Magic Leap reportedly slashes jobs and steps away from consumer plans

Magic Leap made one of the classic mistakes that other before-their-time products make: they tried to create a general purpose product because they didn&#x27;t have a killer app that could focus their efforts.<p>When you&#x27;re building a product without a focused use case, you are pulled in a ton of different directions. In AR, this means focusing on <i></i>fidelity<i></i>, embodied in high resolution, wide field of view visuals, powerful processing, and compelling input methods.<p>The real question in AR is what use cases can you hit <i>without</i> great fidelity? What sort of value can you unlock with a low-res postage stamp overlay and slow processor instead of full FOV? That&#x27;s where the go-to market effort needs to be placed.<p>A similar example of this overreach was in multifunction pen devices of the 90s (General Magic, Newton, EO Personal communicator). A great counter example is Apple Watch, which didn&#x27;t chase the &#x27;smartphone on your wrist&#x27; everything device, and instead picked a few key use cases, established a beachhead, and slowly added capabilities as the technology allowed.<p>When a category-defining product has yet to emerge on the market, there are going to be a lot of people making predictable mistakes like this - mistiming ideas, scoping the wrong set of features, getting too excited about the wrong technologies, not leveraging their assets.<p>If you&#x27;re a product person interested in understanding more about these factors, I wrote an essay on the subject recently: <a href="https:&#x2F;&#x2F;nickpunt.com&#x2F;blog&#x2F;category-defining-products&#x2F;" rel="nofollow">https:&#x2F;&#x2F;nickpunt.com&#x2F;blog&#x2F;category-defining-products&#x2F;</a>

A little perpendicular to the subject, but this kind of thing always brings my mind back to iPhone. Apple had AT LEAST four kicks at the can with mobile devices.<p>They had the &quot;Knowledge Navigator&quot; vaporware in 1987, twenty years before iPhone.<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Knowledge_navigator" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Knowledge_navigator</a><p>They started working on realizing the KN concept in 1987, and shipped Newton in 1993, fourteen years before iPhone. Alas, the state of tech was not up to their ambition.<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Apple_Newton" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Apple_Newton</a><p>They shipped iPod in 2001, six years before iPhone. In conjunction with iMacs that could rip CDs, they had a massive hit!<p><a href="https:&#x2F;&#x2F;www.apple.com&#x2F;ipod&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.apple.com&#x2F;ipod&#x2F;</a><p>Then they shipped iPhone in 2007. The greatest hit in product history.<p>What made it possible to have so many kicks at the can was, of course, having a successful(ish) business selling Macs.<p>With VC funding, you strip all the legacy&#x2F;cash cow business out of the equation. In exchange, you get tremendous financial leverage for founders, but you also have a very limited window in which to ship a hit.

&gt; Citing COVID-19, CEO Rony Abovitz wrote in a blog post that the company needed to shift focus<p>Right... because of Covid-19. As a counter example, Animal Crossing on the Nintendo Switch is doing phenomenal right now, in part due to Covid-19.

Wow, they burned billions.<p>Karl Guttag has blogged about them for years, debunking their technology. Hi blog is a good read for all things in the AR&#x2F;VR space <a href="https:&#x2F;&#x2F;www.kguttag.com&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.kguttag.com&#x2F;</a>

They&#x27;re exploring a sale valued at $10B, but it&#x27;s doubtful who would have the appetite to buy it at this valuation. Google declined a follow on round recently, Apple has been developing their own tech for years, and Facebook has quietly stepped away from AR&#x2F;VR.<p>Magic Leap is reminiscent of another company with &quot;Magic&quot; in its name: General Magic (<a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;General_Magic" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;General_Magic</a>). They both made a product that evangelize the form factor in the public&#x27;s (or some subset of it) eye, but alas is way ahead of its time in terms of tech, and content.<p>It&#x27;s easy to hate on Magic Leap and its self aggrandizing marketing. Although I personally never bought into the hype of Magic Leap in particular, they did inspire a whole generation of developers in a way that hasn&#x27;t been done since the release of the original iPhone.

I sort of always knew it was the job of VCs to hype up their portfolio, but i&#x27;ve never seen it as bare faced as when Benedict Evans was shilling Magic Leap saying things along the lines of &quot;Magic Leap was the coolest thing I&#x27;d seen since the iPhone. It&#x27;s now much cooler than that.&quot; and &quot;I’ve had the Magic Leap demo. It was worth going to Florida for.&quot;<p>Well that looks a bit silly now doesn&#x27;t it.

Two bad signs:<p>1. They were founded by a well-connected VC-type, in a hyped new industry. These companies always raise a lot of money (because of the connections and the hype) but rarely (never?) work out well. (See also 21.co for “blockchain”.)<p>2. A few years ago they contracted with my friend’s company to make some swag, it was a chromed 3D paperweight of their logo guy. I saw a prototype of it, and it was really nice and pretty cool. Then I heard magic leap had rejected it because they didn’t like some way the chrome plating came together at the point it was dipped or something? It was insane to me, that thing was pretty cool and totally professional, and I knew if that was emblematic of how they did business they were screwed..

Does this officially place the Magic Leap&#x27;s consumer device on the list of the biggest vaporware products in the history of the tech industry?<p>I don&#x27;t know whether there was some tech hurdle they could never get over or if they were just straight up selling a fantasy from the beginning, but this result has seemed to be the likely destination for years.

Ah, the death step of every failed VR&#x2F;AR company. &quot;Focus on enterprise customers&quot; just means &quot;draw out our demise for as long as possible in the hopes of drumming up some more VC before we file for bankruptcy.&quot;<p>Hopefully someone competent buys them before that happens.

Jesus Christ. I personally know two people that started working there right around when the lockdowns were starting to get put in place. They&#x27;ve probably been there less than a month.

Magic Leap is like the story of overhyped, over-priced tech vaporware investments in the 2010s all embodied in one company.

This is the modus operandi of every startup. Consumer products look great and can really wow people until you realize all of the money is in enterprise. This is why enterprise is always the largest business segment of large software companies - corporations have way more money than individuals and will provide recurring revenue.

This is such a weird company. They created big buzz over years and it seems they are just fading away quietly with nothing to show for the money they took in. Reminds me a little of Theranos (although not as criminal). Why do these investors keep pumping so much money into a company that has nothing to show? I thought they do due diligence.

The product exists. Their intention was never to do vaporware or deceive anyone - Rony&#x27;s a good hearted fellow - but they had too much money, so much that they thought they&#x27;d bend reality. Francis Ford Coppola famously said of producing Apocalypse Now: &quot;We were in the jungle, there were too many of us, we had access to too much money, too much equipment, and little by little we went insane&quot;. This is really what Magic Leap felt like from the inside. So much money, so many famous people on board (and on <i>the</i> board), all these dreams of creating not new means of consuming content but <i>all-new content</i> and all-new use cases. Making this functional and beneficial to your everyday was not enough, Rony wanted a full on sci-fi universe right here and now.<p>This company could snub reality for a long time and I&#x27;m honestly surprised it lived for this long.<p>That said:<p>1. There absolutely exists a product and putting it on for the first time is a pretty exhilarating experience. Unfortunately Magic Leap failed to provide an convincing reason to put it on for the second and third time.<p>2. The company had very good talent. Unfortunately its management turned more awkward as you climbed the ranks - professional corporate survivors which needed to bridge reality between Rony&#x27;s dreams for the next year and what&#x27;s possible in the next 10 with their modest skillset.<p>It was a bit of Hunger Games up top.<p>3. AR hardware startups need money, and lots of it. I estimate Magic Leap had about 50% overhead, meaning that given better management and direction - and a bit of hindsight no doubt - it could have been done with $1bn. It&#x27;s <i>still</i> $1bn.<p>4. Consumer AR will come in a minimalistic form, such as Intel&#x27;s deceased Project Vaunt (ironically enough, many of its Swiss optics team were brought on to Magic Leap following its termination in Intel). Minimal, stylish, useful - not something to wow you once over but to provide day in, day out value. An Apple watch rather than an Oculus.<p>Source - I was there for few years, running some parts of their engineering. I don&#x27;t regret a second of it.

What a lost opportunity to pivot from the inachievable (cinematic fully immersive VR) to the desperately needed (face to face equivalent interactions and entertainment). Time for the board to find new management.

<i>&gt; Citing COVID-19</i><p>That disease is going to get a whole lot of bad news laid at its feet. Basically if any company has anything bad they want to get off their chest, now is the time to do it.

This is unfortunately not a surprise. Magic Leap is now an example of why companies should ‘under promise and over deliver’.<p>I don’t think the product could’ve ever lived up to the hype train.

The problem for AR is that there are no killer apps that aren&#x27;t deeply privacy invading. What people want is something that basically googles the world around you giving you all the relevant information it can find. We are very quickly going down the path to making that entire use case illegal, especially for people. Without that use case, I&#x27;m really not sure there is much outside of things like How To instructions.

Has any company ever raised more VC money and then produced so little? This has to be up there with Theranos, not sure if there are other contenders.<p>Magic Leap is one of those companies where it seems like everyone (in tech) was rooting against them. Too confident, too much money, too little to show. The only people I ever heard defending them were people who were financially invested in them or in AR as a whole.

The sheer volume of cash and talent thrown into something that hadn&#x27;t yet found a market is sort of amazing &#x2F; seemed like a huge amount of cart before the horse.<p>It seems generally like they decided to do X, Y, Z but needed to invent A, B, C before they could get there, let alone know if anyone wanted X, Y, Z.....

Are there other companies making progress in the augmented reality space? I&#x27;ve tried the Hololens v1 and was completely underwhelmed. The field of view is far too small and not impressive or immersive at all. Is the v2 much better? When will we get what Magic Leap was initially promising?

A little off topic and maybe a dumb question but why does a consumer products company that hasn&#x27;t shipped a product yet and isn&#x27;t selling anything have offices in 4 cities around the world? Like what are Magic Leap employees doing in New Zealand when HQ is in Florida?

So many startups seem to be blowing up right now. Amazing how fragile the whole ecosystem was.

Makes me think of the Theranos funding scam, but more money and less health risks.

couple of years ago when I first saw the Magic Leap, it&#x27;s kind of magical to me, their tech is great and they advertised it to do big things to help the world (aquarium or 3d painting, I don&#x27;t remember exactly what it was) Last year when re-visited their website and see their showcase with Spotify and NBA sport, I was very letdown. Why do I need VR app for Spotify? Why do they think it&#x27;s importance to do something like that instead of make a bold product. So disappointed.

Will VR&#x2F;AR join 3D TV in the consumer tech hall of shame?

Imo enterprise and military were always going to be the first successful applications for this tech. Smart money will stay in those lanes until the tech is mature.

It was too expensive. That&#x27;s why it failed. This doesn&#x27;t seem that complicated.<p>It was a really cool product. If it was $300 instead of $2300 I would have bought one.

To me the styling of their product looks like it is out of the 1990s (even though nothing like this existed in the 90s). I don&#x27;t know what it is about it

&quot;Because COVID&quot; is a new generation&#x27;s &quot;Because 9-11&quot; rationalization for otherwise indefensible behaviour.

For the ignorant amongst us (by which I mean me), what <i>are</i> the enterprise applications of Magic Leap?

What a cowardly way to lay off a bunch of people. Waiting for a crisis that requires you to push people to work from home, then quietly fire them with a curt email and cite difficulties from COVID-19.<p>The respectable way is to get them in person, look them dead in the eye and admit to the failures of the company and product vision, and then let them go, apologizing profusely for your incompetence.

This is approaching Theranos levels of sham and has already passed Juicero a long time ago.

Niantic Pokeman Go is one of the few hits so far in AR.

Doubling down on corporate uses of AR.

Shame on them.

Proper move. Consumers care less about AR than even VR. For AR to be interesting, the reality needs to fit.<p>That is possible in an amusement park where you can roam in an environment, but if you want to make a livingroom interesting, might as well cut out reality completely.

Magic Leap &lt;==&gt; Theranos<p>But I&#x27;ve said it for years, if I shorted it 2+ years ago I would have lost money!<p>Not sure what that means.<p>They are clearly pivoting off Covid-19 for more VC money, something I wouldn&#x27;t have predicted last year. I guess if not Covid-19 it would be something else.<p>How do you predict when they will fall off the end of the graph I guess is the question?

Why not just have a VR, with a pair of cameras on it?<p>Ensure that the frame rate is capable of 120 frames&#x2F;second, or whatever value will make it comfortable for humans to see in real time.<p>Then, overlay the digital artifacts on top of it. And skip frames, if you can’t compute the objects fast enough to match the frame rate.<p>This way, you can put on the VR goggles, and still be able to walk around in the real world, without tripping and falling down.<p>The AR stuff seemed way too complicated.