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May 22, 2020 7 min read augmented reality
Magic Leap Can Succeed Where Hololens Does Not
Magic Leap has secured a lifeline. With $350M in new funding secured through 'existing and new investors' the company has been able to withdraw its notices of potential termination to employees not laid off during the last wave.
The announcement has been met with sighs of relief, skepticism, and an attitude that "well, at least they're limping along". (Check the thread below):
Magic Leap CEO today told staffers the firm has raised $350 million from existing and new investors. The struggling AR startup is also withdrawing notices it sent remaining employees that they could be laid off next month if it can't secure financing. https://t.co/f7MYgVaNc6
— Alex Heath (@alexeheath) May 21, 2020
But the security serves another purpose: now that we know Magic Leap will be around a while longer, it's time to look at their 'pivot' into enterprise in a new light.
Magic Leap and the Genius of Value
I've had a simple lens I use to look at technology, projects, client engagements and business development. The lens is simple:
You are either helping someone to SAVE money or helping them to MAKE money.
For example, let's say you're launching a new contact management cloud service for enterprise. Your product will have a lesser or greater focus on making companies more efficient and productive, or in helping them to discover new ways to earn revenue.
Products that try to straddle the divide end up with a muddy value proposition. The person you're selling to is usually motivated by a single driver: they want to reduce costs or they want to increase their top-line.
Sure, you might pitch both to that enterprise customer. But when they go to sell the project to their boss they're usually focused on one side of the ledger.
And that's the first thing to realize about why Magic Leap's "pivot" to enterprise is so important.
While the majority of 'augmented reality for enterprise' is focused on efficiency and productivity, Magic Leap is poised to help enterprise to transform markets and create new value.
Magic Leap has a different vision: that AR can be about something more. It can be, well, magical. And magic is what's needed if you're going to transform industries.
The Creative Class
This is Apple vs Microsoft all over again. It's creativity and imagination versus productivity. It's the creative class versus the IT department.
Apple, famously, never achieved the widespread corporate penetration of IBM and Microsoft. It couldn't compete with all of those billions of hours spent preparing PowerPoint decks that you could barely remember 5 minutes after you saw the presentation.
But Apple WAS the platform for the creative class: the music producers and graphic designers, the ad agencies and publishers.
For a while, Apple tried to straddle both worlds: to be both a driver of increasing value and improving productivity. They launched all kinds of computers with sufficiently geeky-sounding names.
Their market position faltered further. They tried to straddle the divide. Their value proposition became muddy.
Then Steve came back and swept it all into the trash bin where they belonged.
Magic Leap is in a similar position.
Forget about their consumer missteps. They were competing at the wrong time for the living room. You couldn't walk around town with a Magic Leap on your head, but you could use it at home.
And so Magic Leap was competing with your game console, with Netflix, with time scrolling through TikTok on your mobile phone.
But what Magic Leap DID do was create a story: that augmented reality is about EXPERIENCES. It's about creativity, and making worlds, and telling stories.
It's a device for creativity and imagination. It can make your world a better place rather than just a more efficient one.
It's Apple in a world of boring, black and utilitarian PCs.
It's Magic Leap in a world of Hololens.
Lessons from Healthcare
You tend to think of healthcare as programmatic. A doctor diagnoses you and then consults some table somewhere and figures out the best treatment.
A surgeon prepares for an operation and what they really need to do is practice their approach.
But like other industries, healthcare is a combination of efficiency and productivity plus imagination and collaboration. (We'll ignore for now the profit motives in some markets).
I spent 20 years in healthcare. Our focus was on increasing value. I was never good at being efficient in any case (as my meandering blog posts can attest).
We created a haptic wheelchair for military amputees which helped them recover from PTSD. They could 'wheel their way' through a video game. We helped Johns Hopkins improve the patient's experience of healthcare by helping them to re-imagine how everything from a room design to an intake form could be improved to deliver greater value.
And so when we hear Magic Leap is potentially partnering with major healthcare concerns, I don't wonder how they'll make healthcare more efficient: I wonder how they'll help organizations to re-imagine the hospital, how they'll help surgeons brainstorm approaches with their team prior to entering the operating theatre.
The Genius of Rony Abovitz
OK so curse me. Some people call him a charlatan. Theranos never delivered a product. Magic Leap delivered, although they mis-managed expectations.
Abovitz has been a few too many steps ahead of his time.
I personally think that his Magicverse post may be seen, one day, as a defining artefact for our times. As a vision document, it has been deeply underrated.
"The Magicverse is an Emergent System of Systems bridging the physical with the digital, in a large scale, persistent manner within a community of people. The Magicverse is dynamic, alive, and a home for the endless creative expressions of human life. It can also become a fabric that binds a community together through shared public services. Spatial computing creates the power of place, of physicality with digital together."
Now, sure, there are a ton of 'round sounds'.
But if you decode the document it's actually a stunning description of our shared future. It's a vision document and yet it actually describes a stance, a philosophy, and a systematic way of 'framing' the technologies that need to be developed.
And, I dunno, but compare it to this:
"Work better together with HoloLens 2—an untethered mixed reality device with apps and solutions that enhance collaboration. Help your whole company be more productive and innovate with more purpose."
Oh, please. Restrain me. I'm so excited.
Hololens isn't an extension of XBox. It's an extension of Azure. It's valuable, it's utilitarian, it will absolutely unleash new waves of productivity and, sure, some true innovation.
But Abovitz inspires in the same way Jobs inspired (and Ballmer, say, did not).
Sure, he might also inspire antipathy but he rarely inspires a yawn.
And it's this kind of vision which will let Magic Leap tackle industries in a way that Hololens will not.
Sure, it's all up to the vendors. But different types of vendors migrate to different platforms, just as the creative department at an ad agency migrated to Apple while the accounting department was "all PC".
Enterprise Is a Direct Path to the Consumer
If Magic Leap forges a path through enterprise based on imagination, storytelling and value-creation, it will be building tools and awareness that primes it for its next leap into consumer-facing devices.
Apple may popularize wearing glasses that DO stuff (and will barely care that they "do" AR). But it will be a long, long time before Apple Glass features rich 3D.
There will still be lots of room for the Magicverse.
Magic Leap can win where Hololens will have a much harder time.
Sure, down on the factory floor you'll see workers accessing training and maintenance manuals next to the machines.
But up in the marketing department the team might be using their Leap to map customer journeys, re-imagine their retail stores, or co-creating new products.
I mean – it will just be more COOL for an agency to say: "Grab a Leap and let's set up a Magic Room".
The devices can be used in pitch presentation to major brands. It can be used to create magical walk-throughs of future store designs, with 'smart avatars' guiding the way.
As major brands start to understand Rony's vision for the Magicverse, he'll be creating an army of supporters in enterprise who live at the intersection of product innovation and the consumer. And he'll be developing more and more tools, and better and better devices.
Just like Apple suddenly jumped from the graphics department into homes everywhere when they launched the iMac, Magic Leap can similarly jump from the 'innovation department' at Fortune 500 companies onto the bridge of your nose.
Success Factors Going Forward
So here's what I'm looking for:
With funding now removing the Magic Leap death watch, what enterprise partnerships do they announce first?
Do they make the mistake of migrating to "we help with productivity"? If they do, it means that Rony has lost his voice
Do they make a major push into the "Big C" creative space? Do they become the de facto device for architecture and ad agencies, store design and product innovation?
Do their forays into 'training' end up being bland and dull? If so, they're only going after low-hanging fruit rather than aspirational use cases
Do they start to muddy their value proposition, trying to straddle the divide between "productivity and efficiency" and value-creation?
Can they start to parse the Magicverse for enterprise? If you know how to read it, it's a brilliant path forward for corporations and non-profits, perhaps especially during these perilous times.
Magic Leap's "pivot" to enterprise might seem like a retreat, and in some ways it is.
But the work they did in seeding an imaginative view of what AR could BE could pay massive dividends. Magic Leap can be what I just don't think Hololens will ever be: a platform for unleashing new value and facilitating paradigm-changing market innovations.
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