Bill Wallace

AWE 2021

I attended, In-person, the just completed Augmented World Expo, AWE 2021 in Santa Clara California; the preeminent XR/VR/AR event and feel I have some good insights to share. This report is truly Me-centric, providing my perspective and not at all trying to be a comprehensive review but will hopefully be of interest to some.

I mention many of the announcements and sessions that I found most important. However, I don’t provide much detail. Any one of the significant announcements from the show would require an article of their own, so this just gives a clue of what you may want to investigate further.

A “Good “Metaverse”

I’ll start out (just below) by sharing how this event affected me personally. The isolation of the long pandemic lockdown. The social division and unrest that is so forward in the news. That feeling that the world has changed and maybe not for the good was surely a low grade worry I wasn’t even aware I was carrying, but it was there. I think reuniting with a new tribe at this event was just what I needed to bring some sunshine back into my outlook.

For this year’s event, AWE should stand for Awesome Women Everywhere.

For this year’s event, AWE should stand for Awesome Women Everywhere. Yes, I am a dude but no, I am not making some chauvinistic or sexist comment here. In-fact what I am trying to convey is a bigger, social, or ethical aspect that I hadn’t expected at all. This is the reason for my title saying we have a great hope for a “Good Metaverse” in our future.

Our real world today is so full of what some term “woke” ideals, which in reality all seem to focus on just being good humans or maybe just humane. Regardless, if it is a focus on diversity or inclusion or equality or caring for the planet or just some basic love and respect, it all hopes for a better future.

At this conference, starting with the zany, madcap (Max Headroom inspired) opening keynote by Ori Inbar (the father of AWE) and continuing throughout the event, there was an authentic “wokeness” (if you will) that was just inspiring. It feels like we really have woken up into a new day.

I am an old school (old) dude who has been around the tech industry for a very long time, notably in 3D. I attended conferences (back-in-the-day) at the Santa Clara Convention Center when it was brand new. Being somewhat engineering centric, these conferences used to be a big dude-fest. At AWE this year, Ori shared that more than ½ of the speakers were women. This was clearly not some plan to be inclusive but because they were the best persons to be speaking on their respective subjects.

Walking the halls and seeing all the various communities represented, it was just so inspiring. It gives me a hope for a “Good Metaverse”, but there is more. There were so many signs of our great new path.

Who Will Build the Metaverse, and Will it Lead to a Dystopian Future?

This two-point question was really a thread through the entire event. Ori addressed it in his opening keynote. Then, John Hanke (Niantic) dedicated the last ¼ of his keynote to directly addressing and rejecting the dystopian future. Another key theme, expressed nicely by Brielle Garcia in a panel discussion about the status of the Metaverse was (I paraphrase) “We are living in it now, it’s already happening.”

Looking around the conference I quickly realized, these ARE the people building the Metaverse. Of all the people on the planet, a good portion of those who will be noted in history as Metaverse pioneers (Pionerds) were at this event. The Metaverse isn’t being planned by some Meta organization. It won’t need someone to overlord and make sure it is “Good” or kidnap it for evil. We are already on a great path to a great future. We reject some dark fate for humankind and as we live our good lives each day, we are building the future we want to live in and that includes a good Metaverse.

OK, now two steps down off the soapbox.

What was the AWE Event?

The speaking sessions/tracks covered a huge variety of VR and AR subjects. The quality of the presentations was top notch in every session I was able to attend. The creator community was deeply represented. Such an incredible blend of tech and heart and talent. Surely populated by a younger tribe but such a wonderful and bright light shining on our future. Alongside the artistic creatives we had, for instance, a session delivering a deep-geek hardware presentation delving into the specs of a waveguide lens. You should be getting a feel for the breadth of topics. I even found some of my old tribe of construction site technologists showing videos of guys getting mud on their boots while traversing an early phase commercial building site wearing a HoloLens painting the scene in precise AR content.

The exhibit show floor was a lot bigger than I expected and I had several reasons to think it would be smaller. First, this a tightly focused market space in some respects. We are also still coming out of a state of pandemic uncertainty where 6 months ago when you had to start planning to attend, as an exhibitor, it was kind of impossible.

Not just the size of the show floor but the diversity of exhibitors helped me realize, this is sort of the “Maker” event for the Metaverse. Yeah, Niantic was the big 40 x 40 booth when you first walked in so end user consumer apps were represented. However, they were surely more focused on the newly announced Lightship as a tool provider for building the AR part of the Metaverse. Right across the aisle was a 10×10 both with a company who provides lens coatings for glasses manufactures. Kitty corner to them was a haptic glove maker. Just such a wide array of the base components of the Metaverse.

On my personal quest for valuable new tech, I found a software library provider, ReSight out of Tel Aviv, that has a world-scale spatial positioning solution that might solve some of my orgs critical path problems.

There was also a big playground area with dimmed lights and lots of corrals where you could play with various VR headsets, robot reality-capture dogs, volumetric capture rigs and the AR House chill area. I went over there several times to watch players swatting at the air and slaying dragons or armored horses with virtual broad swords or small axes.

Some Other Show Pieces

The show provided pretty good amenities. You could find a coffee service when needed. The evening happy hours had some finger foods and cash bar. The Auggie awards were well attended where the Next Generation Snap Spectacles won a well-deserved “Best Headworn Device” award. That is a big accomplishment considering all the great emerging solutions. IMHO Spectacles have a great form factor, great vivid display. Not perfect but surely one of the better releases of the year (should say limited release but will surely come public in some state soon).

There was an offsite Auggie awards after party at the Glass House in San Jose, but I didn’t make that so can’t comment.

My Favorites

I mentioned Ori’s opening, great keynote which was followed by John Hanke’s (Niantic) keynote. It was a real tone setter for the event. The Lightship ARDK announcement was well received as well. I was most interested in the VPS (Visual Positioning System), think replace/augment GPS. It could be a great resource for me once it has mapped a good chunk of the world. It is kind of a future thing also, but soon they said. I tried drilling down with some of the tech management who were at the show. I have enterprise needs and ideas, but they seemed to be tightly focused (and reasonably so) on their community of users and a crowd-source scenario before considering any business and tech adaptation to the enterprise.

Cathy Hackel’s Shaping the Metaverse was a must-see session. Each panelist brought unique perspectives and insights on pretty much all the key topics like “What is the Metaverse?”, “When will it happen?”, “What about NFT’s or Crypto”, etc.

I posted about this before but will reiterate this here as it was a real lightbulb moment for me. In the discussion about NFTs, Dirk Lueth, founder Upland (I’m an Uplander and almost Pro) gave me some new insights. He spoke about NFTs, in the future, being our identity ownership. Like in our real world the car we drive and the shoes we wear are owned items that, admit it or not, are part of our identity. Therefore, in the Metaverse, using blockchain (NFTs) will allow us to replicate those identity embellishments and accessories with a similar ‘acquire and own’ concept. Of course, the flexibility in the Metaverse immediately causes brain-explode if you really think about it, but maybe later for that.

Session: The Future of Art and Creation: Interactive Art and Games in AR

• Featured a panel of sort of Snap centric, super talented creators
• Representing Bad Chick Studios, a guy who hangs at AR House (in L.A.), and Streem amongst others. All top notch.
• Really cool insights. “Put a smiling face on things. It engages people. If an object just smiled at them and then my app crashes, they would boot it back up.” Brilliant!

Session: Usability in Wonderland: Advanced UX Standards for Spatial Computing and Virtual Worlds. Nicole Lazzaro

• I’ve been following her for a while in places (not like stalking). This subject wouldn’t be top of mind for me, but I wanted to see what she had to share.
• Beyond insightful. I hung on every word and concept. So many of the sessions showed a real dedication to the work, deep prep and passion translated into valuable guidance. This session exemplified that.
• No more mouse pointer or windows, and a fresh and well though out way to facilitate deep engagement.

Session: Stereoscopic AR in WebXR

• Some folks from MetaVRse and I “Think” backed up by Denali Advanced Integration (I hope I got this right) showed LIVE, 4 people with VR headsets all in a multiuser shared space all driven by WebXR. The excitement in the room really did make it feel like a historic event. “I was there when…” The new Kitty Hawk. They only flew for a few seconds, but we will be talking about it forever. Ha. At least it seemed like that to me.

I could never do justice to the sessions I attended that covered way more than I can discuss here. Financing, hardware, security, privacy, etc. With 5 or 6 simultaneous sessions, starting every 30-45 minutes, over 3 full days with over 300 speakers, the information was mega for sure. The conference was a clear inflection point for me, personally and professionally.

I came away inspired and refreshed and somewhat in awe of where we are headed and the people helping us get there. I am dedicated to building my little piece of the future and have a renewed energy and clarity of focus after this time together. I seem to end every article with this sentiment, but lets get to work building this great future.

A story about a startup business strategy in action

I’ve launched a new AR focused startup. Regarding the headline, it is very misleading. I haven’t actually earned a single penny of sales revenue yet. However, I did have an (almost) million-dollar month of sorts. I have just started to execute my business strategy and tactics and they are playing out (generally) as I intended. Market conditions are developing as I predicted, faster even, and I’m getting excited. This story is about launching a startup.

Things are not happening exactly as I planned. They obviously never do. It’s just that the surprises are, well, surprising. Some things have taken longer, and some things are happening way faster than I could have imagined.

AR Obsession

As I’ve mentioned in a previous article, I became obsessed with AR many years ago. At the time, I was a software product owner in a major global corporation, it was my job to watch trends and propose and deliver cutting edge solutions. However, I just couldn’t get any traction with my AR vision, we just had too much other backlog to head off in a new direction. I then tried getting hired into companies with potential or intention to get into AR, but I just couldn’t land a gig.

My obsession was real, so I needed to find some way to feed it. I decided I just needed to start my own company but how the heck would I get started? How could I fund it? I decided to leverage my side hustle in real-estate to flow some capital into my coffers to get me started.

One Strategy Point

I am bootstrapping (self-funding) at first. I want to maximize my pre-money valuation before I look for investment funding. I will try to fund this on my own up until I have some early (paying) customers. When I do look for an initial capital influx, I want to be able to get enough to really build the business while keeping a decent share of the equity for me and my fellow founders.

All In

I quit my high-tech, high-pay job. Well, it took three tries, but I finally did and went all in on my real estate scheme. I planned to take 6-9 months to do a few small flips and fixup and sell off my rentals. Then I could tackle the big flip, a 120-year-old 3,000 sq ft Victorian I already owned. It was decaying and decrepit, but I only paid $215k for it and it could be worth $750k if done right.

Not everything goes to plan. My first flip took 9 months, while I was still working my last corporate job. The cash ROI on that project was zero. I got my money back but that was it. The rentals did sell at decent prices so I could still launch the mega project.

I lived in the attic of the decrepit Victorian for 18 months while I went downstairs everyday and rebuilt the entire building. Oh yeah, I simultaneously had an offshore team and a few free lancers around the globe building prototypes of my AR platform, so I’d be able to hit the road running once I cashed in on the Victorian. Staying focused on my obsession fueled my daily work.

When I was nearly finished with the massive flip, the market in my area was smoking hot, properties in my price range were selling in 3 days with multiple offers. Things were looking pretty good. My place came out amazing and my realtor pegged my sale price at $884k. That is $130k over my original expectation. Oh yeah. I was completely burned out, nearly busted and so happy to finally be ready to sell this baby.
I listed the home (in June 2021) one week after covid restrictions were lifted in California and the buyers disappeared. Properties just stopped selling. Fast forward 90 days and I had only seen 5 buyers come and look at the home. No sale.

During those lonely 90 days I really felt the letdown, having expected the property to sell in a few days for over asking. I kept telling myself that God didn’t teach me how to swim, just to let me drown but I sure felt like I was going under. I had some severe self-doubt about my craftsmanship and my price expectations. Everyone was telling me what beautiful job I had done but hardly any potential buyers were looking. I really was all-in and needed an out. I had done my homework; I had managed my risk and could hold the property for the next year if I had too. I learned some good lessons there and a little bit about patience too.

Finally, the right buyer showed up and 120 days after I listed, I closed an all-cash offer for $875k.

Another Strategy Point

I’ve written before about my belief that AR will deliver a huge wave of business and specifically when AR glasses sufficient for my intended workflows are moving towards mass market acceptance. My explicit strategy is to build a viable AR business now (in the Visual Search segment) using mobile devices (phones/tablets) as the client, with the full intention that once the market swell caused by viable glasses happens, I’ll be a very attractive investment for the smart money looking to be in AR.

Such a Spectacle

We are seeing so much activity in the “AR” glasses game. Yes, many of the “AR” glasses or “Smart Glasses” are just camera glasses or audio glasses or HUDs. However, having been fortunate enough to be accepted into the Snap Next Generation Spectacles (4) beta program, I can say the new Spectacles are truly AR glasses. I would have to re-read my NDA to know what else I can say so I’ll just leave it at that. There are some other great solutions as well.

Having had my Snap awareness raised, I learned that Snap had funded a Ghost Fellowship grant program and I applied. I was seeking $125k to build out an amazing solution on the Spectacles platform. I made the first cut, got an interview and it went great with a great engaging team. I was really looking to push the tech farther than it can go at this time, but they got it, asked all the right questions, hard questions, and seemed enthusiastic. I evaluated the situation and felt I might have slightly better than even odds getting accepted.

I was so stoked. This extra $125k was not in my original plan at all. However, I had predicted that as AR started gain traction, gaining some attention, the money would start to flow into this segment. I was thinking maybe late 2022 when Apple ships their AR glasses. Now, in just the last months we have seen many of the big players and lots of upstarts making announcements about glasses, shipping products. We are even seeing the traditional early placeholder products from big players just so they can have a presence in the market while they play catch up. Heck, Snap has created a $3.5M grant fund to accelerate their platform. That’s just straight up cash on the barrel. Money was coming into this market.

I didn’t get the grant.

That would have made my million-dollar month. $875k + $125k. I let it get me down for about a minute and then I started concentrating on building my resolve. I’ll have a lot of these lost opportunities. I’ll need to experience a lot of lost opportunities to accumulate a few wins along the way.

Focus, Bill

What does an engineer do when the machine he is designing fails? Of course, they analyze the failure. They go back and review the relevant design principles, prior art, the acquired knowledge base of their education and experience. Break the problem down into its numbers, into measurable, smaller components that can each be analyzed, optimized, swapped out.

My machine is a business. So, what things do I know about such a business? For me, there are several software business “Truths” I have garnered from my education and building businesses inside corporations, grinding out in various startups, my own little ventures and learning from my friends and colleagues, from my failures and successes.

• One magic number seems to be the $40M year.
  • If you can generate $10M a quarter, you are legit.
  • You won’t see an IPO without seeing that number first
  • That is a lot of fricking business for a guy with a prototype and “no customers — at all
• In the software business, I think the standard target is to generate $200-$250k per employee, per year.
  • Let’s see, Google says Autodesk does $3.79B.
  • 1,500 employees
  • That is $330k per. Nice work Andrew.

Okay, I have a few first principles I can work with, but my design, my business plan, is a bit hard to write as a $40M business when I haven’t made my first dollar yet. However, I was generally comfortable with that “million-dollar month” concept.

The Million-Dollar Month

Ok, I can start to back into some numbers, mathematically. $12M a year divided by $250k per employee pencils out to 48 employees. That is a number I can envision. I only ever managed less than half that many people directly but, in a matrixed org as a product owner, I orchestrated the actions of many times that many people, in many different roles, taking my product to market. I never had CEO as my title so with that little extra kick-ass, my-word-is-law authority, I think I can do that.

Now when we are saying $250k per employee, we are not talking about 48 engineers. That headcount includes the lowly office boy, HR, PR, purchasing, sales, etc. So, as I envision growing an org from zero, the plan needs to be accountable for that total structure.

Backing into some more numbers, if I am targeting enterprise customers, then $1M a month means some distribution like 100 customers paying $10,000 each per month or 1,000 customers paying $1,000 per month. That starts to indicate a rather large sales org. Math again, each individual customer is at $12k-$120k per year. I think a sales guy might be able to find and manage maybe 10 customers that size. Therefore, I’ll need 10 fully loaded sales guys to deliver that revenue. Honestly, it’s probably more like 20 sales guys. That won’t fly. I can’t have nearly 50% of my org as sales guys if I am also building products.

My enterprise market experience has always included, or even been exclusively an indirect sales channel. Resellers. The cliché’s here are endless. An indirect sales channel is the worst type of sales channel, except for every other type of channel. Motivating resellers is like pushing rope. It’s not an 80:20 rule with resellers, 1 out of 10 resellers will deliver most of your sales. Unfortunately, these are not just cliché’s, I find them to be among the “truths” I spoke of earlier.

Even so, I never met a reseller I didn’t love. Honestly, these are the guys on the street in every big and little city. How in the heck can I make a sale in Omaha when I am sitting in California? The price of the flight alone kills the idea. If I can have one direct sales employee, reseller manager, who can effectively engage 6 or 8 reseller organizations, I can conceivably have dozens of salespeople on the street for each direct sales employee/manager. That drastically lowers the number of direct sales staff I’ll need. Yes, there are all levels of competence and enthusiasm in the reseller channel. However, if you can deliver the value to deserve the attention of a reseller, you can get it.

Building the Plan

I have not written much here about a successful product building process. I’ve written before about my approach to product planning and development. For me, that is the easy part. I’ve been a product owner and understand that realm. Now I am expanding my vision to being a business builder.

Strategy point number one is to hold off getting a capital influx until I have some paying customers. There is a long way between today and that waypoint. Therefore, my plan needs to devise a ramp that gets me that far. I won’t have 48 people in my employ while I am in my bootstrap phase. Regardless, I can at least stay focused on what is the critical path between here and those first few paying customers. What product and organization can get me that far?

Strategy point number two is to build a viable AR Visual Search product and business using mobile apps as the client. Then capitalize on the market buzz of AR glasses as they take off. Honestly, even in the time it took to pen this piece I started losing focus on that. The business issues of hiring sales guys, making a monthly target, it all starts to blur the focus. I need to keep a sharp eye on product. A product that can deliver to my target customer.

Organizing my thoughts for this piece has helped me sharpen my “Next Steps” focus. It also reaffirms to me I’ve been generally doing the right things so far.

In Action

LinkedIn has been a fantastic platform from which I can network and start to build out legitimate valuable relationships and move my business forward in this early phase.

Distribution: I have been connecting with distribution partners from my previous positions and finding new ones. Really smart people who are engaged daily with my potential customer base. I have really enjoyed briefing them on my platform and the problems it solves. About half of the engagements are super valuable. Some people have different interests or already have a strong focus elsewhere; or they just don’t get it. Regardless, I have several individuals and orgs ready to learn more and potentially take my product to their base.

Partners: I’ve been connecting with potential technical business partners. Both former colleagues and newly discovered connections. I have lined up some potential innovative integrations and have a shared vison about potential future markets opened by AR and associated spatial/geospatial tech, with some great folks.

Technical Innovation: I’ve also been meeting and having very cool discussions about technical challenges and developments of my AR platform. I feel so fortunate to be able to find and sometimes hire such brilliant folks to solve difficult issues that ultimately will deliver a simple product for my users. I really love being on that leading/bleeding edge and seeing potential and existing technologies come together in a vertical integration to make hard problems seem to have a simple solution.

In Conclusion

I’ll be out here working towards that real million-dollar month. I’ll likely share more about the adventure as things develop. I look forward to meeting new people and building great new things together. I hope you have found some value in my inner thoughts exposed and I am always open to having a candid discussion about the AR business, the startup challenge and stuff like that.