AR Is Not Dead: How A Few Scrappy Entrepreneurs Aren't Just Surviving, But Thriving

A few years ago, I visited Dubai in the summer. As the thermometer crept above 43 degrees, I took shelter in the air-conditioned wonderland that’s the Dubai Mall. One of the world’s largest and most excessive shopping centers, the Dubai Mall also acts as a proving ground for new consumer experiences and technology.

In the mall’s center court, a new attraction was set up: an augmented reality (AR) experience putting you in control of an A380, the world’s largest airplane. Immersive in sight, sound, touch and even smell, I felt like I was a mile high.

AR was exploding; Pokémon Go was causing traffic jams in the middle of Los Angeles. A revolution was upon us, and this was “it.”

Years later, we’re still talking about a revolution. Yet, as initial capital investment dries up in the United States and consumer novelty wears off, many promising AR startups have closed, causing a general cooling in a once-extraordinary space. As a technology executive, you may have been considering this technology, but now find yourself worried about making the investment.

As a tech leader who previously conducted diligence on the AR and VR space as a venture partner for BCG Digital Ventures, I’ve noticed that some of the most resourceful entrepreneurs in the world don’t believe AR is dead at all. In fact, they’re creating a thriving ecosystem that offers real value to consumers and businesses.

Why The Doom And Gloom For AR?

AR’s inability to achieve ubiquitous distribution — fast — across mobile applications and desktop networking is the primary contributor to its stalled growth. Nascent applications that easily fit into existing distribution models on mobile or desktop have a much easier time. Additionally, the hardware required for AR is not only expensive, but it’s also bulky and heavy, creating an extremely challenging user experience that very few AR startups were able to overcome.

Rather than focus on what you hope you can create with the technology, focus more on solving immediate consumer needs. AR will only become a great platform if it achieves scale, which, in turn, is created by network effects in audience and fan growth. That itself is powered by solving real-world problems.

Focus On The Use Case

Let’s look at Atheer Air, an AR startup focused on applications for medicine, insurance, automotive, mining, aviation, industrial plants and oil and gas exploration. These aren’t “sexy” industries, but they represent a significant number of potential customers. In turn, Atheer is laser-focused on use cases, continually benchmarking its approach to real-world adoption data.

For example, Atheer prices its enterprise AR solutions low enough to create value for its target market. Examples include pre-visualizing an oil and gas field in Alaska, which can save millions for the end user. In the insurance industry, adjusters can use Atheer’s AR device to do remote expert calls with senior adjusters or claim specialists, keeping claims moving through the pipeline.

Similarly, Dreamscape VR, founded by Walter Parkes (former vice president of DreamWorks) and Bruce Vaughn (former head of Walt Disney Imagineering), leverages AR and VR as part of a storytelling experience including light, sound, smell, and motion. The immediate use case — immersive and in-depth storytelling, similar to a film or TV show — is what matters. More so, Dreamscape is solving the distribution equation by bringing it where consumers are: in vacant mall spaces around the country.

Then, there’s Skyrocket. Initially a games studio for AR, the company merged with VRSE to develop immersive gaming content for brand and publishing partners. By working with partners like the New York Times, it’s established strong channel partnerships to lower the risks surrounding distribution.

Know When to Hold ‘Em And When To Fold ‘Em

While these examples demonstrate how entrepreneurs solved the challenges inherent in the AR space, the question remains: How do other tech startups decide when to listen to the apocalyptic messages about a technology and when to stay the course? What steps can they follow to build a sustainable business?

Companies should pivot if, after multiple attempts at changing positioning, pricing and even overall product orientation, things don’t catch on. Many virtual reality (VR) and AR companies are predicated on the idea that just because their solution is the best, most advanced, or most novel, it will win. However, the history of technology adoption and failure (Google Glass, anyone?) demonstrates that often isn’t the case. Entrepreneurs need to constantly adjust their product to changing market conditions and serve customers where they are today.

An extremely easy and oft-overlooked strategy is to simply interview and listen to prospective customers. By asking questions, you’ll understand not necessarily what people want, but what they may be willing to adopt.

Tech startups, especially in the AR space, should seek product-market fit first through small product iterations. Rather than build a scalable product without user testing or interviews, build the MVP (also known as the minimum viable product). Essentially, this represents the smallest product you can create to test your value proposition before scaling it. This approach enables fundamental product iterations and changes before allocating a significant investment.

As Y Combinator advises, it’s often better to have a core group of users early on who love your product than several users who are indifferent and using it casually. Continue building and iterating as you solve a core issue or provide a key value for your subset.

Finally, know the unit economics of how your business works at scale. This information can help you continually adjust and refine your value proposition. In doing so, you create a pathway for a business that will continue to be relevant and in demand. In this way, it doesn’t matter if a specific feature or technology is set for the chopping block — you’ve continued to evolve beyond that one component.

AR may seem passé, but many working in the field can verify that it’s not. By learning from the real-world experiences current entrepreneurs have endured, the rest of us can make the most of the technology — and impact the world around us.

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AR Is Not Dead: How A Few Scrappy Entrepreneurs Aren’t Just Surviving, But Thriving

Source: By Alex Gold