Tech Markets: Urgency Will Change Today’s AR Vision into Tomorrow’s AR Reality
Dirk Schart • May 17, 2020
Covid-19 as catalyst for Remote Work and On-demand Access to Knowledge
AR is a good example of this. I’ve been working with AR and VR for 10 years during which I’ve seen the ups and downs and shifting success factors. Researched in the 1970s, and anticipated through the new millennium, it still doesn’t pass the toothbrush test: “Will people will use at least once a day, and will it make their lives better?”
Even though there are numerous use cases that demonstrate how AR makes life and work easier, daily use is still lacking. The added value is evident, but adoption was still slow. Why is that?
Adoption = Value + Urgency
If you look at AR in the enterprise sector and compare it with
Geoffrey Moore's "Crossing the Chasm construct, it is easy to see that the market is in the middle of the chasm. AR has already left the early adopters and is freeing itself more and more from the ranks of the innovation labs. The first scalable platforms and roll-outs at large companies have begun, and adoption is slowly but surely increasing.
For startups, this means a moving target because the buyers have different demands – from innovation labs to larger enterprise rollouts. As pragmatic buyers, companies expect a mature software solution that meets the requirements for security, integration and scalability. These factors join value urgency and user experience as crucial components. While users in labs are already experimenting, pragmatic buyers expect an easy-to-use and “turnkey” application.
Before the coronavirus crisis, the lack of urgency was one of the reasons why AR didn't get off the mark. Change cannot be achieved gradually, and the pain was obviously not big enough to replace existing tools, even though the problems were known (difficult to understand instructions for complex tasks, wasted time searching for information, unnecessary travel costs for experts, etc.).
Urgency is a Catalyst for Change
An MIT study
about embracing digital technology reports that 63% of surveyed managers said the pace of technological change in their workplaces is too slow, primarily due to a “lack of urgency”. Employees need to understand why the new technology is an improvement from what they had before. We could see the latter in some use cases, but it was not enough to achieve the necessary urgency and establish AR on the market. From my previous experience with emerging technologies, the value has to be even more obvious and sometimes external effects are needed - especially if the new technology requires a major change.
“From one day to the next, our world--and thus the way we learn and work–has changed completely.
Travel and access restrictions have led to rethinking and thus created the missing element: urgency.”
From one day to the next, our world - and thus the way we learn and work - has changed completely. Travel and access restrictions have led to rethinking and thus created the missing element: urgency. Companies can no longer fulfill service contracts, in-person trainings can no longer take place, on-site sales demos and events are canceled. And the solution: remote work and support. Instead of "in-person", we experience a shift to "on-demand." Mary Meeker describes in her report “Our new World” how this principle will apply in the long term to key enterprise segments like training and healthcare.
The Rise of Remote
Google Trends indicates a smaller impact for the term “Augmented Reality,” while "Remote Support" shows much stronger relevance. However, it’s important to keep in mind that “remote support” includes AR solutions as well as traditional video calls. In our own data at RE’FLEKT, we see an increase in the MAU of about 300% for remote support tools across all industries. In some cases, the peak increase is 600%. The increased number of requests as well as the growing user base was confirmed by my sources at other AR startups and vendors.
A key finding is that many users currently do not differentiate between classic conferencing tools and AR support. Both categories use video calls but solve different problems. Even if the Google Trends do not yet make a significant statement about the medium-term development, it’s clear that the market will differentiate and thus create new fields for AR in which startups can move. Remote AR 4.0 will be able to focus more on the new problems in companies and users than before.
What does it tell us?
AR is addressing the broader market compared to VR. Even though Smart Glasses and VR headsets have the capacity to solve current Covid-19 challenges (depending on bottlenecks in manufacturing), it is phones and tablets that are immediately ready for instant use. Existing devices do not have to be bought or approved. In addition to Covid-19 as a change driver, there is an existing and broad mobile market as a basis for technology adoption.
2. Remote AR will become the catalyst for all spatial computing fields
Remote AR can empower far flung workers with the live and on demand support of colleagues, making everyone an instant expert by placeshifting knowledge. Although it is still early for a meaningful trend, there’s a growing number of active users in the past four weeks. While Remote tools are hot during Covid-19, the entire AR and VR market reveals new use cases and gives new meaning to existing ones (e.g. the long-explained advantage of AR in training and operating complex devices such as ventilators in hospitals). This can lead to increased acceptance of further areas of application of AR and VR and to present the long-awaited killer app (even if I personally do not find the term suitable).
3. Fast track adoption needs user experience to survive
Urgency is the trigger for faster adoption of emerging technologies, but without easy operation and a good user experience, growth is quickly over. Zoom is the best example of this–it just works. Although there have been some problems in the past few weeks, the users are convinced of the simplicity and stability. Zoom leaves Microsoft miles behind with Skype and teams. Exactly that was one of the obstacles with AR and also with VR because the technology was mostly in the foreground.
4. Higher education level will force startups to build products for the market
In 2020, we will see users learning more about their own requirements for AR and VR (software and hardware). They will know exactly what they need. The feedback collected so far is mostly unstructured and not meaningful due to the too small user base. Startups have to use the phase during Covid-19 in order to better understand where AR / VR can be used today and tomorrow and to develop the right products. Covid-19 not only brings spatial computing to urgency but also to a growing market (not in 2020). This will make it easier to go into specific use cases instead of getting stuck in endless trial phases. Remote support has a much lower level of explanation than other AR and VR applications.
5. Reverse effect from the enterprise sector into consumer market
Anyone who uses AR at work will soon no longer want to connect or set up a router or IKEA shelf without AR. We often see the opposite picture: early adopters find new technologies and innovations that carry it into the business sector. This has not worked for AR and VR so far because the entry was too complex, the hardware is still too expensive and individual highlights such as Pokémon Go or the Oculus Quest could not change a complete market–what Apple will do. In the business sector, many users experience how practical remote support is while Covid-19. The behavioral change comes from the business sector and will have a significant impact on the consumer market.
To stick with Tim Cook's quote, we are still setting the table. Today we are at the first course (Remote AR). The missing ingredients for the main course are brought, and by 2021 we will have the full pleasure before the dessert is served. Tim will play an important role as one of the main chefs - not only to build hardware and ecosystems, but above all to take the previously hesitant investors on the trip.
Big players have the potential to change markets and push technologies. Apple completely turned the mobile age upside down in 2007, Microsoft shaped the way we work on computers. It is precisely in these times that there are great opportunities for startups. Salesforce changed the market for CRM software and paved the way for the cloud in the late 1990s while the internet bubble was in full swing. And Zoom, yes, the startup folks that make video calls easy have made Skype almost forgotten.
When I started my AR journey ten years ago, smartphones weren't built for the technology, users didn't know what we were talking about (but were enthusiastic). Since then, we have made a big leap and as a startup, we have mastered many of the challenges that a new market brings with it. Startups that develop products with new technologies face their own problems that they have to solve. The next two years will be decisive for AR and VR. AR seems to be finding its place in the "Augmented Workplace." How exactly? We will find out in the coming months.
Follow me on LinkedIn
or Twitter
where I share my thoughts around how to build and market emerging technology.
Dirk Schart is CMO and President of the Augmented Reality startup RE’FLEKT. His focus is on B2B enterprise software and SaaS models with early-stage technologies like AR, AI, IoT—from market engineering to thought leadership and go-to-market. Dirk is a startup mentor at the German Accelerator in the Silicon Valley and former CEO of the Digital Lab at HyperloopTT.
Market Engineering with easy-to-use frameworks enables startups to check the market opportunities and define the beachhead market. Learn how to cut the big market topic into 3 simple steps.
How can startup founders, entrepreneurs, marketing and PR managers navigate their startups through a crisis like Covid by using marketing and communication with an education-first approach to help customers in uncertain times and stay ahead of the game.
How can you get access to almost unlimited knowledge? Why is it essential to meet founders who have done it before? What is that mindset thing everyone is talking about in the Valley? In this article, I will share my experiences about the ‘Learn & Share’ mindset and why it is beneficial to build a business and bring early-stage tech products to the market—with examples from meetings with founders, advisors, and investors. Here’s my background. I am the Chief Marketing Officer and President of REFLEKT Inc., the US entity of the Munich-founded tech startup simplifying industrial maintenance, operations and training with Augmented Reality. I started building our US business out of Sunnyvale in the Bay Area and turned it from zero to a recognized player within one year. In that year, I had the chance to learn from founders and advisors who have built several startups and who understand what it means to fail and learn. These meetings motivated me to share what I have learned and why I believe there is no better place to learn so much in such a short time. How can you learn in the Silicon Valley? One way is to start watching HBO’s Silicon Valley series. Seriously! This way, you don’t even need to come here. Frankly spoken, what Richard & Co. showed in the six seasons about the tech industry is not that far away from reality. If you do make it to the Valley, though, I highly recommend you to book a tour where you get an express ride through one of the big accelerators. Every day at Plug & Play , I see massive groups walking through the building where we have our office. Plug & Play is the biggest accelerator with over 50,000 visitors from 15 different countries per year during the tours and events. Once you see the companies and startups involved, you realize that you don‘t even need to leave your office to build a massive network. The ‘where’ you can learn is one thing. The ‘how’ and ‘why’ you can learn is the fascinating part for me. What is often separates The Valley from other places is the growth mindset. But, the mindset alone doesn’t make a place special—that’s true. There’s much more than the obvious phrase: in the Valley you rather get a “Yes” instead of a “No” when you come up with a crazy idea – which is something I like to do. Here are my three reasons why this area is so interesting and why you can learn faster and more (about the startup and tech world): 1. A very high number of founders, advisors, VCs involved in tech and startups, 2. All accessible within 50 miles between San Francisco and Santa Cruz, 3. People are eager to share their experiences, learnings, and failures.
I always need fresh input — whether it is from books, articles or podcasts. Especially others sharing their learning (and failures) is a great source to grow. Instead of sharing my favorite podcast series, I want to recommend specific episodes which helped me and which I listen to over and over again. For me, an interesting episode is a lot more than just receiving interesting information. What makes the difference is the people in the podcast. That’s why I don’t have too many sources but love podcasts from Danny Fortson, Reid Hoffmann, Jason Lemkin and Andreessen Horowitz (especially the ones from Sonal Chokshi, and with founders like David Ulevitch). 1. David Ulevitch (OpenDNS & a16z): What Time Is It? From Technical to Product to Sales CEO Since the startup (and founder) journey doesn’t go neatly linear from technical to product to sales, tightening one knob (whether engineering or marketing or pricing & packaging) creates slack in one of the other knobs, which demands turning to yet another knob. So how do you know what knob to focus on and when? How do you build the right team for the right play and at the right time? It all depends on “What time is it”: where are you on the journey, and where do you want to go. In this episode, David Ulevitch (in conversation with Sonal Chokshi) shares hard-earned lessons on these top-of-mind questions for founders; as well as advice on other tricky topics, such as pricing and packaging, balancing between product visionary vs. product manager, how to manage your own time (and psychology!) as your company grows, and more. Much of this is based on his own up-and-down, inside-outside, big-small-big-small, long journey as CEO (and CTO) for the company he co-founded, OpenDNS. 2. Dara Khosrowshahi (Uber): How pirates become the navy Early-stage startups are a lot like pirate ships — they need a buccaneering spirit to survive. But every startup needs to shed its pirate nature at some point, and evolve into something more akin to a navy — no less heroic, but more disciplined. Dara Khosrowshahi, as Uber CEO, took on the most extreme pirate-to-navy transition in startup history. Though Uber blitzscaled to become the most valuable startup in the world, it was also notorious for its toxic culture — and Dara turned the company around. His method? Truth-telling and doing the right thing. 3. Michael Birch (Bebo) & Danny Fortson (Sunday Times): The Bebo Billions Michael and Xochi Birch launched Bebo, one of the first social networks. They sold it at the height of the market for $850 million to AOL Time Warner. Two years later, AOL sold it again — for $1. In a two-part podcast, we tell the Bebo story: its extraordinary rise, the fall, and how the Birches made away with the GDP of a small nation. 4. Nick Mehta (Gainsight): Founder Struggles from Imposter Syndrome to Vulnerabilites SaaStr CEO Jason Lemkin sits down with Gainsight CEO Nick Mehta to discuss what it means to be a SaaS leader. What are the day-to-day struggles? The fears and the worries and what it means to be “crushing it” today. 5. Ben Horowitz (A16Z): “Jeff Bezos should be more like Genghis Khan” The Sunday Times’ tech correspondent Danny Fortson brings on Ben Horowitz, co-founder of Andreessen Horowitz, to talk about company culture, the Amazon example, what’s wrong with new Uber, Uber’s old culture, Silicon Valley’s moment, how culture can be a company-killer, on whether capitalism is changing, why there aren’t more outsiders in venture capital, seeing what you don’t have, how lack of diversity creates product problems, and seeing culture early. 6. Don Erwin (Mixmax): The Secrets to Managing a Successful Sales Team How do you manage a sales team when you’re at a company with both Free and Freemium Sales-Driven Segments? What about SMB vs. Enterprise Sales? SaaStr CEO Jason Lemkin sits down with Mixmax’s Head of Revenue Don Erwin to discuss it all. 7. Christopher Lochhead (Play Bigger): Category Creation is the Strategy In this episode, Christopher Lochhead discusses why category creation is the new growth strategy for legendary marketing. Great companies do not focus on incremental growth, rather, they focus on being exponentially different. These leading companies introduce people to new businesses and provide them with new ways of doing things. Lochhead cites different big enterprises as well as small enterprises as an example. Huge companies now started as small when they changed our way of thinking. Companies such as AirBNB, Google, Amazon, Palo Alto Networks, Cisco and Salesforce not only created great products — they created a good company and a great category. 8. Bob Tinker (MobileIron): Finding Go-to-Market Fit in the Enterprise In this episode of the a16z Podcast, Bob Tinker, author of the book Survival to Thrival and founding CEO of MobileIron, and a16z general partner Peter Levine, talk with Hanne Tidnam all about how to find the right go-to-market fit for the enterprise startup. How do founders avoid that moment of reckoning after product-market fit, but before growth? When should an enterprise startup accelerate sales investments? — the “Goldilocks problem” (not too early, not too late!) — and pick the right sales team and go-to-market model for their product and their customers? And if you’re stuck in that moment where growth stalls, what are the right tools to get out of it? What are the important metrics to know both where you are, and when you’re out of the woods? 9. Mark Mader (Smartsheet): Staying Accountable and Scaling a High Growth SaaS Company Learn how Mark Mader grew Smartsheet from a six-employee startup to a publicly traded company with over 1000 employees serving 82,000 customers. How did Mark and his team convince investors and customers that Smartsheet was solving for what spreadsheets don’t do well? Why did Smartsheet host their first customer conference just three years ago? What did Mark look for in new board members heading into Smartsheet’s IPO? Get the answers to these questions and more in this episode. 10. Dirk Schart (RE’FLEKT): Building the AR Operating System for Enterprise In this episode, Alan Smithson and myself are talking about early-stage markets, my experiences from building trust in the enterprise sector and realizing a vision to make a difference in the AR market. Most businesses have the information and infrastructures they need to be more efficient and competitive — it’s just a matter of having it all at their fingertips. RE’FLEKT is working at making that process easier by creating a modular, scalable, open-source operating system for businesses to build their own in-house AR applications on top of. President and CMO Dirk Schart drops in to explain how. Enjoy listening! I hope you take as much from these episodes as I did. Follow me on LinkedIn or Twitter where I share my thoughts around startups, tech, marketing and growth. On our blog you can find more about what we do at RE’FLEKT .
These days, most of the news around Augmented Reality are about Apple and its new ARKit — a development tool to place digital objects into real scenery and display it on iPhones and iPads. Still in its beta version, ARKit has started a second wave of public awareness for AR after the most successful mobile game in history: Pokémon Go. With the consumer market now finally entering the AR world, it is little known that the enterprise sector has already been using the new technology for many years — often in stealth mode with prototypes and proof of concepts as internal apps. This is about to change completely. In this article, I want to share some thoughts about how “consumer first” announcements like the ARKit influence the enterprise business. You may think that apps like Pokémon Go and all the examples developed by nerds around the globe with the ARKit don’t have anything to do with the business sector. The same applies to Snap’s Spectacles — AR glasses that look like hipster sunglasses — or Pokémon Go, another mobile game with some hype for AR. Believe it or not: you’ll see all of this repeated in some form or another in the enterprise sector. I’m not talking about single use-case scenarios, I’m talking about how the tools from Apple as well as the AR activities from Facebook, Google and Snap inspire us to rethink the use of AR. These are the opportunities that make better enterprise applications and adapt the technology to the user — instead of educating the user to adapt to the technology. ARKit brings Augmented Reality to millions of users and developers Mapping our world with the smartphone camera and using tracking methods, like SLAM, to place virtual objects into real scenery — in a nutshell… this is exactly what the ARKit does. The more realistic the objects look, the better they merge with the real environment. Once our brain perceives the virtual content like physical objects we reach the full potential of an augmented or extended reality. Therefore the size of the objects has to fit to the environment and the objects have to react to different light conditions — just to mention two important factors. One of Apple’s first applications on iOS is in development with IKEA. It allows IKEA app users place furniture and accessories straight out of the catalogue directly into your living room using Augmented Reality. Apple’s camera and software technology supports what I described before: it identifies the room size and light conditions to scale the furniture to the right size and texture. Imagine this for planning stores, supermarkets, hotels and real estate. This powerful software is giving almost anyone the possibility to create AR applications and will have a huge impact: from September on — with the release of iOS 11 — there will be millions of new AR users and developers building apps. In the first step, we’ll see a bunch of different apps. Once the developers understand the way AR works and what the possibilities are, there will be more and more daily-use applications. It was the same with the first mobile apps — it took some time to reach the full potential. We will be able to create better and more natural user interfaces and get closer to the point where we use AR in daily business. Instead of simply placing furniture in our living room, we will be able to visualize operational knowledge in the real work environment. What would you say if I told you that there is no difference between Pokémon Go and a maintenance application for a technician? Both applications embed digital objects or information in the real world.
It is a pretty familiar scene, that of the classic morning routine of the future. A person wakes up, gets out of bed, and walks over to their window. As they gaze out at their city skyline, a hologram hovering somewhere in the sky informs them of the weather. Other floating projections display the morning news, their itinerary for the day, and whatever else may be relevant to that person at that time. After updating themselves sufficiently, they head over to their closet and virtually try on a few different outfits in a matter of seconds, finally settling on one they are happy with. As they continue to prepare for the day, all the mundane necessities which humans previously had to do manually now operate automatically, leaving the person more time to do something of importance before they embark out the door.
