tools for industrial companies. They work on phones, tablets, and smart glasses. They build software that’s portable to all platforms and as AR devices improve, their [user experience] improves alongside them.
X: Does the rise in voice interactivity change the way consumers and businesses will choose between AR and VR; or between AR glasses versus holding an iPad with AR features? Does voice command extend the benefits of hands-free operation to more AR hardware?
AM: Yes, voice is pivotal for hands-free experiences and, in some cases, immersion as well. That being said, voice can be a problem in public areas. We don’t talk to our phones on buses or in quiet places; I’d imagine AR will be the same way.
X: How could advances in AI (and advanced chips that enable AI software to process data within devices) change the potential AR/VR formats and their use cases?
AM: The major application for AI in VR/AR is computer vision. Computers need to be able to perceive and understand the world around us in order to properly augment it. For example, by using computer vision AI to identify buildings, an AR device could tell you about the buildings, such as if there are any available apartments in the building and what the monthly rent is.
X: How far in the future do you see the headset/glasses/other device market consolidating behind a limited number of leading formats?
AM: It’s too early to tell. Likely the consolidation is at the [operating system] and standard feature set level. Apple’s iPhone will set the standard for 2D-based AR; and their glasses, whenever they come out, will likely set the standard for wearable AR.
X: Could a single format someday support all content?
AM: Maybe, we expect it to be platform-driven with Apple and Google setting the standards.
X: What are the upsides/downsides to having a standard format?
AM: Just like with mobile applications, a large consistent addressable market with guaranteed hardware functionality.
X: Over the past year or so we’ve seen some casualties in the young VR/AR sector. Rothenberg Ventures, which specialized in AR/VR and other frontier technologies, folded last summer; and AltspaceVR closed down this month. What are your thoughts?
AM: On Rothenberg – we’re grateful that they have laid the foundation for frontier tech investing, and we’re glad to have been co-investors in multiple deals. The ecosystem and momentum behind these technologies is big enough that one fund can’t make or break it anymore.
On AltSpaceVR – we’re sad to see them go. They were pioneers in this field and will be missed. We are believers in social VR and expect that there will be a company that eventually builds the metaverse.
X: What are the advantages to Presence Capital of specializing in VR/AR? What are the risks?
AM: The advantages are that we can be domain experts and really understand the space we’re investing in and the enabling technologies. If you’re not focused, it’s really hard to differentiate between multiple companies seemingly doing the same things. By doubling down and going deep on the approaches to market and the technologies being used, we can find opportunities to invest that may elude others. Obviously, the risk here is that there are no major revenue generating companies in VR or AR for the foreseeable future, and the market takes longer than we thought to develop. In such a case, we’re too early and potentially have no returns. We actually told our [limited partners] this when we raised the fund, but have been satisfied with the speed of development in this space, and feel that our timing was likely correct.
