Kyle Russell is on the deal & research team for Andreessen Horowitz (aka A16z) where he’s focusing on investing in technologies ranging from virtual & augmented reality, artificial intelligence, drones, and other exponential technologies like quantum computing. A16z has invested in a number of prominent VR companies including Oculus, Magic Leap, Within, BigScreen as well as Lytro, & Improbable.
I had a chance to catch up with Russell about how these exponential technologies are combining together in order to solve real problems. Russell used to write for Techcrunch, and so in order to keep up with the latest tech trends he’s become a power user of Twitter lists, subreddits like /r/MachineLearning, and an AI-research aggregator called the Arxiv Sanity Preserver. He also is tracking many different possible futures when it comes to emerging business models based upon the decentralized blockchain, self-sovereign identity initiatives such as the Decentralized Identity Foundation, as well as thoughts on the growing wealth disparity and blending of cooperative and competitive economic approaches.
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Rough Transcript
[00:00:05.452] Kent Bye: The Voices of VR Podcast. My name is Kent Bye, and welcome to the Voices of VR Podcast. So I was recently in the San Francisco Bay Area for Google I.O. and reached out to Kyle Russell from Anderson Horowitz. We have followed each other on Twitter for a while, and he's somebody who is a power user of Twitter, someone who's just highly engaged with my presence on Twitter So Kyle and I are very similar in the sense that we are a little bit like an inch deep, but a mile wide. We have the luxury of being able to take in a massive amount of information, trying to figure out the entire industry. For me, I'm very specifically focused on virtual reality, but for. Kyle, he's about a quarter on virtual reality, and then a quarter on AI, and then a quarter on drones, quantum computing, and a whole bunch of other exponential technologies. So I wanted to sit down with Kyle in order to get his perspective on this confluence of all these different exponential technologies right now, from the perspective of someone who is at one of the hottest venture capital firms in the Silicon Valley. They're investors in Oculus, and Magic Leap, and a number of other different VR companies that we go into. The other thing I just wanted to mention a couple things before we dive into this interview here is that Walt Mossberg is somebody who's been a tech journalist since like 1991 Doing these weekly articles reviewing technology as it's evolved from this, you know personal computing revolution into the mobile revolution And he has recently retired and he published one of his last articles before his retirement and he kind of takes a step back and just reflecting on the overall technology industry and And I think that as I cover virtual reality in the tech industry, I've come to a lot of the similar conclusions, which is that there's a lot of concerns around the overall system of capitalism and whether or not these technology companies have too much power and control, lots of concerns around privacy, as well as are there going to be new economic paradigms and business models that companies in the future are going to play into not only just from the decentralization with the blockchain, but also just from the standpoint of the wealth inequality that can happen from capitalism, which I talked about in a previous episode with the sci-fi author Cory Doctorow with his book called Walk Away, which was inspired by a number of books that were having these critiques about debt and capital in the 21st century. The other thing is that I recently read this book. It was called Move Fast and Break Things. How Facebook, Google, and Amazon cornered culture and undermined democracy. So I read the book and it's a great account of a lot of the history of the consolidation of power that's been happening with these tech companies and really questioning whether or not they have too much control. Now in this book the problem that I have with the author Jonathan Taplin is that he is essentially just taking information that other people have reported and he's consolidating it in this kind of survey but yet he's not engaging in a direct dialogue with some of these decision makers at either of these companies or these VC tech firms that he's critiquing within this book. So there's a lot of thought of maybe the solution is that the government is going to come in and regulate things, but I also am a believer of the Hegelian dialectic where there's a thesis and antithesis and then a synthesis. So right now we're dealing with the thesis of capitalism and all the things that are out there and I am like on this search of what is the antithesis, what is the thing that's going to be counter to that and is it going to be this yen currency that comes from the government or is it going to be something that comes down to ethics and values of these companies or is it going to be something that's kind of built in into the systems that we have. So, we'll be covering all of that and more on today's episode of the Voices of VR podcast. But first, a quick word from our sponsor. Today's episode is brought to you by the Voices of VR Patreon campaign. The Voices of VR is a gift to you and the rest of the VR community. It's part of my superpower to go to all of these different events, to have all the different experiences and talk to all the different people, to capture the latest and greatest innovations that's happening in the VR community and to share it with you so that you can be inspired to build the future that we all want to have with these new immersive technologies. So you can support me on this journey of capturing and sharing all this knowledge by providing your own gift. You can donate today at patreon.com slash voices of VR. So this interview with Kyle happened at the offices of Andresen Horwitz on Sand Hill Road in Menlo Park, California on Friday, May 19th, 2017. So with that, let's go ahead and dive right in.
[00:04:44.638] Kyle Russell: My name is Kyle Russell. I'm a member of the deal and research team at the venture capital firm Andreessen Horowitz. I look at areas that we as a firm consider emerging computing platforms. So that's things like virtual and augmented reality, as well as drones, robotics, applied AI, and things that my colleagues lovingly call the weird things like cryptocurrencies and blockchain and quantum computing. So if you read about it for the first time in science fiction, rather than in business news, those are the kind of companies that I'm looking at.
[00:05:10.747] Kent Bye: Yeah, so for me as a journalist, I feel like I'm sort of doing this really deep dive into VR. I started to look into AI last year a little bit, haven't started the Voices of AI, but that's coming. And for me, just keeping a hold of what's happening in VR is enough to keep me busy. And so like, How do you keep up to date with all of these? Exponential technologies that are moving so quickly such that you know, it's so broad just for me to focus on VR Like how do you sort of keep up to date to all these different technologies?
[00:05:42.699] Kyle Russell: So some of it comes down to habits that I developed back when I was a journalist as well before this I was a reporter at TechCrunch looking at basically all of these same areas and so I Part of it is being a Twitter power user. I follow 2,400 people, but I'm really aggressive with the use of lists. So I break people down into areas like autonomy for vehicles, drones, VR, AI. So part of it is maintaining or following what the smartest people in these various areas are talking about and paying attention to and raving about and saying, everyone, you need to see this. It's awesome. More formal, though, when I say it out loud, it doesn't actually seem that formal, practices I follow, habits like checking Reddit, you know, r slash machine learning. I use a tool from one of the folks over at OpenAI, the Elon Musk AI effort. It's called Archive Sanity Preserver. There's this website called Archive where all the latest machine learning papers get published. But it's this kind of just giant repository that's hard to find anything in particular. So what this tool does is it turns it into just a feed that you can kind of skim throughout your day and see like, oh, like what experiments are being run? You know, what problems are people looking at? And when it comes to AI in particular, what's so interesting is how many products that we're seeing hit the real world, like at Google IO this week. where frankly it's, you know, some of it is research that's done behind closed doors where you just have to kind of keep track of what comes out of the big announcements at these big events. But so much of it is actually kind of just implementing at scale state-of-the-art research done, you know, within the last year. And at the pace that things are getting published, it's, you can almost see this like direct track between paper published and then nine months later you'll see like two or three companies working on it or, you know, Google Publishes that's now baked into Google Photos or something like that.
[00:07:25.338] Kent Bye: Yeah, that's the thing that I've noticed, both in starting to look at AI, but also virtual reality, is that in academia, you tend to look at things maybe, it used to be maybe two to five years ahead of time, and there's still some technologies that are not even where near being consumerized. But certainly with artificial intelligence, I went to like three AI conferences last year, IchiKai, AID, and another O'Reilly conference. And just to be able to see the contrast between what I was seeing at the academic conferences versus what was being integrated into products for AI is sort of a similar story that I'm seeing in the VR world where I'm seeing like interactive narrative and AI be like way further to what is actually being implemented in VR. And I kind of decided that, OK, well, I'll kind of wait until I really start to dive into AI a lot more, until it starts to feed into the VR, which I'm starting to see a little bit more. But to me, I see this as this shift from the information age and moving into the experiential age, meaning that I need to have a direct experience of it in order to really evaluate it. For VR, that's really clear. For AI, that's a lot more difficult, I found, even as a journalist, to look at, like, how do I evaluate how well this machine learning is performing? For me, I can take an easy out, which is, is it a fun game? Is it a good story? That's sort of like my level of being able to evaluate AI. But when you're talking about AI and to these other specific applications, how do you, as someone who's making these decisions, evaluate a technology? How do you get a direct experience of it to really get a sense of whether it's a vaporware or it's actually able to do what they're claiming it's able to do?
[00:09:07.013] Kyle Russell: Yeah, so that's where kind of the transition from R&D to real world commercial applications adds a lot of complexity to that kind of evaluation, where it's one thing to say, okay, how well does this, let's say it's a deep learning based tool for object recognition, how does its ability to say like, this is a cat compared to if you put 1000 humans at that question, and you know, looked at their responses. And this is where Coming from 2012 on, people bring up ImageNet results, where those results are starting to hit 96% accuracy, error rates equivalent roughly to humans, where the error that comes in is just choosing a word that other people didn't choose, and so it's basically right most of the time. But then when you think about like, okay, well, how do we turn this into a real product? Suddenly the thing that you have to evaluate becomes much more complex. It's okay, we're baking this into a security camera system and we're monitoring how many times people in this store picked up a specific product or specific kind of object just to understand like, well, What are the customers that we're actually able to bring into our retail location actually interested in? And what's drawing their attention? If it's drawing their attention, they're not actually deciding to put it in their basket and pay for it at some point. What does that say? Where suddenly the metric to track is like several metrics deep in terms of things you could look at. And then you have... things, frankly, they don't know the application yet and it's still kind of a research project where, for instance, you're seeing things like OpenAI published research earlier this week where they did one-shot reinforcement learning combining virtual reality as kind of a set of inputs and robotics applications would be kind of the output where You put human in a virtual environment, have them perform a task, then the training system basically looks at that. It uses that as input to figure out what the policy the system is trying to pursue to optimize to accomplish a task, where you can see fantastic results in kind of an abstract problem that they put, you know, just picking up a block and putting it somewhere else. But then the real world application is going to be picking up a soft teddy bear being shipped out of Amazon or a box full of light bulbs. And the physics of actually picking those things up is way more complex. And so a lot of early research hard to translate into what its effectiveness is going to be in the real world. And so for us, we have the advantage of we don't really have to like figure out, okay, you know, placing a bet on a technology in particular, placing a bet on a company in particular. And so, What that means is we're typically waiting until they're out on the market and actually accomplishing something. And frankly, we also have abstractions and measuring capabilities like we don't have to think necessarily about what percentage ends up being valuable. We can look at how much are you getting paid and what does that say about the value that you're providing and how does that compare to the costs of another approach that's maybe more manual.
[00:11:47.871] Kent Bye: Yeah, I think the really fascinating thing about the time that we're in right now is that we have all of these, let's just call them exponential technologies that are changing so quickly that they're evolving and creating all these new possibilities. And as they get combined together, you have all these adjacent possibilities with all these exponential technologies. So for you, it sounds like you're kind of covering a whole swath of them. If you were to kind of identify the major exponential technologies that you see out there right now, which ones would sort of be on the list that you're really tracking?
[00:12:19.372] Kyle Russell: So we actually think about this a lot at Andreessen Horowitz, and we have kind of a specific lens we look through, which is, and we're stealing phrasing from Chris Anderson at 3D Robotics, drone startup. He basically talks about the peacetime dividends of the smartphone wars. The fact that smartphone is the first billion user plus computing platform. led to intense demand for compute and sensors and screens that were much more capable, much lower power consumption, much lower cost. And how, if you look at different product categories like VR headsets, which are, originally it was the exact same screen that was on a Samsung Galaxy S3, I think was what Palmer used in the original prototype down at USC. It's piecing together those exact same components in a new form factor and suddenly you get an entirely new platform that can be used for entirely different purposes. Same thing is happening with drones now, where as we're getting to a world where hundreds of thousands of people in the United States own these drones that are manually controlled with controllers that look exactly like RC copter controllers from decades ago. And frankly, it's kind of used almost like a flying DSLR. You have to train a lot on how to figure out how to use these things in order to get to the kind of the second derivative of like capturing good footage with the thing. And really like what we're excited about is a transition that we think is going to happen over the next couple of years where drones understand the world that they're in and behave in a certain way based on the context. And so that comes down to sensors that throw off high-resolution imagery at high frame rates, getting really cheap, the cameras that you put on these drones. It's the fact that they're going to be running the same Tegra chips, you know, these like really low-power system-wide chips that have a GPU with roughly the same architecture, if fewer CUDA cores than you have on the same GPUs we're using for machine learning and for, you know, high-resolution gaming, 4K gaming or VR. And then you also have deep learning techniques in order to identify like, okay, these objects I see around me, is that a tree or is that a signpost? And depending on like what I'm trying to accomplish with this drone in this context, like what does that mean about how it should behave and how it should fly around? And so all of these things like fit together. And so one way to look at it is the components. One way to think about it is almost like the mindset of we could feed a lot of data into this thing, identify patterns, and have kind of rough heuristics or rule sets of how something should behave, or like what path to take next, or, okay, you know, the classic Andrew Ng, like anything that can be done, like, by a human brain in, like, a second, like saying, well, that's a cat or that's a dog, you know, just kind of that way of thinking about problems and piecing these things together. So, I'm really excited about the developments happening in GPUs, just because a lot of the math across these areas is, you know, doing multiplication and addition across matrices. It's linear algebra, whether you're talking about graphics or machine learning. Really excited about components, whether you're talking about capture for drones and building up environmental models using SLAM techniques or getting footage for VR video. Like, for instance, I have like a Theta camera that outputs 2K video. It's okay, but I'm really excited for capturing 6K, the resolution that Facebook says is like what really makes it pop when you're in a VR headset and do the kinds of like splitting it into 30 different views and showing you the highest resolution at any given time. So, compute, sensors, screens, and more broadly, kind of optics and other forms of display, partially because, you know, with new form factors of devices possible because of these different components over time. If we want to learn a lot about what's in someone's home, maybe people point Google Lens at various objects in the home and we'll start to build up a model of what's there. But it's a lot easier to do that data collection if everyone's wearing Magic Leap glasses or whatever the equivalent is that comes out of Google and Apple. And you're using all those cameras, like HoloLens, to do inside-out positional tracking and building up a 3D map and fingerprint of the space. but also feeding in actual 256 by 256 pixels of what was I looking at when I opened my fridge and training on what products I'm interested in. Obviously, then you start bumping into some of the privacy implications that you've brought up with VR. I think you're definitely right to bring up stuff like, okay, in VR you can track exactly like what people are looking at with their eyes as soon as we introduce eye tracking, but you're also going to have like, you know, things like EEG and looking for pulse where you're going to have like ground truth of how something made you feel. With AR, it's going to be that, but also looking outside of you and looking at what else is in your environment and not just like, your responses to things and getting something from that, but saying like, okay, in the past, what has this person been interested in, as indicated by things that seem to be in their home, which would indicate they purchased them at some point.
[00:16:57.804] Kent Bye: Yeah, glad you sort of brought that up. Just because I think that I've been also looking at using the blockchain, for example, to do like combination of the blockchain with identity you start to get the concepts of like self-sovereign identity where rather than having like centralized data stores of people you may have this model which could have like using this kind of cryptographic magic to have some way that Potentially even new business models I think is that we're kind of moving from the information age to the experiential age and that I would argue that we need new business models there because I feel like there's so many thorny questions doing the sort of surveillance capitalism that a lot of these companies are doing. I understand that you need the data to train the AI, but it just feels like there's an unknown ethical threshold. And so as you're looking at companies, they're coming to you with business models that are based upon surveillance, because essentially people want to know who you are, what you want, what you're going to buy, and there's all sort of like ambient information you're giving out. And as we move forward, we're going to be able to collect more and more of that information, which I think It brings up all sorts of really deep existential questions about having that information there and nothing's ever completely secure. What happens if like, you know, I trust that Google and Facebook are pretty secure, but just imagine that somebody hacked into Google or Facebook and all of a sudden all the data they have is on the dark web. That to me is super scary to think about the implications of privacy. From your perspective, I'm just curious to hear if you feel like there is going to be this completely new paradigm shift based upon these blockchain technologies and self-sovereign identity to move into Maybe new business models where maybe there's a direct exchange between people get paid for the data that they shared, for example. Or if you feel like we're kind of on this track and we seem to be happy to make this exchange of data for free applications.
[00:18:51.750] Kyle Russell: Yeah, so there's kind of multiple future states that I try to evaluate and just think about what's possible. So let's say keep most things the same in self-sovereign identity. Tricky thing about that is most efforts to pursue that kind of model of you'll own your digital identity online, you'll like have exact control over who has access to it, it'll be stored in a way that's secure and completely encrypted. Even if someone got hacked, there's nothing really to get out of that unless they happen to have maybe like your private key or something. The tricky thing about that is most, I think, experiments of that have been deficient in things that consumers still really care about. And so sometimes it's user experience. Something that we've just noticed is that there seem to be folks who are in crypto and folks who are in consumer tech and never will they meet. And frankly, we have an investment in a company called Keybase, former founders of OKCupid, that actually do have a consumer mindset and are building really interesting tools for things like a decentralized Dropbox or encrypted messaging, this all-in-one platform. You know, we're starting to see progress along those lines, but what I think maybe we need is a new business model, and it might have to do with just breakthroughs in machine learning, or again, just the fact that over the next 10 years or so, we're going to be equipped with objects throwing off just ever more data, and we'll become aware of that. You could imagine, like I've seen folks propose on Twitter, rather than having a universal basic income, what if instead of getting free products for our data, you instead charge the big companies for access to your data? And that's where, if there was that kind of a powerful incentive to adopt control over your information, maybe something like that could be what it looks like. The other track that as an ecosystem, as a paradigm we might take is the kind of things that Apple talks about, and now Google is too, doing machine learning locally on your device and not necessarily sending everything back to the mothership. That's really interesting in that it doesn't really require deviations in user experience, kind of unknown implications in terms of quality of what gets trained. I think that's kind of an experiment that needs to be run at scale to know if that actually adversely hurts product development and maybe that would be something that would keep Google from pursuing that direction further. I think it's kind of unknown. Personally, I feel like the status quo is pretty great for most people. I think in terms of the trade-off of personal information versus getting value from these platforms and free tools, most people really like the free tools. And I'm not sure what the forcing function would be. We're seeing now every year, you know, hack retailers, financial institutions that have lots of your data. And it's kind of everyone knows like, oh, it's been six months, time to change my password again. Or, oh, this hack happened, and they definitely have my information, going to change my passwords, or not. And at some point, we hit 100% hacked. And at that point, do people go, OK, now we will take this seriously? Or do we go, oh, we're in a future state where everyone's been hacked, and it's almost like no one's been hacked at this point? So I'm not really sure how that plays out, but it feels like we're going to get to a point where it's just path dependency on one of those routes.
[00:22:05.245] Kent Bye: Yeah, and I wanted to also ask you, I've had a number of different discussions with different people, both episodes have aired and not aired yet, taking a step back and looking at different models of currencies. For example, there's open source, you could say, is a more cooperative, open, shared. And I think a lot of what I do here at the Voices of VR podcast is that I broadcast information. The more that I broadcast information, the more that people give me information. So it's like this feedback loop. there's a sense of cooperation there where I can't actually feed myself with information, so I still have to get paid. So it's like I'm having this combination between competitive currency of people who are donating, actually, the patronage to me. But just to put this in the context of companies, some companies, like Google, for example, do a very high combination of open source strategy. So I think a lot of people in AI will open source a lot of the algorithm. It's just that the data is something that is hard to get a hold of. And so because they have that, then they have the ability to open source a lot of stuff. But just this idea that the criticisms about capitalism is that the rich get richer, and that money is not being redistributed in a way that's equitable. And I feel like artificial intelligence could potentially be one of the forcing functions to make us reevaluate the underlying economic models that we have, because you have this potential to have a few companies be huge winners of potentially creating technology that displaces jobs. And I think that there will be new jobs that are created, but there's this long tread of technology that has been putting people out of jobs. But with these new technologies, it feels like it's going to cross this new threshold that's going to potentially put us into a new realm where we start to think about How much power and control do these individual companies have? Versus the benefit that they're providing and they're just taking this money, but perhaps doing something that's to the detriment to the entire world so for me as I start to look at all the technology I see the influence of our economic systems, and I'm just Curious to hear if you have any thoughts in terms of like if it's something that is a matter of ethics and culture versus the companies that are doing this that they find ways to not just completely centralize everything or if it's something that requires a completely new economic models that may get into something where we have this blended reality of real reality and virtual reality but there's like cryptocurrencies and other things that may have different ways of actually executing different economic paradigms.
[00:24:31.642] Kyle Russell: Yeah. So, uh, first off, not an economist, but definitely spend a lot of time thinking about these things as well. And so what's interesting is when you start to kind of go down the different paths of logic, you run into pretty different systems that may end up accomplishing the same thing. So one thing you can do is assume that yeah, automation will make corporations, particularly like incumbents more productive than ever shifts the productivity of capital to be like significantly more productive than labor. And so one thing you could do is those corporations for especially a long time would be more profitable because lower cost of labor to accomplish the same level of output. And so just tax the corporations more and redistribute that wealth. And maybe you do something like universal basic income, maybe do something like expand the earned income tax credit. So for the folks who are still working just get to take home more of that pay. You could also, and this is kind of similar, essentially have like a sovereign wealth fund where the United States government or world governments invest in the companies that are kind of getting the most benefit from automation and still kind of the same thing. They capture the profits somehow and redistribute it. With that said, every wave of serious automation, so pretty much every technological revolution before this, there have been concerns over automation taking all of the jobs, whether it was agricultural jobs going away, jobs within factories that were primarily, you know, kind of manual tasks in the 1800s, and as that evolved to the first wave of industrial revolution. And thus far, like, human wants are infinite, and therefore there are, like, infinite productive things that people could do to execute against those desires and wants. Those who are concerned about automation today think that AI is getting to a point where the, like, long tail of tasks that humans can do to, like, deliver that value will be addressable entirely by machines. Folks at Google and OpenAI, with the exception maybe of Elon, DeepMind, you know, owned by Alphabet but still kind of related from the Google brain team, you know, separate from it. They'll tell you that that's like decades away if it will be a possibility and that's like the same thing that was being said in the 1960s when we first got like single layer neural nets implemented in hardware for the first time. Like this is a conversation that we've had before and we've had multiple AI winters where it was like, oh my gosh, things are taking off. Eight years later, things kind of slow down and we hit like kind of a new plateau. So I don't want to extrapolate too hard from the current things that are taking off, hitting human-level accuracy, and assume that because a computer can say, yes, that thing is a cat, that therefore it will be able to run a veterinary clinic taking care of cats within the next 20 years. What I am hoping that we see and like, frankly, like what I'd be really interested in investing in are things that leverage these new technologies. And again, as you phrase it, like exponential technologies that are kind of becoming intertwined and like making each other more valuable, put to use, making humans more productive and therefore making their time worth more, getting better wages. providing like a bigger tax base that can then be redistributed to the folks who are kind of being left at the bottom. Maybe that's direct reimbursement, something again like universal basic income. Maybe it's another way you could go about it is doing training plus optional relocation. Interesting theory I've seen about how to deal with this stuff in a book called The New Geography of Jobs. is that while there is this set of high value, high knowledge necessary jobs where incomes are kind of just like taking off compared to the rest of labor, in markets where those kind of effects are kicking in, so like take the San Francisco Bay Area where there's tons of engineers and people related to the technology industry who are you know, making fantastic incomes. Folks in those markets also end up doing better even if they're doing unskilled labor because there's certain kinds of jobs that have to be delivered locally and therefore, you know, the price for their time in order to deliver it in a place that has higher prices tends to be dragged up. And so someone who's just doing hairdressing in San Francisco will make way more than in Wichita, Kansas. And so a lot of that I think disparity between the high and low incomes can probably be addressed by moving people to places where essentially like they have higher ROI. You with the same given level of skills will just do better off there. Then you start to run into local market issues, San Francisco housing problems where we need to just build more housing for people so that it could be affordable to live here and not commute from three hours away. But overall, that feels like something where in the 20 year time frame before general intelligence is something that like is actually competing against most what people call a blue collar unskilled labor. A lot of that disparity could be eliminated and give us kind of breathing room to think about, OK, systemic change really happens. How do we deal with that?
[00:29:11.341] Kent Bye: Yeah, and just to go back to VR and immersive technologies a bit, I'm just curious to hear like your path into VR, because I know that, you know, Andreessen Horowitz was an investor in Oculus, but I don't know if that predates you or what you can kind of tell me about your journey into VR as well as Andreessen Horowitz participation in the history of VR.
[00:29:30.483] Kyle Russell: Yeah, so actually the thing that got me into technology in the first place was wanting to make video games. I remember actually it was the May 2003 issue of GamePro magazine had an article about, so you want to make video games, here are these three tools that can get you into it. Game Maker, RPG Toolkit, and Dark Basic. And that was the May issues at the beginning of summer after fifth grade for me in elementary school. I dove into all of those tools and went crazy. And making video games ended up becoming a passion of mine. In 2005, Microsoft makes XNA available. You can develop your own Xbox games for the Xbox 360, run it on your own hardware, which was kind of a huge deal at the time. So it made me pick up C-Sharp and .NET. Around that time also, one of my grandparents got me a new GPU for my computer so I could play Half-Life 2. which made me pick up the Source engine, and I started learning C++ so I could make mods for Half-Life 2. And from there, my interest, by the time I was in high school, kind of channeled more towards, I would say, traditional startups. But it was still kind of a big passion of mine, a lot of hobby projects. And so I ended up going to Berkeley for a while. Two years in, I spent a summer in New York at Business Insider as a tech reporting intern. And one of the interns there, he got the Oculus Rift DK1, had a gaming rig that he brought to New York for the summer. And that's where I got my first exposure to Oculus. And from there, I definitely signed up almost immediately for DK2 when it was available. Around the time DK2 came out was about when I transitioned over to working at TechCrunch. I had a little bit more leeway on the beats that I could cover. Right from the outset, gaming and VR ended up being a focus of mine. I think the first or second article I published was about actually why people were concerned about Facebook acquiring Oculus. And frankly, it had to do with a lot of concerns you bring up. I use the GIF that sometimes goes around from Futurama, but they use text where it's like, hey everyone, I want to introduce you to the Facebook Oculus. And they go in and they're like, oh no, it's all ads. And, you know, I had some theories about, for instance, around that time also, a couple months later after, or actually around the time I started, yeah, Twitch was acquired by Amazon. And I wrote an article from some ideas that had been banging around my head. For instance, VR was maybe an opportunity to push back against Twitch for kind of the spectator way of engaging with gaming content. In that, when you're just streaming out from like a screen, it can be really compelling for certain game types, but imagine if you could actually be inside the game world. have different spectator experiences based on maybe interacting with what's happening or not, but having different perspectives and total freedom over what you see. And basically, over the course of my time there, I also, through things like CES and GDC, got to spend time with folks like Brendan from Oculus, and got to meet Tim Sweeney, and basically just kept getting closer and closer to the action of what was happening in VR. And in May 2015, I met Chris Dixon, general partner here who led the investment in Oculus, And we just really hit it off. And so since then, you know, something like a quarter of my time has been spent meeting with folks in the VR ecosystem, figuring out, you know, what's working, what isn't, what might work once we have real scale as these things take off over the next couple of years. What will that scale look like? Is it more like game consoles or is it its own computing platform that we should treat kind of independently like, you know, the PC and mobile ended up kind of breaking off rather than being treated as kind of one big whole. And then from there, obviously, you know, one of the big narratives that we all talk about is AR versus VR. And so, you know, you can't talk about one without the other and can't think about the prospects for one without looking at the other. So by the time we joined, we were already investors in Oculus and Magic Leap. And that alone basically opened a lot of doors for me to go meet really interesting companies and kind of immerse myself in the space.
[00:33:18.544] Kent Bye: Yeah, and for me, I see that there's a little bit of a saturation in the VR HMD market. A lot of the big players are kind of settling in, and AR as well, as we start to start with the phone-based AR, but now move into HMDs, both with the HoloLens, and eventually, as we move into inside-out 6DOF tracking, and we're going to see this convergence over the next three to five years of the AR headsets really coming into a little bit more maturity. We're kind of in maybe the pre-DK1 days of AR, maybe even before that. But the thing that I see is that there's a lot of enterprise applications, a lot of applications of actually applying this technology. A lot of possibilities with the combinations of exponential technologies, whether it's drones, Internet of Things, robotics, artificial intelligence, AR, VR, you know, combining all these things to actually solve real world problems. But also, I'm just curious to hear, like, if you can talk about some of the other companies that you've already publicly invested in, that you've talked about. Some of them, I imagine, are stealth and not announced yet. But the ones that you can talk about after Oculus, I'm not sure the other things that you can speak to the active investments that you have with both virtual reality and augmented reality.
[00:34:27.847] Kyle Russell: Yeah, sure. So there's Within, formerly known as Verse, that's Chris Milk and Aaron Koblen down in LA, kind of a tech-enabled production studio for VR, making some of the most compelling content out there I especially love. And given the constraints of 360 video, what I really appreciate are things like kind of the documentary-esque format that Within is, I think, really strong at. So everyone talks about clouds over Sidra, but also now they have this ongoing series where you know they visit Boston Dynamics and get to see those robots up close and personal and with a sense of scale that maybe a YouTube video or a GIF that goes viral on Twitter doesn't quite convey. There's also Improbable who just within the last week or two it was announced that they raised something like 500 million from SoftBank and so what they're doing is letting you do very scalable simulations and there's kind of two use cases or kind of buckets that they're putting those simulations into. On one end It's city and you're trying to model things like traffic patterns and you want to figure out okay like for this construction project We're gonna block off this left-turn lane for an entire six months What's that gonna do to traffic flows throughout the entire city where lots of agents interacting like multivariate factors to consider? where there's that and then there's building the metaverse. And so, you know, if you look at MMOs to date, with the exception of, I guess, EVE Online would be one where there are actually thousands of people interacting in like actually the same shared space. Most of them, you know, the World of Warcraft being one everyone knows, there's actually never that many people interacting simultaneously. You know, you go into a city and maybe there's hundreds of people and you start getting laggy and things like that. But for the most part, you don't actually encounter that many folk. And so the massively multiplayer is kind of like, the game in aggregate has this many players, but at any given time, how many are actually interacting with? Tens, maybe? And so what Improbable will let you do is actually have sessions where thousands and millions of people are in the same dense urban environment, or maybe because it's VR and we can be in any world, something more magical and colorful and cel-shaded, whatever it is, but actually cram way more people in there, have many more like physical interactions. Again, like with World of Warcraft, your ability to have like agency in a world and influence things is kind of like only what is explicitly predefined. Clicking a button and a pre-set animation happens. It's not, oh, I'm going to mess with some physics, you know, like something like Gary's mod or something else where you've got a little bit more freedom. So that's really compelling. I'm really excited to see the kinds of things that get built upon that and I'm really excited to see like them partnering with for instance I think was announced at GDC partnering with Google where you're gonna be spinning these things up on top of Google and their cloud platform and therefore they are really excited to push this tech and then Google's also working on Daydream and heavy investors in Magic Leap and so that's like another area where you're seeing like The collision of these exponential technologies hasn't quite happened, but when it does, a lot of things that people envision VR doing are finally actually going to be there. So other companies. Another one that we're invested in last year, we invested in big screen. Most of your listeners, I'm sure, are actually pretty familiar with this. It lets you hang out with up to four people today in a virtual environment, bring your desktop environment from your Windows PC into that same space. I kind of think about it as a bridge between VR, the gaming peripheral, and VR, the computing platform. You know, one thing that a lot of people use it for, it's playing Rocket League together on a virtual couch and kind of simulating the, hey, let's all go to your house and play Super Smash Brothers or, you know, have a LAN party. But people are also using it almost as like a virtual WeWork. a shared space where you can have the kind of natural interactions that you get when you're in an office with someone, just kind of can turn around and poke them on the shoulder and say, hey, what's up? And you're like, can you look at this? So really excited to see where that goes. I also think that, and this is not me sharing the roadmap, this is me going where I think that user experience can go, just for the record. But for instance, feels like that user experience could live both within VR and AR. For it to be in AR, keep the avatar, keep the desktop, eliminate the background environment, for instance. So, really excited to see where Darshan and team go with that. So then, in addition to having invested in Oculus and their big series before they were acquired by Facebook, we're actually invested in another of the big AR VR platforms and that's Magic Leap. Obviously, not much has come out about them, and I'm not going to be the one who starts putting things out publicly, but from what we've seen, I'm really excited for where AR is going to be in the next couple of years. Other people might push back and say, well, that's actually mixed reality. I tend to try to keep things simple and say it's AR or VR. I'm not sure where you land on that right now. I think you're probably in the same space. Yeah, HoloLens is great with its inside out tracking capabilities. They actually put something out there for developers to learn from. But if you look at just kind of the field of view limitations, the fact that it's so bulky on your head, frankly, that kind of limited app selection because not that many people like it. You said that AR were kind of in the DK1 stage. I don't even know if we're there yet. DK1 and DK2 ended up reaching hundreds of thousands of people and HoloLens hasn't yet. And so a lot of experiments of what works, what doesn't, what's actually compelling haven't been run. And so I'm really excited for Magically, but also ODG and a HoloLens V2 and Meta to all get out there so that we can actually start running experiments and figuring out what are the candidates for a killer app for these platforms.
[00:39:46.054] Kent Bye: So what do you want to experience in either augmented or virtual reality?
[00:39:52.581] Kyle Russell: So there's a scene at the beginning of Back to the Future where Doc is showing off the DeLorean for the first time, explaining the flux capacitor, and they show the dial where you enter the dates and he's saying, say you want to see the signing of the declaration. Or you want to witness the birth of Jesus Christ, and he enters December 25th, 0000. I really love the idea of virtual reality letting you be anywhere at any time. Today you see things like destinations where people are doing really interesting things with photogrammetry, capturing real-world locations, and when you go on a Vive or a Rift, like, I feel transported in those experiences. And we are so early on in terms of the capture capabilities. I captured my apartment with photogrammetry taking 430 photos with an iPhone. I know Valve recommends using a DSLR, but I was cheap. But it feels like, again, things colliding. What I'm really looking forward to are autonomous drones that are equipped with multiple 4K cameras, or by the mid-2020s, something like 16K per camera, doing really high SLAM and then photogrammetry on top of that, capturing public places. You could have meetings where some people are there in person, some people are there virtually, and you're just seamlessly synced because you're not wearing something that people are publicly calling headset, but actually glasses. I really look forward to the idea of teleportation, like what I call true telepresence, actually feeling like you're there and as productive or taking in as much information about that place. That's a very technical way of saying like, you know, going to Paris and like feeling like you can actually like breathe in the history. I'm excited for VR and AR to really get to that point.
[00:41:30.264] Kent Bye: Great. And finally, what do you think is kind of the ultimate potential of virtual and augmented reality and what it might be able to enable?
[00:41:39.667] Kyle Russell: Yeah, so that last answer kind of points in that direction. When it comes to AR and VR, the ultimate potential, this is such a cheesy answer, but the idea of it as an empathy machine, I definitely think the ability to really understand other people's perspectives understand the context in which they're coming from, the circumstances that have informed their positions. I think that that's incredibly powerful. And, you know, today, again, we have the within style documentary of, you know, plant a 360 degree camera there for a couple of minutes and gives you a sense of what it's like to be there. But I think there's kind of a distinction between 360 video and like full on VR, what it was like to be there versus feeling like you are there. And whether it's photogrammetry or Lightfield sending, you know, exact replicas of that scene and having full 6DOF ability to move around there. I'm really excited to just let other people understand and appreciate context based on this, again, like capability to like teleport and do anything or, you know, be anywhere.
[00:42:42.991] Kent Bye: Great. Well, thank you so much.
[00:42:44.311] Kyle Russell: Yeah, it was my pleasure. Really love, you know, all the work that you do on the podcast. And hopefully I sparked some ideas around the combinations of these areas. I'm excited about that. You know, translate into someone building something awesome.
[00:42:56.158] Kent Bye: Awesome. So that was Kyle Russell and he is on the deal and research team for Andreessen Horowitz. So I have a number of different takeaways from this interview is that, uh, first of all, it was really insightful for me to hear some of the perspectives of Kyle in terms of like, whether or not there, we're going to see some sort of decentralized identity come out of the ecosystem. So, when I did this interview, I did it on May 19th, and just a few days later, on May 22nd, at the Consensus Conference, which is a giant Bitcoin conference in New York City, there's actually a consortium of about 18 companies that came together to form the Decentralized Identity Foundation, and one of those players was Microsoft. So you essentially have these major players that are coming forward and saying, Hey, you know what? We're going to open source all of our proprietary technology that is dealing with this vision of trying to create this self-sovereign identity. And they're creating a foundation in order to open source and collaborate, but also create these open standards in order to have kind of like built into the fabric of the internet, some ways to decentralize identity away from the centralized institutions of like Facebook and Google. I think this is a huge move, and when we did this interview just a few days before that, that hadn't been announced yet. So we'll see how that unfolds, but the fact that there's a consortium of companies that are trying to figure this out, I think is a huge movement of where I see some of the biggest problems when it comes to privacy online, as well as, is this going to be a viable solution? One of the things that Kyle suggested is that are we going to move to a situation where maybe the companies are paying you for the access they're getting to your data that you're giving over and they're using to be able to train their AI algorithms, which is generating all sorts of value, But also whether or not there's going to be a little bit of like this model that you've heard on some podcasts which is like this Advertisement as a code you go and if you actually buy something in using that code, then there's a kickback That's being sent back to wherever you heard about it So maybe if there's gonna be something like that such that anything that you're buying there's maybe these discount codes that you're getting and maybe that's going to be embedded within these decentralized self-sovereign identity that's going to be enabled by the blockchain technologies and So that I think is yet to be seen. One of the critiques that Kyle had about that approach was that the crypto folks tend to be completely separated from the user experience folks and that none shall the twain meet. But with this decentralized identity foundation that was announced just a few days later, maybe that issue is starting to get solved of trying to add into the user experience. So the forcing function of what's going to actually flip people over, I think, is still an open question because there is so much value that is being provided by these companies who are providing these services in exchange for people's data. Now, the unexplained costs of that are that there's disruptions to our Fourth Amendment rights. That data is never fully secure. And we kind of have this implicit assumption that nobody's ever going to hack into Google or Facebook. But just imagine if some hackers eventually get into that vast repository of data and unleash it into the dark web. That is just going to wreak havoc onto everybody's sense of privacy and identity. So anything that you hand over to a company, according to the third party doctrine, has no reasonable expectation for privacy, such that as we move more and more into virtual reality technologies, the more that we decide to give up our biometric data is like so much more intimate information where they can start to look at our unconscious behaviors and start to hack our fixed action patterns, which means that there's this unknown ethical threshold such that where's the line between advertising and thought control when you can start to control every single part of somebody's environment. So that I think is the context that I've been covering in the larger privacy issues that Kyle's been listening to and he's aware of and it's kind of an open question. So that's part of the reason why I wanted to really question some of the fundamental business models, because I think as we're moving into this next iteration of the web, which is becoming more and more decentralized, but more and more immersive, then I think it's a perfect time to start to reboot some of the ways that we've thought about the web. Because the early days of the web were great, but it's kind of crap these days with all these ads and pops up. You know, it's not a great user experience anymore. And I think that trying to chase after this advertising and attention model, that may not be the best way to think about things. Right after I did this interview, I talked to the developer of Soundboxing, who pointed me towards the web browser of Brave is going to launch in initial coin offering for Ethereum. It's an ad token and it's called the basic attention token. And so again, it's sort of using these cryptocurrency ideas such that whatever you're paying attention to online could actually, you know, create this cryptocurrency such that there could be a middleman between your identity and the ad sellers who are selling your ads such that, you know, there's kind of a seamless integration where your identity isn't centralized in any specific way. This is a new technology, but that's also something to throw out there as well. So I just wanted to also just say a few more words about these larger discussions about capitalism. You know, I don't have the answer. I don't know what the answer is. The way that I think about it is this balance between the yang and the yen. The yang is the principles of competition where you have a debt-based currencies and capital flows such that there's investments and competition and zero-sum games, and eventually what you have is this consolidation of power and huge companies like Facebook, Google, Amazon, Netflix, Apple, Microsoft, and all of these tech companies don't have any antitrust laws such that they have so much power to create these monopolies in these different ecosystems. And I don't know if the government is going to be able to step in and come up with some level of regulation to stop that consolidation of power. That's sort of the opposite effect of the yin. The yin principle is talking about openness, collaboration, cooperation, and trying to take the public interest in mind. So there's something that is within the ethics of our existing capitalistic system, such that we don't have that kind of built into our economic incentives, such that there's things that are just externalized, like the public interest, like the earth, like what might be the best for the users. There's this profit-maximizing incentive that, if left unfettered, just brings up the worst in humanity and greed, and just creates these horrible nightmares that I feel like we're in this kind of, we had this economic collapse in 2008. And I think a lot of that was kind of papered over in the sense that a lot of the underlying issues weren't really addressed. A lot of people who were responsible for that didn't necessarily be held accountable. And so we kind of have this situation where now we have an administration that is all up for deregulating everything and having even less oversight into our economic systems. And so I just kind of feel like at some point over the next couple of years, it may be coming to this crisis point. So from Kyle's perspective, he's saying that, OK, maybe we do have the government do some sort of level of universal basic income. some sort of trust such that there's a taxation of these companies and in some ways it's redistributed out into the rest of the world. So that is one approach where you're relying upon the government to do that, but because we have all this kind of like libertarian ethics within both the companies as well as the government that doesn't seem to be either competent or willing to be able to have the knowledge to be able to even regulate these companies. I don't have a lot of faith that anybody in Congress is going to really know much about artificial intelligence or virtual reality, augmented reality, or the blockchain, to be able to make rules or decisions that's going to make it equitable for everybody. Ideally, I'd love for it to be built into the economic system, the models, the technology. But I think, honestly, it comes down to ethics and values of these companies, whether or not they're going to make the decisions that are taking in these things that are usually invisible. So just as a metaphor, as I was going in to wait and to do this interview at Andreessen Horowitz, I was sitting in the lobby and I was waiting for Kyle to get out of a meeting. And I look up and I see this like explosion. It's like a nuclear explosion of an H-bomb. And I'm like, oh my God, whoa. That just really took my breath away. I couldn't believe that there was this image there. So I was really taken aback by it. And I asked to get a closer look. So I started to take a closer look. And I started to take a picture of it. And they're like, no, no, I'm sorry. We do not allow you to take a picture of that. So in the lobby of Anderson Horowitz, one of the biggest VC firms in the valley, they have nuclear weapons welcoming you as you're walking in about to give your pitch into these VCs. So it's kind of the essence of like fire and air, this unending expansion of the mind this competition and just destruction. I mean, it's just this essence of the power of the human mind to just completely destroy the earth. And to me, it was a little heartbreaking just because it was like, I love the idea of like cooperation, collaboration, the earth, harmony. And to see the image of nuclear weapons just gave me this sort of metaphoric image of like, destructive capitalism, like we're going to take you for everything you're worth. And It stuck with me. It was an image that stuck with me throughout the entire interview, and it just really bothered me. So I think here's the essence, is that in some ways I see it as a metaphor for the vision of man to be able to just have never-ending expansion without any consequences to the impacts of the glare hole. Nuclear weapons, for example, are completely destructive, not only for humanity and life and living, but also to the Earth. And so that is the essence of capitalism is it doesn't fully take into consideration the concerns of the earth. What are the systems to be able to have the thing that's going to make this system that we're creating in the future work for everybody. And it doesn't work to just like have people move from Kansas because you just have this issue with the housing crisis that's happening in San Francisco right now, which is kind of like a larger metaphor for the unsustainability of this kind of mindset of unending growth. So what I would propose is that there is an ethical responsibility for both venture capitalist firms as well as for companies to think about how do you give back? What are the things that you're getting back in order to sustain an ecosystem that is healthy for everybody? Money is the only thing that we have in our ecosystem that infinitely grows. The more that you have money, the more that you can have access to that power and wealth and expansion. And I don't have the answer. That's the thing that I think is so frustrating. And I think that it may actually get to the point of having some sort of economic collapse such that we start to really think about these new systems. Is it cryptocurrencies? Is it self-sovereign identity? Is it like a gift economy? We're actually like pay attention to our neighbors and be embodied in our bodies with other people and we actually have empathy for what's happening in the larger picture. It's that lack of empathy and lack of connection to the earth that I think that for me was like the most disturbing. And Again, I don't have the exact answer to say, here's the system that is better. But if something happens with these systems that we don't see that it's working, I'm not sure that government's going to come in and fix it. And so I'm really interested in thinking about what are the systems that are going to be able to come in and kind of replace these systems that aren't working for everybody. So that's all that I have for today. 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 become a donor. Just a few dollars a month makes a huge difference. So you can donate today at patreon.com slash Voices of VR. Thanks for listening.
