Founder Hubris Led to Magic Leap's Fall -- But Valley Hubris Enabled Its Rise

Bloomberg News has a great long feature on the rise and fall of Magic Leap, which raised $3.5 billion on the prospect of transformative AR technology, only to lose nearly all of that money in the fires of hubris. The company is still operating, but mainly now as an also-ran competitor to Microsoft's HoloLens/AR for enterprise use business. The hubris of Magic Leap's founders is not surprising -- it's pretty much par for the course for any startup that attracts that much funding so fast -- but the story doesn't cover another variation of hubris. 

Specifically: Why did so many major tech companies and VCs invest so much money on a product -- i.e., a head-mounted display -- with no successful track record whatsoever? Especially when one of the Internet's largest companies (Google) recently demonstrated the social disasters inherent in AR glasses -- i.e. "Glassholes"?

But invest they did, and took great pains to do so:

Many high-profile investors made the pilgrimage to a swampy, downtrodden suburb of Miami, where they became convinced [Magic Leap founder and CEO Ronny] Abovitz was building a kind of Apple Inc. for computers strapped to people’s faces. Private demonstrations of the technology, which made it appear as though digital objects viewed through the headset existed in the physical world, helped procure capital from China’s Alibaba Group Holding Ltd., AT&T Inc., Google and the chipmaker Qualcomm Inc. 

As Abovitz was publicly declaring he would crush the Big Tech companies, he maintained a backchannel with nearly all of them, just in case. The CEOs of Apple, Facebook Inc. and Google each journeyed to Florida for discussions about a potential acquisition in 2016, according to the technology news site the Information. The talks with Apple progressed far enough that Abovitz flew to Cupertino, California, to meet with the company’s senior leadership, said a person familiar with the trip. Abovitz named the sale talks Project Batman. Silicon Valley has long been seduced by the idea of augmented reality and has struggled nearly as long to make the technology useful.

I remain utterly fascinated that these companies had convinced themselves Magic Leap could somehow sell an HMD to a mass market where no one else had before, and that it could overcome social barriers that frankly seem nearly essential to what it means to be human. Like I put it to Abobitz directly on Twitter:

Does the [Leap] roadmap include making it possible to directly see people's faces or to enjoy the same digital device at the same time in close proximity - behavior now deeply integrated into our social lives? It doesn't really matter if the HMD is VR or AR, the same barriers remain.

We are seriously talking about a technology that impinges on how humans bond with one another:

Our sensitivity to eye contact begins incredibly early. Infants of just two days of age prefer looking at faces that gaze back at them... Whether or not other people make eye contact with us changes the way that we think about them and their feelings. For example, we are more likely to remember faces with which we’ve experienced mutual gaze, and we consider displays of anger and joy to be more intense when shown by a person making eye contact. In fact, when a person or human-like entity (such as a human face morphed with a doll) makes eye contact with us, we assume that he/she/it has a more sophisticated mind and a greater ability to act in the world, such as to show self-control and act morally, and a greater desire for social contact.

I can understand why AR enthusiasts can ignore this (and Abovitz basically ignored my question about it). What's mysterious is why all these massive companies ignored that problem too -- even when they were writing $3.5 billion in checks.

Comments

[Fionalein]

FOMO in action...

[Joey1058]

Early on, I was excited when they did the demo of the guy at the desk shooting robots. But later on, when they did the whale in the gym, even I know it takes a lot to pull that off individually. I started calling it smoke and mirrors by then. And Abovitz thought himself smug. Even now on Twitter, you can find his legions defending him, saying how advanced his thinking was. Pfft. I'm discovering that I'm unfollowing everyone that is a cheerleader for the guy. I'd bet all these 'yes men' don't own a Magic Leap, either. This is a lesson that Apple better pay attention to. Because if they don't get it perfect after all the time they're taking, and all the iPad demos they've been providing, there's gonna be a crowd with pitchforks waiting for them.