
Magic Leap trying to sell for $10B - manigandham
https://techcrunch.com/2020/03/11/magic-steep/
======
thrav
I had a chance to use one of the Meta headsets (Magic’s primary competitor) a
few months before they went under. Don’t get me wrong, it was pretty cool to
walk around a 3D model wearing a headset, but the UX was nowhere close to
practically useable and the picture quality was too faint to do anything
serious. There’s undoubtedly some kind of value in the tech and IP, but I
can’t see these things being used for much anytime soon. VR is light years
ahead in terms of practical potential, and it’s not really getting off the
ground either. I can’t see them getting anything remotely close to $10B.

~~~
nikofeyn
> VR is light years ahead in terms of practical potential

i agree VR is light years away (it's been just around the corner for years),
but i don't even understand its potential. what are the big applications? i
just can't get around its usefulness for anything but maybe video games.

~~~
tiborsaas
Gaming will be big in VR once the price / quality ratio reaches a reasonable
level. I kind already did.

In 11 days Valve will release Half Life: Alyx which is the most awaited VR
game ever. I suggest you to tune in, it might shed some light on why it's so
cool.

~~~
rabuse
The games are honestly trash right now, at least for the Oculus. You play them
for about 15 minutes, and it becomes stale.

------
sdan
Chase, google, and a ton of others (I think even pichai personally) put big
bets a few years back. ML portrayed the aurora of Snapchat, but ultimately
their secrecy killed them as well.

Really reminds me of what happened with general magic (In secrecy w/ failed
product and huge investor hype)

I also interviewed with this a while back: they were clearly frantic from what
I could tell

~~~
mondoshawan
No, it wasn't secrecy that killed them. It was incompetence. Gross
incompetence all throughout the company. Source: I worked there for a little
over a year as a techlead/unofficial director -- even relocating to Florida.

~~~
sdan
Was there a reason why ML was in Florida?

~~~
mondoshawan
Because Rony wanted it to be, and no other reason. From a hiring perspective,
it was an absolute nightmare.

~~~
unlinked_dll
This is an anecdote, and I don't want it to come off as rude.

I know a person who is currently a director at ML. The simple fact they were
hired and placed in an administrative/managerial role is enough to tell me
never to work there. Shame too because I think the tech is cool and I'm fairly
well qualified for the jobs this person posts incessantly on LinkedIn.

Don't mind South Florida either, go canes. Also 20% off the salary of most
regions, but also no state income tax and relatively cheap home prices if you
go up to Broward.

~~~
ryandrake
Doubtful their location ranks high on the list of reasons they couldn’t hire.
I interviewed there and one of the major reasons I was excited was that it
would give me a good reason to move back to Florida. The interview was, to put
it nicely, unusual. The highlight of it was trying to have a conversation with
a director who sounded like he was driving down I-95 in a convertible, and was
getting frustrated that I couldn’t understand a word he was saying.

~~~
unlinked_dll
I absolutely think the region is high on the list of reasons they can't hire.
They pay less for worse jobs at lamer companies and don't have money flowing
to startups. Magic Leap was very much the exception, and it's kinda cool
because it's there because the founder liked it, just like Shockley thought
NorCal was dope.

And much like Shockley semi I think ML is a flash in the pan. But unlike
Shockley Semi, Abovitz didn't hire an equivalent of the traitorous 8 because
they already worked out here and got paid way more money to hang out at a
FAANG or startup.

Everyone I'd want to work with from my time in South Florida is either out of
the area or trying to leave. It pays like shit, and there is no money or
companies down there to make cool shit to make up for it. Besides ML. But it
appears that is shifting.

~~~
QualityReboot
I moved from San Francisco to South Florida as an experiment in being fully
remote. It's been pretty good so far, but if I was looking for another job,
I'd hit up everyone I know in SF for a remote position first.

There aren't many like-minded people here, and that's kind of nice for a
change. I still love San Francisco, but it simply priced me out of living
there. I'd rather retire in 5 years here than work another 30 there.

------
pjbk
Funny because I'm still getting probed by their recruiters almost on a monthly
basis for several of their positions. Perhaps because I live 5 minutes away
from their HQ. ;-)

It's a shame but not a surprise. I have friends and acquaintances that have
worked or still work there, and yet I wouldn't vent details of what I know
here, everyone knows they have been struggling with their technology,
overpromise and growth. Archetype of the "too much money in too little time"
syndrome, and a despair to deliver and build a successful company. Be careful
with what you wish for.

I don't know Abovitz personally, though I have worked with people who worked
with or under him since the early Z-KAT days and he is well regarded. Contrary
to what most think about engineers in South Florida (or Florida in general),
we have some very capable people here. Companies complain that they can't find
good talent. However most of the time they cannot put their money where their
mouth is and commit over the local "market price", which is comparatively low,
to secure a good hire. It has certainly been an issue in my career, indeed.
But guess what? We faced the same difficulties in one of my companies finding
the right people when I lived in the Bay area a couple of years ago. The
answer is not that simple.

Having worked mostly in startups through my life, from the outside it amazes
me how they were trying to spread out so early. When I first heard about them
they were pitching movie producers, but after they got their first $50M things
started going crazy. I once dated a girl who was a writer producing fancy
literary content far before they had shipped anything. This was way before
they hired Stephenson. I have experience in medical devices and robotics, and
their recruiters have contacted me offering positions for healthcare
applications, and also a very pushy one was trying to convince me to move to
their Sunnyvale office where they have a robotics team. Think industrial
manipulators. Then they go out and sue their once employee Gary Bradski for
doing his usual Bradski things and for which he is lauded in the valley... but
not here it seems. Certainly they have management problems due to lack of
experience.

It would be painful if they fail. They have been the most funded tech company
in the state and at least they managed to ship, something many startups are
unable to demonstrate.

~~~
nikhizzle
I am also close to their hq. Would love to get together and talk tech. Email
in profile.

------
code4tee
The company isn’t just magically worth billions because they want it to be and
want to exit. That may have worked years ago but those days are over.

They’re worth something relative to the revenues they’ve been able to
generate. The IP is also worth something but given the cold shoulder from the
FAANGs of the world probably not as much as they’d like.

At some level these sales start to look like a stubborn buyer that’s asking
far too much for their house. It will sell but a painful reset of valuation
expectations is clearly required if one wants a sale to close.

~~~
nikanj
Ultimately, companies are not sold, they are bought. Without a willing buyer,
they have no hope

~~~
asdfasgasdgasdg
> Ultimately, companies are not sold, they are bought.

What does that even mean? Companies are both sold and bought. One implies the
other. There are always willing buyers for entities with non-negative value.
Hell, I'm a willing buyer for Magic Leap, at the right price.

~~~
wpietri
> What does that even mean?

It means the number of potential buyers for a company is generally small. That
it's a buyer's market: [https://www.redfin.com/guides/buyers-market-vs-
sellers-marke...](https://www.redfin.com/guides/buyers-market-vs-sellers-
market)

> Hell, I'm a willing buyer for Magic Leap, at the right price.

You almost certainly aren't. Magic Leap is burning money at an incredible
rate, reportedly $50 million/month. Even if you could buy it for $1 over their
cash on hand, you'd be a fool to do it, as you'd have to spend the next
several months laying people off, negotiating with creditors, liquidating
assets, and fending off lawsuits. It would be miserable, and there's a good
chance you'd have little to show for your time.

Any serious buyer would expect to put another couple billion in cash in just
to get it to where it has a product people will actually pay money for. I'm
guessing that isn't you.

------
terryf
The more bad news like this is coming out, makes me wonder _what did they show
to the initial investors_ \- it MUST have been something incredible, that was
probably too bulky to wear and that they didn't manage to miniaturise.

I really hope someone talks about that after they either go broke or get
acquired.

~~~
DonHopkins
>makes me wonder what did they show to the initial investors - it MUST have
been something incredible

Cocaine.

[https://www.youtube.com/watch?v=w8J5BWL8oJY](https://www.youtube.com/watch?v=w8J5BWL8oJY)

------
wyxuan
I feel like this is the new WeWork, and I almost guarantee Matt Levine will
write about this tomorrow.

------
pcurve
I'm thinking early investors have largely written this off in their mind. They
would probably be happy to take small fraction of $2 billion they put in at
this point. Realistically, would they even get $200 million?

~~~
whoisjuan
The device is pretty good. It really achieves some tremendous stuff and has a
highly polished user experience, so I'd say that just by the merit of its IP
it's worth at least $200 MM.

I think their problem is basically timing. Nobody wants this thing right now.
Nobody wants it in that specific form factor. And nobody wants to create
content for a platform with such a high price point and unexpected future.

It's an egg and chicken situation. I can see why Facebook doesn't want them or
need them since they probably have been developing parallel IP in their Oculus
division.

Apple may be also very deep into the development and exploration of its own AR
(which is already evident by accelerated development of ARKit).

Microsoft has its own competitor for years (Hololens).

So I think is really a problem of who might want all this IP and who can use
it meaningfully to create a solid pipeline of AR products.

Again. Their problem is definitely timing. Consumers, content creators, and
companies definitely want this type of technology. But not until they can have
something with the same footprint as a pair of reading glasses. I think we are
still very far from that.

~~~
ericd
I would think Google would want it, instant visual product search using the
cameras is probably one of the killer apps for this on the consumer side. And
oh, the data collection opportunities about the real world would have them
salivating.

~~~
Jasper_
Yeah, that was the promise of Google Glass. And they killed that off before
they got _really_ into killing things off for fun. Nobody wanted it.

~~~
ericd
Yeah, solving the glasshole problem is still kind of the crux.

~~~
bsder
Stamp "Mega Brand Name(tm)" on the side, charge $10,000 for it, and pay a
bunch of NBA players and rap stars to wear it around in public.

Now it's a fashion accessory that everybody wants.

~~~
blululu
They are selling these for ~$6000. They already tried this marketing approach
with Shaquille O'Neil. It's just not that cool to wear googles on your head.

~~~
ericd
Eh? The ML One is ~$2-3k. Or are you talking about something else?

------
baybal2
By the way, it's not a secret in the electronics circles here that Apple is
still working on its own version of Magicleapy VR goggles.

For example, they made an entire new semiconductor unit just to make microled
displays for it.

They also been hiring, and buying companies in light field imaging field for
years now, and they may add a light field imaging/display into the mix.

I think Magicleap knows now that Apple is miles ahead of them, and tries to
sell while they still can

~~~
swalsh
This probably is going to come off the wrong way, but there has not been an
"innovative" product to come out of Apple that truly impresses me since Steve
Jobs died. It feels like the company has learned how to optimize what they
already have, and its innovations are fueled by fumes.

~~~
artimaeis
Neither AirPods nor Apple Watch come off as impressive? That's pretty
pessimistic. I'd say both were highly innovative and impressive -- further
pushing miniaturization both of the physical hardware and the user interface.

~~~
z3ncyberpunk
Except that neither of which were invented by Apple?

~~~
harrier
Apple didn't invent the smart phone or the mp3 player either.

------
elvinyung
I guess the word "magic" is cursed. General Magic, GetMagic.com, and now this
(not that we didn't see it coming)...

~~~
hkmurakami
Magic the Gathering still going strong in its 26th year. Performing alchemy
transmuting cardboard into gold.

~~~
monocasa
Magic the Gathering Online Exchange isn't, lol.

~~~
strbean
Well duh. Collectibles are basically non-fungible by definition. How are you
going to have an automated exchange for them?

/s

------
yalogin
This was the outcome for a long time now. They had a lot of infighting to
begin with. They couldn’t agree on who leads and where the development needs
to happen. I predicted that they will sell back to google for a discount a
while ago and it still might happen.

------
rburhum
I am going to do a reality check that will probably be unpopular, but it
doesn’t matter...

While MS had products like hololens out, Magic Leap was still “in stealth”.
This is the same company that was “worth billions” before they even released a
product or before they had made public whatever product they wanted to sell.
The marketing videos they produced early on (which were impressive) look
_nothing_ like the technology that was released years later. Look up the
expectation vs reality videos of if you want a laugh.

Now they want out at a crazy valuation.

When the economy is “good” and there is plenty of dumb cash lying around
(think these past years of bubble build up), an expert sweet talker is able to
command money away from the vision fund type of folks. However, then the
situation is like we are right now, we go back to the basics... things like
market-fit, income, revenue, growth, sustainability... the healthy business.

We need the bubbles of the Magic Leaps, WeWorks and all the other
unsustainable unicorn startups to burst. This is what will bring us back to
industry sanity. The first dotcom bubble burst made our industry better. I
hope this one does, too.

------
kriro
I've sold some AR projects to customers. Just product visualizations for trade
fairs etc. nothing too fancy. It's cool and fun to work with but my takeaway
was that for many practical applications it's pretty cost/time intensive to
work on the non-technical parts of the projects (tuning the models and scenes
so they look photorealistic). The devil is in the details. For example our
typical projects involved getting CAD data from customers and turning it into
a fairly simple AR-App. Most of the time was spent on fixing the models in
various ways (and that's fairly hard to automate imo). UX is also really
tricky.

Reminds me a bit of the cost of working with data vs. the actual models in ML.
The models and tuning them and playing with them is the cool stuff but most of
the competitive advantages (imo) come from mastering the data part.

I learned a lot from my ventures into AR and it was fun and I've kept a
mindset of pretending there was an AR device in contact-lense form to
brainstorm what one could do with this breakthrough every now and then. But
there's really not much beyond "novelty effect" and gaming I see as
interesting products today. Even in areas where AR solutions are deployed in
industry (warehousing and logistics), I feel that less glamorous solutions
would provide similar benefits.

All that being said, long term I'm quite optimistic that the technology will
bring very interesting changes and things I cannot imagine right now.

------
sdan
Chase, google, and a ton of others (I think even pichai personally) put big
bets a few years back. ML portrayed the aurora of Snapchat, but ultimately
their secrecy killed them as well.

Really reminds me of what happened with general magic (In secrecy w/ failed
product and huge investor hype)

I also interviewed with this a while back: they were clearly frantic from what
I could trll

------
mohankumar246
This is just going to a We Work in headset category. Along with the end of
bull market today, many startups burning cash will go kaput. Their tech is not
worth more than a few hundred million $. It would have been it worth a lot had
it succeeded, unfortunately didn't. Maybe hololens/quest have a shot.

------
IntemerateApe
Does Neal Stephenson still work for/with them?

~~~
mikepurvis
Page is up on his website, but no content there:
[https://www.nealstephenson.com/magic-
leap.html](https://www.nealstephenson.com/magic-leap.html)

~~~
quakegen
Chief Futurist? kek

------
moron4hire
I have both a Magic Leap One and a HoloLens 1. I've done work on both. I also
have every major VR headset, which I have also written software for each. I've
been working in AR for about 10 years, and VR for almost 6.

And honestly, with the latest OS updates, the HoloLens 1, even today, is still
the better device. You can compare specs on a sheet of paper all day long, but
there are fundamental flaws in the Magic Leap hardware and software that
prevent it from being a good user experience. The HoloLens, on the other hand,
is just old.

Magic Leap's battery/compute pack turned out to not give it an appreciably
longer battery life, while also making the device uncomfortable, as the cable
constantly tugs on the back of your head. The HoloLens isn't comfortable,
either, but that's mostly because the vast majority of people completely
ignored the little, rubber strap that came in the case that you attach across
your to take the bulk of the weight of the device.

The WiFi and Bluetooth an my ML are constantly failing. I've used three
different units and have had the same experience on all of them.

The controller _constantly_ loses tracking. It uses magnetic tracking and it
just doesn't do well. Also, the sensor is on the right side of the headset,
and it is legitimately worse to use the controller in your left hand. It's
also way too complicated for just-a-pointer, while not being complicated
enough for a bespoke user input device. HoloLens has a clicker instead. It's
superfluous, but it does the job and doesn't fail.

The hand tracking is too broken to actually use. HoloLens' hand tracking isn't
anything to write home about, but I've never encountered it doing something
_blatantly wrong_. It's just slow. Magic Leap's is similarly slow _and_ often
wrong.

This goes hand-in-hand with the ML SDK being poorly documented and rather
incomplete. One way HoloLens gets around its rather limited user input
capability is by giving you voice recognition out of the box. And in writing
software, it's incredibly easy to setup. It's also relatively easy (though
takes some thoughful design) to create a speech-based UI that works reliably.
Magic Leap, on the other hand, talks about how great it would be to have
speech-recognition, but offers nothing in their 1st-party demos to demonstrate
it and nothing in their SDK to implement it.

The operating system on ML is a hacked-up Android system. I'm sooooo over
trying to do 3D graphics on Android systems. All the standalone VR headsets
are also a gigantic pain for developing software. If you've ever developed
software for the HoloLens, it's a joy in comparison.

And Microsoft did a lot to make 2D applications an integral, usable, and
useful part of Windows Holographic. While Magic Leap has its own version of
that feature, they bury the documentation and don't provide any good samples.
Whereas, on HoloLens, you can basically run any pure UWP app, whether it was
made for the HoloLens or not.

~~~
Zee2
Your point about the software ecosystem is very good. I think the advantage
you're talking about stems mostly from how Hololens is a first-class Windows
10/10X platform now, serving as one of their flagship new platforms for their
new OS. It was clear from early on they wanted Windows Holographic to be clear
extension/continuation of their goal for UWP to be the new write-once, run-
everywhere platform (even if that goal was a bit aspirational/unrealistic).

That positioned Hololens as a more competent general-purpose computing
platform. That's a valuable perspective to have on what AR/XR is supposed to
look like: new, but not entirely new, and flexible enough to be able to run
the old software.

------
ausjke
The writing was on the wall for a few years, to me it is the WeWork version of
VR.

~~~
Tepix
They're into AR, not VR. It seems that these two markets will remain separate.

------
floatinglotus
They’ll be lucky to get $500M

------
TheMagicHorsey
I've got news for Magic Leap. Nobody is spending $10B on anything as
speculative as AR/VR right now, with the macro environment being what it is.
Maybe $1B.

------
JumpCrisscross
Do we have any reporting on their runway?

------
m3kw9
Try 1 Billion

------
rasz
just like Playground Global, Andy Rubins VC firm taking over CastAR and trying
to pump valuation without releasing any product, ending in whole thing burning
to the ground with IP sold off for pennies on the dollar back to founders and
original IP creators.

------
finphil
The keyword right there is without a doubt "trying" (^_^)

------
byteface
Trying to find the flute meme. Has Winston Smith removed it?

------
grepory
In _this_ economy? Bahahahahahahaha

------
maedla
people won't get into wearable AR until its a contact lens

------
hardwaresofton
Not in this market

------
tritip
Shocker

------
empath75
What is there to sell? What’s the product?

------
aaron695
AR has no use case. None. Feel free to name one.

So better than VR, doesn't need generic human level artificial intelligence,
and wouldn't work as well from just talking in your ear.

~~~
wpietri
I agree it may not have many consumer use cases, but there are a fair number
of industrial ones. Boeing has been experimenting with AR for decades [1], and
they're still working on it:
[https://www.boeing.com/features/2018/01/augmented-
reality-01...](https://www.boeing.com/features/2018/01/augmented-
reality-01-18.page)

And I think that points at some consumer uses, too. Basically anything where
people are already using their hands has AR potential. When I still owned a
car, I would have loved to have the repair manual info overlaid on whatever I
was looking at. But so far I don't think anybody's found much compelling
enough to pay what AR systems cost.

[1] See "Fundamentals of Wearable Computers and Augmented Reality" ch 14.

~~~
aaron695
AR won't get you manuals.

There will be less AR manuals since they will have to produce both paper and
AR.

To recognise parts will take pretty good pattern recognition, but possible,
what can a phone do now?

But the next step will take AI at a fairly high level if it's guiding you
through a process.

If a camera can look at a motor and 'see' what to do, then just a voice
telling you want to do will be close to brilliant and useful now, camera and
speakers are easy.

True a overlay would be better, but the underline tech is AI, if you can make
this AI then no need for AR at this stage, sell it now if it's possible.

~~~
wpietri
Nah. I don't want a voice telling me what to do. I want what manuals give me:
supplementary information related to what I'm looking at.

