delivering.

Alan: Let’s talk about what these solutions are enabling your customers. So let’s say, for example, we’ll just use John Deere. I was at LiveWorx and I’m walking around and my jaw is literally hanging open the whole time. I’m trying to figure out what do these guys do? I came to LiveWorx thinking, “Oh, they make AR for industry, not thinking anything else.” And then, of course, I realize I get the crash course and “Oh, we make this CAD-like program where you can build a product.” Let’s say you’re fabricating a product digitally and then it’ll also say, let’s enter in the information about that product. I need it to be 500 grams or less, I need it to have this type of tensile strength. And it’ll run all sorts of calculations and give you unique build designs of a product in ways you never could possibly think of as a human. And it’s a collection of all of these tools that are serving this customer. So let’s just take John Deere for a second. I put on a RealWear headset and I was able to see a screen in front of my eyes that walked me through step by step on how to change an air filter. Recognize that I’m in front of the tractor, give me the information, said “climb up the tractor,” pull this door open, pull out the filter, replace the filter, do it up. And within three minutes, I had replaced an air filter on a tractor that I would have assumed the air filter was on the front of the tractor, not the back. It turned me into an expert instantly. So what are the types of things that customers are doing then?

Mike: That’s a great example. What you were able to experience is the output of a product that we actually introduced just in May, and that product is called Vuforia Expert Capture. And basically we built this product, because there’s a lot of domain knowledge out there in our customers. There are people that have been working in industry for a long, long time. And they’re getting to the point where they’re retiring right here in North America, a lot of the baby boomers are leaving the workforce. And companies have this challenge that when those people leave the workforce, their knowledge goes with them. So what we did is we built this tool called Vuforia Expert Capture. And basically what it does is it allows an expert to put on either a RealWear device or a Hololens, and basically just do their job. So what happened in the demo you saw is we had an expert come in and teach us all how to replace the air filter. They went through and they did their job. And when they were done doing their job, we took the device and we plugged it into a computer. And we extracted all of the video, all of the spoken word, all of the bookmarks and pictures, everything that they captured as they did their job. And we prepared that, kind of enhanced it a little bit, structured it, and we published out a procedure. And that procedure is then presented back, either on a RealWear device or on a Hololens or on a phone or a tablet or frankly, I mean, you can even dump it out to Word, if you want it on paper. But that’s all we’re talking about here today. So who wants that?

But what you saw was the result of that, which basically provides procedural guidance. And this is — again — a new product we introduced in May. The market reception to this has been outstanding. I mean, again, this is a real problem that companies are facing every single day. And this is a great solution to that problem, taking advantage of some of the latest technology. That’s just one of the things that we allow you to do. That’s — again — the newest offering. And that’s one demonstration you might have seen. The one where you did the brake repair, that’s one where the situation was a little bit different there. What we were trying to teach you was not something that somebody had in their head, but sort of an engineered procedure. That was a procedure that somebody either in service planning or maybe manufacturing process planning, they would have defined ahead of time and there would be engineering deliverables, animations, and sequences, and prepared processes for that. So in that case, we got to leverage 3D engineering data and use that to present to you how to get the job done. And what we’ve realized in our AR journey here, is that there are different constraints on affordances that a company might have. They might not have 3D. They might have knowledge in people’s heads. And Expert Capture is important. They might just need to be able to access an expert remotely. And that’s where our you-see-what-I-see — or we call it Vuforia Chalk — offering is most relevant. Or they might have a highly engineered set of information that they want to present to somebody. And really that whole spectrum has to be respected. And we’re trying to embrace that with a true enterprise AR suite.

Alan: What are some of the other ones? I know there’s a couple of different things here within the Vuforia family.

Mike: Yeah. So there are four key offerings today. The first we’ve talked a little bit about and that’s Vuforia Engine. That is the foundational computer vision SDK that you would use most of the time with Unity. You can use it with other 3D modeling or rendering tools and build custom apps. Then we have three offerings really targeted at the industrial enterprise. So the first of those is Vuforia Studio. And the key story there is that allows you to reuse 3D CAD data you already have. It seamlessly integrates with our Thingworx platform, which allows you to bring in IOT data — data from frankly any digital source — and then create AR experiences really, really quickly. This isn’t deep programming with computer vision, it’s basically reused 3D, add the content you want, sort of decorate your scene, and you’ve got an AR experience, literally in a matter of minutes. So that’s our Vuforia Studio offering.

Alan: Yeah, the first time I saw Vuforia Studio and Thingworx was actually back at Augmented World Expo in Silicon Valley, maybe three years ago?

Mike: Could have been, yep.

Alan: Three years ago. And you guys were not trying to reinvent the wheel with like, “Hey, we need to have image recognition that’s precise”. It was “No, here’s a barcode. Look at the barcode, it’ll recognize it, and then overlay the data.” And I thought that– QR code, not barcode — and I thought sometimes we as developers, we’re overthinking things. A QR code allows you to identify an object really quickly, rather than try to put it through a database of a thousand machines that all look the same. That was a really easy way to do it. And then once you’ve got that, you can just add annotations, you can bring in CAD data, you can overlay the CAD 3D model on top of the actual physical unit and teach people how to use it. Teach me how to fix it, that sort of thing. And that was three years ago. And what I saw this year was basically the real practical use cases of that technology. There was kind of like a coffee machine, I think was the demo. And now it’s expanded to boats, and tractors, and all sorts of things. What’s the craziest thing that you’ve seen somebody work on using AR?

Mike: Well, let me make a really important point, based on the story you just told first. And that is– first off, you’re right. We have evolved from image markers and QR codes to 3D CAD data being used to help us recognize a shape, and then overlay the geometry. I mean, you may have seen in our CEO’s keynote where we were actually originally using CAD data, but basically looking at a table full of parts, and then being able to identify which part is which. So that’s not technology that’s ready for mainstream today, but that’s sort of that idea taken to an extreme. But another important point is, you sort of recognize that three years ago when you saw this technology, we showed up with what I would call a very pragmatic approach.

What we’ve learned is that it’s really important to meet the market where they are. There’s all kinds of crazy things that we could potentially do. And a trap that customers often fall into, is they imagine the most outlandish thing that AR computer vision technology *could* do for them. And what we try to encourage them to do is identify things that are practical, that are going to have a business impact, that are going to be valuable and move the needle. And frankly are achievable, let’s go do something bite-size and make an impact, and then build off of that success and go on. So there’s this element of pragmatism. There’s this idea of meeting the market where it is, not showing up and saying “You’ve got to spend bajillions of dollars.” or “You need the most outlandish high-end hardware.” or whatever the case may be. Just identifying business problems that they have, that are well-suited with AR technology that’s available today and then going off and solving problems for them. So I’m glad you saw that a few years ago. And that’s a mantra that we really hold dear and continue to drive into our customers.

Alan: One of my previous interviews was with Dr. D.P. Prakash from GlobalFoundries. He was saying that the Vuforia Expert Capture system is decreasing time to generate standard operating procedure manuals by 10x.

Mike: That’s right.

Alan: I mean, that’s a big number. When you start to combine AR and AI, then you’ve got– the world is suddenly this magical place, where you can manipulate data and then display it in ways that we’ve never really contemplated before.

Mike: Yeah, I mean that– and that’s– I’m glad you had the chance to speak with DP; he’s a great guy, and we’ve had the chance to work together closely, actually. But you’re exactly right. I mean, when you think about applying AI *and* AR, you think about providing people with — really — superpowers. I mean, you give them the ability to understand things — that people can’t understand — through the power of AI, and then visualize that stuff in the context of the physical world where they’re actually doing their work. And that can have profound implications, like tenfold increases in terms of productivity when you’re documenting your SOPs.

Alan: One of the things that you guys have done very well, is being advocates in promoting augmented reality to the industrial workforce. And one of the things that you did was a joint piece with the Harvard Business Review called “A Manager’s Guide To AR,” but it was also AR-enabled. So if you downloaded the app, you could bring the white paper to life, and this factory popped up. What was the genesis of that?

Mike: It’s been an interesting journey, right? I mean, you’ve been working in AR for some time, so maybe this isn’t a surprise to you and your listeners. But five years ago, when we were talking with our customers about the potential impact of AR, they would look at us and say, “What’s AR?” That article had to have examples of what AR was, right? This idea of presenting digital content in the context of the physical world. Now, of course, the good news is that we’re largely beyond that. That article was written several years ago. I think a lot of the key elements are still relevant, but I think a lot more people know what AR is now, and we’ve sort of gone through a journey from “What is AR?” to “How would I ever use that at work?” to now discussions about real value and tenfold increases in productivity and all of those kinds of things. So it’s been an interesting journey over the last five years or so, as we’ve progressed and educated the industrial enterprise market on the true potential here.

Alan: We’re still very early in this technology and you guys are pushing the limits so you have more experience than most. But one thing that I found really amazing is that I was at a bicycle show recently, and the Cannondale bikes have a– well, it’s a custom, it doesn’t say PTC, but I recognized the shape. They have a QR code on them. How are they using that? I didn’t pull out my phone and make it work, but I saw the Thingworx tag on the bicycle. Now, is that shipping with every bicycle? What are they doing with that?

Mike: So that’s actually called a Thingmark. It’s a combination QR code and AR marker. So basically it provides unique identification, so our system knows what bike is this? And then we use it also to place the content. It’s 000 for the augmented content. And what Cannondale is doing, is they originally wanted to help their technicians in your local bike shop — their dealer network, if you will — understand the new features on their bikes. For some of their bikes — it’s not available on all of them, but some of their higher-end bikes — they built an AR experience. And that AR experience does a couple of things. It teaches the dealer what the important features are of the bike. So what are the new capabilities and what are the performance specs and all of those kinds of things? It also provides them service instructions for how to do certain things to the bike, replace the shocks, or whatever the case may be. And then finally, it also provides spare parts identification. So the technician, instead of pulling out apart and trying to find it in a manual or find it online somewhere, they can simply look at the bike. And then in AR they see what all the part numbers are so they can order replacement parts.

Alan: That’s amazing.

Mike: It’s a very, very cool app. And what they quickly realized– this is due in part to the fact that if you’re a cyclist, you generally like to tinker with your bike anyway.

Alan: [chuckles] Yes, you do.

Mike: Their customers, as well as their dealer network, were interested in this technology. So they’ve seen quite a bit of our uptake there. and it’s become a bit of a sales and marketing tool as well for them.

Alan: It’s interesting you say that, because I had Jonathan Moss — head of learning for Sprint — on the show, and they rolled out AR training to about 30,000 staff. And because, of course, you can keep track of how many times it’s used and stuff, they kept seeing certain employees were using the training 10, 20, 30 times and they couldn’t figure out why would a staff member take the training so many times. So they went into the stores to figure out how they were using it. And what they were doing is exactly what you’re saying. They were taking their training and using it as a sales tool in the store.

Mike: Oh, that’s awesome.

Alan: [laughs]

Mike: The unintended uses of technology is amazing sometimes. That’s a great story. And there are all kinds of cases like that, especially with technology that’s as compelling as the technology that you talk about on your show. People, they get so excited by it and they want to share it. They want to evangelize it, almost. And it’s a great thing.

Alan: Some companies are seeing such dramatic improvements in process, from 20x-ing their expert capture, to increasing sales by 20, 30, 40 percent by decreasing training times by up to 100 percent. It’s kind of one of those unique, rare times in a technology’s life cycle where people are — like you said — evangelizing this technology. And it’s almost to a fault, because if you think about it, this is a direct competitive advantage that companies have right now over companies that aren’t doing this. And so by them telling the world about it, they’re kind of saying, “Hey, here’s our competitive advantage.” and letting everybody else know, which is really wonderful, because I don’t think we’re in a net sum game of humanity. There’s enough to go around. There’s business for everyone. So it’s really interesting how in these early days of this technology, everybody’s rolling up their sleeves to make it and also evangelize it. And then thank you for being on the show as well.

Mike: Yeah, it well, it’s my pleasure. And it’s a pretty exciting time to be involved in technology. And I think the key is — and part of what your show, I think, is helpful at doing — is distilling what’s real. It’s important to set realistic expectations. It’s important to really understand where is the value opportunity? Where does this stuff work? Where does it not work? It might work there in the future, but where does it not work today?

Alan: What are some use cases that you guys have worked on, or worked with that were just kind of like, they had a slight improvement, but you’re like “Nah, maybe not useful here”?

Mike: I think that the potential impact for AR across the industrial value chain is deeply profound. It will fundamentally change the way that we interact with the world around us. But when you factor in the reality of where does content come from? How comfortable is digital eyewear? Can I work truly hands-free, with all of the benefits that AR promises, for an entire shift? Some of those things aren’t quite there yet. And then frankly, the computer vision technology is still maturing. It gets better every quarter. We come out with great new innovations, but it’s not a human eye connected to a human brain yet, not yet anyway. Those limitations can get in the way of some of the more advanced use cases. But as we’ve talked a little bit about, there’s so much potential impact right now, whether it’s capturing expert knowledge, sharing expert knowledge in real-time, or presenting compelling instructions and other 3D and digital data in the context of the physical world. And what we’re really encouraging our customers and our clients is to work with us to identify those opportunities, and let’s go drive some real value there.

Alan: That’s like music to my ears. So there’s been all sorts of companies use your tools. One of them is Hot Wheels. I mean, I don’t know about you, but I grew up with Hot Wheels. I had little race cars.

Mike: Absolutely.

Alan: How is Mattel using AR?

Mike: Yeah, I would speak for Mattel and many of the other toymakers. A lot of them are Vuforia customers. And what they’re doing is they’re recognizing that the nature of play is changing. You and I grew up with Hot Wheels. You and I did not grow up with iPads. [chuckles] And kids today, they do. So the challenge for some of these toymakers is, how do they bring a digital element into the physical world of the toys that they make, whether we’re talking about Lego, whether we’re talking about Hot Wheels, whether we’re talking about Mattel and a hundred other companies. Augmented reality gives them the ability to do that. It gives them the ability to supplement their physical toys with an experience, whether it be animations or gameplay. All of those kinds of things, which really resonates with the kids that are playing these games today. So that’s a great space for us. And we’re really lucky to have a lot of great toymaker customers using our AR tools.

Alan: You actually mentioned Lego and I know Lego has been doing a ton of stuff in AR over the last few years. We had Eden [Chen] from Fishermen Labs on the show and they’ve done a lot of work with Lego in Denmark, to not only animate the boxes, but– I was just on actually, if you go in walmart.com/lego and then you click the “see it in action” button, you can now drop the Legos toy set on your table, and see it animated and see how it plays in front of you. And I mean, that’s all web-based.

Mike: That is very cool.

Alan: Let’s take a look at that. So right now, everything that you’re building is app-based. Are you guys moving towards a web-based offering in the future, or is that something on the roadmap?

Mike: It’s something where we’re looking at. As with everything else, as technology proliferates and standards are established and embraced, we really have the opportunity to drive this democratization even further. So that’s something that we’re there were researching. The advanced research team is looking at that. What I can tell you right now, is that app-based is really what the foreseeable future has for us. Whether that app is a broadly applicable viewer, like we have with Vuforia View, or custom-tailore apps that a toymaker like Lego or an automaker like Mercedes Benz will make for a particular use case, doesn’t really matter. But in the near term, that’s really where a lot of the focus is.

Alan: One of the things that people have to realize is that companies like RealWear, for example, RealWear is a head-worn display that allows you to move this articulating arm into your side of view and see almost like a maybe 10 inch iPad, 10 inches from your face so that you can see stuff. But it’s not really AR. It’s just kind of augmenting, giving you a screen. It is, by all accounts, the lowest possible tech of this. It’s not doing image recognition, it’s just literally showing you either PDFs, or videos, or information and being able to capture that using a camera and project it back. And they just raised $80-million. So I think we’re– as a collective group, we need to take a step back from trying to invent the future of the future of the future, and say “Hey, the tools we have right now are driving real ROI value. How do we leverage those the most so that we can fund the future of the future kind of things?” And I think you guys have done a great job on that.

Mike: We’ve got a great partnership with Andy Lowery, the CEO of RealWear and all the folks over there. I think they are a great example of that point I made earlier around sort of pragmatism. Meeting the market where it is. That device is intrinsically safe. It’s got long battery life. It’s got a hot-swappable battery. Does it provide the deep immersion of some of these other pieces of digital eyewear? No, but for some of the use cases out there, that’s not required. That’s a device that meets that need very, very effectively. And I think that as the Qualcomm XR-1 chip, this new augmented virtual reality chip that’s been built for those kinds of devices, as that gets adopted more, you know, we’ll see more and more advances in the digital eyewear technology. But there’s a ton of value to be realized today. And that’s a great example.

Alan: You really hit it there. And it’s funny, because you look at something like Magic Leap, they raised $3.5-billion, almost $4-billion now. They’ve built this beautiful device that does spatial computing, spatial mapping, spatial audio, but you cannot use it in any industrial use case yet. It’s not IP rated, it doesn’t have safety glass. So you’ve got these two extremes, one, that they just bomb proofed a display for your eye, and the other one they made the most advanced spatial computing device ever made, but didn’t make it available or useful for the enterprise. It’s an interesting dichotomy there.

Mike: Yeah, but like you said earlier, it’s early days. I am quite sure that the folks that Magic Leap are going to recognize how much value there is in the enterprise space, and figure out that they’ve got to have certain characteristics. And I think that there’s a lot to happen in front of us in the realm of digital eyewear. Sometimes I think about 15 years ago when maybe you had a smartphone with a great camera, and I had one with a huge screen, and my friend Matt had one with a keyboard on it.

Alan: If you’re talking fifteen years ago, I had a belt. And I had a phone on one side, I had my camera on the other side, I had my Palm Pilot, which wasn’t connected to Wi-Fi, which was just literally a calendar on the backside. I looked like Batman, I had a bat belt.

Mike: All right. But what do you have now? I bet you a hundred dollars there’s a black rectangular iPhone sitting on the desk in front of you. Right?

Alan: There is a black device here, that has multiple cameras and it’s got all the things. And we’ve exponentially every year getting better and better. Better. OK. So you’re [garbled] you think about this all day, every day, I’m going to put you on the spot here. Timeline for ubiquitous eyewear in the public.

Mike: Not taking the bait.

Alan: Ahhh, dammit! [laughs]

Mike: [laughs] I do believe that it will come, and certainly our grandchildren will have that luxury. But listen, there’s– again, it’s early days. There’s a long way to go. There are many questions left unanswered at this point. We know a little bit about how Google thinks about this. We’re beginning to see glimpses maybe of how– I don’t know if you saw it just last week, Amazon released the Alexa glasses.

Alan: Yeah.

Mike: We have no idea what Apple will do. Facebook’s got–

Alan: It’s interesting. The Alexa glasses are– they’re just audio. Spatial audio.

Mike: They’re just audio, right.

Alan: But they’re direct — literally direct competitor — to the Bose AR offering, the Bose glasses.

Mike: Yep.

Alan: Assuming they’re going to be pretty awesome, because I tried them out and spatial audio, I think, is actually going to drive a lot of value, just with the audio.

Mike: Yeah, I agree. I would say I think that visual cues are gonna be the most compelling. I think we get– scientists will tell you we get something like 85 percent of our input visually, but certainly sound, touch, those are all other important elements.

Alan: Oh, speaking of touch. Have you tried to Haptex globes?

Mike: I have. I was at EWTS last week in Dallas, and I had a chance to play with a whole bunch of all kinds of gadgets. And it was a blast. There’s some cool stuff coming, no doubt.

Alan: I got to play with the Haptex gloves last week at the Simulation Summit. It’s just–

Mike: It’s mindblowing.

Alan: –mindblowing. [laughs] It really, really is. I remember the first time I tried the Ultra Haptics. I was like, “Yeah, I don’t get it.” And then I tried it again, when it was a little bit further ahead, and I was, “Oh, I get it now.” You have Expert Capture, you’ve got Chalk, which is being able to look over somebody’s shoulder. So let’s talk about Chalk for a second, because I think it’s a really important one that gets a little bit overlooked, but it’s very, very important.

Mike: It’s an application for a remote expert assistance. So it basically allows you to see what I see, and it allows both of us — while we’re speaking to each other — to draw on a live video stream of the real world. And what’s interesting about that, is that we’re drawing on this live video stream and what we draw actually sticks to the real world. So this isn’t a case where I take a picture, send it to you, you circle something, send it back to me. We’re both looking at my view of the real world. And if you see something you want to draw my attention to, you simply draw an arrow, draw a circle, whatever the case may be. And no matter where I look, when I come back to that spot, those annotations will be fixed there in space. So this is a tool that is really key for helping, let’s say a junior technician, somebody that’s a novice out in the field. This is allowing companies to save money on rolling a second service truck. It’s allowing them to increase their first-time fix rate. And one of the most exciting things about this technology is that it works on a really, really broad collection of devices. So, you know, the reality is most technicians out in the field, they probably have an iPhone, they probably have something running AndroidOS. And this technology works on many, many of those. It doesn’t require — for example — ARKit enabled devices or anything like that.

Alan: Being able to have an expert — like you said — Expert Capture, there’s people retiring. But it’s not that they want to retire, so much as that they just don’t want to work in a factory anymore. Or maybe they just want to just work a couple hours a day. But that one expert can now look over the shoulder of hundreds of employees and help them and guide them as they go about their day.

Mike: Yeah, I agree. I think– sometimes I think about these drone operators that sit in the bunker out in Las Vegas. They remotely control the drones all over the world. I think about the remote experts like that sometimes. They’re sitting in some really comfortable environment, they’ve got a bunch of screens around them, and they’re supporting this army of technicians out there with their knowledge. It’s a powerful concept and our customers are getting a lot of value out of it.

Alan: It’s one of those things where I think we’re scratching the surface, but the surface is pretty amazing and it’s driving real ROI now. What problem in the world do you want to see solved using XR technologies?

Mike: What problem do I want to see solved? I think that we– I think the problem that’s most interesting to solve for me is mistakes, right? There are so many mistakes that are made in the world, that are made because people can’t get access to the right people or they don’t have the right information or they were trained on how to do something a year ago just in case they ever encountered it. And the way that I see XR technology applying to the world we live in is shifting that information delivery from “just in case” to “just in time.” And when it’s delivered just in time, a lot of stuff gets done a lot better.

Alan: I want to say thank you. This has been an eye-opener. PTC’s LiveWorx. If you haven’t been to LiveWorx, you gotta go the next year. The stage that you guys set up at that event rivaled EDM stages. It was incredible. Multi-level stage with lights and lasers, and it was just mindblowing. And you really know how to bring people together in the context of industrial applications. You could feel the palpable energy. So visit ptc.com to learn more. Yeah. Is there anything you want to add, Mike?

Mike: No way, man. I wouldn’t dilute that message if you paid me. Well said, and thanks for the chance to talk on your show, and I can’t wait to see you and all of your listeners at LiveWorx.

Alan: Welcome to The XR for Business podcast with your host Alan Smithson. Today’s guest is Teppei Tsutsui. For the past decade, Teppei has been the managing partner of the GFR Fund, and he’s led several key investments in acquisitions in Tokyo, including GREE’s acquisitions of open feet and Funzio. Teppei is currently leading the GFR Fund in San Francisco. You can learn more about the GFR Fund by visiting gfrfund.com.

Teppei, welcome to the show, my friend.

Teppei: Oh yeah. Thank you for having me here.

Alan: It’s my absolute pleasure. You guys were one of the very first companies to start investing in the virtual and augmented and mixed reality space. You come from a gaming background. Maybe just give us a little overview of the GFR Fund, and how this came to be that you’re investing in some of the name brands in virtual reality.

Teppei: Sure. Yeah, absolutely. So the GFR Fund is a seed stage fund that’s investing technology companies, disrupting the digital media and entertainment space, including VR and AR. We have about 40 million under management and we invest in primarily in North America, but also in Asia and Europe, too. And we are backed by ALEC Japanese… more like a strategic investor from Japan and Asia, including GREE, which is a publicly-traded company, a mobile gaming company out of Tokyo, and they also help us investing in companies and altogether. Before launching this fund back in 2016, I was working for a company called GREE. — that’s the same company that I was kind of explaining — and I was the head of the corporate development team based in Tokyo, and also here in San Francisco, so that I was kind of working together with them, just looking for lot of the venture companies in the gaming — and VR and AR — space, as well. So that’s how we got started, this GFR Fund, and that’s the relationship.

Alan: GREE is a fairly large company, is it not?

Teppei: It is. So they have about 1.5 billion market cap and they’ve got about a thousand employees across the globe and they’ve got 2,000 billion US dollar revenues. So it’s I feel like a decent company, decent size company.

Alan: That’s awesome. I would assume because — it’s social media and gaming — you would be a direct competitor or something like Tencent. Would that be the case?

Teppei: Yeah. In a way. But the GREE’s more built upon the mobile games, whereas the Tencent sell– they do both PC games and some sort of consoles, too.

Alan: Got it. I’m looking at your portfolio here under the GFR Fund. You’ve got VRChat, Spaces, the WaveVR, Littlstar, InsiteVR, Streem, Torch. Let’s go through these — if you don’t mind — and kind of talk about each one one at a time, and why you guys chose to invest it. But first I want to know: you talked about your fund being $40-million, when did that fund start?

Teppei: The first fund was launched in April 2016, so it’s almost like a four, three and a half years ago. And then we also launched a second fund, beginning of this year.

Alan: Great. And then, so you’ve got– that’s $40-million total under management?

Teppei: Yes. Yeah. Well, $20-million, the first one is still $20-million. And the second fund is also another $20-million.

Alan: So you’ve got 40 million to play with. You’ve made some early-stage bets, what are the check sizes that you invest in?

Teppei: Yeah, we typically do somewhere between $100k and a half million. But overseas, the body’s about $300k-100k. And we also keep one-third of the fund for the full loan, so that we can maybe continue to support the companies that we invested, up onto a series B or series C, so depending on the situation in the company.

Alan: I mean, something like VRChat, for example, I know– I believe they just raised another round, was it?

Teppei: Yeah, there is a $10-million series C lead by HTC, and also another fund called The Makers.

Alan: Now did you guys participate in that round as well?

Teppei: Yes we did. Yeah.

Alan: Okay. I’ll call out the companies in your portfolio, and maybe talk to us about why you invested in them, why they’re a good company and go from there. Let’s start with VRChat, because it’s pretty amazing.

Teppei: Yeah. The VRChat, we are really excited about what they are doing in a team. I think we first met with them late 2015, when they’re still at the Rosenberg Ventures — a surrender program — and they were quite small back then, it’s only like a thousand users, but what was really fascinating about them was they have real active users. A small number, I don’t remember– maybe like a 100 people, a 120 people, but they’re spending like five or six hours per day in the VR. So we are quite excited about those. They have a passion and also the activeness of those plastic users to what they are. The concept of VR. So we see in looking back on the– there’s a shift from a PC to the mobile. We saw that there will be a huge shift from PC/mobile to a new platform like virtual reality. So we saw that the social and communication is a key concept, a key sector. That’s– it’s going to be a new format for communication, with new format of the social VR. And VRChat is really the one that we found out. So I think we are the first institutional VC invested in them and since then we’ve been really loved just working with the team and also how they run the user base.

Alan: The first time I was in VRChat I was on a show– I can’t remember what the show was called, it was– Oh! “Gunther’s Universe!” And what it was, this guy had made– and the great thing about VR chat is you can make your own environments, you can make a room however you want, you can have gravity, you can have no gravity, there’s all sorts of features about this. So we were in this like stadium-sized thing, with people everywhere. It was kind of like Ready Player One, where you’re talking to somebody who is a human avatar and then you turn around and somebody is a giant robot. It was really cool, because no matter what the shape that they took you could have a conversation with somebody, and it was really cool because as I went around the room there was people from all over the world in that room and they were super passionate, super excited. Just to your point where very very active users. And not only active in the fact that they’re going there and talking to people, but building. And I think that is really cool, that’s one thing about VRChat I loved. And we look at something like Altspace — which is a direct competitor to VRChat — and it doesn’t seem like it’s moved or changed since it was released in 2014, 2015. Nothing really been improved in my opinion. If anything, it’s gotten worse, because there’s more people in now and it’s lagging. What are these guys doing to keep their tech stack ahead of the curve when it comes to adoption, as more and more people come onto the platform? Obviously they need to scale their bandwidth. What are they doing there?

Teppei: Yes, they have a pretty sharp user growth for the last maybe 12 months, so they’ve been spending a lot of time just keeping up the servers, how the community grows and there’s no toxic behavior in the community too. So the last 12 months they spend so much time in just that, moderating the community and also making sure they can have fun. Specifically, the new users, once they are in, they have a comfortable experience just interacting with other people. I guess the main point for them to be successful is just to listen to users. So they have some sort of community advisory group and they actively talking to the actual users, what they feel like, what they want in the community, and they try to reflect– they take those feedback really seriously and implement as soon as they can. For the technical side, just make sure that they can support like a 100,000 people at the same time. And also the other parties, just to make sure that the communities doesn’t pull apart. Just what other big Sure Shot user. We did have like a really good time in there.

Alan: Imagine that: a company that listens to its customers and community. Seems so basic, but so powerful. [laughs]

Teppei: Yeah. It’s– I think sometimes it’s quite hard, because some people say they want to dance and some people say they don’t want to dance. So you just have to make sure that what’s the best for the community. So sometimes they have to make some judgment, as well. Some people may not be happy, but in the overall the community can just be in a good shape and can grow.

Alan: Let’s move to Spaces, which — again — in VR, but now this is more location-based entertainment and I know there’s, what, three locations now?

Teppei: They have about six locations now.

Alan: Amazing. So they’ve six locations. So I had the opportunity to meet with Shiraz [Akmal]. We were both accepted to the Museum of the Future Accelerator in Dubai.

Teppei: Oh, really?

Alan: We spent a week in Dubai together. So I got to meet them there. But really amazing stuff. One of their title pieces, or one of their licensed IP titles is Terminator. So tell us about those guys, and why you think they were a great investment?

Teppei: Right. Kind of the same story, so I met Shiraz and Brad [Herman] — CTO and CEO of the company — maybe late 20,16 when they are still working for DreamWorks. So they’re like the– they are the lead team members of the [garbled] for the any XR type of the experiences, and they are just thinking to spinoff the team out of the parent company. So we talked a few times, they showed us what they are working on, and it’s like– it’s just a great team and combination: Shiraz is more like a business guy and Brad is like a really technical person. So we just loved what they’re working on, and also the team itself. They were originally trying to create some the content platform for VR. So they’re like really great I like creating content too. So when they’re talking to Chinese company Shin, which is one of the largest creator of a theme park in China. So they– sunshine actually invested in them, and also they had a big agreement for the contents of distribution in China. So it seems then they’re more focused on the content, to creating content for a theme park, like a location-based VR stuff. Right now they have about five or six locations, three in US and one in Japan line to buy. So that’s– they have Terminator IPs and it’s been great. It’s been really great working with them, as well.

Alan: VR Park is this crazy– it’s like a video arcade that got carried away. When you walk through the mall, all of a sudden the whole arcade facade, the front of the building is like wrapped around over top of you, and buildings are kind of coming down. It’s almost like, what’s that movie– Inception, where buildings are coming from the ceiling down on you, and it just an incredible facade. And then when you walk in the room– they’ve taken location-based entertainment to the next level. And one of the things that I think is really special about what they do, and is starting to trickle down with things like Spaces and these companies is that the experience before you get in the VR headset is as important as the experience while you’re in it.

Teppei: Yeah.

Alan: It’s really, really important to get you excited about it, builds the immersion before you even put the headset on. It’s very exciting. So where do you see the future of that going.

Teppei: Location-based VR is like one of the categories that’s quite successful in monetization and also user attraction. And I think the– not only Spaces but other companies that got deployed, like Sandbox VR. So all companies have a slightly different approach. The Void is more like creating bigger attractions, like partnering with Disney. And Sandbox is creating like a snackable, easier to use kind of experience in the shopping center. So it’s just a little bit different, but I think for the location-based VR is like that’s what the people want, they just to go there to try something new. So it’s been– I think it’s been a great future for the VR industry as a whole.

Alan: I think it’s one of those things that people originally said “well why would I go to a location when I can just buy a VR headset at home?”. But what people don’t understand is that the experiences that companies like Spaces and The Void are doing are really bringing a different added layer of complexity, so they’re able to put you inside of a space where you can walk around you can touch things you can interact with things. And it really cannot be replicated in a vibe or an Oculus Rift or avoid I’m sure spaces is going to do this as well but using haptics and vibration plates and sent machines and spatial audio. All of these things together create an immersive experience that you cannot get at home and he won’t be able to get it home ever because as the home technology gets better and better of course the location-based entertainment is going to get better and better as well.

Teppei: Yeah.

Alan: Speaking of which, let’s go in and talk about Littlstar. I know the guys at Littlstar. I’ve known them for quite a while and they’re more of a distribution platform for VR videos and content. So talk to us about them.

Teppei: Sure yeah. So yeah like you said, Littlstar’s the content distribution platform. Not only for VR, like 360 video, but also AR, and also other contents too. So they have a platform on their own app and Sony PlayStation’s, as well. And they’re distributing lots and lots of content to the end-users, to consumers. And recently they also deal off the interesting blockchain technology that’s called Ara, and they’re also trying to replace old existing content distribution platform with a unique to build their own technology built by like click the link to blockchain or so that they can do more decentralize the content management, after all. They’re out of New York, but the founding team recently moved to LA, to just get more closer to the content creators. That’s basically in LA. They are just doing fine. The PlayStation is like a relative measure of deal sales and user attraction for them. And Sony has been a great partner for the company. Sony has been helping them get more content and also deal more access to more users as well.

Alan: It’s interesting that PlayStation– you hear so much hype about Oculus and HTC, but PlayStation is just delivering VR headset after VR headset. And two days ago, I was on my way to Chicago and in the airport there was a huge demonstration setup for PlayStation VR. And it wasn’t up and running yet, but you could see they were building it and it had… 6 demo stations built into it, right in the middle of the airport. And I thought that was really a great sign.

Teppei: Playstation has been really– they’ve been running the gaming platform for a long time, so they know to how to get more content on the platform and combining not only VR, but also like a gaming, simple like a PC or the console gaming, but together I think the more attractive to users. And the Playstation not only the Littlstar, but for other companies, they’ve been great content to work with.

Alan: Amazing. I’m actually just looking up these Ara blockchains, ara.one, is that the one?

Teppei: Yeah. That’s the one.

Alan: That’s pretty cool that they’re able to do that. And basically the blockchain content platform, very cool. Now, is that a separate company or is that under Littlstar?

Teppei: It’s a separate company.

Alan: Oh, great. So you’ve invested in that as well?

Teppei: No, we didn’t. We couldn’t really invest in the blockchain companies under the court fund one, because of the limitation on deal that’s been missing focus.

Alan: That makes total sense. The next one here is WaveVR and WaveVR started off as a DJ platform, so you could DJ in VR. And I actually had the opportunity to DJ at the Microsoft Build conference in — I want to say 2015 or 2016 — in the Wave, which was incredible. Obviously at the time it was very early days, and it wasn’t great for DJ’ing, but at least people got the understanding of that I could control things in VR for an audience. And since they’re– one of the things that that struck me about this is that it wasn’t just “here’s a way to dDJ” but here’s a way for entertainers and artists to expose their music and their art to different people, but on a platform that allowed people to not only just consume it but to interact with it. And one of the things that I heard — and I don’t know if this is true but maybe you can put this straight — is that they have a mechanism where you take these little pills and you share it with somebody, and then you go on a separate experience with other people. Is that correct? Is that still a thing?

Teppei: I’m not sure.

Alan: I thought that was amazing; selling digital drugs for real money.

Teppei: [chuckles]

Alan: But anyway, if that’s not part of it, then we won’t talk about it. Basically what they’re saying is a new type of interactive music experience, and tell us about WaveVR. Oh, Wave*XR* now.

Teppei: Yeah. They changed the name to WaveXR, because they’re not really– not only in VR, but more like broader experiences. Yeah. WaveVR is like a social platform, more like for virtual concerts. So anybody want to play the DJ or some like instruments in the virtual space. Yeah, like you mentioned, they started as more a platform only for the VR, but they’re now expanding to cover any PC, or consumer, or any platform that’s being done in virtually. Recently, they’ve been working with more real DJs and most the other famous artists and creating a virtual concert. One concert, the last month, the concert got about 400,000 users interacting in real-time. So that’s really good, one of the biggest concerts, even bigger than a real physical concert. So it was the– kind of showed the potential in holding a virtual concert, because there’s no boundary for the people to just join the concert. They can just join the concerts whenever they can, from online, from PC, or from mobile, they can still watch on Twitch. So that’s quite a– opening up a new opportunity for the artist, as well.

Alan: Absolutely. This gives the artist a whole new way to not only interact with their fans, but create new art as well.

Teppei: Yeah, absolutely. And also I’d like to try to work with the US more publishers, the game publishers, and also deal like the platform, add a platform as well. So that let’s say like the VRChat has– want to have some concert. They can just provide all the technology behind it, so that VRChat is just more like a platform that can partner with WaveXR, to organize this kind of technology concert for the users.

Alan: That’s pretty awesome. Moving towards kind of the more enterprise side of things you’ve got InsiteVR, which is a VR meeting space for architecture, engineering, and construction.

Teppei: Sure, yeah.

Alan: Tell us about that.

Teppei: So InsiteVR is the– it’s more like a Skype using any 3D models inside. So they’re now targeting– they’re more focused on direct architects, like construction companies. And they’ve been doing great, especially the turning point for the company was the Oculus Go and Oculus Quest. Before that, the PC– any of the tethered VR headset, they have to ask the customers to buy the PC or console or any platform that the contents can be played on. But with the introduction of the Oculus Go and Oculus Quest, it’s like a standalone headset, so they can actually bundle the hardware with their software content. So that’s kind of accelerated their user, their content’s growth and they have now more than 100 customers, paying customers, and they are making quite decent revenue as well. Yeah, we are real excited about their future, too.

Alan: That’s pretty cool. I really love it. And it’s interesting, because we’ve been doing an industry analysis on all the different technologies and– or a competitive comparison for all the different things. And the collaboration platforms, there’s actually 59 that have been identified. That’s a busy space. But I think, even though there’s 59, I think there’s room for all of them, to be honest with you. Because as companies start to realize the full potential of having meetings in VR, and being able to have design meetings, especially being able to bring in an architectural drawing or a CAD file, discuss it on the fly, having people from Japan and San Francisco in one room together without having to get on a flight. The savings for one flight pays for your annual license 10 times over.

Teppei: Right, yeah. That’s true.

Alan: Amazing technology and I think that’s a really– it’s gonna be a big hit for you guys. Let’s talk about– I know nothing about that one, sorry, I apologize. But what’s YBVR?

Teppei: Yeah, YBVR or first the streaming optimization technology for 360 video. So it can work with the content studio. Right now they’re focused on the sports, so they work with companies like streamers and any of the broadcasting companies. That’s one of the stream 360 video to users online. And they are currently working closely with some companies like Rakuten. Rakuten, they’re also a Japanese company, they own a few soccer team, they also like a big sponsor to the Golden State Warriors, and they also organize some tennis events, tennis matches. So they work with YBVR and YBVR can just to capture and export the games, and broadcast the 360 video to the users in real time. As long as I know, they’re the only company that does those optimization technologies in real-time. So yeah, they’re a really unique team, unique product and we are also really excited to recommend them, too.

Alan: It’s interesting. My one of my podcast today was with Michael [Shabun] from Insta360.

Teppei: OK.

Alan: And the first interview this morning was with Michael [Mansouri] from — another Michael, lots of Michaels today — from Radiant Images and Radiant Images has been doing a lot of work with live streaming, especially now that they have their Insta360 Titan 11K camera. It’s going to be more and more important to figure out streaming technologies for this, for live events.

Teppei: Yeah, exactly.

Alan: Exciting stuff. it’s exciting times, my friend. We’re in the middle of a revolution and you guys seem to have made some pretty good bets on technologies that are going to revolutionize this entire industry.

Teppei: Yeah, we are really excited about it.

Alan: So another one that I am familiar with is Streem. It’s actually– Charlie Fink’s son is part of that. And one of the things that Streem allows you to do is use your phone to get instructions for something, so basically almost like a remote expert. And so–

Teppei: Sure.

Alan: Talk to us about Streem.

Teppei: Streem, they have a technology — mobile AR-based technology — that’s helped the expert talk to the users over the phone and they combined just streaming the phone with the computer vision technology, so it can– they can detect all those details about devices or any furniture they are talking to. And that’s going to help the experts more accurately analyze data, what the problem is. The CEO is Ryan Fink. It’s kind of an interesting story, because I met him when still he was working for the previous company. I met him after CES — maybe three years ago — and he kind of indicated that he’s like leaving the company soon, to start his own business. And when I heard about his concept, I thought that this is going to be really huge. I know that home service space is a really huge market and there hasn’t been any solution like that before. So we just jumped on the opportunity and just now started working with him. And like the VRChat, I think we are the first money into their company.

Alan: It’s funny, you’ve made investments in companies that we’ve been friends with. So it’s awesome to have this like, “Oh I know all these people, it’s great.”

Teppei: It’s a small world.

Alan: [laughs] It really is a small world. Another one is Torch, Paul’s [Reynolds] company, and Paul is actually one of our mentors. And Charlie Fink is one of our mentors at the XR Ignite accelerator, [too]. Yeah. So we’ve pulled together. Right now we’re at 67 of the top mentors in the world for the accelerator. We wanted to create an accelerator that would take companies like these whether they’re pre-investment or post-investment and really help them to do business with enterprise. And so we’re really a B2B SAS marketplace-type accelerator, but Torch’s Paul is one of our mentors for this. And Torch is an AR authoring tool that lets you create augmented reality experiences. It started off as more of a prototyping tool, but it looks like it’s really starting to become more than that. So, talk to us about Torch.

Teppei: Yeah. Paul and his team, they started out as more like a design tool — a prototype tool — but as they listened to their customers and users, their users actually were more looking for some sort of authorizing tools in AR, so the user can just create contents and publish on multiple platforms at the same time. So as they listen to the users, they just tried to change the strategy a bit, and now are more focused on the AR-based authorizing tool. They’ve been working with the big companies so far, and… I think they haven’t made an announcement yet, but they’ve got a few good deals orbiting him.

Alan: Yeah, they make fun demos. There is one of planets all lined up on a table and there’s a travel one. This is really cool, and you know what? A great group of people doing fantastic work, and I can’t support them enough. If you want to visit, it’s torch.app. What else have we got here that’s VR-related in your portfolio? Did I miss anything?

Teppei: We actually made about 22 investments in the VR and AR space. That — I think — only covered maybe half of it. [laughs]

Alan: Wow.

Teppei: Plus 10 more companies, but I guess we don’t have time to just go through them. But just to highlight…

Alan: Do you just want to talk to them quick, and then… we’ll do a part 2!

Teppei: Sure. There’s a company called Sturfee; they’re creating mapping in the computer world. So they maybe fall under the category of the AR cloud, but they’re more focused on outdoor, and the technology is quite unique too. They take satellite images of the city and they create a 3-D mapping of cities, like actual city streets and buildings. And if users use the phone camera to extrude some buildings, it can just identify where that camera is located, where they are heading, and where they’re looking at. With that, content creators can create actual games or any advertising signs on the buildings or streets attaching to it. So it’s interesting technology, and they have good traction too. They recently announced a multi-year agreement with one of the biggest mobile carriers in Japan. They’re just great, really unique technology, and a strong team.

Alan: OK. What’s next? We got Sturfee.

Teppei: Yeah. Another company is apprentice.io. It’s a New York-based company and they are an AR/AI driven solution for pharmaceutical companies. They automate everything, every single process, of production and R&D development cycles at their pharmaceutical companies. Those like pharma need to record every single step.

Alan: This is like PTC’s Expert Capture. But for pharma.

Teppei: Right. You can set a course, they can send human resources and just streamline the process.

Alan: I have a customer for you guys. That’s great. We’ve got to talk quickly — I know it’s not to B2B — but Facemoji. How cool is that?

Teppei: Facemoji’s a really interesting company. So they have a kind of interesting video/photo app that anybody can like a broadcast or take a photo of yourself like a selfie with your favorite Avatar or some. So you can create any person any like animals any Avatar is this based on like what you need what you want you like and you can just like a livestream like whatever you want to say and capture it. The video showed a video of it and share with your friends and families. So that’s like a really interesting new way of self-expression for young teenagers and quite popular in the teens. So it’s like more like a Gen Z type of the other way users.

Alan: It’s really cool; it takes a photo or a video and turns you into an emoji almost like the one that Snapchat bot anyway. But it’s in three dimensions which is pretty cool. So I assume that the future will you’ll be able to drop yourself into AR and VR and all those sorts of things. So very cool. What else have you got, anything else? There’s I’m sure there’s a bunch you got, 10 more so.

Teppei: Yeah I guess. OK. So one of our companies is called Phiar, it’s a car navigation tool based in AR. So it’s more like AR on a Google map. So if you’re driving from one point to the other, you have to see the Google map on a flat screen; but instead of looking down at an app, if you use a Phiar, it’s just using the smartphone camera.

Alan: So basically, instead of putting your phone on your dashboard and you have it up high, it’s kind of on your screen and it’s overlaying the directions on top in realistic which that’ll probably be where we go with glasses anyway. So they’re kind of ahead of the curve. The only thing I have with these air navigation tools is that it’s so easy for Google to come along and just do that and I wonder about the long term longevity of these types of things anyway. My job is not to get into that but it’s definitely interesting technology.

Teppei: I’m sure Google is working on it, but Phiar’s team is like really nimble and fast. So I think they can get to the market for the first product on the market; that’s a good advantage for them. And Google has been creating the Google map. They also bought Waze too. So they can be both working on something but acquiring some other consumer programs.

Alan: Yes I think there’s gonna be lots and lots of acquisitions that it’s already starting last week there was Apple acquired Akonia. Verizon acquired Jaunt and Facebook or Control Labs. So the acquisitions are coming.

Teppei: It is. It is coming.

Alan: Which is fantastic. Well, I want to thank you for taking the time. I mean, we could basically talk about this all day every day and probably still never get to everything but I want to say thank you for taking the time to spend with us today and explain these different companies that you’re invested in and your strategies. It’s really been enlightening. What is one problem in the world that you want to see solved using XR technologies?

Teppei: That’s a great question. I’d just say, remote control like that. Maybe the concept that Streem is trying to solve, but you don’t have to be actually there but you can just see the things feel things and talk to other people but you can actually feel the presence. So that’s the like maybe the biggest program for VR or XR is solving and I’d love to see it out there that’s going to be happening in the future. The new future.

Alan: So what do you mean, touch it? Haptics?

Teppei: Haptics; that you can see things with the video maybe, but you can feel and actually touch the things. So with the haptics, maybe grabbing a wall or just grabbing these glasses; you can still feel that haptics. And it’s not only haptics, but to combine everything together so that’s like more a total solution for you in AR.

Alan: You know, it’s amazing. Last week I was at the Florida Simulation Summit. It’s a military simulation summit and we got to try the Haptex gloves and there is these ugly looking giant Gloves they look like you’re a giant robot. And if anybody they used to have the Nintendo Power Glove? It was like that, only with cables and stuff hanging out all the end.

Teppei: Yeah.

Alan: Connected to a giant box on the table. But once you put the gloves on you put the VR headset that you can’t see them anyway so it doesn’t matter when I put on the VR headset I reached out and there was somebody in front of me I could touch them and I could pick up things and feel like they were really in my hand. And one of the things I picked up I was that I was supposed to be a medic was medic training and I picked up a needle and they said take the lid off the needle and stick your finger on it. And when I did that it scared the crap out of me because it hurt like a needle and obviously didn’t hurt me but because I was looking at a needle and I put my finger on a needle and it buzzed. It stuck with me and it was that combination of tactile and visuals and sound that just I was fully immersed in I think I have to go for some PTSD treatment after that because it was a very graphic simulation.

Teppei: Wow.

Alan: But I think you’re absolutely right in doing that. Have you tried those gloves yet?

Teppei: Not that one yet but I tried a couple other Haptics gloves.

Alan: Nice. What’s the best ones you’ve tried so far?

Teppei: Hmmmm…

Alan: You don’t have to say anything. All of them really aren’t very good yet. [laughs]

Teppei: Right.

Alan: [laughs] Let’s just leave it at that. The Haptex ones were great except for the fact that you have to have a giant box.

Teppei: Yeah. That’s the biggest problem for haptics right now.

Alan: There’s new ones that just were released today. They’re just in the research phase but they’re just like a little almost like a little skin that goes over your fingers. So we’ll see how that goes.

Teppei: Wow, that might be interesting.

Alan: Thank you for joining the XR for Business Podcast with your host, Alan Smithson. Today’s guest is Sandro Tavares, and Sandro is with Nokia. He has more than 20 years of international experience in the telecoms industry, with the past 18 working with the Nokia family of companies. He’s had several key roles that have been integral in shaping the latest evolution steps in the mobile industry and communicating these advances to Nokia service provider customers around the world. He is currently the Head of Mobile Networks Marketing, a position in which he leads a global team focused on promoting Nokia solutions for mobile networks, including 5G. To learn more about the great work that Sandro and his team at Nokia are doing, you can visit nokia.com and if you want to dig even deeper, you can just type in “Nokia 5G” into Google.

Sandro, welcome to the show.

Sandro: Thank you very much, Alan. Thanks for having me.

Alan: It’s my absolute pleasure. I’m super excited about this. We’ve had people from telcos, people from industry. We’ve had all sorts of great people on the show. But we’ve never had somebody from a company that is building the literal infrastructure that all of XR will run on. And that’s 5G.

Sandro: Yeah, that’s great to hear. Really an honor to be here and to be the first one discussing this topic with you guys.

Alan: So tell us, what are you guys doing at Nokia? Why will this impact XR?

Sandro: Well, I would say that probably a lot of the listeners, they know Nokia for the devices, right? From the cell phones in the past and the early stages of the smartphones. But Nokia has actual history that goes much beyond that. It’s a company that was founded 150 years ago. It started as a paper mill in the countryside of Finland. It has evolved through several different industries. And in the last decades, it has been focused on technology. So our two biggest businesses in the past were the handset business, so the devices, the cell phones as we know them, and then the networks that actually support these devices. So the networks that are provided to service providers, operators all over the world. Then after Nokia has divested these devices business few years ago, then we focused 100 percent on our networks business. And this is what we are doing now. We build basically all generations of telecommunications in the past, and now we are heavily focused on making 5G a reality. And that’s where basically what takes my time throughout most of the days, just talking to customers and discussing about the benefits that 5G will bring to the world, that just goes much beyond just providing broadband. And looking to the applications that can be built with 5G, quite a lot of them are actually going to be enabled by XR technologies. So you can think about a myriad of applications where XR, AR, and VR are going to be important and that are going to be leveraging 5G to actually get brought to the market and delivered to customers.

Alan: Obviously I’m a little biased, being the XR for Business Podcast. Let’s dive into some of those use cases. Let’s take a broad. I was told real millimeter-wave 5G in its perfect condition will be able to be 100 to 1000 times faster than what we’re using currently. And to put that in perspective, somebody said you’ll be able to download the entire Game of Thrones, not an episode, but all the seasons in a few minutes.

Sandro: That’s absolutely correct. So if we talk about data speed, you would say that an average connection on a 4G network — nowadays, of course, that depends on the country and where you are — but it’s usually on the tens of megabits per second. So something around 30, 40 if you’re in a pretty good network. Our aim with 5G is to get to an overall throughput first sight of about 10 gigabits per second. And even on the initial deployments that we’re seeing right now that they’re not using — let’s say 5G — to its full capacity, you’re already seeing speeds that go beyond 1 gigabit per second. So it’s really a fundamental shift in terms of download speeds, which is very important for XR applications, though.

Alan: 4G, we’re looking at, let’s say, 10 to 50 megabits per second. And for 5G, you’re talking 1 to 10 gigabits.

Sandro: Yeah, if you’re talking about millimeter wave implementations, yes.

Alan: That’s a thousand times increase.

Sandro: Yes.

Alan: Or, well, hundred to a thousand times.

Sandro: A hundred to a thousand times. Yes.

Alan: Holy crap. So when is 6G coming? I heard Trump talking about 6G.

Sandro: [laughs] Well, that’s going to take a while, right? So we’re basically starting the implementation of 5G. We’re not even scratching the surface of the possibilities we’re gonna have with 5G. 6G, I’m not gonna say does not exist, but it’s still in the very early stages of standard definition, even discussions of what 6G would be. And we still have quite a lot of years ahead of us. And still quite a lot of value to develop on top of 5G, before we should even start thinking about 6G.

Alan: It’s funny, I was totally kidding about–

Sandro: I know, I know.

Alan: But you guys are already– If you look at the world we’re in, it’s very hard for most companies to look out[wards]. Most companies are in a quarter-to-quarter fight for quarterly earnings. Telcos are in a different position. Telcos and obviously infrastructure companies like Nokia, where you’re building the infrastructure, you have to have a 10- to 15-year roadmap in order to prepare for this. How long is 5G been in the works, then?

Sandro: Well, for quite a long, long time. So I would say that at least– so when you’re talking about really definition of standards and getting deep specifications, detailed specifications done, we can easily talk about like five years, even more than that. The initial steps to 5G, they were being discussed when we were still kind of implementing 4G, or even beginning to implement 4G. And that’s why when I say that 6G is in works, it is in very early stages. So it is a market that has these long cycles. So that is definitely important. It doesn’t mean that, of course, we’re not also fighting our daily or quarterly battles, but we need to have a long term view of our business and of our technology evolution.

Alan: Okay. So let’s dive into, let’s just take 5G and say, “OK, what are the benefits?” You’ve got data speed is one of them.

Sandro: Yeah.

Alan: That’s like, no problem. That’s a no brainer. Now, there’s other features of 5G that make it a unique technology to power XR. What are some of those other features?

Sandro: Absolutely. So I would say that one of the most important ones — if not the most important one — is actually related to latency. When we move to a 5G network, there are some fundamental changes on the overall architecture of the mobile network, that allow us to reduce significantly the latency of the connections as well. So if you take like a traditional 4G connection right now, you may be talking about latency in a real live network about 30 to 40 milliseconds, which is already pretty good. On 5G, the aim — for some specific applications — is to get to around one millisecond, not for all applications, but we need to be able in 5G to provide around one millisecond for some of the applications that require that. And even right now–

Alan: Listen, AR is going to be one of those applications.

Sandro: Absolutely.

Alan: If you have anything more than a five-millisecond delay, you’re going to a bunch of people with glasses vomiting in the streets.

Sandro: Exactly. Exactly. This is one of the first points we made when we started talking about 5G to our customers. A few years ago was about these reflexes, vestibular ocular reflex or something like that, that basically means that if you’re not on a low latency level, that you’re required to stream and interact with AR and VR content, especially VR, then yeah, you may get people actually feeling sick. So this is really important.

Alan: Funny you say that, I was on a webinar last week with Kay Stanney of Design Interactive talking about cybersickness and the causes and cures of cybersickness, and latency is one of them. You know what another one is? The inter-pupillary distance — the IPD adjustment — of the headsets. That’s why we see an increase in motion sickness in VR with women, it’s because the headsets are actually designed with too wide an IPD for women.

Sandro: That’s interesting. I haven’t heard about this one, but yeah, it makes a lot of sense. Yeah.

Alan: Yeah. Your eyes are diverging, trying to look outward rather than inward. Then you get this kind of headache and you get this nausea. So I know it.

Sandro: Interesting.

Alan: We’ve got data speeds, then we’ve got latency. So data speeds are 10 to 100 times faster.

Sandro: Yeah.

Alan: Latency is 10 times faster.

Sandro: Yeah, at least. Yeah. At least 10 times faster even. I mean of course you have — and we can even get a little bit deeper into that — but depending on the type of implementation that you use for 5G, you’re gonna get different levels of latency. But yeah, at most for applications that require that, we’re looking into this kind of single milliseconds, around a design target of one millisecond. And a third aspect that I would mention is around the concept of network slicing. That in placing to actually this point that I made about applications that require low latency, applications that require specific characteristics. So if you’re looking to a mobile network right now and basically all kinds of networks, you’re talking about resources that are being shared. Let’s say if you are under the coverage of a 4G site, you’re using a VR application in any capacity. Your neighbor is watching Netflix and your other neighbor is, I don’t know, playing online, gaming online. You’re all sharing the same resources. And basically, if there is congestion, everybody gets affected. With a concept of network slicing, you can actually create or dedicate parts of the network to a specific customer or to a specific service, meaning that for a service that requires ultra-low latency — let’s say a hypothetical VR streaming service — the network would dedicate resources to this service, to make sure that it works according to specifications, which means I need to be providing ultra-low latency, I need to be providing very high data rates. For example, for another application that is basically, well, let’s say basic broadband to check e-mails and so on. Well, you don’t need low latency. You don’t need that much speed. So I can dedicate specific resources for that. And most important, let’s say that you have a mission-critical VR application and someone else close to you decides to watch a Netflix video in 8K and starts stressing the network. You are not going to feel that because your network resources, they are reserved, they are dedicated to you. So the only people that are going to be affected by someone watching an 8K video, if that gets too congested network are the guys that are using the same network slice. So people may say, well, is this a VPN? No, it’s more than a VPN, because it actually works across the entire network and it works dynamically. And it is created based on the nature of the service, while–

Alan: Let me ask you a question. I make sure that my phone has priority. Is this going to be like a premium service?

Sandro: It can be a premium service. Actually it can be part of even a full service that a service provider or a partner of the service provider is offering. So let’s say this is going to have a lot of applications, for example, in enterprise cases. Let’s say that you’re talking about the training solution that utilizes VR or AR to train sales troops that are on the field, or even to train service or support troops that are on the field remotely. So the company that is providing this training is going to close a deal with the service provider, to dedicate a slice of the network for that service. And then they are going to be using that and making sure that these resources are available. Let’s say that while a hypothetical streaming service for VR content gets online and then you can buy a package for this VR service through your service provider, that includes that when you are using data application that your connection goes to this specific network slice. So you get like a guaranteed quality, guaranteed service that you need for that specific application. So, yes, it is a kind of a premium service and it can be part of, let’s say, a higher added value offer that a service provider can put together. So not only just serving connectivity, but actually providing a full service together with partners or even by themselves.

Alan: So we’ve got data speeds, latency, network slicing, which is really awesome. And then the last one, I think is going to be bandwidth.

Sandro: Yeah.

Alan: You want to walk us through bandwidth?

Sandro: Oh yeah, absolutely. So it goes pretty much together with the data speeds. So basically when you’re talking about 5G, one of the differences of approach compared to 4G is actually that we’re stepping into frequencies, transmission frequencies that we were not operating with before for the mobile service up to now. So if you get to the LTE networks that are deployed, so the 4G networks that are deployed, you go all the way to the range that we call centimeter wave, which can go up to 2.5, 3.5 gigahertz, which provides you quite a lot of spectrum for you to build your network and then transmit data fast. With 5G, we are moving further into the spectrum and we’re stepping to the domain that we call millimeter wave, which is frequencies that get to like 28 gigahertz, 35 gigahertz and so on. So very high on the spectrum, which means that as higher-end, the higher you get on the spectrum, the more bandwidth you have available for you to deploy your networks. And that allows us to provide better speeds. And also we have better data overall traffic capacity. That is one of the new things. Of course, it is a kind of a tradeoff. The higher you go on the spectrum, the shorter distance the signal can travel. So when you go to really millimeter wave deployments, which you can see — for example, in US — some of the deployments, you can say — for example, AT&T, Verizon — the operating millimeter wave, you get a lot of capacity, but you do not get that wide coverage that you’re used to seeing in LTE. There’s ways to fix that by deploying more base stations, by complementing your coverage with spectrum on centimeter wave and even low band. But the fact is that while operating on these millimeter-wave bands, you’ve got to be very mindful about how you’re going to build your coverage and how you’re going to make sure that your customers do get the performance that they need. But it is definitely a very important aspect that we are covering with these new 5G deployments.

Alan: Let’s talk more about the actual practical applications of this technology. So what will this allow content creators to do in VR and AR?

Sandro: Absolutely. So when you talk about like VR and AR so far, I mean, the networks that were available, they are, I would say, somewhat limited, when you’re talking about real-time applications of AR and VR. Of course you can stream to some extent, not a problem, especially for VR content that is already produced. When you’re talking about building interaction and transmitting a real-time application based on VR and AR, that’s where we start to hit the limitations of the network, not only in terms of latency that impact really how we feel when we are using the technology, but also about the bandwidth and the throughput of the network. So with 5G, we’re going to really be able to take the next step and implement VR into real-time applications, be it VR conferences– actually, when we were launching the network with Sprint here in the US, one of the use cases that we have shown to the folks that were attending the launch was actually a real-time virtual reality call with one of my team members that was in another site close to where we were having the event. So you could actually talk to this guy that was at the Venice Beach Pier, while we were in a hotel in Marina Del Rey in Los Angeles. And you could see that it actually felt as if you were seeing this guy right in front of you.

Another possibility is around, of course, gaming. We see in — probably all of you guys have heard about these — the gaming industry right now is growing tremendously. It is already a business that is significantly bigger than movies and music, which is something that probably a few years ago it was unthinkable of. And still, there is quite a lot of demand on the market that is not served due to basically adoption barriers that exist. So not everybody can invest in a gaming console or on a professional computer to play games. And with that, the concept of playing– hosting games on the cloud has been growing quite a lot. So that basically breaks the adoption barriers and allows pretty much everybody or anyone that wants to play a game to just hire a service and pay a smaller amount and have access to computers and graphic capacities that is hosted on the clouds and play whatever game they want. Needless to say, to be able to make that work, knowing how demanding these applications are, you need to have a network that is able to deliver on the transfer capacity and on the latency that would be required for these games to work. And then 5G is really the answer for that. And it goes even further in terms of capacity requirements if you’re talking about VR games. So just to kind of finish my point. So when we were in the Mobile World Congress in Barcelona, earlier this year, which is like the biggest event for our telecommunications industry. We were showing together with Sony and Intel a VR game using the content of the new Spider-Man movie that just went out a few months ago, where then we would have people playing — using a VR headset — against another person that would be in another booth — in this case, in the Intel booth — and they would compete being different Spider-Men in the city there, who would actually complete the tasks faster? So that was a pretty cool application of showing, first of all, VR gaming live for basically whoever was visiting our booth there and showing how actually 5G was enabling this experience between two different players that were in different locations, even though at the same fair.

Alan: Was there a distinct advantage with 5G, versus not?

Sandro: Oh, absolutely, absolutely. So without 5G, we simply couldn’t make it work. And we have another case that we show in these events, which is a game of ping pong. So a virtual ping pong. So you have basically the two players, they are wearing VR headsets and then they start in 4G, and then they see that they are unable to hit the ball because of the latency. So when they see the ball coming, it actually already went and they’re not really able to play. Then you move them to 5G, and they can actually play ping pong as if they were actually using a real ping pong table and real ping pong rackets. That shows the impact of latency very, very clearly. And quite a lot of the demos that we’ve put together to show the impact of 5G, they do take advantage of VR and AR, because these are actually domains where we can clearly see the impact of low latency communications and high throughput communications in action.

Alan: That’s incredible. So what’s the roadmap for rolling this out for everybody? Because we’re talking about it in very controlled environments,.

Sandro: Yes.

Alan: Gaming arena and maybe a hospital suite, but these are controlled environments. When can we expect pervasive 5G, where I’ve got my phone and my phone is screaming fast everywhere I go?

Sandro: As I mentioned, we’re in the very early stages of 5G deployments, which actually happen faster than initially thought by the industry. So back in 2017, we were saying 5G would be around by the end of 2020, beginning of 2021. And in reality we had the first networks getting commercial in the beginning of 2019. That said, we’re still really scratching the surface. So out of the four major operators here in the US, for example, they all launched 5G, but most of them are just taking a hotspot approach, because they’re operating in millimeter-wave. They’re still kind of deploying their network and building coverage and so on. So if you get a phone right now, you’re gonna have a great service, but not everywhere on 5G. In some areas you’re going to be in 4G, you’re still going to get great service, but that’s 4G. We do expect these to evolve pretty fast throughout the rest of this year and 2020 here in the US. So potentially by the end of 2020, you’re already going to have pretty wide coverage of 5G in the biggest cities of the country. In other parts of the world, you have countries, for example, like South Korea, where you are already reaching quite a lot of subscribers with 5G. So they reached the threshold of their first million subscribers just a few weeks after the initial launch. And now they’re already counting — if I’m not mistaken — more than 3 million subscribers on 5G in the country.

Alan: So does that mean they’ve sold 3 million 5G devices as well?

Sandro: Yes.

Alan: Wow.

Sandro: They had early access to like one device from one provider. Now there are way more on the market. But yes, this is a market that has the most number of subscribers on 5G right now.

Alan: Sandro, do you have a 5G device?

Sandro: Not yet.

Alan: [laughs] We’ve got to get one.

Sandro: Yeah! Well, to be frank, I just ordered one on Friday.

Alan: Oh, cool! Which one?

Sandro: I got a Xiaomi. And a Samsung. I actually got two, for testing purposes and so on. But like there are, for example, if you go here in the US, you have options also with LG, with OnePlus, that they’re also pretty good as well. So yeah, I’m in. Luckily, in my role, I get to test quite a lot of them. So I’ve used a few test phones, but then I got these two now to do some additional tests in the US and, well, another thing that is worth mentioning is that of course quite a lot of people in the market, they’re still waiting for the iPhone to support 5G and well, we’ll know when that happens. It was not with the 11 that just came out, but let’s see for the next iteration if you’re going to be supporting 5G as well.

Alan: It’s interesting that Apple is taking a longer approach to bring their 5G device to market. Do you know why that is, or is there a reason, rationale beyond that?

Sandro: It’s hard for me to comment on their strategy. But if you’re looking to the devices that are currently available, they have way less options of frequency bands than you usually have on a device. You’ve got a 4G phone now, it’s going to support those zones of different frequencies. So you can basically use it wherever in the world. The 5G devices are getting to the market right now. They’re going to support just a handful of 5G frequencies. This basically could be due to the maturity of the chipsets. That may be one reason that they want to have like, let’s say a wider approach and not carry too many different SKUs, which means that it may be better for them to wait a little bit more. But I mean, I can’t really comment on their plans.

Alan: Yeah, but it’s coming for sure.

Sandro: Oh yeah.

Alan: For sure.

Sandro: Yeah.

Alan: OK. So let’s move the conversation to more XR specific.

Sandro: Sure.

Alan: You mentioned being able to collaborate, being a collaborative space. But let’s be honest, there are VR experiences now, that we can collaborate in 3D space over Wi-Fi.

Sandro: Yeah.

Alan: And that’s working fine. But if anybody who’s been in Altspace or been in some of these multi-user collaboration platforms, they are a bit laggy.

Sandro: Yeah.

Alan: Sometimes they glitch out of it. And so this promise of 5G seems to be kind of that magical part that will allow us to push the limits of this technology much, much harder and much further than we ever thought possible.

Sandro: Exactly, exactly. So of course, if you’re talking about especially like a local application and so on, in a controlled environment, Wi-Fi can do quite a lot. The thing is, when you really get to real-world implementations, where you’re going to have an environment that sometimes is not fully controlled and that also where you cannot really guarantee that everybody is going to be in the same network. So you can guarantee low latency and so on. That’s where really 5G is going to make a difference. And that’s not only for VR and AR. We have a myriad of applications, enterprise applications that– well, they somewhat work under Wi-Fi, they work better under 4G, but they do– where you do not have the full benefits until you really get to what 5G can bring to you. So one good example, going a little bit outside of AR/VR is for industrial automation.

So, for example, controlling robots in a factory. Most of the factories right now, they’re using fiber to connect these robots — or sometimes even copper — just because Wi-Fi is not reliable enough. But what they lose with that is the ability to quickly reconfigure a production line, which in the world of today happens way too often. So 4G already starts bringing some possibilities for that. But if you’re really talking about a fully autonomous factory, like in a fully automated factory, then 5G really plays a big role. And coming back to the VR and AR point, I think that this is a story about utilizing VR for connecting people remotely into content that can be– of course it can be entertainment and most importantly, business-related content is going to be extremely important. So let’s say if I take any company that has a support troop on the field. So let’s say even like a service provider, it has to have people that are visiting sites and so on. Someone, some other company that needs to train remotely sales or support troops, being able to utilize AR and VR to train and support the execution of activities on the field is extremely important. And then 5G is going to come really to guarantee that this connectivity is available wherever they are, that they do not have to rely on streamed content that is not real-time or to have to basically scramble to get the perfect Wi-Fi connection to be able to access the content, because not always that’s going to be available.

Alan: So let me ask you, if we wear glasses, let’s say Apple comes out with glasses in, — let’s call it five years, I don’t know — Magic Leap gets miniaturized, maybe North glasses expands their field of view, we’ve got access to glasses. And those glasses are relying on 5G and they’re giving us this three to five-millisecond latency. What happens, then, when we switch between 5G to 4G in our experiences?

Sandro: If you get to this point of switching from 5G to 4G, what you’re going to see is an increase in latency, which can become a problem depending on the application. And then a reduction on the throughput capacity, which for AR may not be that big of a problem, but for VR can become a problem. There are ways to kind of offset this problem though, or these challenges. When you’re looking to building the 5G network, one thing that is very important to actually enable all of these is that we further distribute the compute capacity of the network. So of course, like the 4G and the 5G infrastructure, they both rely quite a lot in cloud computing capabilities to be able to provide all of the processing power that is required. But if you take like what is done in 4G and what is done more traditionally in these networks, we have this capacity being very centralized, being deployed in a very centralized manner. Not as centralized as, for example, you would see on an Amazon or in a Google data center or anything like that, but still very centralized and probably focusing just a few points of an operator countrywide network. When you move to 5G, to be able to enable these low latencies that we were talking about, we need to distribute compute capacity further and then we deploy this concept that you probably have heard about, edge computing and edge cloud. Why am I talking about that? While we are deploying the edge cloud to support 5G, we’re also able to start deploying in these same locations capabilities related to the 4G network.

So you can have like, local breakout of traffic, you can have caching of your content being deployed in the edge of the network, which would then — even on a 4G environment — help you reduce a little bit the latency that you’re going to have while accessing this application. So you would, in brief, kind of utilize the architecture that is being viewed for 5G to also enable 4G services and to enable — and most importantly, to host — these applications to make sure that you minimize as much as possible the latency, even if you are on 4G. So you would minimize the impact of a potential drop from 5G to 4G.

Alan: Really exciting times. You know, you talk about edge cloud computing and that’s the ultimate goal, is being able to have all the compute power in the cloud, rather than on the device.

Sandro: Exactly right. And of course, like device compute is important, but we become much more efficient when we have, well, the cloud taking care of the processing of the applications. But to be able to do that on real-time applications, then edge capacity becomes key. Because you cannot rely– for an application that has a strict requirement of latency, you cannot rely on a data center that is anywhere in the world. I mean, you need to really make sure that you’re getting your content from a data center or even an edge compute site that is close to where you are. Otherwise, the application’s not going to work.

Alan: It’s really just amazing at the amount of technology that’s going into this. How many employees are working on this at Nokia?

Sandro: I cannot give like the specific numbers, but Nokia right now is a company with more than 100,000 employees all over the world, and quite a lot of our focus right now is on 5G. Of course, it’s very obvious that our R&D guys and our Bell Labs team that is working like on really the future of 5G and even 6G, they’re all deeply involved in that. But I used to say that every person in our organization is part of our 5G success. Because be it in my purchasing, or CFO team, or marketing, sales, we’re all involved in delivering these networks and making sure that our customers are getting the best service they can, and that we make 5G a reality for the world. Because this is beyond just a technology standard, this is fundamentally transforming the way a lot of industries will work and it can potentially improve the lives of a lot of people. So we are all excited about that.

Alan: Yeah, it’s really an exciting time. Sandro, I really want to say thank you for taking the time to not only explain 5G and how it works and the benefits, but really to dive deep into why it’s important to the XR community. I don’t think a lot of people truly understand 5G and what it is, and this has been a great kind of precursor to that and fully understanding the technology and why 5G is going to enable and unlock the full potential of XR. I think it’s just– it’s early days, but like you said, it’s coming faster than anticipated. And I think if you look at glasses like the Nreal glasses, that are running off a phone device, super lightweight, low price, these things are coming and they’re coming faster than I had anticipated as well. So it’s funny, I took this 10-year approach, I was like, “OK, by 2025, these things will happen.” And we’re already seeing an enterprise. Well, it’s not 2025, it’s 2019, and things are being rolled out now at scale.

Sandro: Oh, exactly. Exactly. It is indeed like exciting times. I think you can clearly see by where I’ve been talking about how excited I personally am.

Alan: [laughs] Of course.

Sandro: All these and yeah, I’ve been very happy to be here with you, Alan, discussing this and talking to all your listeners.

Alan: I got to drop a bomb on you here.

Sandro: Sure.

Alan: We haven’t announced anything, we will be announcing in 2020. But we’re working on a product, that our mission is to democratize education globally by 2037. So in 17 years from now, we should be able to — using cloud computing and XR devices — provide really, really personalized, contextualized, real time learning, to any learners around the world, to learn anything they want. So you look at a machine and it’ll tell you how it works. You look at somebody walking down the street, it’ll tell you where they got their clothes from. Being able to learn at the speed of automation and AI is going to be essential as we move into exponential growth of everything. And I think 5G is going to really unlock that ability to distribute this content around the world. Not only distribute it, but also create it and let people create the technology and the content. I think that’s really where this is going to shine. So I thank you for all the work that you and your team are doing to build the infrastructure of the future of learning.

Sandro: You know, this is really exciting to hear, really exciting, Alan. We’re looking forward to hear more about it. And yeah, I mean, these kind of things that give us purpose.

Alan: Exactly.

Sandro: Yeah. I mean, we all like technology, but we like it even more when we can clearly see a purpose for it, and we see people benefiting from it. So this kind of initiative you guys are doing is absolutely great. So delighted to hear about it.

Alan: I appreciate it. And I have one last question for you. What problem in the world do you want to see solved using XR technologies?

Sandro: I mean, it may sound that I’m kind of surfing on your wave here, but definitely education. I have always been personally a great advocate of education everywhere. And I see that this is actually where a lot of the gaps that we see in the world are being generated, like the lack of education. So really, if we can use AR and VR to break barriers and enable really the democratization of access to tech education — to education in all senses — is going to be a fundamental step for a better world. So definitely this is for me, really a great potential that this technology has for the future. I’m going to be looking forward to seeing this happen.

Alan: Well, we’re going to make it happen together, my friend.

Sandro: Absolutely.

Oh, and Alan gets a spaceship.

Alan: Thanks for joining the XR for Business Podcast with your host, Alan Smithson. Today’s guest is Jon Cheney from Seek XR. I’m really, really excited to have Jon on the show. We traveled all through China together, pitching to rooms full of Chinese investors. And it’s been an amazing experience. Jon is the CEO and founder of Seek. They’re a leading provider of web-based augmented reality for e-commerce brands. I just found this out about him: he’s a composer as well, for films. SeekView is his web-based product built for e-commerce brands. They’ve won several business competitions, including Pluralsight LIVE, where they won $50,000. They’ve announced some really big partnerships with Walmart and Lego and some other stuff. We’ll get to that. But if you want to learn more about John and the work they’re doing at Seek, it’s seekxr.com.

Jon, welcome to the show, my friend.

Jon: Thanks so much, Alan. Great to be on the phone with you today.

Alan: I’m so excited, man. It’s been a minute since we got to just talk and hang out. We had a great time in China. And since then, you guys have done some amazing work. Talk to me about what you guys are doing. I saw some things from Lego and Walmart. And you’re building 3D visualizers for big companies. What’s going on?

Jon: Yeah, man, it’s been quite a journey. Where we are today is way far away from where we started. [chuckles] There’s a lot of people in the XR industry that could probably chime in with similar stories. With this industry that changes so fast, you got to be ready to move with it. But from the very beginning, we’ve had one overarching goal that actually hasn’t changed. We wanted to make augmented reality easier to find and access, and make this a technology that was more accessible. And where we’ve landed is in web-based AR. And there’s obviously hundreds of use cases for web-based AR, but where we really decided to focus is on the e-commerce realm of things. And you’re talking about Walmart, Lego, and those were a couple examples of some of our recent partners. But we’re really focusing on the e-commerce and the retail sector, because there’s just huge benefits when a customer, the end-user is able to use this technology to see a product that they’re considering purchasing. Whether it’s a little Sonos speaker, or a new couch, or a new shoe, or whatever that is, to be able to see it in your space, in your environment, and kind of have all those questions answered that you don’t really know until you get the product, typically. It’s just a huge benefit, and so because of that very obvious benefit, it’s taking off in a big way, and we’re fortunate to work with some of the big, big companies out there at this point.

Alan: So you created this web-based AR visualizer. Walk us through, like I’m on a website, I’m scrolling down, I see a product, I’m like, “Man, that’s really cool, but I don’t know if it’s gonna fit my living room.” — maybe it’s a coach, we’ll just use a couch as an example — I don’t know if it’s going to fit. You can press a button, using the camera on the phone, now it’ll project that couch into your space. Is that what I’m–?

Jon: That’s exactly right, yeah. And the cool thing about what we’re doing here, is it’s appless, right? You don’t have to download the Amazon app, or the IKEA app, or whatever. This can happen right on any browser, on Chrome, on Safari, Android, iOS, it doesn’t really matter. We’ve kind of worked on building out this ecosystem, so you just tap on this link or this button and it opens up the camera. It measures the environment in a really quickly, and then that object appears in its true size, right? And so we’re using a lot of the technologies that Google and Apple have been working on — the ARKit and ARCore and things like that — of being able to measure the room around you, and then be able to engage with it and start to interact with it and start to answer those what-if questions without having to order–

Alan: Without having to answer them at all.

Jon: Yeah, exactly. Without even having to ask. And that’s exactly right. It speeds up that decision process for the consumer, they’re more likely to buy it. And on the back end, because they made a more confident purchase in the beginning, there’s a lot less returns, too. So it saves problems from the buyer’s standpoint, as well as the hand that doesn’t want to have to deal with returned products and that whole process.

Alan: What are some of the companies that you’re working with? Can you talk about specifics?

Jon: Yeah, sure. Again, we’ll talk about Walmart for a second, and then we’ll talk about Nestlé. I think they’re an interesting use case as well. But Walmart is obvious, they have 300 million products and the task of getting 300 million products turned into 3D objects is something we can talk about a little bit. But really, they just focus on different categories. Obviously, furniture and home goods, things like that are an obvious starting point for most stores, most retailers that sell lots of things.

But where we started with them actually was with Lego. Lego’s a very visual products, it’s a very fun product. And Lego has actually been kind of an innovator in the AR space for a long time, for five or six years. If you go to their Lego stores, they have iPads, tablets there where you can see things come to life. And so they’ve been doing a lot of really cool things, but they have a lot of problems around the deployment of that. It’s really, really difficult to update apps, the iPads break, and things drop, and there’s a lot of just kind of forcing it, right. And so we’ve worked with them to make the experience much, much easier. Really, what Seek does the best– easiest way to compare what we do, is we’re a lot like YouTube in terms of just the hosting. With YouTube, you upload a video to YouTube, and they give you a link, right? And then you, as the video uploader, don’t even have to worry about which devices your content is compatible with. YouTube takes care of that. They make sure every screen out there plays that video. Because that makes their service more valuable. And it’s a great service to you. And so we did the same thing with 3D models. You upload a 3D model to our system and we give you a link. And so because it’s just a web link that then works within a browser, you can do all kinds of things with it, including accessing it from a QR code, which is one of the ways that Walmart and Lego are doing it. You can honestly access it at Walmart.com. You can try it out, I think it’s a Walmart.com/lego and just click on the “see it in action” button and you can try it out. And then there’s a banner that says, “see it in action”, you can click and play with any of those things.

On on mobile browser, you can try that out, or if you’re on your desktop and see it work in 3D. But then in-store, they just have QR codes right next to the products. It says, “Hey, here’s this new Star Wars set! Scan this QR code to see it come to life!” Boom! And so you click it and your camera opens and there’s a 3D Lego set in front of you with the AT-ATs walking around, AT-STs walking around and shooting things. And it’s pretty cool to have that come to life. So that’s a really interesting use case because it’s working, of course, on the website, but also in-store in retail. And so that’s a really cool crossover.

I think that AR can be used to enhance that in-store process, because while it’s cool for Legos, think about that from a furniture perspective. You’re going in and you say, “Hey, you know, I like this couch.” I sit on it. I like it. I’m at the furniture store. I just don’t know if it’s going to fit in my house. And so the sales rep says, “Hey, you know, don’t worry about it. Here’s a link. When you go home, make sure that it fits. And if it fits, just push this button and we’ll complete your order and send it to you.” That’s a really cool use case to combine this online and offline experience using a very, very easy to use simple technology. Nestlé is pretty interesting. They actually started working with us originally to help their sales reps. They sell Nescafé machines to convenience stores and grocery stores, and they have end caps. Where it’s like, “Hey, here’s this KitKat aisle end cap in a grocery store.” And so they have sales reps that go around tens of thousands of malls around the world, they go around and sell these things. And up to now, all they do is say, “Hey, here’s a picture of the latest thing.” But with Seek, they’re now able to say, “Hey, here is exactly what that new KitKat end cap is going to look like in your grocery store. How many of them do you want?” And they can leave a link with the store manager. And it just becomes a much more immersive process. And so they started out there and it went really, really well and started growing.

And now, due to some of the new partnerships that we have that we brought to the table with Google for them, we’re enabling some of their content through Google AR Search. Now they’re moving that to their consumer-facing websites, so that customers can see what a coffee machine looks like in their kitchen, before they buy it. So it’s fun to watch even progression within a company. And the different use cases they find about technology.

Alan: I’m watching a Lego airship fly across my desk right now.

Jon: [laughs]

Alan: Then land on the desk, and there’s like a battle going on.

Jon: That like the Avengers one?

Alan: I have no idea, but it’s so good. Hold on, it is the… Avengers. Yeah, the Avengers one. So cool. Oh man, you got to try this, walmart.com/lego and then “see it in action.”

Jon: Yeah, it’s a pretty– I don’t know about you, when I was young I was building Lego sets more often. To have this available, let alone from the benefit that there is from that e-commerce perspective. But it’s just fun, right? I mean, kids love this stuff. It’s really fun.

Alan: I love it. You point your phone, and it basically puts a little flat plane and then drops the Lego set in. And you can zoom all around, and it’s animated so that the Lego people are walking around. There’s a girl on a horse right now, I’m trying a different one. It’s just incredible. Dude, this is amazing.

Jon: How easy was that?

Alan: You know, how easy was that: press the button and it worked. I don’t know.

Jon: Yeah, exactly.

Alan: Really?

Jon: Right? And compare that to where we were just a couple of years ago. “Oh, you want to see this in AR? OK, that’s fine. Here’s the app you download. Go and do that, and maybe you have to create an account, and then you have to go find the product again, and figure out how to get to the link.” This is just: boom, tap it and it shows up.

Alan: It’s so much fun. I’m going to post a little video of it tomorrow on my LinkedIn, because this is so much fun. Well, how do you deal with then — I guess the question becomes — with Lego, for example, there’s maybe, I don’t know how many you’ve got in there, but let’s say there’s 20 sets. You’ve animated them. You made them in 3D. But how do you deal with the fact that they have 300 million products?

Jon: Yeah. Walmart is a very interesting one. Another one of our customers is Overstock and they’re very similar. And we’re much further along in the process with Overstock, we’re fully launched with tens of thousands of products with them. And ultimately, it really isn’t possible for one organization to say, “Hey, we’re going to tackle even 100,000 products.” That’s very expensive, prohibitively expensive for most people, and for Walmart to take on even a fraction of the 300 million products is crazy. For Amazon to take on– Walmart has 300 million products; Amazon has 300 million sellers.

Alan: Amazon’s got 1.4 billion products.

Jon: Yeah, it’s crazy. And how do you deal with that? And I know that you’ve done some work in this area, Alan. And the point is, I think in the long run, it’s gonna have to– I think that phone technology, scanning technology is going to get way better and you’re going to be able to do it just with the handheld devices in your pocket all the time.

Alan: Yeah, the new Samsung 10 does it.

Jon: Right. It does it, but it’s still not quite there. It’s pretty good, don’t get me wrong.

Alan: It’s good, but it’s not perfect. It’s not retail quality.

Jon: Exactly. It’s not to where Walmart’s going to feel like, “Oh, I can put that on my website.” We’ll get there.

Alan: Yeah. I think honestly it’s going to be solved with AI, to be honest. I–

Jon: Totally agree.

Alan: Yeah. Having studied this exact problem quite a bit, I know that it’s going to come down to AI algorithms taking the six photographs that you already have on your website: front, back, left, right, top, maybe the bottom, if you don’t have the bottom just put a black bottom.

Jon: Yep.

Alan: And now you got a 3D object.

Jon: Totally.

Alan: I mean, I’ve seen early attempts at this and they work for very, very, very basic things like a box or a chair, but it’s not even close to where we need to be. But I think give it another year and I think we’ll be there.

Jon: Yeah. A year, two years, three years, however long it is. It’s not very far out. And I agree that the way to really scale it is to automate that. But in the meantime, what these retailers are doing is saying, you know, Overstock says, “Hey, suppliers, we now are enabling this 3D or AR technology on our website. Here are all the benefits that increases conversion by 80 percent, reduces returns by 25 percent” or whatever the numbers are. And then they just say, “Hey, if you want to be in, send us your 3D models.” And so that’s cool. But the problem is, as you probably also know, there are literally hundreds of different variations of 3D models, even if you take the same OBJ or FBX filetype or glTF, one of these extensions. There are tons of variations within that. They don’t all work. Some of them are too big. They’re missing–

Alan: You have to create a standard for them.

Jon: Exactly. Exactly. And so part of what Seek has done that has allowed us to scale up to work with these really large scale operations, is we have built that automation that can take a 3D file and spit out the proper version on the other end.

Alan: What is the version that you guys– what is it, is it a glTF from the backend?

Jon: So, yeah, there’s a few things that we do on the backend. One is Draco file, one’s a USDZ and one is a glTF, and then we have a couple other ones that we use that were playing around with, especially for things like Magic Leap that we’re working with, and some other kind of newer file formats that we just want to be able to support them. But the point is, we want to be able to have the whole process be automated. Upload 5,000 3D objects and then our system goes through and analyzes them and figures out all the inconsistencies. And on top of that, another piece, it’s important that we do is it compresses the file down to where it’s under two or three megabytes, where it needs to be to be used at a consumer level. You click on those Lego sets and you see how long it takes, it’s not very long at all, it’s really fast. But if it was a– I can tell you this, when Lego sent us those files — because Lego actually created those animations, we didn’t do that, we just enabled the technology — but when they sent us those, they were 150 to 500 megabytes each. And that’s just completely unusable. That’s why they have had to — up to now — pre-load them onto an iPad or something like that, because you just can’t have the consumer depend on some sort of 4G or LTE, 5G would maybe handle it, but we’re not even close to being that large scale. So they needed us to come in and say, “Hey, let’s bring this down by a factor of a hundred and then make this available to our users.” So that’s where Seek has really been able to shine, is in that processing and dealing with thousands, tens, hundreds of thousands of 3D models and preparing them and getting ready. And then, of course, that’s not to discount the technical challenges of supporting all of these platforms.

Alan: Let me ask you a question, speaking of supporting all these platforms. Does your WebAR platform work on Chrome on an iPhone?

Jon: Yes, sir.

Alan: Really?

Jon: It does.

Alan: How do you open the camera on Chrome on an iPhone?

Jon: You know what? If I were the CTO, I might tell you, but I’m not. [laughs] I’m not going to tell you. But, yeah. Try it, try it on Walmart’s thing right there. You go to Chrome and watch it work.

Alan: Amazing.

Jon: So, yeah, that’s an important thing. I mean, tomorrow is the Apple event, right? The big day, we’re all saying, OK, what’s going to happen next? Are they going to talk about AR glasses?

Alan: How many AR start-ups are they going to put out of business?

Jon: Exactly. [laughs] Exactly. They come out with their new ARKit 3.4, what are all the new features that are going to come out? And so, yeah, I mean, there’s really cool things happening there. But one of the things that they did, they actually changed the way that they handled textures in iOS 13 here. Anybody that doesn’t know and doesn’t hear this today — which they’re not going to — doesn’t know that that’s happened, every single model that they are hosting in USDZ file format will fail. They will all be broken and they’ll have to go through and fix every single one and adjust the textures and re-deploy all of their content. And so that’s another big problem that we’re solving for brands that work with us. Overstock can’t keep up with that. And they can’t say, “Oh my goodness, we have to reprocess and recreate 50,000 pieces of furniture and 3D objects related to it, knowing that it’s going to happen and knowing when it’s going to happen. Oh, my goodness. As soon as people upgrade to iOS 13, all their stuff breaks.” But for Seek, we just update our installation that’s on these websites. And we’re updating the backend system. Just like if YouTube all of a sudden supports some new device, you don’t have to re-upload your videos, right? YouTube just transcodes it again and sets it right, or fixes the player and makes sure that it works. And so we’ve done that. All of our customers, as iOS 13 comes out, they won’t notice any difference. They don’t even know what happened. They may even know that we saved their bacon. But we learned about this only about a week ago, actually.

Alan: Wow.

Jon: Wrangling with a couple of our developers to say “Alright. Let’s put in some fixes that will make sure that the entire ecosystem that we’ve built — hundreds of thousands of 3D models across dozens of major websites across the world — don’t just die overnight.” Big problems, lots of change. And again, it’s a fun problem to tackle, as we try to help this become more democratized.

Alan: I love the work that you guys have done in such a short amount of time, too. I mean, when we were in China it was about, what, a year and a bit ago.

Jon: Yeah. Yeah, a little less than a year and a half.

Alan: And this was on the roadmap, but I don’t think it was– definitely wasn’t at this point?

Jon: Correct, no. We launched this almost exactly a year ago, September 15th. And it’s grown just at an incredible pace since then.

Alan: Amazing. So what are some of the actual numbers on ROI? How much does a 3D model cost to make? How much does the platform cost? What is the ROI on this? Is there an increase in sales? Let’s talk turkey here.

Jon: Yeah, definitely. In the end, that is why we chose the e-commerce field. That is where the most demonstrable ROI is. You could just run straight Google Analytics and say if they used AR, what was conversion? If they didn’t, what was the conversion rate? And the numbers are pretty astounding. So just to speak, we’ll start from the end, and then I’ll go backwards and talk about some of the costs and how you get there. And I can’t share specific brand names, but we’ll just say a large retailer.

Alan: “[Insert Large Retailer Here.]”

Jon: [laughs] “Insert large retailer here.” That’s right. So we work with quite a few, but one that we’ve done about $10-million of testing with. In terms of not $10-million for us, but $10-million of sales, measured through them is a 150 percent increase in sales conversion. A 150 percent increase! That means if they were going to sell $400,000, they actually sold a million dollars, because AR was used. If AR is used, sales conversion increases by 150 percent. On the flip side, on the back end of that sale, they’re measuring currently a 25 percent reduction in sales returns. So the savings on just both of those number, on each of them individually, are just absolutely immense. The ROI is very, very demonstrable. Seek charges based on tiers. So, maybe if you have a million views to your website a month, then 10,000 a month or something like that. Just depending on– those aren’t exact numbers. But that’s kind of how it is. It’s just a consistent SAS model based on different tiers, based on how big your website is and how many product page views you’re getting, and how many– how often the Seek service is being called, or the Seek view service is being called. And then on the front end, yeah, there’s the setup. And then you have to also have 3D models. If the company has 3D models, occasionally we need to have them pay us to process them. Maybe they’re in some crazy format or they’re CAD, files which are just ridiculous to deal with. I’m sure you’ve done that before.

Alan: Oh yeah.

Jon: But depending on that, lots of times that they have 3D models, they avoid that setup across altogether. But if they don’t, then we can create them. And it just depends on what the 3D model is of. If it’s of a table, then you’re talking lower, 100-200 dollars per model. If you’re talking a Harley Davidson, might be a little bit more than that, by a factor of 10. 3D model creation depending– it all depends on the quality. Do you want PVR? Do you want physical base rendering? Do you want it to be super high quality? Does it need to be cinema quality? We received a CAD file one time, of Bumblebee from Transformers, and it was like literally *the* file they used in the movie.

Alan: Oh my god, how big was that?

Jon: Four gigabytes, Man, it was crazy to deal with. And they said, “Can you guys get this down to like two megabytes?”

Alan: [laughs]

Jon: So we had one of our developers spend three weeks on it, and we got it down. Yeah. So that’s fine. That’s not quite a manual process. [laughs] Hopefully in the future that gets more automated. But we do that very– that’s very rare. Something like that. Most of the time, people are sending us files that are 15 to 30 megabytes, and they’ve got great textures and then we can reduce them by a factor of 10. Pretty straightforward with our system. The cool thing about what we’ve done, you know, if you go to our website, you can look at price at seekxr.com. Even if you’re a startup, you’d want startups to have access to this, too. I think our startup pricing is $79 a month. You can have one object, maybe two objects. And we’re pretty flexible with our startups. If you’ve got five objects and one uploading, you need one on your website. Great, let’s make it happen. But we want people to be able to show off their product and sell more. As a startup and to have access to this new technology, so we can work with the small business, the startup, and all the way up to the biggest companies in the world.

Alan: That’s amazing. I think that’s really great. I think– I don’t know if you guys have plugins for Shopify yet, but I mean, there’s a whole market there of smaller companies that now with things like the Samsung Galaxy S10 or whatever it is, the one that has the scanning capability.

Jon: Yeah, right.

Alan: If you sell, maybe you sell 10 products and creating them into 3D is not that difficult if you know how this phone device. It’ll take you some time, and it’s not as easy as just taking a picture. But you spend a bit of time, you make a nice 3D model, now you’ve got 3D on any website, democratization of it.

Jon: Yeah. That’s so awesome. We want every eBay listing, every Craigslist listing. You know, we want to be so easy that anybody can do it in the future. So we’re trying to build that infrastructure out to be able to handle the big and the small. It’s the future of shopping. I mean, this is not just some cool fad or cool thing. This is the future. Look a little more into the future. You’re going to have holodecks. You’re going to have holograms and you can build things in a whole new way. Now, the next step between here and there is wearables. Apple glasses and other things like that come out. But this is the new way to do it. It’s– 2D pictures, while they do have their place and they’re not going to go away completely, are not going to be the ultimate visualization that you fall back to on your shopping online in the very, very near future.

Alan: Wow. If you project out a couple, you let’s call it five years. I don’t think it’ll be longer than that, but we’ll be wearing glasses. And I predicted this a little while ago. It was part of my presentation in China is that every product in the world that’s sold will need a 3D version or a mirror world version.

Jon: Yep.

Alan: And I still stand by that. Every single product in the world will be converted to 3D in the next 10 years.

Jon: Any company today that is creating new products — like, for example, a furniture company — if they sell– right now, when you onboard a new product in a product company, you need a description, you need pictures, you need all the links, you need a developed product page. Anybody that isn’t including “build 3D model” in that process right now is just shooting themselves in the foot. Because all the other companies, all the other furniture companies that are thinking about this are going to be there. And they’re going to be the ones that win. If I go to a website and IKEA and Wayfair sold a lot of the same products, and Amazon. There’s a lot of furniture companies out there that sell on multiple retailers. And if one website offers me this premium experience, where I can see the product in my home and the other company doesn’t and the prices are the same, take all else out. I’m buying from the one that gives me more information. No question.

Alan: Yeah. It’s not even information, it’s just being able to experience the product in a very natural– it feels natural. I mean, AR– we talk about augmented reality this and that, and it’s just opening the camera and dropping it into the real world. Let’s get rid of the titles of AR and XR, all this crap. It’s just a better way to experience the product in the real size that it’s going to be. If you look at Snapchat, they’re the biggest AR company in the world right now. They’re using the most AR. And not once ever did they mention AR. Never. They probably had from down on high that said “Do not ever mention the word AR”, because you never see it. We get caught up in the technology speak, and forget that the rest of the world doesn’t care. They just want really cool ways and impactful ways to shop.

Jon: Definitely. And we’ve tried to avoid using the word AR in any consumer-facing content. So on Walmart, on Overstock, it’s “view in my room.” It’s “see in my environment.” “View in room” seems to be the best phrase. But again, using those terms that make it feel just really natural. I completely agree with that. You know, I think we’re just hitting the very, very beginning of this. It all comes down actually to tracking. Tracking is the technology that really Seek is working on and focusing on right now as the next step.

Alan: What do you mean?

Jon: Right now ARKit and ARCore are pretty dang good at tracking flat surfaces. They can track the ground, they can track a wall, and that’s about it. Maybe there is some face tracking and some other things in there. But as trackers get better and quite frankly, I hope that Apple and Google come out with them, so that we don’t have to–

Alan: Me too. It’ll be a lot easier than us building everything.

Jon: Hand tracking for jewelry, foot tracking for shoes, body tracking for clothes. I believe that the biggest AR industry — for e-commerce, at least — will be for clothing.

Alan: That’s the hardest one too.

Jon: Oh, it is. It’s so hard, there’s so many pieces of the puzzle you gotta fit to get it right. You need exact measurements of that clothing. You have to get exact measurements of the shape of that person’s body. Then you have to track it and put it on and have it look real and feel good. And there’s a lot of issues with it. And I think we’re still quite a few years away from really the future of shopping there. But when we get there, clothing in shop for way more often that furniture is, or than appliances are, what a lot of the really good use cases for AR are right now. Shopping for a hot tub, yeah, super helpful to see what that’s going to look like in your backyard before you drop 10 grand. But you just don’t make that purchase very often. And so the number of clicks that are happening, the number of engagements that are happening just aren’t very high. But often you’d shop for a new shirt. Or new shoes or a new hat. And it’s almost every day for some people. And so when that technology gets to the point where that is really true to size and really accomplishing what it’s supposed to and letting you see what’s this going to look like? The clothing industry actually suffers the most from returns. It’s upwards of 40 percent. Because people buy, it doesn’t fit, they send it back.

Alan: Yep.

Jon: And it’s horribly difficult for clothing companies to deal with it. You know, what are you going to do? You have to– all your competitors are offering free returns and free shipping and all these things. You have to jump right in, or else they’re going to go to your competitors. So I’m really excited about the future in that regard. I think that all the trackers, you got body trackers. But then what about a car tracker? They can recognize, “Oh, those are the tires. Let’s switch those out” or “Oh, those are the windows. Let’s tint those a little bit. Let’s see what that looks like. Let’s change– That’s the body, let’s change the paint job here.” But you need to build, somebody has to build a really good car tracker that can use AI to recognize all the different parts, and be able to accurately place a grill where it’s supposed to go, or headlights where they’re supposed to go. We’re essentially going to need AI to be able to recognize and track and then interact with using the 3D objects, to be able to see what they look like on everything in our lives.

Alan: You know, I actually saw a demo of this exact thing at the PTC LiveWorx conference. It was incredible. They held up and iPad, it recognized the 3D shape of a– I think it was an ATV. And then it captured the shape, it gave the outline and you lined up the outline with the thing, and then it locked in. And then I could add things to the machine. I could add fenders and extra lights and running boards, and it was nuts! And it was adding it on as if it was right there.

Jon: So awesome.

Alan: Oh, dude, it was amazing. And I’m thinking to myself, “This is it. This is the future.”

Jon: Yeah. Yeah. And so you have the ATV tracker. And that’s great. But there’s just thousands of products where this can happen. And there’s so much opportunity out there. For anybody that might be an entrepreneur listening to this, looking for an opportunity, figure out how to do that. Pick something you really care about where there’s a decent industry size.

Alan: Yeah. Mine’s learning, man. I’m going after learning.

Jon: Yeah, education is just– I mean, we had an opportunity to do something with a nonprofit this year, here in Utah for the Transcontinental Railroad. It’s the 150th anniversary of the railroad being connected to the west. Here in the United States, “the Crossroads of the West” is one of the nicknames of Utah, because that’s where it connected. And so there’s about an hour and a half from where I live here, is where that happened. And so we got to recreate the Golden Spike. The spike that went in, and the trains that met the Big Boy train. And all these cool things, and even an AR version of Abraham Lincoln that people got to see. And so then that got pushed out to all the schools here. And we had over 15,000 children that just on one day, all using the technology, we tracked it on all of our analytics. And kids all over the state of Utah were able to bring history back to life and experience this in a way. I mean, these trains, these Big Boy trains, literally. Just the engine’s 60 feet long, it’s huge. And so they’d have their class take an iPad and go into the gym in the school, and spawn this train right in front of them, have it just appear. And then they just go walk around it together. They get to look at this train, as if it was sitting right there in the gym. And so, I mean, there’s just– education’s awesome. I love that you’re tagging–

Alan: Yeah. It’s funny, because originally when we met in China, we were basically working on exactly what you guys are doing. We were down the road of commerce and our ultimate goal was always to build a new education system. But I also realize that the e-commerce side of things was a way to fund that.

Jon: Yep.

Alan: And so we were going down that road. And recently we just decided we can’t walk on that line. We need to just focus on education. We can’t do both. And we tried to do both and did everything poorly. So now it’s– we really have to focus and we’re really focused on this.

Jon: We have to choose one. I mean, that’s something that both you and I have learned in this industry is, yeah, there’s a lot of AR agencies out there. As a company, you can go to them and say, “Hey, can you build this custom thing for me?” And they say, “Yep, sure.” Great for the company. They get a nice custom product. But the problem is, the company that built that custom product for them is going to fail probably, in the long term, because they’re not going to be able to stay in their business with project-based work. You have to build a sustainable business model and focus on one thing and do it better than everybody else. That is really the only way to build business, really, in any industry. But in this industry especially, you can’t say, “Yeah, we’ll build anything you want.” We have gotten really good lately at saying no.

Alan: But hold on. Let’s go back two years, let’s say.

Jon: Yep.

Alan: You guys were building everything for everybody.

Jon: Totally, man. We had a platform and we were trying to build our vision of YouTube of AR, in this platform for consumers, and at the same time taking all these projects on. That’s just impossible.

Alan: I learned something recently from another company in Toronto here. They’re an app development company. They do basically websites and really complicated apps for banks and stuff. And then they spun off this side project or the side company. It was totally separate. And they said, “OK, we’re gonna build our own products because we’re sick of building products for people, we’re gonna build our own.” So they siloed everybody off the development team. And what happened was they were starting to make products, they were making great progress. Some products failed, but it was like a– they were working on everything. The problem that they had was, as they got these big projects, a million-dollar project comes in and they’re like, “OK, we need all hands on deck.” And they pulled the people away from the products to work on the projects. And all the products just failed, because now you don’t have the team working on it. You just took the team away from what they’re working on, to work on someone else’s problem.

Jon: I know.

Alan: Yeah. And I learned in that one conversation, I was like, “Oh my God. It makes total sense why we’ve had such a struggle.” We just basically put a kibosh to that immediately. [chuckles]

Jon: You got it, man. It’s been a journey, but we’re excited with where we’ve gone to here.

Alan: You guys are doing amazing.

Jon: The future is bright, I think, for both of us. I’m really excited about what you guys are doing with XR Ignite, and supporting the whole ecosystem.

Alan: Thank you, man.

Jon: Of course, your education product and everything that’s going on there, and we would love to support you in whatever way we can.

Alan: Well, I truly appreciate that. I mean, this is a small world, this XR world, and it’s getting bigger by the day. But I think one of the things that I’ve really noticed in doing these podcast interviews is that almost every single conversation out of the entire — maybe 99 percent of them — training and education comes up.

Jon: Yep.

Alan: And it may be my influence, but I try not to influence the conversation. But it comes up, because it’s something that I think everybody realizes is going to be a big challenge for humanity. This is a problem that we– IBM released a study this morning, that says more than 120 million workers will need to be re-trained and re-skilled in the next three years, as a result of AI and intelligent enabled automation.

Jon: 120 million people.

Alan: In three years.

Jon: I read the same article, it’s absolutely insane. How do you do that?

Alan: I don’t know. I mean, I have an idea.

Jon: I have some ideas, too. But bringing those to life quickly and then implementing–

Alan: The problem isn’t so much that– I know we can do it, but can we do it in three years? [laughs]

Jon: Yeah.

Alan: I don’t think so.

Jon: Mm-hm.

Alan: That’s why we’re raising an enormous seed round, and it’s like when I presented this to an investor, he’s like, “That’s not a seed round. That’s a series A.” I’m like, “It may have been a series A in the past, but this is the seed round now. So get used to it or get out of the way.”

Jon: Mm-hm.

Alan: It’s nuts.

Jon: Well, thanks so much for having me, Alan.

Alan: Oh, it’s my absolute pleasure, my friend. Thank you so much. I’m so glad for all your successes and I’m really looking forward to seeing you again. I’ll pop down to Utah and we’ll have dinner. It’ll be great.

Jon: Oh yeah. Come down. Let’s ski this winter.

Alan: Ooohhh! Done, done! I’m a snowboarder, though. So don’t hold it against me.

Jon: That’s fine. We’ll to go to Snowbird or Park City or something, let’s make it happen.

Alan: Welcome to the XR for Business Podcast with your host, Alan Smithson. Today’s guest is Kai Liang. He is an amazing global world-trotter, travelling around the world promoting virtual and augmented reality for education. He’s a deep expert and practitioner of VR and AR education and industrial solutions in the global marketplace. He’s currently the acting director in a number of different companies, including world-class VR education content company MEL Science as their director of business development, leading VR education company Smart Stone Technologies, and the co-founder and VP of a leading Chinese VR education company, Growlib Technologies. He was recently appointed to the European Managing Director of Shadow Creator, a leading Chinese AR glasses and solution company based in Shanghai. Kai’s various businesses are responsible for successfully deploying VR education classroom solutions to thousands of schools in many countries all over the world. And soon, solutions in several countries directly with the ministries of education. You can visit melscience.com for more information.

Kai, welcome to the show.

Kai: Well, many thanks, Alan. That’s a fantastic intro. Very kind of you.

Alan: Oh, it’s my pleasure. I’m really excited to have you on the show. How did you get into VR?

Kai: Well, I think it’s really a part of the trend. I used to leave the marketing for glasses-free 3D technology. I was the VP for Dimenco. Glasses-free 3D — or otherwise called auto-stereoscopic 3D technology — has a lot of promise, has a lot of potential, but unfortunately, due to a number of factors, the business didn’t take off. The industry kind of slowly drifted, and a lot of my friends and partners actually moved into virtual reality. And I can’t help but notice that the difference from auto-stereoscopic 3D, VR was a technology and an ecosystem that is joined by a lot of leading global brands such as Facebook, Google, Microsoft, and Huawei, etc. etc. So business is growing stronger and stronger. And I can clearly see that it offer a stronger impact to user, as a media forum than auto-stereoscopic 3D. So yeah, that’s how I just naturally fit in, my credits from 3D to VR. And education is really the area that I initially settled on to. I find that lot of possibility and their missed potentials. I believe this can add a lot of value to what we do.

Alan: Well, I think you guys have already started to add an enormous amount of value to the education system. You sent me a license to your MEL Science VR application. The very first lesson was the difference between pencil lead or — carbon in a pencil lead — and carbon in a diamond. And I was able to — in VR — go in to at the molecular level, and see why carbon as a substrate like lead — or not lead, but graphite — is different fundamentally than how a diamond is. One is organized in sheets and the other one is organized in a structure that is much, much stronger. Obviously, diamonds are much stronger than graphite, but they’re the same materials. And unless I had gone into that VR experience and gone down to the molecular level, I would never, ever really fully understand how that works. This kind of virtual reality experiences to explain phenomenon that are really difficult to grasp from a two-dimensional level. This is really, really powerful. So how did MEL Science start to work on virtual reality education? Because MEL Science started off as a company that provides science kits to students. So you can go online, you order a science kit, and it comes in the mail. And then you can start to do experiments, chemical experiments, you can do physical experiments. How did it kind of morph from that into VR?

Kai: Sure, it’s good question. I would enjoy telling the story. And also, I’m really glad that you enjoyed the experience with MEL Chemistry VR as well. And I think you’ve described reasons to certainly my experience in demonstrating the solution to teachers, to students, to professionals, to colleagues from many countries around the world. So generally people like it, and people like good content. This is very fundamental. I mean, we are all– every day, we enjoy content. And by now when we watch movie, we enjoy the good content. With movies, really a lot of detail, well-constructed storyline. And so good content actually make a big difference for people’s lives, and for education as well. And it’s worth noticing that today, what people see from MEL Science is mostly chemistry. And there’s a good reason for that. The founder of MEL Science is a gentleman called Dr. Vassili Philippov. He’s a friend, and he’s also a physicist and an ex-director of Yandex from Russia, that’s a leading Internet search engine. So Vassili is a great businessman and he’s also a scientist. And Vassili likes to improve the way science is taught and he wants to make things interesting, which is why you notice that MEL Science originally started off designing and manufacturing and provide a really beautiful, interesting, and innovative chemistry experimental kit of very good quality for 22 countries around the world. So in a way, if we go back to our K-12 school days, chemistry is actually the most difficult subject, because mathematics is very reasonable. And physics you can feel and touch. Chemistry, on the other hand — things magically happen on a microscopic level or atomic level, that you just cannot actually see at all. So you have to imagine it. And also, you have to try to take interest from what is happening on a macro level for chemistry experiments when metal changes color, when one state changes to a different state, and one material changes to different material, we make these crystals. You cannot see that and you try to imagine what’s happening on the micro level. So that actually made chemistry really hard to grasp for a lot of people. But yet, it’s such a fundamental subject for everyday life. Our entire biological phenomenon is driven by chemistry. Petrol chemical industry is the backbone of society. Chemistry. And cosmetic? Chemistry. So that is why Vassili and his peers, they really want to do something to improve — to help the society — by improving the way chemistry is taught, so that the difficulty of trying to understand what’s happening in a chemical reaction is not going to be so difficult. So it’s not going to put off so many people. So that is why the experimental kit was designed to make it very interesting — great fun — that is more fun than the experiments you get from standard textbooks. And in addition, virtual reality technology is utilized with really good graphics, with more accurate scientific description, and with a unique journey to actually make the theory easier to absorb, make it immersive. Students can also construct that molecule together using different atoms. So there’s a lot of interaction with it. So I think that, in a way, is what a good virtual reality education program can give you. It’s that unique immersive experience to actually realize, to practice things that is normally impossible on a microscopic level. It can also do things on a macroscopic level, such as playing with concepts on the planets at a solar system scale. But for chemistry, this help, this method is delivered at a microscopic level. And you don’t see a lot of companies from the world actually doing things so focused as MEL Science. And as a name, MEL Science is a suggestion, chemistry is not what we’ll stop, of course. The team has already done a large number of physics content, also on the same level of quality. So there’s a great storyline, beautiful graphics, scientific and accurate, and with the right pace, and with good immersive support, and with a lot of interaction. So all these elements follow through on MEL Science’s philosophy of offering not a lot, but really high quality focused science engaging content.

Alan: It’s interesting that you punctuate the quality, because there’s other companies that are pushing out virtual reality content for learning/education and they have hundreds of modules. But the quality is not quite there, and it’s almost like they rushed through creating as much content as possible. You guys are taking a different approach, where instead of just rushing through as much content as possible, you guys are really focusing on the quality of content.

Kai: Yes, indeed. We– every content MEL Science makes, we want to achieve a really strong wow factor. And normally if you go to trade show, where you try to promote virtual reality education solutions to company. Every company seems to have a list of star content. They would demo the star content in order to push their entire portfolio of VR, the kitchen counter. Now, MEL Science is unique that they really want to make sure that every piece of content have this wow factor. In other words, a consistent high standard. So I think this is very unique. And another thing interesting about MEL Science, I will talk about other VR education company as well. But another interesting thing about MEL Science is it’s a combination of reality and virtual reality. I think that’s also quite important. Already for chemistry, we know that MEL Science makes *real* chemistry experimental kits. That is fun. And you can go to Facebook, our company community page on Facebook. You see more than 1.3 active subscribers on Facebook community page there, because the video was generated and the picture being produced from the chemistry experimental kit, which is beautiful. So the combination of real experimental kits, plus the VR element give you a combined educational and messaging power. And much has recently been made out of the setup for that, called MEL Kit. So this is to teach science to really young children — possibly between five to ten years old — and it’s not constrained to chemistry. It will include physics, mathematics, light, temperature, energy, all these subjects. But this is — again — young children would construct a functional scientific toy, not too difficult. And they will be able to read a storyline from a book. They will be able to construct a bit of a treasure hunt, with a storyline as well. And in addition, they enjoy an augmented reality teaching experience. So again, you’ll see this element of reality. The things you can teach, you can read, you can feel, plus the employment of AR and VR technology. I think that’s actually quite important. You’re having the market two schools of thought. One is to really use the best of VR and AR, but try to leave the traditional education approach. But that’s probably not the best way to go about it. It is important to combine the value of VR and AR, together with well-designed, well-authored education material on paper and physically. And also you can see and touch, and there’s that social element with it as well. So I think that’s actually quite unique, and I hope that is something that can be noticed, can be enjoyed by the user community and teaching community,y so that truly we have VR that is working in partnership with other means of technology, to give that extra bit of user experience.

Alan: Yeah, I think that’s really key in learning. A lot of people when they started to talk about virtual reality is that oh, this is going to replace teachers, and I really don’t feel that. And I think you guys have taken a really pragmatic approach. Virtual reality serves a purpose. It can show students things that were not possible: going down to the molecular level. But you still need that hands-on approach. You still need the experiments, you still need the written word. And I think it’s really not something that’s going to completely replace teaching in the way we know it. It’s just going to enhance it. It’s like when tablets came into a school. Tablets didn’t replace teachers. Computers didn’t replace professors. People need to wrap their heads around the fact that VR and AR are just another tool in the toolbox to provide excellence in learning.

Kai: I agree. And I think that extends beyond teaching as well. Today we see the most high-end utilization of XR technology, including mixed reality, in industries. The common philosophy is that XR technology gives human beings a way of experiencing manipulating and interacting with data. And that really should be an enhancement from what we do and how we do things, rather than replace it. Once we notice that, hopefully we can truly use XR technology in the right way; for training, for education, and for industrial applications and beyond.

Alan: You guys are working on science from experiments and teaching science from that base level. Another virtual reality startup, Labster, is taking a different approach. They are creating a very, very high-end chemistry lab that you can go and start doing experiments virtually. And this is really, really important because they’ve created a lab that you can go in and — like a wet lab — but it’s available to any student. Because most times, these labs are million-dollar labs, and they’re in universities and they’re very, very specific to that, and being able to scale that… do you see Labster as that next step? When you’ve graduated from MEL Science and you’ve got this passion for science and chemistry and physics, then you move over to Labster to really start experimenting at the higher level with that. Is that something that you guys have looked at as a partnership perhaps?

Kai: Yeah, I know the Labster team quite well and they have excellent products. As you already mentioned, Labster’s product and concept focus around college-level or university-level. At the moment, MEL Science focuses on young science education, as well as K-12 level. So in a way, I think these are quite complementary. It’s also difficult for us to work directly with each other, because we address different markets. We have a lot of mutual respect to each other. Labster is great, and also supported by Google. While MEL Science… the market we address is very different. Another thing that’s different about MEL Science is that MEL Science wants to be really platform-independent. We support the Google platform. We support the Oculus ecosystem. We’re working with — this trip, that I have in China — is to talk with other VR platforms in China, including HTC, PPVR, Pico, and we support the iOS platform. We want to be much more universal, so that this is a reflection of education at K-12 and younger levels, because you have a huge variety of different hardware platforms that people use, while — at the university level — they can perhaps be more fixed, and more focused around Google platforms. Hopefully in the future, we can collaborate more.

Alan: Absolutely. I think you guys both have similar missions to provide a new level of science education. I think it’s wonderful. So tell us, what are some of the results that you’re seeing with virtual reality? Are you seeing improved test scores? How are you measuring the success of this, in the school environment?

Kai: That’s a really good question. Especially, we envision the improvement of test scores. You typically see that in eastern countries such as China, Korea, and Japan, it’s very important that whatever education technology you utilize in school, they have the result in a positive effect on the exam scores. And while in the West there has been independent research, both in Russia and the United Kingdom and the USA, to try to measure the difference between utilizing what’s around education technologies such as MEL Science, and the control group that you don’t. In all this different research, there is really strong evidence to support that virtual reality technology give you enhancements for people understanding of the education knowledge point. And notice I’m talking about “knowledge points,” because each VR education application is addressing the delivery of certain knowledge pieces, and all these knowledge pieces actually within the standard K-12 curriculum of different countries. The interesting thing with K-12 is that the education curriculum at K-12 level in all the different cultures in the world, they don’t differ that much from each other. What is useful for one culture — for UK system — would work very well for US system, and will work in China as well, in Japan, etc. etc.. Not only that, the student, after the experience in VR, the youth that uses VR to expand their knowledge, and they get a better feel for it. They get better focus. If you tend to notice that you might have certain naughty students, or there’s a student in the classroom that their patience can easily drift away; once they put on a VR headset — or AR headset, for that matter — this enriched multimedia experience instantly changes their nature. They’re focused on learning for a change. This is a very powerful tool to actually really deliver the kind of baseline knowledge that you want everybody to have in the classroom. So, once people have better confidence with knowledge points, they actually get through the entirety of the education message. I mean, by definition, we know that you should have a positive effect on the exam score. If you truly want to be scientific above exam scores, it’s essential for you to really observe the students who conduct experiments, or start doing research, for a prolonged period of time; at least for one year, or possibly two years. Now, I don’t know of any structured education project as such in the world yet, but of course, we are open to actually work with anybody — for any research institutions — we will facilitate that research, because that can be done. It can be very useful for education communities from around the world.

But having said that, I do want to mention a couple other VR education products, that are written by my friends and partner. For example, there is this company based in Cyprus — loved the island of Cyprus — called Luden.io. And this company, the CEO is called Oleg. Oleg’s team used to develop an education technology game, or edu-tainment games, such as InCell and InMind. I mean, there was a different version of InCell. They also developed a really innovative edu-tainment project such as “while True: learn()”. So it’s artificial intelligence, a machine learning application. Oleg’s team is working with autism institutions in Russia and the US, and I’m putting them in touch with Australian Autism Recovery Centre in Australia, and also in Beijing and the UK. So, by working together with the research institutions to help children suffering from autism — to learn better, to socialize better — they purposely develop the application together as research. This type of product — their product set is called Rewire.Education. They are actually a combined result of scientific research together with virtual reality education. So their product, I think, is certain to deliver positive value in education for autistic children. I mean, it’s different; it’s a very niche market sector. But I think that’s actually a good example; hopefully we can begin to see more and more collaboration between the good VR content teams and top research institutions. They would focus on how to utilize the XR technology to improve education. But, in that way, without waiting for one or two years for research, we know that we’re going to deliver things that deliver a better result, because we involve research and we know teachers, and we know students, from day one. So I hope initiatives like this can happen more and more in the world.

Alan: I agree. I think it’s it’s wonderful. It’s interesting, the position that you have, because you represent a number of different technologies all within the K-12 education space — Luden.io, Smart Stone VR, and then MEL Science — but they all work together to enhance learning. How did you get into the field of learning? How did you end up here representing all of these different future education components?

Kai: Good question. As I said, I started in the world of VR by working in the area of virtual reality education. And I remember my first job in this area was that I became the sales director for — at the time, back in the days of 2016 and 2017 — the leading Chinese Virtual Reality Education company called VR School. I was a sales director, so my job is to deliver positive revenue for the company in a very competitive market space against all the kind of a traditional resistance of the technology, and also against the fact at that time, the experience of VR is not all that great. So I have to push. But very quickly, I noticed that the good companies really deliver the message and deliver the benefits. It’s obvious, but there are not so many good companies back in 2016 and 2017, certainly in the market in China, and also internationally. You have all this content isolation. One company will have certain content — and don’t forget, writing virtual reality content at that time is a lot more expensive compared with these days. You have much less professionals who are able to generate VR content, including VR education content. So you have one company, and perhaps you have five to 10 pieces content. Another company, perhaps has 20 pieces of content. When you put them all together, it’s still not going to come anywhere near enough for VR education to be adopted or even trialed in the education community. So from 2017, while I was working for VR School, I already formed the habit of trying to get known people and companies around the world who actually are working on VR conferences. Normally I would ask people, “do you also do something in the education? Why not?” And I think that therefore, we’ve done this consistently for three years ago. It gave me the benefit that I start to actually get to know a lot of good people from different worlds, from different countries with different styles. They all have different content from me. And MEL Science is actually one of the companies I came across in this search, being probably one of the best. And together with Labster, as you rightly pointed out, and Luden.io, and CoSpaces, and VictoryXR, Sterling Pixels. I can then weave our long list of really, really good people, good teams who actually created good VR education content, and by working with these people, you also can see all the reasons why they can create good content.

Sometimes I even try my best to offer help. For example, my Australian startup Smart Stone is now working with Luden.io, because even though their application as a product is great, it’s probably going to be too difficult for some students. And so we needed an easier version, so that the message of the experience can be enjoyed by a wider group of people. And we do that because we know the Minister of Education in China very well. While you have a country with a massive amount of buying power, and also really active needs for a good artificial intelligence education product, we’re able to marry the need better with the team producing the content. So I think it’s really the job experience kind of took me to this direction. And also it’s really a factor of enjoyment, of working with teams who are passionate about creating good content. They are normally people with a unique philosophy, with their own thinking, with their own style and their own experience. And they all have a passion to try to improve the way training and education is done. It is great fun — including yourself, Alan. You are also very active, to introduce people to each other. So I think in the world of whenever you have new technologies such as XR, it’s really good to have this community of positive people to try to spread and promote the value, the good of it, to each other, to a different market. So hopefully we can work together to drive the positive energy given by new technologies to help them to actually deliver value in a society.

Alan: It’s amazing. The whole reason they started this podcast was exactly that. I saw amazing business use cases, and amazing education use cases. I saw them coming up every day. And I also was meeting with customers who had absolutely no idea about VR. And so you have this disparity where the XR community is working really hard to create valuable products, but the rest of the world doesn’t know about them. And if the rest of the world does know about them, it’s very hard to get scale. And so I started the podcast to educate people, and it’s thanks to guests like yourself that come on and really explain why this is important and how people can get involved. So speaking of which, how can people get the MEL Science VR experiences on their headsets right now?

Kai: So we are making a trial very much easier this day. So we have a very flexible way. First of all, because we support the VR experience off all kinds of platforms, from the Google Expedition platform, to Oculus, to other all-in-one devices, so our team in London will be very pleased to offer a trial code to anybody who needs it. And we do also attend — and our partners attend — pretty much all the meetings and the tech shows from around the world as well. And so you can meet us in basically all the major tech trade shows from around the world.

Alan: I know you’re also on the Oculus store.

Kai: Yes, we are.

Alan: And are you on steam as well?

Kai: We’re not currently on Steam yet, but we should. I mean, it’s good. Otherwise, I’ll certainly talk to the team to see if we can get us out. Until recently, we also signed with zSpace, which is also a fantastically successful VR education platform. So we just got on this thing. We’re designing and delivering our entire content platform just to zSpace. So the supporting platform is going to expand. We’re on iPad, so we’re not just on VR. We’re also on tablet as well. We might work to actually work out support for Chromebook. It’s a project being discussed internally. We have to do two things. One is to deliver more content, and the other is to support wider and wider platforms. In the meantime, we’re open to actually work with all the platform partners from around the world. So hopefully, we can join to develop content as well. We’re going to be more flexible, especially with the latest round of funding.

Alan: I love it. I don’t know what else to ask, my friend. And I think this has been a great conversation; a great conversation-starter. And for anybody who’s looking for more information about MEL Science, you can visit MEL Science dot com. How can people get in touch with you?

Kai: I can be reached by my LinkedIn page or email kai@[unclear], as well as kai@smartstoneVR.com. And also, by talking to my friend, Alan!

Alan: Yes. Yes, you can message.

Kai: Everybody would know everybody through you.

Alan: Yeah. I am a connector of sorts. Awesome. Well, Kai

Kai: You’re wonderful.

Alan: I really want to say thank you for taking the time to be on this podcast. And I really look forward to trying more of the MEL Science and getting my kids really excited about science, because I think what you guys are on to is inspiring, and it educates, and it checks all the boxes that I feel are necessary as we move into a really fast-paced world of exponential growth. So thank you, Kai.

Kai: Thank you very much. And thanks for this podcast as well. Great idea. It’s certain to benefit all of us working in the XR industry.

Alan: You’re listening to the XR for Business Podcast with your host, Alan Smithson. Today’s guest is Lou Pushelberg, founder and CEO of Circuit Stream. Circuit Stream’s story began in 2015 with Lou traveling around North America, connecting with developers, designers, and creators, pushing the boundaries of immersive experiences. Rather than try to build the next big application like everyone else, Lou saw a bigger need for education and training that could help propel the industry forward. From this journey, Circuit Stream’s 10-week online course emerged. Their education platform has reached over 25,000 students. They’re a Unity authorized training partner and their team of 20 people is giving professionals the skills they need to build value-driven XR experiences. They have three business divisions: education, software development, and their platform. To learn more about the great work that Lew and his team is doing, you can visit circuitstream.com.

Lou, welcome to the show, my friend.

Lou: Alan, thanks so much for hosting me. It’s a pleasure to be here.

Alan: It’s my absolute honor. I’ve been watching the work you guys are doing. You’re basically one of the only educational institutions that are teaching people the practical hands-on skills on how to create XR. How did this come about?

Lou: Well, I was working for another VR startup early in 2015. They were based out of Seattle. This was kind of the DK2 era — so early in VR’s history — and personally was inspired by a lot of the early pioneers, who were building some of the flagship VR content and titles that were coming out on the first wave of consumer hardware — so the Vive and the original Rift — and was basically looking for an opportunity and a need, where I could create value for the ecosystem and help accelerate the adoption of VR and ultimately of XR technology, and found that kind of service and value that I could provide to the ecosystem in education.

Alan: So how did you begin? Where do you start with building a course for technology that’s emerging? Like, “Unity 101: here’s how to make a model.” Like, how did that– where do you even begin?

Lou: [chuckles] Yeah, that’s a good question. So we began with a kind of a core philosophy that was, the only way to learn anything really in it — and especially this technology — was to get hands-on and just start building things. There wasn’t a playbook for VR and AR, there wasn’t a series of best practices at the time. They were kind of just beginning to emerge. So we really wanted to focus a lot of what we were doing around getting people into Unity and some of the other major engines, and just helping them start blazing their own trails by just building stuff and sharing it with people. That’s kind of been our MO and what we try to facilitate with all of the professionals, companies that we work with. So in kind of architecting the course in the beginning, we would go straight to the source. So you mentioned travelling across North America. I had basically booked a trip through what were the four biggest hubs down the West Coast. So starting in Vancouver and then heading south through into Seattle, San Francisco, and LA and in each XR hub, I would interview developers, sometimes from startups who were kind of pushing XR forward, and other times from some of the major players — like the Valves, Oculus, Unity, Google — developers who were in VR building and creating and kind of the aggregated knowledge from the people actually building, the developers and designers. That’s what was used to kind of as the kernel for a curriculum that Circuit Stream started with.

Alan: Where’s it gone from there? Was it mainly game enthusiasts that people just wanted to make an AR game or VR game? Like who are the typical students? You’ve trained 25,000 students; is this people sending their company employees? Is this just enthusiasts wanting to learn?

Lou: What we found was kind of to our surprise, we had a lot of working professionals and companies who were looking at XR and saying “We can take the tutorials online, watch the YouTube videos and invest that time — which is totally a respectful way to learn how to create this technology — or we can work with a partner.” which we ultimately became, being Circuit Stream to kind of tap into some of our educational resources and almost help them kind of co-build. So we had a lot of different companies who are investing in XR as an emerging technology. So folks from Boeing, IBM, General Electric, VMware, VM Builders, Lockheed Martin. There’s more, but that’s just to name a few who we’ve collaborated with in a big way to kind of match some of our instructors and developers with engineers, developers, and designers inside the teams of those organizations, and really teach them the skills and kind of help guide them along inside of Unity, while also helping them build some prototypes and POCs and projects that they ultimately would like to deploy at scale in their businesses. So, yes, we do work with people with ideas for games, entertainment, and productivity tools. But a major portion of our education and training is actually for companies who are kind of thought leaders and investing in building core capabilities in developing VR and AR software.

Alan: It’s funny because we predicted this about a year ago. We said, “Hey, as companies realize how powerful this technology is, they’re going to need to either spin up a team or acquire a team.” Are you finding that they’re just kind of sending one or two people to go in and learn how to build stuff, or what does that look like?

Lou: What we find is that companies, everyone will evaluate their own capabilities in-house and if they’re investing in building internal capabilities for VR and AR, or if they’re just looking to find a partner and outsource development. And both are totally valid. I think what we find is kind of a hybrid model, where they’ll get support, but then they’ll also want to build up a certain degree of capabilities in-house, so that they can still manage the applications that we’re creating together, iterate on those applications without, say, having to call a partner or third party every single time. So that’s what we did. It’s kind of an integrated approach, and it’s worked well for the folks who we’re working with and it’s worked well for us as well. So to your question, sometimes this is a single person, sometimes it’s teams of 10, 12, 15 people. We’re working with the US Navy right now, and I believe they have 8 or 10 folks from the US Navy who actually enrolled in the training program and pulling out some POCs and projects alongside some of our instructors. So it’s been amazing for us to just work with big companies and organizations and see the kind of diversity in projects and goals and just be a part of that growth. It’s something that we’re really proud of, because this is our way to contribute and accelerate the ecosystem.

Alan: I’m looking at your website, you’ve got Koch Industries, Lockheed Martin. I was actually just in Orlando last week, which Orlando has kind of three distinct customer groups. They’ve got military. They’ve got Disney and Universal, so tourism and entertainment. And they have Space Coast, they’ve got NASA. And so it’s this really amazing ecosystem of three industries driving massive high tech adoption of these technologies. The Navy’s got thousands and thousands of people in training and for them to start really considering XR, I think it’s really interesting. One of the things that I really want to ask is what are people making? When you talk about XR AR, it’s virtual/augmented/mixed reality, computer vision, spatial audio, just kind of everything wrapped into this spatial computing package. What are people leaning towards when they’re building stuff? Are they building stuff for Hololens? Are they building stuff for Magic Leap? Are they building to kind of scale to all devices?

Lou: Yeah. We see people building across platforms and across devices. In terms of the content itself, we’ve seen a focus around training and operations. I want to create value here, and not give you the generic answer. So maybe what I’ll do is tell you a story of one example, one of our partners and customers that we’re working with from a training capacity, because I think this story is enlightening. So this company — it’s a company called Vantage Airport Group — has been a really early partner for us, someone who is very taking the training and taking our courses early on in Circuit Stream’s life. And we’ve evolved with him to help him begin to deploy and scale VR training throughout his organization. And what their company does, is they manage the operations of airports. So airports, which are sometimes owned by the city, will subcontract them out to actually manage the training, the staffing, the operations so that the airport can continue to run smoothly. So they’ve got dozens of airports that they’re basically responsible for managing around the world.

In some of their smaller airports, they have this really interesting problem where they’ll get– when they have turnover and they’re training new people, they’re responsible for training all of the people who work airside. So the people who– the wing walkers who have those orange pylons and kind of flag planes in, the people who drive the pushcarts, the people, the baggage handlers, the people driving any vehicles around the tarmac. And for some of their smaller airports, one of the problems that they would have is the folks who drive the pushcarts– often these airports will have a left and a right section of the airport, and planes that are landing on one path of the runway are responsible for then pulling into the left section, other planes are responsible for pulling into the right section. So what would happen with them, is they would often get the people driving the pushcarts airside and airplanes have no reverse gear. They can only go forward. So they need someone to drive a pushcart to– essentially it’s like a trailer hinge and they essentially have to reverse this plane into the right spot. And if you’ve ever backed up a trailer, you know that’s not an intuitive motion to get comfortable with, because when you turn left–

Alan: You’re steering in the wrong direction.

Lou: –and vice versa. Exactly. So think about doing that with an airplane. So because it’s these gates, the left and the right gate — we call them gate A and gate B — the passengers board the plane, we’re relatively close together. And the airside professionals operating the pushcarts are basically trying to steer a giant trailer backwards. There would often push a plane departing from gate A along an L shape — kind of like a curved right angle — into the departing zone for gate B. And then what would happen is they would literally have planes that were trying to land in the airport that could not actually land to debark passengers, because they had another plane that was supposed to be taking off that was pushed from gate A into takeoff zone B. So they had an operational challenge and a training challenge to make sure that the people driving the pushcarts would actually follow the right curve and make sure that planes from Gate A were pushed back into takeoff zone A. And this obviously had financial implications, safety implications, and it essentially came down to better training and better operations. We’ve been helping him kind of develop this as a training exercise to evaluate and measure that people are actually competent to perform this task.

VR training is one of the best uses. I’m sure that’s not new for your audience, Alan. But it’s stories like this that actually illuminate some of the benefits that you can have, and giving people just the ability to practice that before dealing with these real assets in a kind of a live environment, that’s an example. And there’s hundreds of different cases of content that we’ve taught people on or help people built through our training and our courses. This is just one and it’s evolved into an interesting story. And now that’s fanned out to be everything from training on the bridge. So that piece of equipment that’s connects the gate to the plane itself, to other vehicle simulation and training throughout their portfolio of airports.

Alan: Have they rolled this out at scale yet?

Lou: They’re in the process of doing that.

Alan: What are some of the challenges around that, beyond just making the content? Because I know some of the challenges become around security. How do you get this out to people? How do you manage the feedback? What are some of the challenges that they’re experiencing now, and how are you guys overcoming it? Are you working with them to help scale or are you just–?

Lou: We are, yeah. So I’ll share some of the challenges from our perspective. And this ties in nicely to a system that we’re building called the Circuit Stream Platform. A lot of the challenges around scale are IT challenges. So where are you hosting the training? How are you managing the content? How are you administering the content? How do you measure the key results so that you can prove throughout the organization that VR training is beneficial along these key metrics, that could be financial or non-financial, could be time and productivity. We’re building at Circuit Stream a tool that’s meant for deploying, managing, and scaling XR content. So what that basically means is if you’re a company, you may use multiple different VR and AR headsets and devices. We give you a place to host all of your content and then let both employees, training, and operations managers log in to self-administer some of their training or operations applications and then manage those applications. Who gets access to the content, who uses it? Who has access to which modules, et cetera? And then actually measure some of the metrics behind VR training. So things like again, who’s using it, session times, rates of error, training times, etc. that a company can use to, again, tie those back to financial or non-financial metrics.

So in terms of scaling, those are some of the problems that we’re trying to solve and trying to remove some of the friction so that if you have a VR or an AR application that’s effective and you validated, that you don’t go to the IT group and say, “Hey, we’ve got this application that we’re working on it, it’s actually really beneficial at solving a business problem.” and then IT says, “Well, that’s great, but we have 10, 20, 200 devices. And every time the developers update the application, we don’t want to go back and actually update that content on our 200 devices.” So we’re building a platform to basically manage that content distribution, as well as all the versioning and updates. And that’s what we can contribute for some of these market-leading companies, like Vantage, who are scaling and trying to realize and measure some of the benefits of XR. And we’re trying to help them solve that problem and really be a partner in rolling out at scale.

Alan: How are you guys managing kind of device management? Because I know that’s another one that keeps coming up that [chuckles] you’ve got these headsets and then you ship them out to people and it’s like, how do you just deal with that? Are you guys working typically with VR, AR? Like, how do you help them manage that?

Lou: Device management is an interesting one. Depending on the device, we’re working through some other partners, kind of depending on the needs of our clients and our and our customers. Like we have the software development capabilities in-house to build solutions, be it the Hololens. And if someone needs to shut down or wipe their Hololens, if someone forgets it at an airport or whatever, or just other device management systems for some of the VR headsets, be that kind of like a log-in system or device management on a PC. So it’s something that we’re kind of investing in and evolving. And I think our philosophy is to truly try to position ourselves as a collaborator and our partner. So some of the people that we’re working with, we’re trying to kind of identify their needs and then leverage some of our software development expertise to build out the capabilities around device management that they need to run their organizations effectively.

Alan: That’s awesome. The service you guys are providing is really needed. And one of the things that– I actually did a talk last week about this. Some of the results, the early results that companies are starting to release. So Walmart says we decreased our training times 900 percent. Sprint saved $11-million on their training. These are really big, crazy, out-there numbers. But even if you’re increasing retention rates by 10 percent — like, maybe it’s a 10 percent decrease in travel times — these numbers add up dramatically. And one of the things that I think is gonna be a really big problem as companies start to realize the potential of this technology, we’re not going to be able to train people fast enough to start building the amount of content that’s going to be required, at scale. Having Circuit Stream as an education leader in this, have you thought about partnering with universities and colleges to deliver this education at more scale?

Lou: Interesting. So we have thought about that in the past. The educational model through universities is tricky. There are quite a few universities that have their own VR and AR groups and divisions and part of different faculties. One of the problems here is that universities are like a lot of their programs are, for example, going to look at the ability to create jobs and have people go out and get jobs in the XR field. So based on our research — and we’ve had conversations with it with a couple of universities — they are often kind of beginning to build curriculum in-house. And like on a scale– if you were to plot that on an X and Y graph, in terms of the rates of jobs and opportunities for their students versus the timing, I think we’re still quite early on that scale.

Alan: The problem is that if they don’t start to implement it now, by the time– so the industry’s growing from about, let’s call it $10-billion this year, it will be between $8- and $10-billion as an industry. That includes headsets, software, everything. In 2021, they’re anticipating that will jump to $110-billion. So in a 10x growth of an industry, we’re not seeing the ability to 10x the talent.

Lou: Right. Right.

Alan: And that’s– I mean, that’s where I think you guys have a very unique position. One, you’re able to deliver training quickly and practically. And I would assume that your system — and maybe you can speak to this — I would assume that your online platform — or your online system for learning — is evolving as the technology is evolving. And that’s something that universities and colleges are going to struggle with, because as they spend maybe a year, two years to build a curriculum, by the time they start rolling that curriculum out, it’s obsolete.

Lou: Yeah, 100 percent. Coming back to one of our core philosophies and is just that in order to be effective teachers– and there’s a great quote from Richard Feynman, who was a physicist, and he said, “If you want to master something, teach it.” So that’s something that we live by. But I think the inverse is also true, that in order to really teach something well, you have to be doing it day in and day out. So we’ve architected our training around the fact that we are constantly evolving and adapting to best practices and new workflows, new patterns in design, because we’re constantly building VR and AR software for our clients. So that kind of flywheel of information we try to funnel back into our courses. And aside from some of the economic challenges of universities, that’s one of the challenges around curriculum that they have, where they are obviously doing research, but may not be working directly in industry, which is really tip of the spear when it comes to XR, which is kind of forward in terms of computing itself. So the industry is evolving so quickly. And to your point, that’s something that we’ve tried to leverage where because we’re in the trenches building XR software, we’re always kind of staying on the front of the curve in terms of what the best knowledge and best practices are.

Alan: That’s gonna be essential, is keeping the content current, but also being able to use industry-leading techniques. And the thing is, you’re like, “Hey, well, let’s look to industry to give us what we need to teach.” But the thing is, we are the industry, so we’ve got to make it up as we go. It’s one of those things. And when I was first getting into VR, I listened to one of the podcasts on Voices of VR podcast. And one of the guys was saying that VR and AR is so early now that if you’re a Hollywood producer or you’re somebody making something in your basement, the playing field is completely leveled. Nobody knows what we’re doing. And it kind of struck home with me, that there are obviously now — fast forward 3 years or 4 years — companies and people that have more experience than others. But it feels like we’re still at that early phase, where anybody can be a Beat Saber or a Superhot or create a training module. It seems like we have only scratched the surface of what’s possible.

Last week I was in Orlando at the Simulation Summit in Florida, and I had the opportunity to try the haptics gloves, where you put on these giant gloves, but they simulate touch and picking up things. You were able to reach down, grab a virtual object physically and interact with it. And it feels like when you pick up something, it feels like it’s there. And it was– it was that combination of the touch mixed with the VR and the sounds and spatial audio. Everything together made this experience, that I was just literally blown away. And then when I– it was was a military simulator, so it was a bit graphic. But when I took off the headset, it took me a few minutes to kind of re-acclimatize to being in the real world. And I think that’s the power of this technology to really hijack all your senses, to give you that sense of doing it. And to your point about if you want to learn something, teach it. I think that VR lends itself amazing to kind of that, see it or watch it, do it, teach it. There’s something visceral about it. There’s something that that just locks in your memory. It just, it is there forever. And there’s another group teaching VR productions stuff, called Axon Park. Are you familiar with it?

Lou: No, I’m not.

Alan: What they’re doing is they’re actually doing all their lessons in VR. So you actually go in VR, and you get lessons from the instructor in VR, about how to create VR. It’s very meta.

Lou: That is very meta, indeed.

Alan: OK, so let’s move on to specifics around businesses, because I know you work with a number of companies. What are you seeing as the killer use case? I know everyone talks about the killer use case, but what are you seeing as far as use cases that companies are–? Maybe it’s universal, like training is one of them. There’s very little argument around the fact that training using VR and AR is better than not using it. But what are you seeing as other use cases that are emerging that you didn’t maybe think that we’re gonna be a killer use cases, but are?

Lou: So my killer use case is training. What I’ll do, is I’ll try to dive into some of the value drivers in training that may be less obvious, to try to be really specific and create value for someone who’s listening and interested in rolling out XR training. So in that use case, there’s– what we always try to do is, we try to make sure that we’re generating value and can prove out that value. So in terms of return on investment or financial value, an interesting way to think about it is that there’s two types of ROI. There’s a hard ROI, where you’re going to see, quarter over quarter, your applications and solutions that you’re rolling out with XR actually hit the PNL in terms of cost savings or financial impact. And then there’s a soft ROI, which is more interesting. And here’s a way to think about soft ROI: Let’s say that you’re a large company and you gave the example that this can really move the needle, even with small percentage gains when there’s macro kind of stakes at play. So you’re implementing VR training and we’re looking under the theme of soft ROI. If your company has the philosophy of increasing productivity, saving people’s time, to generally increase the value of the business. One way to look at it would be to say, if we can virtualize all of our training, which was– for a portion of our training — which in the past was done in a training classroom, on a PowerPoint, one to one, on the job shadowing — and we can virtualize some of that away, because we can now, with VR and with commercially priced headsets. The pricing of VR is fundamentally right now. It fundamentally makes sense, where it didn’t maybe 25 or 30 years ago, or even 10 years ago.

Alan: Let’s be honest, it didn’t really lend itself nicely to industry even two years ago. Because if you look at VR, you needed a computer. You needed to run updates all the time. It was just generally a pain in the ass. It feels like we’re just past that point where it’s now deployable at scale. The timing is everything and the timing for VR and AR is right now. The devices are there now. To quote Ori Inbar, “We have all the tools necessary to create massive value right now. If we never invented anything else, the tools we have right now are enough to create enormous value.”

Lou: Right, I totally agree. I mean, you’re highlighting the past, kind of two to three years, just the–

Alan: It’s nuts. [laughs]

Lou: Yeah, it’s totally transformed to just some of the kind of IT enablements and hardware enablements that have happened. Dialing back like 10, 20 years, 30 years, that’s where a headset was 10 or 100 thousand dollars and only the military had access to it.

Alan: Yep.

Lou: Yes. I totally, totally agree with your point. So in that lens–

Alan: Can you imagine what we’ve come through in the last three years and imagine what’s going to be the next three years from now? It’s going to be these crazy, exponential improvements on everything. When you look at Facebook or Oculus’s announcement of their varifocal lenses: basically, they’re creating lenses inside a headset that will allow you to focus on multiplane. So if you look at something far out, it’ll be in focus. But if you look at something close up, it’ll also be in focus. And I mean, that’s just– somebody had to sit down and think of how do we focus on multiplanes using a fixed screen? It’s nuts.

Lou: Right. So, I mean, what you’re referring to is — for those of you who are interested — is Michael Abrash’s talk from OC6, which happened recently, and that’s an amazing hardware development because it means smaller, better form factor, more ergonomic, lighter devices, which is kind of where we all want to go. The hardware is just year over year just changing at a blistering pace, which is amazing for anyone who’s getting into the ecosystem.

Alan: I mean, to put it in perspective, just to put a final point in that: four years ago we started doing 360 video for companies, and it was about $10,000 a minute. And you had to stitch it, you had to basically 3D print a rig, and put a bunch of GoPros, and then hand-stitch all the different seams together. Then we started seeing these consumer-grade 360 cameras that did almost the exact same work we were doing. It’d sacrifice a little bit of the resolution, but it stitched on your phone instantly. You kind of had this a-ha moment, where it’s like, “OK, this $10,000 per minute thing is no longer valid, when I can buy the camera for 500 bucks and it’ll do everything for me.” And then fast forward to now, you’ve got 11K cameras, stereoscopic stitching in the cloud, and that camera is less than 10– it’s less than one minute of what we were doing 10 years ago. And you can make as much as you want. I digress.

Lou: [laughs] No, I mean, it’s a good point. I’m reading this book right now called The Dream Machine, that’s about the invention of the personal computer. Michael Abrash, who’s — I think he’s the chief scientist or similar title at Oculus — he was talking about comparing VR to the revolution of the PC and it feeling very, very similar to that point in time. So it’s an interesting comparison that you bring up just in terms of all of these different systems, in terms of content creation and connectivity, hardware platforms all coming together to make this really economical and really valuable.

Alan: I got to say something.

Lou: Sure.

Alan: We have a crazy idea. We’re actually in the middle of pitching investors right now, and we’re pitching for a new product. And our mission for the new company is to democratize education globally by 2037.

Lou: [laughs] I love it.

Alan: Think about it. But that’s my 60th year. When I turn 60, I want to be able to give away global education. But it’s not as crazy thought as when you first say it. It’s like, “Oh, that’s insane.” But if you think about it, the glasses that we’ll wear in 10 years from now will be super lightweight. They’ll be inexpensive. The processing won’t be on the glasses, it’ll be in the cloud. And we’ll be able to push content to everybody fairly easily, anywhere in the world. But the hard part is still going to be creating that content, which is why we gave ourselves another five years to figure out how to democratize the creation of the content. Because we can give content away, but who’s going to create all that content? And so yeah, add five years under that, and platforms like yours and ours and everything that being able to create content or allow anybody to create content really easily, that’s going to be a thing. You fill that within a bit of AI, then all the sudden AI’s pulled some 3D objects from different game engines or whatever, pulled it all in, you get the point. And moving into kind of 15 years out, we’ll wear these glasses daily. And anything we look at will have a layer of data on it, that can either teach us how to use it, about it, or purchase it directly from looking at it. And that’s what I think exponential growth does, and we can’t really see past ten years from now, especially when we’re entering into exponential growth. So I think within 15 years we should have all the technologies in place to democratize not only the hardware, the delivery, and the content development, and then give ourselves two years to figure out how to give it all away.

Lou: Hey. I mean, I agree. And that’s genuinely what we’re pushing for. Even if we only contribute a very small slice of that, that’s what gets me out of bed every morning. And a lot of people on our team here have helped contribute in some way to bring spatial computing to the world and try to accelerate the adoption of spatial computing. So it’s a great point. I love your mission. It’s very noble around democratizing education. I think rewinding back to– we tangented off here, which is great, it’s good. But I think we’re– in this industry, you’re always trying to find the balance between today and kind of also this vision and the potential.

Alan: The business challenge; build for today, but design for tomorrow.

Lou: Exactly. So coming back to the training use case, like you mentioned, education. But when we think about training and the model that we use today, coming back to that piece around a soft ROI, if you’re inside a company like getting your organization to buy into XR from a training capacity, one great way to look at it is to say if, you can virtualize — which we can do today with the technology — if you can virtualize some part of your training process — that could be an aerospace, that could be a manufacturing, whatever the industry is — you’ve essentially now bought time for your training manager, where you’ve actually freed up because you’ve virtualized a lot of the training that they do through your VR or AR simulation or training aids. So what happens to that person now is they can, in theory, make a horizontal shift in the organization and go work on something else that creates value for the company. So we often– training as a use case get people who say, “Well, it’s hard to tell the story and hard to convince the team here to buy in.” And that’s a story that we found is successful.

If your company is willing to make that investment and say, we know that this might not be a hard ROI that’s going to hit the PNL next quarter. But what we’re essentially doing is virtualizing away some of our training or saving time for the training manager, which lets him or her go work on other higher-value tasks — which may not hit the PNL this quarter, but it may hit the PNL in a year or two from now — and either help the company create more revenue, reduce its costs, etc. and essentially make the company more effective and more efficient. So that’s one way that we’ve been kind of looking at, you know, dialing back into today. And how do you make the case? How do you tell the story? This kind of model around soft ROI and increasing productivity through XR is quite powerful for someone who is open to that kind of thinking around value creation.

Alan: You know, there’s two other things that have come up on this podcast recently. One being it portrays your company as an advanced company, as a forward-thinking company. So companies that are using VR and AR training now, their employees are more likely to stay with them. And actually there was– can’t remember who was this morning. I was doing a podcast this morning, and they were saying that they’re seeing an increase just by using– oh, it was James and Justin from Immerse. They were saying there’s an increase in retention rates, not of the knowledge, but of the actual employees. Because they’re staying longer, because they’re getting better trained, they feel more comfortable at work, and they also have this kind of feeling that their company is doing the right things. And I think that’s a soft AR way that you can’t really measure. It’s very hard to measure. But the other one around soft ROI is that people when they go into virtual experiences, they have a very visceral, hands-on experience within virtual and augmented reality. But that translates directly into on the job skills training and management and people that are more comfortable at their work perform better, they come to work enthused. And I think we’re only scratching the surface with this. But at the same time, it’s important for companies to realize the real value is in all of those things combined. And one thing I always highlight when I’m speaking to a customer is like when you’re in VR, you cannot be on your phone. So you’re literally hijacking people’s entire focus. And it’s very rare when you have hijacked someone’s entire focus — even for a small amount of time, for 10 minutes while they do the training — they cannot be doing anything else. It doesn’t work.

Lou: Yeah, I agree. And people are finding benefits just in terms of the training environment, so being able to do it in a controlled environment, something that’s safe, comfortable, maybe not noisy, you can get that personal attention that you may need. You can have effectively unlimited repetitions.

Alan: You can. Oh, and another thing is people don’t like making mistakes, because in all of our school, we’re kind of taught not to make mistakes because we’ll get a lower grade. And people in VR, they can make as many mistakes as they want.

Lou: Yeah. 100 percent.