#764: VR Fund’s Tipatat Chennavasin on HoloLens 2 & The State of the VR & AR Industry

tipata-hololens2The Venture Reality Fund general partner & co-founder Tipatat Chennavasin travels around the world tracking the progress of virtual and augmented reality, and I had a chance to catch up with him at Microsoft Build 2019 in order to get his impressions of the HoloLens 2 and the recent MRDevDays conference put on by Microsoft. Chennavasin sees a significant improvement from the first to second version of the HoloLens that mirrors the scope of improvement from the Oculus DK1 to DK2 development kits. He is confident now that the HoloLens 2 will be able to provide enough functionality and comfort to be deployed at much larger scales to the point where he’s now looking to invest in more AR companies working on mixed reality projects.

We also talked about the of state of the VR and AR industry, why he thinks that there are a lot of strong indicators that there’s a healthy and vibrant XR ecosystem his impressions of Tiltbrush on the Quest, and some of the highlights of what he’s seeing as he’s traveling around the world connecting to the the global XR community.


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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, I end up doing a lot of traveling for The Voices of VR Podcast, but somebody who has me beat by far is Tipitet Chinavasan, who is traveling around the world, tracking the evolution of virtual and augmented reality, in part because he's a co-founder and partner within the Venture Reality Fund, the VR Fund. So he's making these various different investments into the space, and so he's really done a great job of traveling all around, being engaged, talking to people, and trying out all the different equipment. He's an amazing Tilt Brush artist as well, so he's For a long time, he was creating a daily Tilt Brush painting, and now he's been playing Beat Saber a lot. And so he's just somebody who's really dogfooding the virtual and augmented reality and someone who's got a real sense of what's happening within the industry. So I ran into him at Microsoft Build and had a chance to talk to him because he actually had a chance to go to the Mixed Reality Dev Days, the MR Dev Days, which was kind of like this developer conference that was put on by Microsoft the week before Microsoft Build. And so he got to connect to a lot of the different demos and listen to a lot of talks and just to see what the latest buzz was with mixed reality. So I had a chance to talk to him about his impressions with the HoloLens 2. He's super impressed with it. And in fact, kind of shifted his own decision to say, okay, this is getting to the point where he can start to see how there'd be these mixed reality applications that we could start to have these large-scale deployments using the HoloLens 2. Whereas, he was seeing a lot of demos with the HoloLens 1, but wasn't seeing something that was necessarily ready for enterprise deployments at large scales. So we're covering all the things that he's saying about Microsoft and the HoloLens, as well as what he sees as happening in the overall virtual reality industry and ecosystem. So this interview with Sipitat happened on Monday, May 6th, 2019, at the Microsoft Build Conference in Seattle, Washington. So, with that, let's go ahead and dive right in.

[00:02:09.519] Tipatat Chennavasin: Hello, everyone. I'm Tipitat Chanavasan, general partner and co-founder of the Venture Reality Fund. So, I run a fund that focuses on early-stage VR, AR, and AI investing. We're based out of San Francisco, done 30 investments so far. We do Seed Series A. We've been very active in this space, continue to be very active in this space, and I'm excited for what's coming next.

[00:02:28.875] Kent Bye: Great. So we're here at Microsoft Build. I understand that you had an opportunity to go to the MR Dev Days. Maybe you could tell me a bit about what you were seeing there in terms of the trends of mixed reality.

[00:02:39.240] Tipatat Chennavasin: So the MR Mixed Reality Dev Days, that's Microsoft's mixed reality AR, VR developer conference. It's interesting. Everyone there was like, we want to try the HoloLens 2. And they delivered. And that was awesome. Because not only were there plenty of demos, but they actually gave developers hands-on time with it. And so people were actually hacking with the device, getting code up and running. And that was really cool to see. And just cut to the chase, the HoloLens 2 is very impressive. I felt like there are a lot of concerns that we've had with not just HoloLens, but also Magic Leap in terms of like, OK, this is the current state of like dev kits. How far away is this? Is the improvement from DK1 to DK2 going to be substantial? What's that all going to be? And how far away until we get something that we think will be viable in the marketplace in a meaningful way. And I feel like HoloLens 2 represents, at least to me, the best that we've seen so far, but I also think it does reach that threshold of offering, Microsoft calls it time to value, but even because, not just of the hardware, but also because some of the software that they're giving that addresses some of the most obvious low-hanging fruit use cases, that will be useful for enterprises immediately. Now, the consumer side is another story. But at least on the enterprise, I feel very confident that there's going to be a lot of adoption of AR based off the HoloLens 2 device.

[00:03:52.681] Kent Bye: Yeah, I just had a chance to try it out for the first time here in this demo. And I really love the eye tracking. I love the voice interface. And being able to grab holograms and move them around, I felt like there was a little bit more latency than I'm used to seeing in something like, say, a very beefy, powered VR experience with something like Leap Motion. I feel like I've had better low-latency interactions with holograms in VR, but that this is an on-board, completely tetherless device, and they're still working on it. It's not the final version, is what Jesse had just told me. But I do feel like that it's a huge step forward in that I do expect to see that there's going to be plenty of enterprise applications that are going to find plenty of uses for the HoloLens. But yeah, I don't expect for people just walking around with a HoloLens anytime soon.

[00:04:38.148] Tipatat Chennavasin: But yeah, I feel like one of the big things, it's hard to really explain how it is until you've actually tried it, but not even just that it's a lot more comfortable to wear, but even to set up and use, like the automatic IPD calibration, the fact that the iBox, it sits on your head very well, you don't have to mess, like, oh, is this on, is it not on? With the original HoloLens and even with the Magic Leap, it's always kind of tricky to be like, okay, are you set up? And the time.

[00:05:00.001] Kent Bye: It's kind of weird to put on, you didn't know. There's a lot of ways to put it on wrong. I think there's less ways to put this one on wrong.

[00:05:05.624] Tipatat Chennavasin: I feel like, yeah, so in terms of time to actually in AR is almost immediate now, whereas even with others where you have to boot up the system, it just felt so slow. But then also, I think the hand tracking, it's not perfect hand tracking, but it's hugely functional hand tracking. And more importantly for me, that direct manipulation where instead of the weird gesture interface that was kind of hard to train and wasn't always that accurate, now that people could see a, not just a hologram, but like a functional button or something, interact with like, press it naturally without any kind of instruction, that they could just use it right out of the box, that is a huge step change for me in terms of just usefulness.

[00:05:42.364] Kent Bye: Yeah, I'm excited to see what other kind of gestures that people use. Because I'd imagine that there's going to be a lot of machine learning ways of detecting the hands and do different gestures. I guess the thing that I'm concerned about is finding some sort of middle ground between non-fatiguing interfaces and interfaces that feel good and what's going to be functional. But for you, looking at investment in this space, are you investing in HoloLens companies? Do you have existing investments in this space? And what type of things are you looking at as an investor?

[00:06:10.194] Tipatat Chennavasin: So we've definitely invested in companies in the AR space. And one of the things that we were thinking about, too, was like, OK, when they're deploying it, what's the state of the platform? When's enough hardware going to be available? What's the quality of the hardware that's going to be available? But now seeing the HoloLens 2, I feel much more confident in making more of those bets. I feel like before, I was like, it's going to be hard to deploy a lot of the HoloLens 1 or honestly even the Magic Leap 1 in mass deployment in these ways that some of these startups pitched me. But now seeing the HoloLens 2, I feel like, OK, yeah, yeah, it solves a lot of the friction points for enterprise. I mean, of course, there still are other friction points. It's not exactly where we need. It's in the direction that we're going, but it's still not there yet. But it's a huge jump from, like, I think about, like, when we think about the Oculus and the DK1 was rough, the DK2 was a huge jump. But still, when we got to the final rift with the touch or the vibe, like, when we got the full, that was still the best. I still feel like we're on that trajectory. So it's not the final final, but it's a huge, huge step.

[00:07:07.603] Kent Bye: One of the things that I was noticing at F8 was the Oculus coming out announcing new offerings for Oculus for Business. I've been a little disappointed in seeing how Facebook and Oculus haven't really been taking the enterprise market seriously. They've left a lot of opportunities on the table for HTC to come in and just really dominate the enterprise space in that way, but I'm hopeful that the Oculus Quest is going to provide new opportunities for Oculus to be able to penetrate into the enterprise market, but also to just not only have more of a system and setup for having them interface with the enterprise clients, but to speak to the developer community about the different opportunities that are there. So I feel like they've went all in with gaming, but we're thinking very narrowly in terms of all the potential of VR. I think that kind of left the overall ecosystem of VR to be a little ill-prepared to go through what feels like to be a little bit of like this mini winter of VR until we have the launch of the Oculus Quest and see if that breathes new life into the overall VR ecosystem.

[00:08:02.829] Tipatat Chennavasin: I mean I think the things I'd add is I mean it's just thankful that Oculus is not the only game in town because there are people like HTC or even Microsoft through their ecosystem like HP with their new reverb headset targeting a lot of the things to create like a high quality not too expensive enterprise headset and then of course my portfolio company Varia who's going for the super high end like I feel like It's good that there's other people that can fill those needs, but even despite that, they're being dragged into enterprise kicking and screaming. Because if you think about the most significant enterprise deal in VR, that has to be Stryver with Walmart, and that was with Oculus Go. So you're like, OK, well. whether they want to or not, the fact that they have a very high quality product and it can be used, even though they're targeting consumer, people will use it for anything and still close huge deals and still do a lot of good for the whole ecosystem, no matter what the corporate messaging is.

[00:08:50.636] Kent Bye: Does that change your calculation in terms of looking at different investments into enterprise VR applications because now they're getting a little bit more support from companies like Facebook?

[00:09:01.090] Tipatat Chennavasin: Absolutely. I mean, and just the fact that the Quest and, you know, having a high quality portable six degree of freedom, true VR headset, like that is going to be critical for a lot of these use cases that we think are really going to drive adoption in VR in the enterprise. And so I do wish there was still a Quest competitor that was like, And I know HTC and the Focus Plus are trying to be that, but I feel like there still needs to be more in terms of creating a high-quality, all-in-one unit that could be more expensive, but is just as portable but more powerful. I think that is still something that I would like to see for the enterprise.

[00:09:35.349] Kent Bye: Just so that Facebook doesn't dominate without much competition?

[00:09:38.732] Tipatat Chennavasin: I mean, you think about like, if it wasn't for the Vive, I mean, maybe we'd still be on video game controllers and not pushing, you know, hand tracking and room scale and all these other things. So always having high quality competitor is good. And so yeah, I definitely want to see more of that. And I feel like, at least on the high end VR, we still are seeing that, you know, not just HP, not just Vario, but like, you know, Valve with the Index, you know, it's like, I feel like there's still a lot of interesting innovation happening on the high end side. But I feel like in the high quality, portable, like six degrees of freedom mobile side, I haven't seen a solid competitor yet.

[00:10:08.799] Kent Bye: Sorry, HTC. Yeah, the demo that I had of the focus at GDC over a year ago, it was a long ways away from the quality of the Quest. And I'd have a hard time imagining that they'd be able to have a lot of the computer vision expertise that you really need to do a lot of the inside-out 6DoF tracking. Maybe someone like Samsung or Google, I'd expect to see something like that from them as well. So I don't know. Google IOs coming up, but I don't necessarily expect any huge announcements. But it'd be nice to see if there's anything that Google is going to be announcing there to kind of push forward the ecosystem in any way.

[00:10:41.520] Tipatat Chennavasin: And it's not just the inside-out head tracking, but also getting the hand tracking controllers is super critical, super key. And having that as part of the offering from day one, I think, is just super important. Oh, but one thing before we, I did want to go back to talk a little bit about the HoloLens. I think one of the coolest parts of the demo, right, is the eye tracking and the scrolling text. And I feel like it's one of those little things that, again, it just doesn't sound very interesting, but when you actually do it in the demo, it seems like a superpower. And I like that idea of like, it takes mundane things and makes them feel amazing or makes them feel natural. And trying to understand how these new interfaces unlock that potential, I think is going to be key to understanding the value that spatial computing can provide.

[00:11:20.303] Kent Bye: Yeah, it's really tough to demo eye tracking, because I know that every time that I've done an eye tracking demo, you'd almost have to take a video of it and look in your eyes, because you have saccades. You can't necessarily see your eyes move. But just the fact that you were able to look at an object and give a command and have that object react to your agency, I think, is a powerful way to direct agency within your spatial computing platforms. And so, yeah, I could imagine adding all sorts of stuff, even if there was a hot spot. that was on top of the object and then be able to speak at things, you could start to use the HoloLens as like this IoT like master device controller so that you can start to be able to detect the different objects and based upon what you're looking at then be able to then target what context and what object you're talking to and then be able to give some voice commands on top of that.

[00:12:06.054] Tipatat Chennavasin: Yes, absolutely. I think this is one thing that Microsoft did really well at the Mixed Reality Developer Conference was just in terms of their messaging and how they think about the space now, like they really feel like, okay, they found the audience that they want to address with the HoloLens product, they've really revamped HoloLens 2 to focus and like double down on that segment of frontline workers or first-line workers that they call it like and bring the productivity of Information technology to people at the edge or that aren't sitting at desks, right? And so they've kind of hyper tuned towards that but I still think that there's still so much richness in terms of applications in terms of productivity that can be done for Traditional IT workers or for people that want to work in the digital economy that that are kind of held back by the current system and so I feel like One of the things I really liked that they did at Build was, again, only a handful of partner demos were shown at Build that were given showcases. And one of them was a big mixed reality demo in the HoloLens 2 with a company called Spatial, and showing that idea of how, OK, this is how designers at Mattel are going to collaborate, and using mixed reality to kind of do the not just the communication part of a meeting, but also the collaboration component, right? And then like, I thought that was really compelling. And I've been following that team for a while. I'm full disclosure, an advisor, but not an investor in the team. But I've always been impressed with them. And I'm glad to see that Microsoft and others are like really picking up on what they're doing and really understanding that this is going to be very powerful for a lot of people.

[00:13:31.685] Kent Bye: Yeah, I'm curious to hear a brief little update about some of the other investments that you made in the VR space because I know that it's kind of a weird time in VR in terms of like people that have developed applications for PC VR. There hasn't been the market penetration of having enough headsets out there in the market for a lot of companies to really make a go of creating a sustainable business. And so I don't know if there's going to be pivots to the question for some of them or if some of them are folding or some of them are just doing better than ever. Just curious to hear a little bit of an update of what you're seeing from your own portfolio of investments into VR right now.

[00:14:03.273] Tipatat Chennavasin: I'll give some general stuff before I drill down, but like, you know, just that idea, too, of like, OK, well, we need VR to be mainstream. Well, why do we need it? Or what does mainstream even mean? And I appreciate that Zuckerberg, you know, at the last Oculus Connect was like, OK, he tried to clarify what the goals were for mainstream. He went 10 million adoption. The reason why he said 10 million adoption was because that would support an ecosystem where developers could sustain themselves without needing platform support, without Oculus having to prop them up to pay for like dev work and stuff like that. Right. What I would say is we're actually already there, even with a relatively small install base of VR. PlayStation has said they've done 4 million, and then estimates for PC, that's Rift and Vive and Microsoft combined, is somewhere between 1 to 2 million, right? Even in that small install base, I've been tracking over 60 titles that have done over a million dollars in revenue, and most of those had budgets of under a million dollars, so those companies are break-even or profitable. And then, of course, you have Beat Saber, one of our portfolio companies. They announced that they did over a million in sales. They've never gone on sale. The price fluctuates between 20 to 30, depending on what platform. So they've done over 20 million in revenue in one year in this small, nascent, inoperable market of VR. So I feel like I mean, it's tough. Doing a startup is tough in general. And I don't want to sound cruel or not caring, but I feel like there are a lot of people that they weren't succeeding. And then they're like, oh, well, because VR isn't taking off. But it's like, well, no, there are plenty of teams out there, not just Beat Saber, but plenty of other teams that are addressing the same market and succeeding. And it's always funny because I feel like people always, oh, they always come up with like some way to discredit it and say, oh, well, that's just a one off or that's just a, well, no. But you know, it's like, there's over 60 companies that have done a million dollars in revenue in VR. If you haven't hit those marks, I feel like that's more on you and not on VR. And especially understanding too, like, right now the ecosystem for any game developer right now, whether it's, I mean, on mobile, on desktop, on every other platform, on console, right? Like, billions of addressable. How many small teams have actually succeeded to make over 10 million in revenue in the past year? and less than what I've seen in VR. So I would honestly say that right now, at least for a game developer or indie game developer, that VR is probably one of the most viable options, definitely more so than mobile, definitely more so than typical console. I think maybe Steam, there's been a couple successes as well on general Steam and PC. But you have a company like Superhot, right? Or Superhot Team, I think that's their actual name. Not my portfolio company, but great team. So it was a successful game on PC, and then they created the VR version, separate game. They recently announced too that they've made more revenue on the VR side than on the PC side, even with a hit indie game that came out a year before on PC, now that VR revenues have surpassed the PC side. So I don't know, I feel like there's all these indicators if you actually look at it and see, and you're like, well, you know what? Even at this small point, it's a healthy ecosystem. And I think that the Quest is going to exponentially expand this ecosystem, that addressable market, and that people are going to be spending a lot more money. And these games that are making $5 to $10 million now will be making $50 to $100 million within a couple years.

[00:17:14.293] Kent Bye: And are you also an investor on Rec Room? Yes, yes, yes. So I know that a lot of people look at the Steam Spy stats, and I know that Rec Room has been able to be quite successful on the PSVR and on the pathway potentially towards sustainability or profitability. And I think, you know, with High Fidelity, with Philip Rosedale kind of taking a step back from social VR. I think some people are like, oh, well, social VR is dead. But there seems to be some players like Rec Room that seem to be doing quite well in virtual reality and social VR experiences.

[00:17:44.786] Tipatat Chennavasin: Absolutely, and not just Rec Room, but also, of course, VRChat, right? But I think if you really look at what Phil Rozo was saying, he was just saying, well, look, we've been emphasizing that we've been VR, but now we want to say we're both, and really want to emphasize the screen version, because both Rec Room is playable on non-VR, and VRChat is playable on non-VR, and they both, you know, VRChat, the majority of people in VR are not playing in VR. but that there's still enough people playing in VR that makes it a very viable opportunity. And honestly, the big differentiator. But so, I think what we're going to see, or what we are seeing, is that, yeah, there's definitely successes to be had in VR on the social side, definitely a lot on the gaming side. And then, we talked about Stryver already, but there's also quite a few other companies I've been talking to in the space that, for me, I guess, When we looked at this early on in enterprise, one of the biggest problems we had were there were a lot of looky-loos, where a lot of companies would kick off these proof-of-concept POCs, these pilot programs, but they would never get to full deployment. And for 2016, we saw a bunch of pilots. 2017, we saw a lot stall. But then 2018, we started to see companies were kind of breaking through, like Striver, like others, where they're like, okay, this was tested a year ago. The results were good. We proved the ROI. Now we're doing big scale deployments. Now we're signing up to actual recurring revenue contracts. And we felt like, okay, real business was being made. But look at a company like when people say, okay, VR is very tough. EdTech is probably one of the toughest areas right now, right? And not just in VR, but just in general. And so EdTech in VR becomes super hard. But then you have a company like Labster, who just closed a huge round. I could be wrong on there, but I think it was like a $26 million B round. But they're doing education, ed tech, in VR, and gaining support, right? So I feel like, again, if your company, if you are able to crack through, if you're able to break through, you're able to unlock additional funding, you're able to unlock big partnerships. A lot of people are still very much interested in wanting to help see VR and AR kind of get to where it needs to get. But yeah, I really feel super confident about how things are. I mean, for me, Quest is just going to jumpstart or revitalize or not revitalize, because I still think it's been going good for a lot of people, well, for enough people. But I think it's going to go much bigger with Enterprise and consumer for VR. And I feel like the HoloLens shows me that for AR, for Enterprise, that things are going to become much bigger as well.

[00:20:02.314] Kent Bye: Yeah, and so I end up going to anywhere from 12 to 20 different VR conferences over the course of the year. And I know that you come up with a really comprehensive list, and you travel a lot more than even I do. You are all over the world tracking what's happening in the VR space. And so what are some of the other VR conferences that you've been to that people should know just to give a little bit better sense of what's happening in the VR space globally?

[00:20:25.801] Tipatat Chennavasin: You know, honestly, I would still say the big ones in the U.S., like AWE is coming up. It's going to be huge because, I mean, a lot of people travel from around the globe just to attend. But the ones that are done by the platform guys like the Microsoft, Google I.O., Facebook Developer Conference F8, and then, of course, Apple, WWDC, I feel like and eventually Oculus Connect. I think those are going to be the biggest and the best. But every single region has their own VR AR conference. And what's interesting is that the one I went to in China was probably the biggest VR AR conference I've ever been to. And it was so shocking, too, because it was something I had never seen. And I had heard, again, just being here mainly based in the US, oh, China isn't that interested in VR. I talked to some of the contacts I know in Shanghai and Beijing. And they're like, oh, no, it's the winter of VR in China. And then last year, I go to this conference in Shaanxi. And it's, yeah, they call it a Tier 2, because it's only like 10 or 20 million people, not 50 to 100 million people. A Tier 2 city. Yeah, a Tier 2 province or city. And so they're like, this province has picked VR and AR as their economic theme. for the next decade, which means they're going to invest billions of dollars, doing big partnerships, doing all this infrastructure build. And so they threw this VR AR conference there. And I think it was called like the VR AR World Conference or something like that. And it was just enormous. Like the whole city was overtaken by VR and AR, where every single street lamp had a banner advertising this thing. And then, I mean, this is a communist country, so when they go in, they go all out. But every single intersection had at least one billboard, and the billboard had these sayings like, VR is good for the people, VR is good for the future of Zhangjiajie. And then they also have, in their downtown, these huge skyscrapers that are ceiling-to-floor digital signage. And two of them had these huge banners the whole night of like VR AR conference promoting this thing. And so they claim that over a hundred thousand people have attended their expo. Like that is insane to me. So I feel like, you know, you hear different things. I saw it firsthand. It was in this alternative universe where VR AR had won the war. and had taken over this town. But it definitely had that sense, too, where, like, I appreciated when, every morning, they had different, the newspaper, the national newspaper there, had these segments, like insert pull-outs, that talked about VR for agriculture, VR for, you know, oil and gas, like, all these different things, where we were just like, oh, yeah, they're definitely thinking about it in a lot different ways than, you know, some of what we've been hearing here in the States.

[00:23:01.846] Kent Bye: Wow, and I'm just, I'm curious, I've heard that the Tilt Brush is coming out on the Quest. Have you had a chance to play Tilt Brush on the Quest yet?

[00:23:08.745] Tipatat Chennavasin: I don't know what I can and cannot say, but it is amazing. Actually, what's really great was I think it was Patrick from the Tilt Brush team, the co-founder, who actually did a tweet about some of the differences that they had to do. But I was really impressed by how much of Tilt Brush is really in there. And it feels great. Like the tracking, again, it's one of those things where this really shows off the tracking. And what I really like about it as someone that does a lot of Tilt Brush is It's also a great way to now show people as a gallery. It's been so hard to be like, oh, I drew this cool thing, and now watch this YouTube playback, or watch this little poly thing, or you can spin it around. But it's like, oh, no, I did this cool thing. I pull out my backpack, put it on someone's head, and now they're just immersed in it anywhere they are. That's amazing.

[00:23:48.495] Kent Bye: Yeah, no, that's cool. So what is the thing you're holding here? Just describe what this is.

[00:23:53.056] Tipatat Chennavasin: Oh sure. So if anyone's ever seen me, I've been carrying a 360 camera since as soon as they were commercially available. And I recently upgraded to the new Insta360 EVO. It's a convertible camera that does either a 360 or a stereo 180. And so I've been playing with it. It's pretty fun. Again, I haven't been a big believer of hearing me talk about 360 video as a huge media opportunity for consumers. But I personally like to take 360 photos, and it's a great way to remember all the crazy events we've been in. Maybe one day I'll have a crazy gallery 10 years from now where people can just teleport to all the events that we've been to. And so let's definitely take a picture together.

[00:24:29.211] Kent Bye: OK, yeah, for sure. And I'd love for you to give me a guided tour through your memories.

[00:24:34.274] Tipatat Chennavasin: Sounds good.

[00:24:35.192] Kent Bye: So what are some of the biggest open questions that you're trying to answer or open problems you're trying to solve?

[00:24:41.237] Tipatat Chennavasin: Sure. I still feel, like, fundamentally, my thought of, hey, how do we get a billion people in headsets, whether it's VR or AR? And I think that fundamental thing that we have to answer or solve is saying, OK, well, if it's an entertainment device, like a game console, you think the top game consoles today, they sell hundreds of millions of units. But if you get to like a PC, like a desktop or a laptop, those are productivity devices, and that gets to a billion. And then of course, if it's a communication device like a phone, then you get to the six to nine billion, right? But I think to get to that billion, if we can find unlock productivity, not for like specific enterprise use cases, but productivity in a more horizontal way, I think that's gonna be the real opportunity. And so trying to find teams that are saying, okay, you know what, I can actually, use VR to do not just my current job, but maybe even do a new job, a different job that pays better, that allows people to work in the digital economy that typically haven't been working in the digital economy. I feel like that's an underserved population. That's an opportunity where if we think about where computers started, it's always been about getting more people to work with computers. Like that's the story of interfaces, right? When it was punch cards and command lines, very few people did any kind of work on a computer. Then we had the GUI and the mouse, a much bigger segment, but still not everyone. But now, I think with natural interfaces that spatial computing represents, we're going to see anyone can do work in the digital economy if it feels just like you're doing work in the real world. And so unlocking that productivity to say, hey, if I made $10,000 more a year for my job, I would easily pay $5,000 to own a VR system, right? And I feel like that's kind of what the promise of computers and laptops were, where it was like it unlocked so much productivity that it would pay for itself. And so I think we're seeing us prove this validation for large enterprises, but I'd love to find people that could prove it for the individuals.

[00:26:30.804] Kent Bye: Great. And finally, what do you think the ultimate potential of spatial computing is and what it might be able to enable?

[00:26:39.262] Tipatat Chennavasin: I mean, I think this is exactly what I was talking about and what I was trying to get to. Whereas I feel like right now, the digital economy is always expanding, never ending opportunities. We don't have enough people that are working or honestly to like even the types of what we considered digital economy work is going to change, right? Like originally we never would have thought of graphic design, art and animation as digital work, but it is now, you know, it has been since the GUI, right? And so understanding what's that next step and how does that evolve and how does that empower the individual, especially thinking about people that are, I think there are so many people that want to do work, but don't have access. And I feel like if VR and AR could really do that revolution of productivity and let people work borderless, but also let people work with interfaces that work for them instead of them having to adapt to a natural digital interfaces that we have today. I think that's going to make everyone 10x more productive. And I think that's going to allow people to do jobs they never thought would, or we could have jobs that we never thought would be possible. And I think unlocking that next level of productivity that lets everyone benefit, It's going to be a huge, huge opportunity and much better for everyone. Because again, I feel like if everyone could provide for their family, there would be much less hatred, much less suffering, much less tension if people's basic needs were met.

[00:28:07.621] Kent Bye: Is there anything else that's left unsaid that you'd like to say to the immersive community?

[00:28:12.111] Tipatat Chennavasin: Hello, everyone. I wanted to say, if you told me five years ago when I first tried the DK one, that we would have something like the Quest, that would have blown my mind. It's just so fast how quick of the path that we're on. And if you told me that there are companies that a small team of less than five developers in the Czech Republic could make a game that sold over $20 million in revenue in one year in VR, like, that's phenomenal. And I'm just so excited for where this is going. I think it's just going to get better and better. And I just want to thank everyone that's been working so hard on this. And I know it was tough during the, quote unquote, VR winter or XR winter. But I feel like definitely we're past that now. And it's so exciting to see all the amazing things that have been happening.

[00:29:04.906] Kent Bye: Awesome. Great. Well, thank you so much.

[00:29:06.287] Tipatat Chennavasin: Cool. Thank you. Always great to see you.

[00:29:09.070] Kent Bye: So that was Tipita Chinnavasan. He's a co-founder and partner of the Venture Reality Fund. So I have a number of different takeaways about this interview is that first of all, well, the big news for me is that Tipita is seeing the HoloLens 2 as this like turning point, seeing that Now it's worth for him to seriously consider investing into other spatial computing companies and applications that he necessarily wasn't ready to jump into yet, just because he just saw that there was a lot of difficulties in order to deploy these applications at large scale. and that he was super impressed with things like the automatic IPD detection within the HoloLens. It's a lot more comfortable, being able to naturally, intuitively use your hands, the conversational interfaces. There's just so many exciting potentials for what's possible now with this piece of hardware, and it's not to the point of becoming production-ready, and we don't know what the exact release date is. There's still a lot of different tweaks that need to happen, but we can definitely see that there's a big enough jump between the first development hint of the HoloLens and the second development hint That is kind of equivalent to what we saw with the dk1 to dk2 and you still think that there's going to be quite another huge leap that once it gets to like the production ready consumer version of the hololens and Maybe the hololens 2 is considered to be like this first consumer product or maybe it is Maybe considered a little bit more of that dev kit product. I don't even know actually how Microsoft is thinking about it internally, but at least that's how TipTat is looking at it to see that there's probably going to be another major revision, but there's so much improvements that are coming from, you know, just like from the DK one to the DK two, you started to have like six DOF tracking instead of just three DOF tracking. That was a huge new thing. And I think that being able to detect your hands, interact with holograms with your hands, the eye tracking and just the comfort and increased field of view is an equivalent kind of huge jump from the first version to the second version. Now, in terms of the evaluation of the overall ecosystem of virtual reality, to me, this is a little bit harder to come to like the grand story about we're already at this kind of viable ecosystem threshold. I don't necessarily agree with Tipitat's assessment that just because there's been like 60 companies that have, in some terms, there's a feast or famine that happens that if you were able to make over a million dollars within virtual reality, then you are one of the big winners, but I think it's less about having a small handful of big winners. I mean, 60 is still not necessarily gonna be a completely robust, immersive computing ecosystem that is supporting thousands upon thousands upon thousands of people to have a nice, comfortable, middle-class lifestyle. That's, I think, the goal to where it needs to be, and I think we're a long way from doing that. So, I don't think that we're necessarily at the point of already having like a healthy, vibrant ecosystem within spatial computing and mixed reality. So, I disagree with Tipta in his assessment. I think there are some positive indicators that that's the trajectory and direction that it's going. And I think that there's some potential that, you know, with the Quest and these new devices that are gonna be getting out there, that we'll be getting to that point. And I think in large part what's happening in phone-based AR and a lot of these companies that may have started in VR, maybe pivoted over to AR just because there's maybe a little bit more work But that eventually I think it's going to get there. To me, I think Tipita and I agree that it's an inevitability that it's going to get there at some point and it's just a matter of time. But for me, it's a little bit more difficult to say like, okay, here's an overall indicator as to where the overall health of the ecosystem and the vibrancy is. I still think that we're kind of still coming out of that winter and getting to the point where we have these companies that are able to find real value, that they're able to provide, but there's still huge cultural shifts that are going to be coming in terms of people adopting and using these technologies. I think that TipiTap, because he's actually using the technology each and every day, that's something that is a cultural shift that even people who are involved very heavily in creating virtual reality experiences, they're not necessarily at the point of doing it each and every day. And I think that once the different applications come out where you start to have those experiences where you want to get into VR every day, then I think we're gonna see these huge shifts. And I actually think that after being able to play with the Oculus Quest over the last couple of weeks or so, I have found that I am jumping into VR a lot more, especially because I don't have to go out of my way, go to my VR room, set everything up. There's just a lot of friction that comes into being able to just pop into virtual reality and play a single level of Beat Saber, for example. I'm doing that type of thing a lot more, than dedicating a whole 15 to 30 minute to 45 minute play session if I'm gonna get into VR. And now it's just a little bit more kind of dipping in and out. And I think because of that, we're gonna see a lot more casual games where people can pop in and out of virtual reality. So it's just interesting to hear, uh, to Pat's assessment and cool to hear, uh, all the things that are happening around the world. And he's had access to the tilt brush. I haven't had a chance to play around with it yet, but I'm really curious to see how that holds up. And I can imagine that that's one of the creative applications that I'm really looking forward to doing a lot more, especially because I have a lot of ideas and wanted to prototype and just like. be able to kind of stream together different concepts. And I feel like that with the different applications that are out there, there's going to be primarily a lot of games that are out there, but I'm also interested to see what other kind of productivity applications that are going to be released. And, you know, I think the Tilt Brush and Gravity Sketch are two experiences that I'm really looking forward to having more access to within the Oculus Quest. And yeah, just he's been traveling all over the world and to hear a little bit what's happening in China with some of these entire cities that are really dedicating themselves to pushing forward what's possible with immersive computing technologies. Then, I mean, it kind of reminds me of Laval, France that had made a similar decision to invest in virtual reality technologies and for the last 21 years has continue to cultivate an ecosystem within Europe. And, you know, at this point they have this enormous repository of people who have been thinking about and working within these immersive technologies for the last two decades in the enterprise space. And so just to hear that there's other countries that are having similar cities where they're making this strategic decision to go all in and to try to find all the different ways that they could use these immersive and computing technologies, that's certainly encouraging. But I'm also like aware of that, you know, that's not necessarily a sure bet that just because they throw in lots of marketing dollars and money into a concept or idea doesn't necessarily mean that that's going to completely transform what is even made possible. I still think there's still a lot of work to be done by individual creators and innovators to push the limits for what these technologies are going to afford. But to me, the big takeaway is that Tipset is now looking at augmented reality applications using the HoloLens 2 as a lot more viable as an investment option. And that, that is just going to create a lot more opportunities for companies to have access to the first seed funding, to be able to take an idea or concept and start to flesh it out and build it. Just because I think a lot of the early HoloLens companies and applications are already in existing software companies that have been working in this space, or they're startups that have to rely upon very early getting these different contract gigs. And it is a little bit of like, if you are in the Microsoft ecosystem and you get featured either at Microsoft Build or on the keynote stage, it's giving you a little bit more opportunities to have access to those different types of clients. But yeah, just hearing a little bit more at Microsoft, just to hear that they have been doing quite a lot to try to flesh out the overall ecosystem within Mixed Reality. just to see how many different integrations they have with these enterprise clients and these different system integrators like IBM and Accenture. It'll be interesting to see how they start to adopt and promote and use these different spatial computing technologies to be able to pitch different software and services to these big Fortune 500 companies. 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. This is a listener-supported podcast, and so I do rely upon your donations in order to continue to bring you this coverage. So, you can become a member and donate today at patreon.com slash voicesofvr. Thanks for listening.

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