On October 4th, YUR Fit co-founder Cix Liv spoke out on social media about his frustrations in collaborating with Facebook as an independent developer by saying, “they will block you from the store without reason, break your application, try to POACH YOUR CTO, then copy your app and carrot you the entire time pretending they are going to work with you.” This tweet catalyzed me to reach out to Liv to see if he’d be willing to record his testimony on the record, which we did 6 days later on Saturday, October 10, 2020. Liv was also in conversation with a reporter from Bloomberg for an article titled “Facebook Accused of Squeezing Rival Startups in Virtual Reality” that was just released today, December 3, 2020. Liv is no longer with YUR Fit because he chose to speak out against what he perceives to be the anti-competitive behaviors that he experienced with Facebook.
Another indie VR dev alleging bad behavior by Facebook.
@yur_fit founder @CixLiv says Oculus will "block you from the store without reason, break your application, try to POACH YOUR CTO, then copy your app & carrot you the entire time pretending they are going to work with you." https://t.co/laBP0ogawU— Kent Bye (Voices of VR) (@kentbye) October 5, 2020
Liv sent out some other tweets as well, which provided the catalyst that led to the end of his time at YUR Fit. He told Bloomberg that, “he was forced out of his company after speaking out against Facebook on Twitter about a month ago. He said the venture capital fund backing his startup, Venture Reality Fund, told him that he would have to leave the company if he continued criticizing Facebook.” Bloomberg also reports that VR Fund partner Tipatat Chennavasin “denied telling Liv that he had to leave the company if he kept criticizing Facebook.” Whatever ended up happening, the recording I did with Cix Liv was when he was presumably still working at the company, but I was withholding publication until the wider story was reported and vetted by other professional news organizations.
https://twitter.com/CixLiv/status/1320475459830697984
Bloomberg also reports that there are some larger pending, anti-trust lawsuits against Facebook, and that Facebook’s practices “are now drawing the attention of the Justice Department’s antitrust division, which is talking to developers about their interactions with the company, according to two people familiar with the matter.”
Whether or not the experiences that Cix Liv describes fits into a deeper pattern of the other VR developers is yet to be seen. There may be more folks that either come forward to share their story, or perhaps they’ll be sharing more details with the US Justice Department as a part of this larger anti-trust lawsuit. There’s certainly other VR developers that have come forward starting with BigScreenVR’s Darhshan Shankar and Virtual Desktop’s Guy Godin, who have each experienced their own flavors of alleged, anti-competitive behaviors and shared their stories with me here on the Voices of VR podcast over the past three months.
But there may be insights from Cix Liv’s testimony of his experiences and stories with Facebook that could reveal some deeper intentions that is driving Facebook’s behavior. Matching someone’s desired intent with their observed actions and behaviors over time is never a precise science, but there could some underlying patterns of the mechanics of how Facebook goes about “acquiring, killing, or cloning” competition as a part of their larger business practices. It may be that Facebook has been living within the letter of the law, and if there are transgressions here, then perhaps it will lead to anti-trust law reform in order to deal with the unique dynamics for how technology companies are creating entire platforms and marketplaces that end up being functional monopolies.
US House Judiciary Committee released a 449-page report on whether or not Amazon, Facebook, Apple, & Google are violating US anti-trust law.
VR folks may be interested in pg 163 section titled: "Facebook's Strategy to Acquire, Copy, or Kill Competitors."https://t.co/JFd8etn9RC https://t.co/sPCSOs7R3r pic.twitter.com/YMcVHNc0mu
— Kent Bye (Voices of VR) (@kentbye) October 6, 2020
The Sherman Anti-Trust Act of 1890 was written over 130 years ago, and it’s quite possible that the anti-trust legislation is not equipped to handle the unique challenges and behaviors of the major tech companies. So I think it’s really vital to pay attention to what these virtual reality developers are saying they’re experiencing because there could be some bad faith and fundamentally anti-competitive behavior that’s been functionally normalized as “industry standard” for how to run a 21st Century technology firm.
As the power and wealth consolidates into the hands of fewer and fewer companies, then what types of technology policy and legislation needs to be in place in order to foster healthy and vibrant marketplaces and ecosystems? There’s more questions than answers at this point for the entire tech industry, and we should be grateful that Cix Liv was willing to sacrifice so much of his own personal technology career in order to share some of his own direct experiences that may or may not end up helping us all figure out the future of anti-trust legislation in the United States.
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Music: Fatality
Rough Transcript
[00:00:05.452] Kent Bye: The Voices of VR Podcast. Hello, my name is Kent Bye, and welcome to The Voices of VR Podcast. So on The Voices of VR, if you've been listening over the last couple of months, you know that I've been talking to different indie VR developers about some of the potential and alleged anti-competitive behaviors that they're facing with Facebook. So Geek Gidwin from Virtual Desktop, the desktop streaming that was not allowed in the store, he had to put it into SideQuest. Darshan Shankar, the founder and CEO of Big Screen, who is trying to show these different movies, but because of the 30% tax that all transactions have to have, then it's not economically viable for him to have that as a business model. So there's entire classes of experiences that are potentially arbitrarily being stopped from developing because of some of Facebook's behaviors. But there's also some applications not even being able to get onto the application store. So six live was one of the co-founders of why you are fit. And they were doing a fitness tracker and they were having a hard time getting onto the store. Then there was different dimensions of the app getting broken. And then eventually it was announced at Facebook connect one that they had a whole competitor of Oculus move that came out. So SixLiv started to speak out back on Sunday, October 4th, 2020, in response to upload VRs in Hamilton, asking for people to reach out to him on DM if there's anyone who wants to have some on the record comments about what it means to work with Facebook on VR software. And from that, SixLiv responded saying, it means that they will block you from the store without reason, break your application, try to poach your CTO, then copy your app and care at you the entire time, pretending they're going to work with you. And it was in that response to that tweet that I tweeted it out and I reached out to Six to do an on-the-record interview. So I actually recorded an interview with Six back on Saturday, October 10th, 2020. And I think at that point he was still working with YUR and eventually Six talks to Bloomberg. The Bloomberg article just dropped today. I was kind of waiting for some other journalists to be able to cover this story because this is like a big story. And for me, I'm not trying to be a judge and jury about any of these different stories. I'm just trying to capture these oral history testimonies to get an opportunity to be able to talk about their experiences of what's happening. So I wanted to allow these other journalists to be able to do their due diligence and to be able to check it out. So the Bloomberg article came out today. One of the things that they mentioned in that article is that Six says he was forced out of the company after speaking out against Facebook on Twitter about a month ago. He said that the venture capital fund backing his startup, the virtual reality fund, told him that he would have to leave the company if he continued criticizing Facebook. and that one of the fund's partners, Tipitat Shivasan, denied telling Liv that he had to leave the company if he kept criticizing Facebook. So you have this sort of he said, she said situation where Liv said he was pushed out and asked to resign, and then the other side of the investors are saying that he wasn't pushed out. But when I talked to him, as far as I knew, he was working there, but in the aftermath, he is no longer working there. So I just want to make that clear. And so in some sense, he risked his current position of working at the startup just to be able to speak out. So he decided that he wanted to speak out rather than to keep all this private. So that's what we're covering on today's episode of the Voices of the Hour podcast. So this interview with Six Live happened on Saturday, October 10th, 2020. So with that, let's go ahead and dive right in.
[00:03:22.024] Cix Liv: My name is Six. I've co-founded two VR companies now, Why You Are and Live. Live is actually my last name as well. Both these companies have reached over a hundred thousand user base and yeah, it ain't no spring chicken, I guess you can say to the space. And I'm just, you know, on the record here to really talk about the VR space as a whole, as it moves towards this consolidation period with Facebook.
[00:03:47.280] Kent Bye: Right. So I know recently there's been a lot of talk about the relationship between Facebook and developers. Darshan from big screen has talked about different ways in which there could be anti-competitive behaviors with Fandango getting certain deals that he has big screen is not able to get the same deals, or he's creating products that are in direct competition of media consumption that Facebook are doing. or Guy Goodwin who had aspects of his app cloned and specifically the streaming aspects not allowed into the store that has to go into the side quest. And I know there's been a number of different developers who felt there's different anti-competitive behaviors that Facebook have had. And I know you've posted some inklings of that on Twitter, alluding to different stuff. So maybe you could just catch us up to what your experience has been with Facebook.
[00:04:35.660] Cix Liv: Yeah, so the tweet that you're referring to is in response to, I believe, a question for one of the upload editors who asked, what is it like working with Facebook in the VR space? And I candidly responded, they block you, they break you, they poach you, and they copy you. And to say I got a lot of heat from that from people that I work with is an understatement, but it's fact. And I'm coming on this podcast to tell you and inform the industry at large that this is an actual occurrence and it's not limited to just myself. First of all, I want to say that this is part of a much larger conversation right now that's happening between Epic and Apple and these vertically integrated stores. And these vertically integrated stores, the big difference between this and the age of the web is they have a significant amount of data on every single application and its usage methods and who's using it and the demographics behind it. So the conversation of why Facebook accounts are necessary in VR is an additional issue to the developers on the platform beyond all the other issues that are taking place. You know, in my own personal story, Facebook blocked us and told us that we will not allow your application on the store and we won't do that because of the type of data that you collect. After that, we responded, provided all the different materials that they would need to give us the go-ahead to put us in the store. They responded and said, okay, let's move forward. Let's provide an MNDA. And then they just disappeared. A little bit thereafter, I reached out to them again, told them, hey, we have patents. Like, we're really trying to find a way to work with you. What's going on here? You know, still didn't hear anything. And then after that, we eventually built something that integrated directly into games called the Your Watch. And this was actually like engine level. What YUR did is it interpreted movement data into fitness metrics. And the question is like, why is this novel? Why does this matter? You know, there's fitness tracking and, you know, everybody has a fitness tracker. The reason it's novel is because we're taking only motion, only motion, and the coordinates from your head and your hands, and we're able to interpret that data into all these different metrics. We can estimate your heart rate. We can know you're doing a squat. We can estimate how many calories you're burning. We literally invented this, and we invented it in such a way that it's accurate using only data. This has never happened before in history, and we even patented it. So we told Facebook, hey, we've patented this, and we're really trying to find a way to work directly with you. And it's been this constant situation with them where they would say that they would work with us, and then they disappear, and then they come back, and they're aware of our patents. And then all of a sudden, our application started breaking. And our application not only started breaking, we said, hey, even if you're not going to approve our application, at least allow us to exist in a side-loaded capacity, in a side quest. Can you at least afford us that? And they didn't say anything. And all of a sudden, our application started breaking. And it wouldn't just break, it would brick the headset until you deleted our application. So we're dealing with that. They won't allow us into the store. Now our application is magically breaking. And we can tell that a lot of these methods were very much targeted specifically at us. For example, we were the only company in the world to discover how to do a persistent overlay, which allowed you to show the fitness metrics in any games that you go into. So one of the firmware updates was specifically designed to kill that. So we had this issue where not only was our application being blocked, it was intentionally breaking And that user experience was intentionally being broken. And then our own consumers started to assume that we are the ones breaking the application. So then our own consumers start to assume that we're just bad developers and we don't know what we're doing. And we were begging, begging Facebook, please provide us early firmware updates. Literally do anything to try to work with us. And they wouldn't. And they kept aggressively trying to kill our application. Then that wasn't enough. They started going after our CTO. So our CTO started getting all these recruiter messages. He had never been messaged by Facebook before in his life. And they aggressively started going after him. So they've blocked us. They're trying to break our application. And now they're trying to steal our engineers. And okay, if that's not enough, now they come in, start talking to us about various other ways that we can work together. I can't speak to the specifics of that, but we were negotiating with them about working directly in a specific way that I can't necessarily speak to. And we eventually found the conclusion to those negotiations the day before they announced a direct competitor to the application that we've been trying to get in the store for over a year. So think of that as a startup. It is so hard as a startup, just in general, to even go and get a single person to work with you on a company, to convince someone to take a massive pay cut, to work on a startup in the first place and to build a team and to go towards something. It's really what the story I want to tell is this is the death of a startup. Because if you see what's happening right now with all these monopolies, they have these teams of engineers and these teams of lawyers basically ready just to copy all these startups. And they have so much money and so much power, and they act in such a way that it's not possible for startups. It's not possible for startups to compete against these Belmonts. And everybody believes in this capitalism idealism that competition is good. Competition is great. If they would have allowed our application on the store and we sat there, they came out with Oculus Move, which is the direct competitor that I'm speaking about, and it was sitting right next to our application, it'd be completely fine. We have Apple Health integration. We have Google Fit integration. They're never going to do that. They would never want to do that. But that's not what we have right now in the VR space specifically. and the larger capitalist conversation at large. We have companies that intentionally create TOS policies to stop companies from ever existing in the first place. If that's not enough, they basically send a hit squad to destroy your company. And then they can always offer your engineers twice as much as you can pay them. So what do you have left at that point? Patents? We filed patents, we told them about the patents, and they still infringed on us. So the question is, what is a company at this point? And then after they do all these things to you, then they go, okay, now you can work with us. It's like you're sitting next to the very people who screw you. It's sick. And I think going back to like capitalism, idealism, the ideal form of capitalism would be that at some respect, if you open up a store, even if a company is larger than you and they're next to you, there's some form of competition that exists. But this is the equivalent of someone just walking in your store, killing all your employees and saying capitalism. And that's kind of what we're seeing right now is the egregious example of anti-competitive behavior in the VR space. And I'm coming on the record to talk about that and tell VR developers that, you know, you're in a situation where you're either killed at the starting line or you're killed at the finish line in the VR space. And it's specifically by Facebook.
[00:11:46.945] Kent Bye: Yeah, what I noticed from talking to Guy and Darshan is that there's certain areas where Facebook is working on, whether it's media consumption or working with a desktop, in your case, it's fitness tracking, where there was a vision document that Mark Zuckerberg wrote back on June 22nd of 2015, it was their ARVR vision statement. And in there, he said that there's like these three tiers. There's the apps experiences, the platform services, and then the hardware. And in this document, they're saying that they see that the apps experiences are at the top of the food chain in terms of there's certain things that they want to own. And there's lots of different independent developers that are doing games and whatnot, where Mark Zuckerberg says in there, you know, the games are hit driven and that it's not about necessarily owning all those, but there's certain areas where they really want to be in control. And it seems like that with your, while you are fit, fitness tracker seems to be this overlap between their first party solution, which is Oculus Move. And I guess if you go back, you were trying to submit it to their store to have it officially approved. Did they ever give like an answer as to like why it was not being accepted?
[00:12:53.874] Cix Liv: Yeah, I mean, the one reason that they stuck to is privacy in the case of the data that we're asking from, which is emails and biometric data, which is ironically the same exact data they're going to have to ask for their end users in order to do their fitness tracker that's coming out. But there are examples of other developers that do exactly this, which is ask for their emails, have an email login, and ask for biometrics. So they're picking and choosing their TOS policies for companies that they perceive as being the most potentially competitive. Another example of this is virtual desktop. The reason that Chris Pruitt specifically is saying on Twitter there was a response to it, why his Wi-Fi feature is being denied is health and safety. Does that make any sense? Does that make any sense at all?
[00:13:40.676] Kent Bye: They, I feel like they just, you know, just to elaborate that I, cause I talked to people from Facebook and from Guy and what Guy said is that you have to have good enough computer hardware and potentially be in the same room. And if you don't have a good enough PC, you can have variable performance. And so if you are in another room and you're trying to. do this with a middle tier PC. There's like all these things where they haven't actually specified what the minimum specifications for those would be. And so they're using this health and safety as a reason to say like, is this going to work for a hundred percent of the people? And you just plug it in and push play and it works and it doesn't. But at the same time, their equivalent Oculus link also doesn't meet that same standard.
[00:14:20.930] Cix Liv: Yeah.
[00:14:21.310] Kent Bye: And so, you know, John Carmack is on the record saying, hey, there's people that are getting value out of that feature. And so Carmack is on the side where he wants to push it out, but there's other people that are more conservative and, you know, using the reason of health and safety, but there could be some other intentions there, which Guy suspects could potentially be getting access to Steam apps that they have not paid through the Oculus payment system. So it's a way to kind of do a backdoor So there may be other issues that are business driven above and beyond the technical reasons. And so I guess the challenge here is that they may give a technical reason, but you don't know if there's a deeper business reason that's behind it that may actually be driving that choice.
[00:15:01.197] Cix Liv: Well, I mean, I think oftentimes these are business decisions that are cloaked in various different TOS exclusions. There's other examples of this. I've spoken to several developers who have applied to have their apps in the store and they say, you know, for legal reasons, we can't accept this application, but they won't expand. Oftentimes they'll just deny applications without expanding whatsoever. You know, if you can imagine applying to even the Apple app store, they always give you a reason to why you're denied. And, you know, Oculus doesn't even afford that. You know, I just spoke to the guy who built soundboxing is, you know, one of the earliest people who created a rhythm games. He was blocked from the store and they didn't give him a reason. Pavlov was blocked from the store. There's climbing, there's all these applications that are blocked from the store. And they give no reason or they give made up reasons. And oftentimes, you know, from a business perspective, the real reason why oftentimes they're doing this is for business reasons. For example, with rhythm games, it would be they don't want to compete with their own property, Beat Saber. You know, in the case of utilities like general desktop, it's because they're making the exact same thing. on in the case of big screen they're making the same thing and then they're basically trying to drive darshan out of business with a thirty percent tax You know, this is so early in the ecosystem to force one of the earliest pioneers in our space to do that. And then even what Darshan mentions where they're allowing other larger companies in the space like Fandango to come in here with specific deals that he's not given. You know, this is just egregious, anti-competitive behavior. You know, and I've even been speaking to lawyers in various different agencies about this, and it goes beyond just the applications themselves. Even if you look at the Quest 2, the Quest 2 is sold at $299. I've spoken to several people who work in hardware. The minimum you could develop a product like this at scale is like $450. If you go through the build of materials, just the Qualcomm XR2 chipset is $150. Just the chipset by itself. That's not including the lenses or the headset or the packaging or the tariffs or the shipping. They're selling that at such an immense loss that they're creating a vacuum in the market that no other headset can enter. So the consumer space is one, and that's because of this type of pricing. Yeah.
[00:17:17.294] Kent Bye: So like... I mean, they refer to that as predatory pricing, and I don't know the legal definition of that, because there are other businesses that have loss leaders where they may take a loss on the hardware, but they try to make it up later in the software sales. And so if you take a step back and look at all of the technology and how it's being treated with laws, I feel like the amount of antitrust enforcement has really been lagging behind to the point where it's kind of gotten to the point where these companies have been able to just buy up a lot of the startup competition for years. There was actually just a report that came out on Facebook, Google slash alphabet, Amazon, and Apple. And in that report, they talk about specifically Facebook and it's acquiring of Instagram as well as WhatsApp saying that. There's like this strategy of trying to either acquire, copy, clone, or kill startups. And so there's acquisitions or find ways in order to see what the competition is and acquire them. That's already been happening for a long, long time within the tech industry. And I guess the concerning thing for me is that VR is such a nascent ecosystem that there seems to be that same type of like ruthless red ocean mindset of trying to kill the competition rather than create a platform so that a vibrant ecosystem can evolve within it. that there's this competing interest of creating a platform that should be this open, neutral platform versus Facebook coming in and wanting to control and own certain things, but also trying to buy up the competition and not really create this vibrant marketplace, but to really create a monolithic ecosystem that really is not good for the overall ecosystem and not having that natural competition there.
[00:19:00.042] Cix Liv: Yeah, absolutely. I'm not against copying. I think that that's like, you know, one of the initial things that come out is they copied you. Everybody does that. You know, like our wheel that we built and, you know, why you are is somewhat of a reminiscent of the Apple health visual. That's not my issue. My issue is how aggressively anti-competitive they are. And so I shouldn't be starting a startup here and having every single possible way for them to try to destroy us hitting my door every single day. Because then at a certain point, what happens to all these startups is they go, screw it. I'm just going to work at Facebook or leave the industry. And we're going to hit that point that this happens. Because, for example, at OC7, they announced a direct rip to virtual desktop, big screen, Rec Room. Horizon is just a rip of Rec Room. And then they released developer tools that are a rip of SideQuest. And then they released Oculus Move. That's a rip of YUR. And it's this egregious behavior where I want developers to understand that it's not a space that is safe for you. that you are either denied at the door without reason, even if you go in, just let me try to explain all the different avenues here. So the very first way you get in the door in Oculus is Oculus Start. They can deny you without reason and then tell you to join Oculus Start. There are a lot of people, including Oculus employees themselves, who say this is a dead end, that say this is basically just an idea farm. Okay? So that's how you get in the door. And then say you actually get into the store. They control who's featured. And it's entirely subjective. It is algorithmic to some degree, but they completely control who's visible in the store. And you say that's okay. Well, yes, to some degree, but it is subjective. So once you're in the store, they can control you as a developer. And I've spoken to several developers who say basically the only time we get significant sales is when we're featured. So then as a developer, you can't plan out your future because your future depends on you basically begging to the God-King of Facebook to feature you. And the only time that you get significant sales is when they feature you. And there's no transparency in that process. So now you're on the store and you're trying to build a company, but you can't even plan out your financials because you don't even know how much money you're going to make in the next year. And it's not the same ad-driven ecosystem that we can do in VR. because then the comparable will be, well, it's the same way in mobile, you know, they feature the applications there. Yes, but you can do ads. You can do ads to send people to your ecosystem and your games. We don't have that in VR. They completely control the ad stack, the social layer, the featured, they literally control every single corner of this ecosystem. So it's not virtual reality, it's Facebook reality. And I think it was at that they changed their name to that. because they will control the entire vertical stack here. And then, okay, and then the final thing. So you're screwed at the front door, you're screwed once you're in the door, and then let's just say you start to do really well. Now you have the issue of Darshan, now you have the issue of Gi, now you have the issue that we had, but we weren't even allowed in the store because we were seen as such a big threat, where now they just copy you. So they either control your company to such a degree you have to beg them to be featured, or they eventually copy you. And this is not a safe space for developers. There's not a place where you can go and raise money and say, hey, I'm going to change the world. You are just an R&D arm of Facebook.
[00:22:34.118] Kent Bye: Yeah, I think that the way in which that they can kind of monitor what is taking off and then see that I could see how something like Facebook horizon, if they see that rec room has the level of engagement that it does and the amount of people that are participating, that can be a signal that they get and they send back into their own product development. So as the longterm, they're trying to develop their own first party apps. I think there's certainly a conflict of interest there of being able to surveil what's happening in the ecosystem. And this came up actually a lot within the antitrust hearings, especially when it comes to like Google being able to do that within their searches that people are doing. And also an Amazon was seeing what's being sold and having data that's potentially bleeding over. So this seems to be a larger issue within the tech industry where there's a bit of this surveillance to see what is succeeding. And then as they have all these different. numbers and indicators, then that can be driving their product development plan. So maybe you could sort of go back and cause you had with why you are fit some level of success of people using it and people engage with it. And that probably came on their radar to some degree to the point where even though they denied it from being on the store, they still saw that it was something that was valuable enough for them to merit at some point over the last year or two to start developing their own first party solution for that.
[00:23:48.557] Cix Liv: Yeah, I mean, it's important to note too that, you know, there's a saying in startups, it's you have to be right when everybody thinks you're wrong. And what I mean by that is when you start a startup, if what you're doing is obvious, you're just dead in the water instantly. Like if Peloton is already trending and then you're coming out with your own Peloton at the same time, it's an uphill battle. You have to be right when most people think you're wrong. And when we started Why You Are, the whole idea of exercising in VR was still weird. It was still like, even John Carmack himself during OC6 is quoted saying, whenever I see people who are exercising in VR in these trailers, I go, there's no way that's gonna hit a million users. He's quoted saying that. Then even Boz himself, he was quoted in a Upload article that said he's so surprised to see fitness applications taking off during the pandemic. What's upsetting to me is I saw this on the wall. I've seen this twice now. The other big thing that I saw in the VR space that started Live was mixed reality was the best way for the average person to understand what is virtual reality. That's why I was so obsessed with mixed reality in the early stages, which was You know, when you see how game sales happen these days, like Fall Guys and all these other games that are trending right now, it's media driven. And it's usually short form content and streamers that carry the success of those games. And so video content for VR sucked. It was terrible. So whenever you saw an avatar or like a first person view of someone waving their head around, you're not going to sell any content with that. So a big part of what sold Beat Saber was the mixed reality videos that Liv created. And that was kind of what the precipice for the entire consumer movement towards the Quest. So I would, you know, like, I'm just pissed because I was right twice in a row, you know, and I'm still here, you know, in this kind of really messed up situation. And then, you know, fast forward, I start Why You Are. I see that, you know, the Quest is going to be a great device for, you know, VR fitness. BeatSaber is a fitness game, whether people want to call it that or not. People are exercising in BeatSaber. I saw, well, now that it's standalone, this is going to be a big deal. Going back to the startup statement, you have to be right when most people think you're wrong. That's the only way you can usually create some level of mote or some level of traction before the big companies see you. But the problem is because we have such strong market consolidation with the quest and with a $299 headset coming out that has these features, we're going to have even further market consolidation. It doesn't matter. It doesn't matter because you have complete and utter ownership over the vertical. And, uh, I think the concern here is just where do we go from here? You know, what happens in the space now?
[00:26:40.423] Kent Bye: Well, you mentioned that you're part of Live and there's at some point where Facebook actually started to copy and clone certain features of Live and then you moved on from Live and started YUR and then at Facebook Connect 1, which you referred to as Oculus Connect 7 as sort of a poke of that's what it would have been, but it was actually Facebook Connect 1, but that was announced there that Oculus Move was in some sense copying some of the different primary features of YUR. So maybe you could take us back to those two moments.
[00:27:06.757] Cix Liv: Oh, this is so funny.
[00:27:08.185] Kent Bye: Okay, so... Products that you're working on.
[00:27:11.027] Cix Liv: Yeah. So early 2019, I reached out to Matt Conte at Facebook and he gave me a engineering sample of what is now called the quest. It was, you know, called the Santa Cruz back then. I mean, I met them there and I said, Hey, we're working on this. You know, it's kind of cool. He's like, okay, we'll send you a headset. So we started working on it. And then during, uh, OC six, we announced the application and you know, this is again, this, you know, this exact same application that they copied in OC seven or Facebook Reality One, whatever, we're calling the name conventions now. But we had a meeting during OC6, I sat down with Matt Conte and Deborah Guzman, I believe is her name, and our entire team in a room. And they were demoing MRC, which is also three letters, so you know, Mixed Reality Competitor to Live. I wanna be clear, you know, because I've gotten hit on this, that I don't currently work for Live or advise them, so you know, this is just me from a third party stating this as a prior founder. that they were working on basically demonstrating mixed reality with an iPhone without any additional hardware. And that was MRC. So the MRC was a competitive product to live. And in that meeting, I was joking with Matt Conte. I said, oh, you released a mixed reality product called MRC during OC6. I wouldn't be surprised in OC7 if you released the fitness tracker. And he laughed about it, and I laughed about it. And I was like, yeah, this is probably what's going to happen. And then fast forward a year later, it is exactly what happened. And I just, I look back at that meeting and I go, wow, why did I do this knowing what they do already? And yeah, it's just kind of like this hindsight 2020 thing because I think we're so emotionally driven in the virtual reality space because we truly feel like pioneers. We truly feel like we're moving towards this new industry that Eventually, the world is going to understand these crazy people that put these things on their face, that we sometimes lose sight of what's happening, that we're so supportive of those who are moving it forward, that we're not questioning some of the ethical decisions that they're making. And these ethical decisions are not just like on the surface level, you know, kind of bad. We're talking about people losing their jobs. We're talking about people having like, you know, severe emotional issues by building a startup and having being copied. We're talking about the investors who are supporting these companies who are getting screwed. You know, like it's this effect that is hurting a lot of us in our space. And it's just something that people really need to know about.
[00:29:42.878] Kent Bye: Well, take me to the moment when you discovered about the Oculus move as a direct competitor. I don't know if you were watching the keynote or like, what was the moment when you realized that Oculus was working on something that was in direct competition with YUARFIT after having gone through all of this? over a year long journey of not getting in the store, getting broken, having your CTO trying to be poached, and then kind of led on to some point having the realization that they were working on first party competitor to your project.
[00:30:14.370] Cix Liv: Yeah, I mean, it was crazy because we were negotiating with them about something back and forth for over three months. We finalized it on the 15th of September. So I, you know, I was like, OK, you know, we're moving towards working together more directly. I'm so happy. Finally, after all this time, literally the next day. I'm sitting in my room and, you know, the Facebook reality lab started and, you know, we have Zuckerberg doing his super tone deaf conversation dynamics with Boz. And about 10 minutes in, I forgot the exact timeframe, he announces Oculus Move. Zuckerberg himself. And I just sat there and I just was like, what? After all this, after trying so hard to work with them, after... And you know what it did, though, is it helped me. It helped me emotionally. Because all of these things don't make sense when they're happening, but when you look back in hindsight, you go, oh, okay. That's why they were doing these things. That's why my application was breaking. That's why my CTO is getting these magical emails from Facebook to work in their East Coast office. It's almost like it finally made sense. Because during the process several months prior, when all these things were going down and the poaching attempts and my application was breaking and they weren't responding to us, you know, all of a sudden I was losing my hair. Like I was like, what is going on here? And I was so incredibly stressed out because here's the thing, if they were working on a competitor, if they just would have told us or something, I mean, I'm asking for the most little semblance of something so I can pivot my team and not have to deal with this massive, like morale hit. the second that the application comes out. Like we assume they're going to work with us and then boom, we just get completely slapped in the face. And you hear Zuckerberg himself come out with a copy of your product that you've been belaboring yourself so intensely for a year and a half building. And it's a psychological trauma, to be honest.
[00:32:14.632] Kent Bye: Well, in talking to Darshan and Guy, they both had Facebook coming to them saying, you know, we're building something very similar. And at that point they were trying to either buy them out or to say, hey, either join us or we're going to crush you. It was kind of like the essence of the message, even if it wasn't in those words. And on some level, if Facebook is doing their first party apps, I could see how, you know, if anybody's working on social, you have to know that Facebook's working on social. So there's going to be something where it may be difficult for a company like Altspace as an example, where they probably didn't get a lot of extra funding because it's like, well, you're going to be in direct competition with Facebook, but there's all these other first party apps that may be not as clear as to what Facebook strategy is. with media consumption or doing virtual desktop, but there's some level of which at least Darshan and Guy had them saying, hey, you know, we are actually working on this.
[00:33:04.789] Cix Liv: Oh, they never said anything to us. Yeah, I think that's what upsets me so much because as a CEO of a company, I try to lead my team towards doing something that's gonna keep us all jobs, right? At a very minimum. And if I'm blindsided like this while in conversation with them about working with them, I'm double screwed because here I have established, you know, potential repertoire with them to like build this out. But at the same time, they're intentionally behind our backs building a direct competitor. If they would have gone to me and said, we're going to kill you, I'd be like, okay, bye. I'm leaving the space. I'm done now. Right. I wouldn't have hired these people. I wouldn't have, you know, I wouldn't have done this, but they didn't care about what we were building. It seems like what happened was, is they were thinking like maybe it was considered to some degree, but it wasn't a big deal. And then all of a sudden the shutdown happened and they were like, oh crap, we need to have to build this now. You know, now that the data shows us that fitness applications are taking off, but we weren't provided any transparency, anything whatsoever. And maybe part of that is because I would call them out because I've been through this before with them, where they pretend to be your friends and they back channel you and they pretend they're going to work with you. I think that they know that I wouldn't have played that game with them. So maybe that was part of the reason why.
[00:34:24.489] Kent Bye: Well, if you were to take a step back and they were telling you it was privacy, and do you feel like that was the full answer? Because as somebody who's looked into privacy, I have specific privacy concerns as to some of the things that were going on, but are there other reasons why you think they may have
[00:34:40.626] Cix Liv: Yeah, I mean, they initially said privacy, but then we did a whole privacy audit. We made sure we're CCPA compliant, GDPR compliant, which is the EU equivalent. And then there's an additional California one that I forgot the name. We made sure to go do an entire privacy audit. So that was off the table. And then after that, they said, okay, it was performance reasons. The reason we're blocking your application is performance reasons. We did an entire performance audit, and we demonstrated that it doesn't even affect a single frame loss in the headset. And then the question I ask is like, if it was working for so many people, you can bet if there was massive performance issues, no one would use it. So it's just a false positive argument. And then I think that at that point they realized, well, we don't have really strong grounds to prevent this application. So they just went silent on us. And, you know, like, again, like just some menial level of communication, something to tell us that they were interested in the space or that they wanted to build their own thing or something. You know, I feel like we were completely and utterly assassinated. You know, yeah, it's traumatic, to be completely honest.
[00:35:49.255] Kent Bye: Do you feel like that in order to get access to some of these low level things that there was maybe things that you were getting access to that they didn't know to tell people not to do that? Otherwise they would have said that's off limits. Cause it sounds like you were pretty much following the rules in terms of like, you weren't violating any of the development things or like you were kind of digging into the guts of the system, probably in a way that they may have not even expected.
[00:36:13.219] Cix Liv: Yeah. I mean, they didn't like what we were doing because we got data from people. and that data was not limited to one specific application. And I think that that's really where they didn't like about us, which was, you know, we understood what games people were playing and the usage patterns. And then the question for that is like, you know, why would why you are be different than Facebook, right? Like you're collecting data to like, why is it different? You know, first of all, that was anonymized in our case. And also the business model that we were building was not ad driven. It was not based off, you know, like, let's just go back to the whole privacy conversation for a second. Why is this such a big deal now? With Oculus Move, Facebook has a justification to ask you your biometric data. So this same company that's in all these different videos and movies about the social dilemma and how they use that data to manipulate you, now will know your biometric data. Imagine if you're five foot four and they start sending you ads about like, hey, you know, like here's some lifts for your feet. Like they'll start to know if you're overweight. They'll know if you're 250 pounds. Like this is scary level of information that Facebook already knows your friend circle. It already knows everybody you're connecting. It knows everything about you from a social perspective. And now it's going to know your biometrics. And in our case, our business model was specifically tied to a pro tier, and the pro tier would provide additional functionality, and the base tier would just do calorie tracking, basically what Oculus Move does. And so the reason it's different is because our business model was not designed to manipulate the end user. Our business model was designed to provide additional features to the end user. And one of the biggest problems with Facebook is that their business model is designed to manipulate the end user. Like a lot of people don't understand that they are the product with Facebook. And I know that sounds like, you know, people say this over and over now, so it's starting to sound a little overused, but it's the reality. The companies who are paying the advertisers, they are the actual consumer. and they're basically paying Facebook to manipulate you to buy things or to vote for someone or to, you know, do all these different things. And then let's fast forward into the future. This will be the same company that knows what you're looking at. It can hear what you're saying. It can map out your room with a point cloud. The Quest 2 is not a toy. It's a virus designed as a toy.
[00:38:45.157] Kent Bye: Yeah. After the Cambridge Analytica scandal had broke, there was lots of things that came out of that, one of which was the California Consumer Privacy Act, but also it was a violation of the FTC consent decree that was previously passed and they had to look at it again and they actually got a $5 billion fine. And as I was reading through that settlement, one of the things that's in there is that data that are provided to third parties actually is like super extra sensitive. And so in that case of Cambridge Analytica, they were giving private information to third party developers that shouldn't have had it. And they were able to essentially use that specific data to like swing an election. So I imagine there's two things going on. One is that you're a third party developer getting access to sensitive data that could potentially be the next version of a Cambridge Analytica, you know, who knows what that would be. But even if you're just tracking calories, there could be other things that if you're tracking motion data, you know, who knows what kind of threats that could happen within five to 10 years. But there's also, I think, probably the more prescient thing is that you were getting data in terms of what people are using and when, which is probably like, that's like super secret, top secret information that Facebook, you know, hardly wants to tell anybody ever. So you were actually finding a way to get access to a level of metrics and data that I think is probably, if I were to point to one thing, that was probably one of the sensitive things, but there's also this whole other thing that happened with Cambridge Analytica and the FTC lawsuit in the consent decree settlement, where they're under extra scrutiny when it comes to interacting with third parties.
[00:40:11.712] Cix Liv: Yeah, I mean, the question is like, who do you trust with your data? Do you really trust Facebook with your data? And then going back to the business model is designed to use your data to manipulate you. And okay, in our case, we have emails and we know what games you're playing and how many calories you're burning in that, but it's entirely anonymized and abstracted. So yes, you can go into the whole conversation of the data and the value behind it, but this is the same data that Facebook has, but now it's being attached to your social profile. Now they know all the existing information they know, plus your biometrics, plus everything else. So yeah, I mean, it's a larger conversation about data, who controls data, and then also who is the consumer? What is the business model designed for? And I think it's a much larger conversation about data. And there's even people who are saying now that companies should be paying consumers for their data. Yeah, it's definitely a much larger conversation. I think one of the quotes from the social dilemma was that data is now more valuable than oil. It passed the value of oil in value. So yeah, we're talking about a multi-trillion dollar market now.
[00:41:20.741] Kent Bye: So I guess what you're speaking to is kind of like this fundamental anti-competitive behavior where you would be providing the equivalent type of service as an app on their platform, but because they want to own that service to have all these other reasons to use that data and to really justify the use of that biometric data. then there's this blocking of having access to your app to the store. And that the thing that they announced at Facebook Connect One was that they're going to do something the equivalent of SideQuest. And I don't know if it's to diminish some of those existing, like if that would have existed a year ago, if that would have been a platform for something like your app to get on there. But they have received quite a lot of criticism for blocking it, but they see the success of something like SideQuest. And so in some sense, they're kind of like cloning the core features and functionality of SideQuest to potentially have a little bit more control over this unlisted app ecosystem and potentially even put other restrictions in terms of how much bandwidth and whatnot it could be used. So there seems to be like some proactive ways in which that even their future architectures are trying to prevent them from being criticized for this type of anti competitive behavior, but yet still at the end of the day, I imagine that there may be similar levels of control, like for your why you are app, if they were to let you get onto this unlisted app path for people using it rather than the main app and right.
[00:42:42.023] Cix Liv: I mean, if that would have happened, but you know, like, I'm not, that's not what happened. Like going back to these things that are happened, we were basically an assassination attempt here. You know, this wasn't just like, Hey, we don't want to, you know, work with you. And, you know, we don't like you it's a, let's completely destroy this company, you know? And that's the concern that I have here. Even speaking to SideQuest, actually, this is ironic that you mentioned that, like they're trying to fix, you know, the thing that SideQuest is providing. they're going to kill SideQuest. And that same visual and the same graphical interface that they're parodying now with the developer tool system is an exact rip of SideQuest. So that's another example of anti-competitive behavior where they've come in there, they've basically seen, okay, this is how people are sideloading. They pretend, hey, we're going to work with you. You know, everything's going to be okay. We're Facebook. And then you get a call from Facebook And you're one of these indie developers who haven't speak into like someone's seen her at Facebook before and you go, Oh my God, Facebook is calling me. No, I need to be super nice. And it's like, you're appeasing the monarchy. I think it's literally like we're subservient to the monarchy. And then there's the people who work at the monarchy that are these kind of like faceless peons that promote those egregious anti-competitive behavior, but they're getting paid so well that they don't say anything about it. And all of a sudden, OC7, you see an exact rip of SideQuest, and then I can guarantee you they're going to go on the offensive if they don't play ball. And that's going to be another example of another company who's gone through the same thing, where they've discovered value, tried to give it to the community, and instead of being worked with or allowed to exist or even acquired, they're just killed off. And that's what I want developers to understand is you're not in an ecosystem. If you're working directly with Facebook right now, virtual reality is not virtual reality. It's Facebook reality and any type of vertical they want to get into. They have such a massive amount of resources and they're taking this industry so seriously that if you're in any vertical they're interested in, you're just dead.
[00:44:47.254] Kent Bye: And so what's next for you? Where do you go from here?
[00:44:50.126] Cix Liv: You know, that's a good question. I've been asked that. So YUR as a company is expanding into AR, so camera-based technology. It's difficult for me because the vast majority of my professional career now has been in virtual reality. You know, a lot of my connections and a lot of my life for over five years now has been in this space. So for me, it's like having to leave a space because of this, and it's not something I'm super happy about. We were provided the opportunity to build our own game, but then it's kind of like the abuser is coming to you and saying, hey, now that we've destroyed your company, if you listen to us and you do exactly what we say, and you build a game because we're okay with that, we'll let you on our platform. For me, I just sit there and I go, you know what? This is the third time I'd be doing this. It's killing innovation because people like me, people like Darshan, people like Guy, there's even a few other stories that are coming out that now that people are feeling empowered to tell these stories, CTOs being poached by Facebook is like their thing. And, you know, a lot of people who work in these big companies don't understand why that's such a big problem. They go, well, of course they're looking for engineers. Why would they not like look for engineers? You need to understand when you build a startup, it is delicate. It is delicate for several different reasons, especially now that everybody's distributed and we can't sit next to each other and have a coffee with each other. It's delicate. And if you have your most senior engineer poached from you, you kill the whole company. So it's not only just, Hey, you know, we have, you know, our engineers left, you know, we're fine. It usually kills companies because the CTO is the one who knows everything about how it's built. So Facebook knows what they're doing. They're not just getting engineers. They're killing these companies. And it causes these massive morale hits and everybody, you know, questions, why are they doing this? And a lot of people then just like, say, okay, I'm going to work for Facebook. It's just, yeah, it's definitely monopoly behavior. And I'm super excited to see that this is a conversation now. And it's a conversation, not only for small startups, but even Epic is fighting back. And I think that a lot of people see what Apple is doing. And I think people don't understand that Facebook is doing it, but even worse. And part of the reason I'm coming forward with this story is to kind of open the door for other people to be aware of this, for other developers to come forward with their stories and just hope and just hope that Facebook just acts a little less shitty.
[00:47:32.853] Kent Bye: Well, I guess just to kind of wrap up things here, what do you think the ultimate potential of virtual reality might be and what it might be able to enable?
[00:47:43.658] Cix Liv: Well, yeah, I think that's a hard question. I explained this to someone the other day who said virtual reality, mixed reality, augmented reality, what does it all mean? And I think we have to abstract away these buzzword names because we make up new reality words every single year there's something else. Think of what it replaces, and you get your answer. Virtual reality replaces consoles. It replaces TVs. It replaces immersive entertainment. So what virtual reality, more than just immersive entertainment, anything that desires and benefits from an immense amount of immersion. And what augmented reality is, is essentially what a mobile phone is, which is peripheral. You know, I know a lot of people watch videos on their phone, but generally speaking, from an immersive standpoint, it's better to watch it, you know, on other devices. So, augmented reality is just peripheral technology, and virtual reality is immersive technology. It's just in its next form. So we're going to have these two separate markets. I know a lot of people argue about, is augmented reality and virtual reality going to be one device? Okay, maybe it will be, maybe it won't be. I think the biggest question there is input methods will be completely different because you can't wave around your hands while you're talking to someone, right? If I had AR glasses on and I was moving my hands in front of you while I'm talking to you, you'd get really pissed off. So yeah, I think going back to what those two technologies are, virtual reality, what it does in a technology standpoint is just immersion. So I'm super excited about fitness gaming. And this is, I think, one of the biggest utilities that come from virtual reality in the gaming space is that it's kind of like what happened with headphones. You know, early stage and when people wore headphones, they'd walk around these big, huge headphones on their heads and everybody would look at them thinking they're crazy. Right. And what happened was, is headphones and the subsequent technology. it became kind of an essential for exercise. Every single person who goes to a gym now, every single person who exercises, they're wearing headphones. And it's a way for them to immerse themselves into fitness in a way that's so much more engaging and so much more entertaining. Now, take that a step further and add in virtual reality, add in these type of immersive technologies. And now you're so immersed into these technologies and into these experiences that you can exercise and you're not even conscious of the fact that you're exercising. This is kind of like what happened with the advent of Beat Saber. You have all these people who otherwise don't exercise, putting on a headset, they'll hit a few blocks, and then they'll start to get in the mode. They'll start to get in the rhythm. They'll start to get in the tempo. And then before they know it, they're burning calories and they're playing Expert Plus and now they're exercising. Now they're losing five, 10 pounds. It's a huge thing that it's solving, which is this massive epidemic of sedentary behavior with gaming. And there's a lot of different things that virtual reality will solve. But I think in the short term, it's easy to get caught away with what it could be. I'm more interested, especially from a startup perspective of what it is. And what it is right now is the most engrossing and entertaining way to move around.
[00:50:57.765] Kent Bye: Is there anything else that's left unsaid that you'd like to say to the broader immersive community?
[00:51:05.052] Cix Liv: Make a game. If you want to work with Oculus, make a game. They're not going to kill you if you make a game. And it goes back to the reason that they support games, because they're hit driven. So if you wanna work in VR and you wanna have any type of critical success, your best bet is probably to make a game.
[00:51:24.899] Kent Bye: Yeah, to me, as I look back, it's sad to know just some of the companies that I know that have had trouble getting on there, maybe artificially stifled, and then who knows how many other applications of VR that have been killed off over the years. I just wanted to reflect that, you know, this is an experience that you've been through where it's going to be pretty traumatizing to go through this twice of building the startup and having Facebook have the exact direct competitor to your application and go through all of this confusion, gaslighting, and just feeling like you're getting blocked at all these different levels. And I don't know the full reason. And if there's alternative reasons, if what they said is true, if there's alternative, I think that's part of the challenge of knowing what the deeper intentions are. And we'll see how this continues to play out, but. I think for you, it's just, there's a certain amount of risk that you have to take to even come forward and tell your story. And I think the story is important just to get out there. Cause I'd imagine that there's other people that are out there that for whatever reason, they're not in a situation to be able to come forward and even get it on the record in any capacity.
[00:52:22.889] Cix Liv: Oh my God. Yeah. The fact that I even in talking to you is going to get me in a shitload of trouble. But you know what, I feel like I have to tell this story because it's important for people to know. It's important for people to know what it's really like to be a developer on this ecosystem right now. And you know, this may change. And I really hope it does change because I don't understand how this is a long-term strategy, honestly. Like, if I were to speak to Facebook and anybody at Facebook were to listen to this, what do you guys think is going to happen when another headset comes out that embraces developers? You think these developers who've been wronged and screwed and blocked and broken and their CTOs poached and copied are just going to be like, oh yeah, cool, there's another headset. No, they're all going to leave and you're not going to have anybody to copy anymore. And I want Facebook to ask themselves, what the hell are you guys doing? Why are you doing this to us? We're still pretty early in our ecosystem. You guys know that you're not making almost anything on these games compared to your parent company. They've sold $150 million of content on the Oculus Store. A lot of people in VR go, oh wow, that's a lot of money. No, it's not. They make 30% of that because they take a 30% cut from their ecosystem, which means they have netted about $50 million. That's how much Facebook, the parent company, makes in two days. That's how much for they make in two days. So like, why are you guys doing this? You know? Yeah. Ask yourself that question. And you know, this is hard. Okay. Be nicer to us. Jesus. That's not, we're not asking for a whole lot here.
[00:54:01.945] Kent Bye: I think in looking at the antitrust reports, I think that the value for creating a monopoly is worth the loss leading of all this money they're dumping in. So they probably, I mean, the challenge is if they do have a lock-in with the largest market with the best hardware, then it becomes a situation where it will be difficult for developers to go to other places if they don't have as big of a market. So I could see how there's this larger driving towards trying to completely own a new platform, especially as they missed the mobile revolution. play by the rules of Google and Apple in order to deal with their existing app. And so they want to create a future where they can be in complete control, but at the same time, they're replicating the same thing that they're complaining about what Apple has been doing to them.
[00:54:44.935] Cix Liv: Absolutely, absolutely. Yeah, actually we forgot to mention that. So Zuckerberg is on the record complaining about ecosystems should be open and Apple's tax is unfair. He is on the record saying that, okay? And his own property is doing that and worse. I don't hear stories of Apple intentionally breaking applications and poaching all these CTOs. I mean, yes, they may do it. but like this shouldn't be a commonplace. And it's just a general concern I have for the startup ecosystem in the U S at large. We are better than this. We don't have to, we are, we are better than this. I'm not just saying Facebook is the only one to do it. And every single time I say anything about my story, they go, everybody goes, Oh yeah, well, you know, this was just the way it is. Then I go, why the fuck are you doing this? Like why are you working on this? If this is just the way it is, go get a job at Facebook, go get a job at Amazon, get paid 200, 300 K, stop doing a startup. If you're just going to be killed, that's just the way it is. Yeah. That's just the way it is for you too. And eventually if you are going to build something popular enough, you'll deal with the same thing I am.
[00:55:54.670] Kent Bye: Yeah, I'm, I'm a idealist in heart. So I want to live into a future that is a better ideal, but I do understand that pragmatist argument that you're saying there, which people should just sort of settle and kind of deal with the way it is totally unfair.
[00:56:08.223] Cix Liv: So,
[00:56:10.845] Kent Bye: So, you know, hopefully if this does end up getting aired and out there, it'll help paint a future that is possible. And I imagine that people will have to make some decisions either by changing if there are competitors to Facebook, which currently there isn't. And so it's difficult that if you want to be in the standalone VR ecosystem, then there's not a lot of options there, but finding ways to resist, I guess, is what I'm getting at in terms of trying to live into a future that doesn't exist yet and creating something that has a little bit more market competition or other dynamics where there's cultural backlash and consequences, because right now there doesn't seem to be a lot of consequences. So there's no pushback on this type of anti-competitive behaviors.
[00:56:50.606] Cix Liv: I mean, we operate in a world now where it's legal to do all these things, which people would argue it should be okay, it should be not okay. But I want people to ask themselves a question. I think a lot of Americans believe in this kind of capitalist dream that if you work hard and everything, kind of the hustle porn, right? Gary always talks about, um, yeah, like if you work hard, you know, America, you know, we're going to make America great again. And, you know, like these companies, you're going to make your own company and be able to start your own company and everything. But I want to share the reality of the situation is when you get to a certain point, you are in the target of these companies that have so much money and so much capital and so much power to destroy you, that the only way that you can compete with them is raising immense amount of venture capital, immense amount of venture capital. And it shouldn't be that way. And I'm not sitting here saying like, I'm so mad that I didn't build a trillion dollar company. I didn't compete with the likes of Amazon or Facebook. But I wasn't even able to grow to a point where I was able to support even a medium-sized company in this space because I was assassinated so early. And I'm not saying this is the death of their company because we're logical about this and we're pivoting into a new space and we're not dead. But it's very disappointing that for this specific industry itself, that it's like this right now.
[00:58:15.134] Kent Bye: Yeah. Well, I get this larger feel of this kind of vibe from other developers and Six, I just wanted to thank you for coming forward and sharing your story and just getting it on the record. And hopefully it will get out there and either have more people speaking up, but I feel like there's certainly, if this is actually happening to all the degree that you're saying that this can't continue. indefinitely. And, you know, I would certainly want to see a change that come about and to see these different types of alleged anti-competitive behaviors be addressed in some fashion, either by the government or some other entities that, you know, are going to push back or if nothing else, just the market being aware of this is what's happening. And for developers who may not be aware that this is happening to just be aware as they move forward and to be fully informed that this is a potential outcome for what can happen to folks.
[00:59:01.178] Cix Liv: Right. I mean, I want to mention one last thing. So one of the biggest things that started small business growth in the United States was patents. This is the whole idea of if I invent something, I will have some ownership over it. The patent system is utterly and completely broken. When you file a patent and it's a non-provisional patent, first of all, to even file it takes about $10,000 of writing to even have an attorney drafted and publish it in the first place. You say, oh, you could publish it yourself. If you publish your own patent, you will not get it approved, okay? It's an arduous process. So it takes a lot of money to even do it in the first place. Say you file the patent. It takes 18 months to even be visible by anybody else. And by that time, that's the shelf life of the average startup. The average startup shelf life is 18 months. That's why you raise on 18-month cliffs. And so say you file a patent, you invent a technology, you're the only company in the world to do that, and you do everything you're supposed to. And if Facebook comes in and copies you exactly what they did here, we filed a patent last year on this, which is to interpret movement data into fitness metrics. and to do it specifically with an HMD. We filed this patent. They even know about the patent. We told them back in November, and they still copied us. So even the patent system is broken. And then we speak to attorneys, and the attorneys go, well, to even have a retainer to sue Facebook is hundreds of thousands of dollars. So what do we do? What do we do? And kind of breaking down the final thing I wanna say here is like, what constitutes a company? A company is an idea and a team and IP. IP doesn't matter for the reasons I just mentioned. Team, Facebook can hire your employees and pay twice as much. And ideas are cheap. Ideas are cheap. Everybody can think of Uber in two seconds. Oh, what if a car came over here and I jumped in? Ideas are cheap. It's all about execution. So then ask yourself as a listener, what is a company? If all those things are threatened by these monopolies, what is a company? And if this continues to happen, we will no longer have startups, and we'll all be sitting in these big corporate jobs, or we'll just be unemployed. The stratification of wealth is worse than it's ever been in history in the United States. And it's part of the reason is because of these tech monopolies, where we prefer convenience over logic, where we pick Amazon every single time instead of the corner store because they deliver to us the same day. where we pick an Apple device because we already have the same apps that we've had on there for the last 10 years. And this will perpetuate and we will not have any other options. They will not be any other startups for consumers. And a lot of people respond to me and they say, well, you know, startups are still having exits. The majority of startups that are doing okay right now are enterprise startups. They're not consumer startups. Because mass market consumer is so much harder to compete at such a massive scale and requires so much more capital and assistance to do so. And the final thing to mention is, look at all these big companies. Where did they start? The original origins of a lot of these massive companies right now is the web. Google started as a web company. Amazon started as a web company. Facebook started as a web company. They all started in a world where this data couldn't be used against them, where they couldn't be destroyed when they were in the early stages or in the mid stages or in the late stages. The ecosystem of the web did not allow competitors to feed every single piece of data from their end user back. to the parent company. It would be like right now being hosted on one of these cloud services and every single piece of your user data is being sent back to AWS or Google Cloud. Who the hell would ever be okay with that? And that's what we have on these vertically integrated platforms. And that's why Epic is fighting. And that's why I am fighting.
[01:02:56.875] Kent Bye: Wow. Well, six, thank you so much again for coming on and sharing your story. That's a really powerful note to end on. So thank you. Thank you. So that was six live. He was one of the co-founders of why you are fit. And actually as a result of speaking out, uh, both on social media and to various media outlets, he's no longer working with why you are fit. So I'm going to refer to takeaways about this interview is that first of all, Well, first, just kudos to Six for being willing to speak up. I think as we listen to this story, I think we all have to decide, OK, is this something that is very specific to this small context, or is there a deeper pattern here that is fitting what other developers are experiencing as well? because there's always things that are going to be specific to the context and there may be legitimate concerns around privacy or data or whatever else or there could be other reasons why why you are fit was never included onto the oculus store but i think what it suggests is that if we look at what's happening with facebook what we know from looking at darshan and big screen as well as virtual desktop is that there could be some core critical applications that Facebook wants to have domain over, and that there may be other applications that start to encroach into that. And so they're kind of serving two different roles. One is to help to foster and develop this whole new virtual reality ecosystem and platform. But on the other hand, they want to be a first party developer on that platform. When it comes to looking at the history of mobile computing, Facebook was always having to build their application on top of someone else's hardware, someone else's stack. They had to play by the rules by Apple's iOS as well as Google's Android. And so now this is an opportunity for them to stake their own claim and they want to have complete domain and ownership over that. And so they know the value of creating those first party applications because that's in their DNA of how they've been able to make a business. But they also are trying to at the same time create what is presumably trying to be this neutral platform. But I can't help but to think that there's these variety of different conflicts of interest where Facebook wants to really grow the developer ecosystem and really focus on gaming and to really do the best that they can to be able to foster the enthusiasts who are going to be the ones who really drive the adoption of VR. But by doing that, they also at the same time creating a situation in context where they're allowed to eliminate all these other potential ecosystems from blooming and developing and being cultivated, especially if they have in their own mind of the direction that they want to go, then you have the situation where they actually released Oculus Move, which was a direct competitor to YUR. And so as we look backwards, You have to say, well, is this some sort of anti-competitive behavior where they were designing their own first party application and they were preventing other independent developers to be able to develop? I do think that the Cambridge Analytica and the whole aspect of the privacy does play into this because they're extra sensitive to, by the FTC consent decree order, to not allow a bunch of extra information that could be sensitive to get into the hands of third party developers. And so there could be specific applications that they actually do need to have. First-party apps that are only within their own domain But at the same time it's a very convenient excuse to be able to eliminate any other potential competition for some of those first-party apps that they want to develop meaning that they would have complete domain over all this biometric data and And this could be a stepping stone towards in the future, more and more ways in which that Facebook is going to want to be the only one that controls specific aspects of the stack, and specific applications that only they can do. I think that's normal for a lot of these different applications. But I think in this case, when we look at the threats of biometric data in this existing business model of surveillance capitalism, that means that brain control interfaces that are being able to read your mind and that there's no other opportunity to be able to have that type of functionality unless you are willing to submit all your thoughts to Facebook. That's sort of the long term trajectory of where XR is going. Now, like I said, I consider myself to be an oral historian and trying to capture this direct testimony from people from the industry. And ultimately, it's going to be up to these legislators and the Justice Department and the Court of Law to see whether or not some of these allegations that are being made meet the existing laws that are on the books now in terms of the Sherman Act of 1890 and these antitrust Legislation, you know, it could be that those laws are just out of date and we just need a whole new set of laws to be able to handle what's it mean to be able to have These companies that are owning all different dimensions of a market both the selling side and the distribution side and that was one of the big things that came up with Google is that there have this monopoly on being able to buy and sell both sides of the equation which is introduces all sorts of ways in which that in normal markets, that's not allowed. And in essence, that's the same thing that's being created here, which is that there's this closed walled ecosystem where Facebook could potentially start to own both sides of a market where they're both buying and selling. And that's where you start to get these different types of monopoly behaviors. Now, there's existing legislation that's out there with Epic and Apple, and there's all sorts of other ways in which each of these major tech corporations are having these alleged types of anti-competitive behaviors. And just as somebody on the outside, just covering the VR industry, what I can tell you is that there has been this contraction when it comes to a lot of these independent startups and that It has been really difficult for a vibrant ecosystem to really be cultivated and developed, especially if you're only focusing on one domain, which is gaming. And there are certainly a lot of other enterprise applications, but as time has gone on, I've definitely seen less and less independent companies and startups that are out there. It could be that this threat, which is that Facebook has access to all this data, and if they want to track and to see what is successful, and it doesn't take a lot of effort for them to be able to track those metrics and be able to change their own planning, to be able to essentially clone some of the most popular features. And if the web itself had developed like that, if we would have had these centralized cloud computing services like Amazon Web Services or Google Cloud or Azure, you know, imagine that those companies were in direct competition to all those different startups and trying to find different ways to consolidate that wealth and power, then we wouldn't even have companies like Amazon or Google or Facebook. So the context in which a lot of these big major tech corporations created was in this open ecosystem and they were able to use the merits of their own ideas and execution to be able to thrive as these startups that now become these really powerful companies. And we don't really necessarily have that today because we have this much smaller pool of opportunities and the amount of capital and resources it takes to really compete with these big major tech corporations. This issue of surveilling and tracking to see what's worked and just cloning those features It can just absolutely devour the competition in these different markets and there's certainly a history of that if you look through the antitrust Report that is on Facebook. They go through all the ways in which that there's this acquire kill or copy slash clone the competition and Now, within the next week or so, there's going to be a lawsuit that's going to be filed. It's probably too soon for a lot of this stuff that is coming, these latest allegations from the virtual reality community. It's also a lot smaller, but it certainly fits into a larger pattern enough that the Justice Department is at least starting to look at that, according to some of the reporting from Bloomberg, which has been able to verify that there's been a number of different developers who have been talking to the Justice Department. So I think what's for sure is that it's a risk that if you're doing anything other than gaming and getting into the virtual reality industry, it's this existential risk that Facebook, if they're interested in what you're doing, if they have their own plans, then you're gambling. You don't quite know. And there's all these other factors in which what makes an app successful within this closed ecosystem. So it's sort of a feast or famine type of context and situation right now, I'd say. But there is this existential conflict of interest, which if Facebook wants to develop their own applications, they have their own business interests and they have their own incentive to not share with the broader community what's happening. And in this case, there seems to be a lack of communication that Facebook was even interested in this and that There seemed to be all this, the application was breaking, what essentially amounted to be a bunch of gaslighting from Facebook to YUR up until getting some sort of agreement with them. And so they're collaborating with them. And then once they're collaborating with them, then it's revealed to them that they're actually going to be cloning them and copying them. So yeah, that sort of method of, you know, kind of reeling people in and cooperating them to a certain degree, giving them some sort of hope. And then at the same time announcing that they're essentially cloning everything that they're doing. So there's this issue, which is, is it Facebook's moral responsibility to be able to tell the developers that are working on applications that, hey, you know, we're actually working on the same thing? That actually happened to both Darshan as well as Guy Goodwin. You know, in some sense, you could see that as a courtesy, but at the same time, it could also be seen as, you know, trying to acquire anybody that is sort of encroaching on this area. That is, you know, at this point, not public, the roadmap of where Facebook is going with all their different applications is not public. So it's a bit of a mystery. So you have to either deal with not getting direct feedback as to why you may or may not be getting onto the store. It could be because you're have this overlap between where Facebook themselves wants to go. And if there's not specific details as for why you're getting denied, then you're kind of like left in this limbo state, which it sounds like that's the experience of what happened to the six and the why you are. And if Facebook wants to just really cultivate this platform, then there's a conflict of interest of cultivating that neutral platform with some of their own business interests for the types of apps that they want to do as a first party developer and how you navigate that potential conflict of interest. I don't know. That's a big open question that. Perhaps that's where the legislators need to come in and see this type of dynamic that has also been happening at other app stores like Apple. You know, there could be similar stories that are happening there, but how to provide a technology platform that they're investing all these billions of dollars into, and then what are the obligations to be able to disclose or to not have information that's feeding from one division, which is this ecosystem level, to be able to get all this data to then feed into your own personal applications that are going to be in competition with this ecosystem that you're developing. So, that's the big message that I got from this and that is gonna be left up for the technology policy makers and the investigators just to see, hey, is this type of behavior, is this happening, is it a wider pattern other people are experiencing? And if you are experiencing it, feel free to reach out to some of these investigators at the Justice Department or reach out to me if you wanna go on the record and talk more about it. This seems to be building a lot of momentum right now in terms of what's happening with the larger antitrust movements and these different lawsuits that are gonna be coming about here within the next couple of weeks. So, that's all that I have for today, and I just wanted to thank you for listening to the Voices of VR podcast. And if you enjoy the podcast, then please do spread the word, tell your friends, and consider becoming a member of the Patreon. If you enjoy the podcast and enjoy hearing stories like this and covering this deeper thread of where VR is at, where it's going, then please do consider becoming a member of the Patreon. Just $5 a month is a great amount and just allows me to continue to bring you this type of coverage. So, you can become a member and donate today at patreon.com slash Voices of VR. Thanks for listening.
