Exactly, Magic leap has an ambitious software ecosystem vision that they have had trouble to realize - neither content producers, nor end users showed up in meaningful quantities so far. You can't sell what you don't have. At best it's going to take lots more in investment to make this work, if it ever will. Doubts about that are what is probably driving these rumors.
They are also a hardware company with some cool patented solutions that seem to more or less work. IMHO any of the big companies could be potentially interested in adding that core technology to their portfolio. That's worth something but maybe not ten billion.
What they don't have is the operational side sorted to build and ship products in volume (at least not as far as I know). They are shipping a product in limited volume to developers only and so far the reception of this device has been luke warm. Presumably this is not the final version.
The reason they are allegedly looking to sell is either that they are running out of funding and are having issues securing more and/or because it's clear that their current strategy is failing.
The real question of course is what investors stand to lose their money and what kind of financial constructions they can come up with in terms of equity swaps, and portfolio consolidation to protect their investment and turn this into an acquihire/IP grab. I hear Google has a lot of money in this already and its CEO is on the board and it has a history of doing AR stuff (and not quite succeeding). Jack Ma is on the board too.
My fear is that Magic Leap is getting all those investment dollars from big names like Google, Qualcomm, Alibaba, Andreessen Horowitz because the investors are ignoring the realistic difficulties of actually building it and buying into the idea.
My hope, like yours, is that they actually succeed in building it.
They're exploring a sale valued at $10B, but it'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/VR.
Magic Leap is reminiscent of another company with "Magic" in its name: General Magic (https://en.wikipedia.org/wiki/General_Magic). They both made a product that evangelize the form factor in the public's (or some subset of it) eye, but alas is way ahead of its time in terms of tech, and content.
It'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't been done since the release of the original iPhone.
> It’s still not totally clear what Magic Leap is doing, but it sure has raised a ton of money (more than $1.9 billion) in order to do whatever it is that it’s doing. To date, we’ve been able to gather that the company may be launching a device called “Magic Leap One.” And last month, Bloomberg suggested Magic Leap may be gearing up to ship that device to a “small group of users” in the next six months or so.
That might be the most I've heard about what they're doing and when it might be available. I've read some "leaks" in the past, but nothing that has stuck with me. Anyone got any info?
Magic Leap's main product might be more than meets the eye. According to Quartz [1], there's probably more far-fetching tech that Magic Leap is working on that involves "deep learning techniques utilizing robotics," and Bradski's and Kaehler's termination forced their hand to divulge even the least bit of information. Maybe "artificial reality" is not a misnomer and the $4.5bn valuation is not just the AR.
Yep; as Magic Leap goes longer and longer without publicly providing any details about their product I've slowly grown more and more skeptical.
On the other hand though, you and I aren't the ones they have to convince; for now they only have to convince investors. And so far, investors seem to be pretty convinced. Whether those beliefs are well-founded is impossible for us to determine one way or the other, since again, we haven't been provided with any information on Magic Leap's product.
If Magic Leap ever does release a product it won't matter how skeptical the general public is or isn't initially; the product will speak for itself.
So here's my concern with Magic Leap. (And I say this with friends working there, so I WANT them to succeed more than anything, but I can't help but look askew at some of the secrecy)
If their technology is _so critically secret_ that everything needs to be under more NDA/IP protection than I've seen in almost any other consumer product, one would think that implies it's readily duplicatable if someone just had the secret sauce? But in that case, one would expect to see more results after how long they've been in dev. I've heard in many cases founders/VCs laugh at the concept of "keeping your million dollar idea secret" because of the concern that someone will steal it, let alone a concept so complex that a group of some of the better specialists in this area (AR/VR/robotics/wearables/vision) have taken this long to bring a product to market.
So is the concern just about entities like Google/MSR who would show up out of the blue willing to throw essentially endless money at the problem? Because off the top of my head they have not shown a great track record of even executing on _their own_ ideas with a compelling end product on a fast enough time-scale to be competitive against someone with a multi year lead. I'm just not sure I follow the benefit of this level of secrecy compared to the amount of skepticism it naturally generates in someone who would love to be an early adopter.
From what I’ve read, especially on Karl Guttag’s blog, Magic Leap is a sort of running joke. They’ve pivoted to make something a bit less useful than Hololens, with a patent history that reads like a fever dream. Bullshitting about the price after so many outright lies abou fiber scanning nonsense seems tame.
I expect the title and tone reflects that Magic Leap had a history/reputation of being able to walk into a room and have money thrown at it for no reason at all, and now it can't do that.
It also shipped in 2018 and has yet to file an S-1 for a public offering.
Typically, once execution risk has been retired (i.e. you are shipping a product), and market risk (or fit) has been retired (i.e. you're getting more demand than you can fill) then you pour in money and grow the company.
So they have been shipping for a year and don't have enough sales to be operationally cash flow positive, and they don't have a good enough story to convince investors that they can get to market success, and they need cash to continue operations.
No, what this note/observation makes clear is that it's that time where either they figure out some problem where their technology has the most value, or they end up selling off the chairs and desks and try to return something to their investors after JP Morgan sells their IP to cover their last loan.
Odds are its about to follow DAQRI[1] into the bin.
I was, at one point, very excited about this company, to the point where I recommended a colleague join the company (she thankfully did not). I strongly believe there's only so much vaporware that the general public will accept, and Magic Leap has definitely overstayed that period.
If they aren't more honest about their current progress and more realistic with their near-future plans, they'll end up cratering their reputation with the public before they even have anything off the ground. At that point, it might not matter how many billions they have in the bank if they ruin their reputation to do so.
Worse, if they don't get in front of their persistent vaporware problem, they could find themselves in the dust by the time they do come out with a product. Microsoft has already released their first version of the HoloLens, and is said to be working on their next version at full steam. By the time Magic Leap comes out, Microsoft might already have a compelling ecosystem and device portfolio. Other companies are joining suit.
It'd be nice if Magic Leap showed the public the same thing they're showing these investors - clearly, their demo is convincing some supposedly smart people to pour lots of money in, so why can't they show the public?
I really don't understand a lot of the terms in the article, but one thing that I always found very attractive about magic leap is the amount of people they have staffed that are "story tellers" - professional movie types. I can imagine that magic leap will be the next Pixar. They would combine technology that they develop in house with content also made in house. No one knows why google gave them so much money. Maybe this half of the equation, which you can't really ascertain from patents and technical sources, is what is missing for people to crack the code.
Magic Leap has a long game in mind. I have read/watched many interviews with them over "the years" and this was my impression. They aren't in it to just launch something quickly. Just because everyone else has that expectation doesn't mean they are failing or will fail.
I have a pretty high degree of confidence in them and their vision. I do wish it was an "open" company/product though. Who knows, maybe it will be.
Exactly. One of the big concerns for me is the extent to which their work-in-isolation approach has baked in untested market and design hypotheses. By the time they test them in the real world, it could be too late to recover.
I think one of the superpowers a startup has is that early on nobody gives a fuck what you're doing, so you're free to iterate quickly and boldly. You find out which of your brilliant ideas are brilliant and which are big mistakes.
Magic Leap's hype/secrecy combo really cuts against that. Apple gets away with that because a) they have more money than God, and b) they mostly enter markets after other people have broken trail for them (e.g., iPod, iPhone, Apple Watch).
It's perfectly plausible that Magic Leap will come out with an interesting but fatally flawed product, like the Amazon Fire Phone or Google Glass. Amazon and Google can shrug and move on, but Magic Leap may not have the cash to recover.
Or, possibly worse, they come out with something like the Segway: really interesting tech that everybody is excited about, but with little practical use once we get past the gee-whiz phase. For a company that has already raised $2.3 billion, that could be fatal.
If we're seeing articles like this I'm guessing they are preparing to do another round of funding?
The only time these guys ever make the news is just before they raise a massive heap of capital, and this news looks just as vacuous as all the other news they release.
Just based on the HoloLens having a product out already (even if only a dev version) it seems to me like Magic Leap is way behind.
Originally I found the Magic Leap extremely exciting, because
in contrast to phones or tablets, whose touchscreens limit what sort of applications are feasible, AR could allow for arbitrary interfaces.
These interfaces could be present alongside the real world, making them both more convenient and maybe less of an attention-vortex.
This is (among other things) what Magic Leap pitched, and comparing the actual product to their press releases is to note a vast discrepancy.
Still, hope springs eternal, so while I wasn't impressed, I know how hard AR is and I wasn't inclined to judge too harshly-- maybe it will get better as technology improves.
After having read the article, I find myself rooting for them to fail.
This is a company that has taken (and arguably squandered) billions of dollars to release a slightly cheaper HoloLens.
Instead of feeling abashed, they continue blithely on, even having the temerity to invite developers to their platform because the rest of the world (and in particular, other platforms) has so much "baggage" and "negativity".
As the article notes, this is a company that is propped up by oligarchs, settles sex discrimination lawsuits, and is pursuing military contracts with repressive regimes.
Although to be fair, improving soldiers' lethality is the only use case they've articulated that justifies the price.
Now that the missed expectations and general shadiness are starting to catch up with them, they're moving to attract developers.
Somehow, despite all the money, they haven't been able to pay for an idea to justify the hype-- what else could you call it but a con?
Magic Leap is proof that first mover advantage is fictional (or at least it's not an iron law that guarantees success). They spent large sums of money to put out the least half-baked AR product on the market. They would be in better shape now if they hadn't grown so fast.
That being said, AR truly is the future. In a few years there will be multiple digital universes overlaid onto our world. Magic Leap should be commended for their technical accomplishments, but can they stay solvent until their dream of the future is realized? I honestly hope they pull through.
Am I reading the first two paragraphs correctly as the founder was a former magic leap engineer?
Based on what they have said in the article, it sounds a little too good to be true. $1k price tag, lightweight, and good resolution? Maybe someone more familiar with this line of hardware can chime in on plausibility?
Can someone, anyone try to explain why Magic Leap keeps getting money thrown at them? Series D and not even a whisper of a product. What is going on in the tech industry?
The product exists. Their intention was never to do vaporware or deceive anyone - Rony's a good hearted fellow - but they had too much money, so much that they thought they'd bend reality. Francis Ford Coppola famously said of producing Apocalypse Now: "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".
This is really what Magic Leap felt like from the inside. So much money, so many famous people on board (and on the board), all these dreams of creating not new means of consuming content but all-new content 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.
This company could snub reality for a long time and I'm honestly surprised it lived for this long.
That said:
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.
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's dreams for the next year and what's possible in the next 10 with their modest skillset.
It was a bit of Hunger Games up top.
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's still $1bn.
4. Consumer AR will come in a minimalistic form, such as Intel'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.
Source - I was there for few years, running some parts of their engineering. I don't regret a second of it.
They are also a hardware company with some cool patented solutions that seem to more or less work. IMHO any of the big companies could be potentially interested in adding that core technology to their portfolio. That's worth something but maybe not ten billion.
What they don't have is the operational side sorted to build and ship products in volume (at least not as far as I know). They are shipping a product in limited volume to developers only and so far the reception of this device has been luke warm. Presumably this is not the final version.
The reason they are allegedly looking to sell is either that they are running out of funding and are having issues securing more and/or because it's clear that their current strategy is failing.
The real question of course is what investors stand to lose their money and what kind of financial constructions they can come up with in terms of equity swaps, and portfolio consolidation to protect their investment and turn this into an acquihire/IP grab. I hear Google has a lot of money in this already and its CEO is on the board and it has a history of doing AR stuff (and not quite succeeding). Jack Ma is on the board too.
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