Welcome back to the Great North Ventures newsletter! We talk about labor trends this month, with some original research from Branch and some Metaverse updates.

Data Source: Branch x Marqeta 2022 Gig Payments Report

First the pandemic, now inflation is driving growth of the gig economy. According to a Pew Research Center survey, as of Aug 29th, 2021, 16% of Americans had earned money via an online gig platform. Specifically, driving for a ride-hailing app, shopping or delivering groceries, cleaning or assembling furniture, running errands, delivering for a restaurant, or delivering packages.

In a new report released earlier this month based on research by Marqeta and our portfolio company Branch, these gig workers are not only increasing their hours, but are giving up full-time work to to do so – with inflation as a key driver.

Read more in Fortune, or listen to our recent interview with Branch’s CEO where he explains his solution for American workers.

You can now work in the Metaverse. Meta started rolling out features that allow Metaverse creators to get paid for content. While people have been getting paid for everything from building up and selling World of Warcraft accounts, to selling virtual items in Second Life, this is the beginning of monetization in the most ambitious Metaverse project yet.

It’s possible that work as we know it will change. Minneapolis-based RedRex is already in the business of building digital spaces for businesses to transition back from remote work to “in-person” collaboration.

Don’t quit your day job (or your gig work) though, as Meta has lost $10B last year and $3B in the first quarter of 2022 alone. “I’m just trying to lead the company in a way where we’re positioning ourselves as the premier company for building the future of social interaction and the metaverse,” Zuckerberg said.

What is the big opportunity with the Metaverse? According to Tipatat Chennavasin, General Manager and Co-Founder of The Venture Reality Fund, “The killer application of the Metaverse is creating content for the Metaverse.”

What, really?

Hear all about this insight in our interview with Tipatat on the latest episode of Execution is King.

Portfolio News


“Rapidly Rising Inflation Compelling More People to Enter Gig Economy to Make Ends Meet: Research” [Branch]

“Tippy Integrates with Workforce Payments Platform Branch to Launch Tip Solution”

MedTech: Transforming Healthcare with Medical Imaging AI” [Flywheel]

“Pros to Know: How Digital Wallets Keep Freight Moving” [Branch]

“Elizabeth Heffernan Joins Micruity as Head of Partnerships and Consulting Strategy”




135 Open Positions

See all open positions on the Great North Ventures careers page

Dispatch is hiring for 43 positions

Structural is hiring for 1 position

FactoryFix is hiring for 7 positions

TeamGenius is hiring for 1 position

PrintWithMe is hiring for 16 positions

Parallax is hiring for 3 positions

Branch is hiring for 11 positions

Inhabitr is hiring for 3 positions

NoiseAware is hiring for 2 positions

PartySlate is hiring for 4 positions

Flywheel is hiring for 2 positions

Skillit is hiring for 1 position

NextGem is hiring for 2 positions

Backhouse Brands is hiring for 1 position

Yardstik is hiring for 5 positions

Micruity is hiring for 3 positions

Omnia Fishing is hiring for 11 positions

In this episode, Josef and Rob talk about the Metaverse, and how important it is for founders and investors to learn about it.  They are joined by Tipatat Chennavasin, General Manager and Co-Founder of The Venture Reality Fund. Tipatat is a former founder, creative innovator, and VR/AR developer. His background in Metaverse runs deep, including the gaming industry, the first VR/AR-focused incubator, and his six-year old venture fund. He talks about the developing Metaverse, the idea of “the third place”, and the economic opportunity presented. Tipatat paints a picture of what the future will bring, and explains where the opportunity will lie for founders (and investors).

Who does Tipatat see executing? Jadu, a company that creates and sells utilitarian NFTs- virtual items that can be used in the Metaverse.

Full Transcript:

00:09

Welcome to the execution is King podcast where we talk to successful startup founders, investors and ecosystem builders to uncover insights and best practices for the next generation of great global startups. I’m Joseph Siebert. Today my co host is managing partner at Great North ventures, Rob Webber. Hey, Rob, how you doing today?

00:29

I’m doing great. It’s a pretty rocky out there with the ups and downs of the stock market as it relates to tech companies. But, you know, overall, I’m as bullish as ever on the startup space. And, you know, the ability to kind of change the future.

00:43

Yeah, and the next big thing I mean, at least all the hype on the horizon is Metaverse, that’s why I’m so excited for today’s episode. We have an expert in the field, this is going to be a great deep dive longer episode. I’m just really excited to learn a lot more. Rob, why do you think it’s important for founders and investors to educate themselves about the metaverse and the opportunity?

01:09

I think when you have these big, you know, market changing technology forces, you can be a casual observer and kind of develop like a fuzzy understanding of what might be possible or what the future might look like. But when you talk to someone who is spending the entire all their days, nights, weekends, over many years, really immersing themselves in one of these new technology trend areas. They can bring a lot of clarity and maybe eliminate some of that fuzziness. And I think this is such an important opportunity, not only for founders of startups, but also just anyone in the world. Because I think I do think in the next 10 to 20 years, you know this sort of movement towards the metaverse or this trend towards the metaverse is going to impact everything. It’s sort of like, like the internet data in the late 90s. Or like, you know, the iPhone and Android did in, in, let’s say 2007 through the next immediate years after. This is one of those kind of mega trends. And I think the opportunity to learn from someone who’s so knee deep into it to kind of bring clarity is just a really great opportunity. Well,

02:18

let’s get started. Today’s guest is Tim Potat innovation. He’s the general manager and co founder at the venture reality fund and he invests in VR, AR AI and the metaverse. Welcome to the podcast, Tim potete.

02:33

Thank you for having me excited to be here.

02:35

Great. So I know we’ve known each other for probably about 10 years to Potat. But for the benefit of our listeners, can you tell us about your background? And what led to you founding the VR fund?

02:47

Sure. So it’s a combination of things? Yeah, honestly, I’ve always been in love with gaming and animation and technology. And, you know, I think about things that have been evolving in my lifetime, and, you know, gaming kind of being this brand new thing. And then the internet being this brand new thing, and kind of wanting to be involved with it, and seeing how the world is changing through technology, and especially through entertainment, and tech, and media and technology. And so, you know, I did the.com, boom and bust. And then I worked in interactive entertainment and gaming for most of my career. And then when we’d met, I just started, you know, left the company to start my own mobile gaming company. And this was, you know, during the very early, well, earliest days of mobile gaming, but then it was interesting to kind of see how big that business became so quickly, and how the startup opportunity closed pretty quickly for small, you know, early stage startups, and then really thinking about what’s next? And what are the opportunities that come when there’s a huge shift, like the shift from mainframe to desktop computers, or desktop computers, internet, or, you know, desktop, to mobile, computers and smartphones. And so then, really, it was backing Oculus on their Kickstarter, really, you know, seeing John Carmack who, you know, the god of modern video games and 3d graphics and talking about, oh, hey, you know, VR might finally be a thing, we should check it out. And so I was like, okay, that’s worth like 250 bucks. Let’s check it out. Let’s see what it is. And then, you know, got the Kickstarter played with it. Then it was the next development kit, the DK to have positional tracking, playing with it. And again, my experience, you know, my background, I know, a little bit of programming and a little bit of art enough not to make super polished experiences, but enough to be dangerous, and, you know, hack together something that could be interesting. And so I started experimenting, playing with different ideas. Like if you could go anywhere in the world or anywhere in the universe, where would you want to go? And I was like, I really love the matrix. And I would love To be in the matrix, not just watch Neo, but be Neo need Morpheus, dodge bullets jump across buildings, I felt like yeah, that would be the coolest experience possible in VR. And so with some friends, built a little simple demo nights and weekends, just have some fun, and just to see what it would be like to live a movie, you know. And in the process of making a program, I accidentally cured myself of my real life fear of heights. And so that was my aha moment of like, wow, this is unlike anything I’ve ever experienced before. And that the ramifications of it not just for gaming and entertainment, but how we live, how we work, how we learn how we heal, that there is going to be so many things that you know, this type, this new computing revolution, will enable and enhance. And so that’s, you know, when I decided to go all in on the spatial computing VR AR technology, see what was possible. I ended up starting, you know, the first incubator that was focused on the VR AR space. And then that gave me a platform to really think about how a venture fund really focused at that at the forefront of this emerging space could be really valuable. And I was fortunate to partner with my partner marco de miras, and we started and launched a venture reality fund, gosh, six years ago now to create you know, the fund that invests in, you know, the future of computing and the future of the internet. So VR, AR AI and the metaverse

06:30

Have you come across any startups that are teaching people, Kung Fu,

06:34

actually, I’ve seen a couple that do games, and there’s a guided Tai Chi application. And I’ve seen other companies too, that are actually, you know, trying to solve phobias and productize, that that idea of, you know, treating people and doing these kinds of activities.

06:47

Yeah, not quite the plugin download of Neo, but super interesting.

06:53

The Matrix was my favorite movie in college. I’ve literally watched it, I think 30 or 40 times at least, it’s a great movie. Yeah.

07:02

It was just so eye opening. It just did so many things. I mean, it was fun. But the philosophy, yeah, the ideas that they brought out at the time. And, you know, what’s really interesting to like, back then, right, the internet was just starting out, they still use like, dial up modem sounds in the meeting, right? And it’s just like, but they were really prescient, and, you know, thinking about all these things, that would just become huge, huge issues. I don’t know, did you get to see resurrections? The new Matrix movie,

07:26

I don’t get, I think I watched it, you know, must not have been that memorable, because I think I watched it. And I can’t really remember I have to go back and check it out.

07:33

It’s hard to live up to something yet. But then when it was that impactful when it came out, I think has some interesting ideas. But it’s just not as fun or exciting as the matrix was. But the one cool thing that came out of it, I don’t know if you get to see this. I don’t know if we talked about this yet. But epic, you know, the makers of fortnight and Unreal Engine, their CTO, Kim libreria was actually one of the you know, on the special effects crew of the matrix got really close with the Warshawski Spass sisters and, and also, so what they did was they released this tech demo of the latest Unreal Engine five, that’s playable on the new like consoles, the PlayStation five and the Xbox X. And it’s, you know, this recreation of the matrix world. It’s almost like a little teaser of what a Grand Theft Auto could feel like in the matrix. And it’s just unbelievable. When you think about that progress of, you know, Pac Man 30 years ago to now honestly, the effects that the visual fidelity that they could do on a $500 piece of hardware is better than the visual effects in the matrix two and three movies like it’s crazy. And you’re just like, wow, we’ve come such a long way in such a short time. And this idea of like, virtual worlds being so realistic that you would believe it is not that far away.

08:46

So I have this feeling that really the metaverse started with gaming, you know, maybe as far back as even 40 years ago, or I can remember like, I don’t think I had Atari. My first system was a Sega eight bit. Maybe my parents had Atari or something. But like, it felt like to me like, we’ve had the metaverse for a while, but it was in 2d on a big council or whatever. And it’s been evolving. Does it feel that way to you? Because it feels like we’re just changing the how immersive the experiences it’s, you know, but it’s a lot of the same. Seems to be heavily influenced by gaming. Right?

09:17

Absolutely. I mean, just the idea of like, virtual worlds, right, like really, gaming has taken to that next generation. And, you know, with upgraded computer processing, it’s not just the visual fidelity, but the interaction fidelity, right, like the things that you can do now, but also to the scale that you can interact with other people, right. I think the thing that separates remede, the metaverse from traditional like online games and virtual worlds that we’ve seen in the past, is this idea that it’s not just for playing games and like leisure activities like gaming but encompass more hangout leisure activities. This idea of I’m not sure if you’re familiar with that idea of a third place where it’s like a public space where you hang out where your first and second spaces are your family your home And then your work or your school, but then the third place where you socialize and congregate, right? It used to be in the past like parks or malls. But now we do this more online. And then to have these like virtual worlds, where it’s not just centered around like gaming, but this is where you meet your friends, hang out with your friends, go to concerts, do these other activities. But then the biggest component that makes to me the metaverse truly the metaverse is this idea of economic opportunity. And that now people can make a living in the metaverse building experiences for other people, or even just playing the game, and then getting in world currency, but then being able to translate that into real world money that improves their real life situation, right? And what I’d say World of Warcraft had, like all of the previous little worlds had bits and pieces of this, but to bake it into the system, and then to bring it to mass scale. I think that’s the opportunity that really the metaverse does. So it’s not necessarily saying it is the first to do it. It’s about taking the best of these ideas, and then really making it mainstream.

10:58

It’s interesting. When you think about players and games and having an appetite for these more hangout spaces. I mean, you see it in everything from like, Twitch, which is like people just hanging out and watching other people play video games, to people going on to these online worlds and a cost playing NPCs. Right. They don’t need to be the hero at the center of it anymore. Like they’re they’re fine, just pretending to be a guard and white run and Skyrim you know, things like that. So that’s, that’s fascinating. And third place. I hadn’t heard about that before. You know, I wanted to kind of pick up this this his thought on the matrix, because, you know, of course, the the metaverse there, if we call it that was hiding this dystopian nightmare behind it right. You know, and that’s part of all the hype and the headlines. There’s Zuckerberg and the main shift for you know, Facebook, the creation of the parent company meta net ownership they’re trying to do to put their stamp on it. But also that, you know, people have criticized the metaverse and cast it in dystopian terms, right like this is this impending doom? So like, you know, between like this public perception where we’re at now, and where we’re actually heading, what do you think the world at large is getting wrong? And what do you think will be like the most surprised about over the next, like, three years or 10 to 20 years?

12:21

I think there’s so many different levels, or places where this can go. But I think fundamentally, right? Like, why I think that the metaverse is so much more interesting than the real world in so many ways is because the metaverse is not resource constrained, like the real world. And in the real world, like we know this, right, like, there definitely hasn’t have not been so many times, it’s based off, you know, where you were born, you know, who you know, within your like, little like, the area that you were born are the resources that you have accessible to you in the immediate area that you live. And what we see with the 2d Internet, you know, online world is it lowered the barriers to that immensely. But still not enough, right? There’s still so many people, there’s still this huge digital divide that’s happening. And, like fundamentally, right, like, we still have to get connectivity, you know, solve some of these fundamental underlying issues. But this idea that now, you know, before the internet, most of the people that made money from the internet were developers, people with CS degrees, right. And now we’re kind of seeing a shift. And now there’s the Creator economy and people that don’t have CS degrees, but people that are not coding, but people that are designing or creating content or artists and, you know, other people can make money from the internet now, right? And I think the metaverse is a continuation of that idea and expansion of that idea where now you know, the tools. The way to access and live in the metaverse will be much more natural than a keyboard or mouse or even a touchscreen. It’ll feel like the real world, right? Like you see a digital item and you just grab it and you know what to do with it. And that’s going to make that’s going to lower the barrier of entry for creators for people that are developing content in the metaverse and really democratize this idea that anyone can make money, provide value in the metaverse, right? I love this idea you brought up, you know, people playing NPCs, right? Well, people should get paid if they’re going to be NPCs. Right? Like, it’s almost like, can you imagine an online dinner theater, right? Or like, you know, a dungeon master in d&d controlling all of the different characters in your quest, but then you pay for that experience? Because it’s gonna be great, right? And I think that’s gonna be a new way we’re gonna think about, you know, what is theater? And what is video games, and it’s like, a merging of the two and creating these brand new experiences are just going to be amazing. Fantastic. And I look forward to that like it for me. Imagination is infinite. And that’s the only thing that’s constraining the metaverse, right? And that’s why to me that Metaverse world will win. Because again, there’s going to be infinite opportunity for everyone.

15:00

Wow, that’s, that’s pretty all encompassing. I think it you know, the closest I ever had this feeling was like, you know, maybe in the mid 90s, when you just had millions upon millions of consumers getting on the internet for the first time, and you had that sort of sense of the same feeling I get hearing you describe, you know, the sort of infinite potential of where we’re headed. And we try to sort this all out, I saw in your LinkedIn profile, you had this really great market map from 2017. Kind of categorizing the VR and AR space. I guess. I’m curious if you were to either update this now, how do you break down the different categories of the metaverse in terms of a market map?

15:43

Yeah, I mean, honestly, I stopped doing because it started being too complex, right. It was like, it was easy to manage when they’re like hundreds of companies. Now there are 1000s of companies that again, met this criteria of like, yeah, and they made over a million in revenue, or did they get millions and investor money? And yet, what were they working on it? I think the fundamental idea was to kind of show the different applications of these technologies and that it wasn’t just gaming, I think, yeah, most people when they think 3d online worlds and you know, VR AR technology, they immediately go to gaming and well, definitely, it’s one of the biggest opportunities. It’s clearly not the only one, right, like these technologies were developed originally for by the military for training and simulation, right? And it’s just like all the offshoots of that encompass so many different opportunities. And then I think it’s interesting to like, you know, when most people talk about the metaverse, you know, like, Zuckerberg and so many others like Tim Sweeney, and like Roblox, it’s definitely a consumer focused metaverse. But then you also hear Microsoft talking about an enterprise Metaverse, right? Or you hear Nvidia talking about their Omniverse, which is, you know, what their take on the enterprise in Metaverse and this idea that, you know, just as big as you know, playing and doing these, like, consumer foot facing things, right, there’s also going to be this huge opportunity for enterprise and b2b applications of online worlds with presence with people connecting and yeah, I mean, still hasn’t been cracked yet. But if we can get that experience, where virtual meetings, especially collaborative meetings, where you’re not just like presenting our PowerPoint, but we’re actually doing the work together, once those can really be done in a very, you know, productive way in the metaverse, then that’s going to have huge, like, environmental positive environmental impact, right. And we’re seeing this already in like a certain scale with Ford. You know, for car reviews, I used to fly all other people from all around the world to one location. So they can do an in person review of a car, look at the clay, physical sculpt of the car, you know, and they’d have to do this, it would take a long time to get everyone’s calendars together, fly everyone out there give people feedback. But for the past, even like, almost five years, now, they’ve been doing it virtually right, they put on the headsets, they can do it. And then they can make changes on the fly, right? And then they put everyone behind the wheel, see what they need to see adjust the things and it’s just like, okay, like when VR headsets in the VR equipment, and the software upgrade, it costs millions of dollars, it makes sense that it should be done for products that are, you know, cost millions of dollars to create. But now as all of that hardware and software gets cheaper and cheaper, then it’s gonna make sense to design more and more cheaper products in that way too. And I think what’s also interesting too, is to see like this idea of virtual production, right, like all of the major Hollywood films right now. And TV shows everything Yeah, Mandalorian, Lion King, you know, the Marvel movies, they all use VR AR tools in the process of making them. And you know, the idea of like, visualize the world, let the actor see. So they don’t have to just imagine everything, and then get the camera crew and the director is really like understanding and getting the right shot. All that kind of stuff. We’re gonna see kind of trickle down into the mainstream. And it’s going to be the way that more and more content and games are created. And that’s going to be kind of going back into like, what is the killer, like application of the metaverse and it’s creating content for the metaverse. Right? It’s kind of weird, but if you kind of think about it for computers, too, right, it was like, what was the killer app for the you know, the internet, obviously, right? But why? Well, it was not just for consuming the internet, but also for creating and continuing to develop on the internet, right? You need the computer and that’s why it became essential and that same way we’re gonna see like VR and AR especially because that’s the best way to create 3d content not just consume content but but but create 3d content. We’re gonna see it really kind of take off.

19:43

There’s a lot of opportunity, but there’s the with all the chaos there’s there can be a lot of confusion, right? I mean, we have multiple, you know, gigantic companies competing over the new device types. Of course, they got Oculus for Facebook now, Apple, Google snap and others. Building 3d glasses, then you’ve got other platforms for more of the operating system or other layers, like, you know, I guess you could put steam in that boat, or you could put, maybe maybe the gaming companies come up with their own. Of course, there’s, you know, elements of creation in Roblox or fortnight and their own sort of communities. But when you think about all this, if you’re running a startup or thinking about launching a startup, how do you decide, you know, which device to target? Which platform to launch on first? And then I guess, you know, do you have any, you know, any predictions on who the winners will be for some of these platforms? I mean, usually we don’t have I don’t, I don’t think anyone would, would believe we’re going to have seven different 3d glasses that end up hitting critical mass to millions of consumers around the world, or, or 10s of millions, it’s probably going to be a small number, right? Or how do you think about these forces in terms of, you know, how we get from where we’re at now to maybe a future with, you know, with other screens or other other form factors beyond what’s available today?

21:03

If you think historically, like, where it’s gone from, like, desktop computers to now smartphones, I think it’ll look a lot more similar to what happened with smartphones, right? I think Apple has really proven the right model. Everyone wants to be like Apple, right? It’s like, you want to own the hardware. But you also want to own the first party, you know, App Store, you get to approve what goes on there, and you get your cut. And then you also have some of the best applications like the browser, and some of these main fundamental applications, right, that people use it the messenger and things like that. Right. So I think that Apple model is what everyone’s eyeing, and you know, honestly, that’s why I think, you know, what, yeah, formerly Facebook, very much in that same way where they’re, like, they lost out on the mobile phone. And you know, they’re always kind of beholden to Apple. And so if, you know, if anything, right, like Apple’s switch of the pipe of privacy information, and that hurting, you know, not as quarterly revenue, like, you can see what impact it has when you don’t own the platform. And so, Oculus by x was, that was a $2 billion bet, which again, small bet Fermat at the time, to say, hey, is this the future? Could we be a part of it? And I think, you know, after, you know, the six, five years, since that’s happened, you know, they have the data, right? They’ve seen the usage, they see what other opportunities out there, and they realized, now’s the time to really double, triple, quadruple, you know, 10x down on that bed, and really try to own this next computing platform and the next internet. Now, can they do it? Will they do it? I mean, honestly, there’s a part of me that’s like, like, no one owns the internet today, right. But at the same time, when you’re the most used application on the internet, in a way, you kind of do own a lot of it for a lot of people. Right? And so I think we have to really be cognizant about that fact. And think about okay, yeah. And this is also why, you know, course apples investing, Microsoft, and all the major tech companies are investing, but also to like, don’t discount, you know, bite dance owners of tick tock, you know, they recently bought the PICO the Oculus equivalent in China, right. And so, you know, snap, and others have been talking about hardware and trying to be that hardware platform player and create an integrated, you know, hardware software product. And I think that’s gonna be That’s the dream, right? Like, that’s the goal. Now, if your startup, honestly, if you’re a hardware startup, it’s just so hard to do. It’s so expensive, I get Oculus hadn’t gotten bought by Mehta. Would there be this big? Could it be successful? No, probably not. Right? Like, it needs a lot of backing, it needs a lot of money, but also to it means that foresight of someone at Zuckerberg, even when it’s a loss, you still have to invest because again, 10 years down the line, you don’t want to be caught not being one of the major players in the nest ecosystem. Right. All that being said, I like the way I view it is startups in particular, right? It’s all about leveraging other people’s big investments, and then writing on top of that, and saying, okay, you know, what, like, yeah, make the apps for the next iPhone, right? Like, make the apps in VR, leverage the billions of dollars being invested by the apples and the matters and the Microsoft’s of the world, right? And really come up with that great use case, that application that’s going to get, you know, millions to billions of people excited about using this device day to day, right. Like, I think that’s the big opportunity.

24:25

I think for me, it’s hard to imagine with the advantages of Apple, Google, and maybe to a similar extent, even Microsoft, with their reach with developers, that how Facebook could overcome that with their relatively limited reach with developer communities, do you but of course they have a head start with Oculus being pretty developed and iterating on that. Where do you see developers hanging out now? And I guess, do you really feel like this is gonna work for meta and you think that Oculus is going to be be when Apple comes out with their 3d glasses? is our people just gonna, you know, are we gonna forget about Oculus? You know, and that cycle? I just because for me it’s, it’s hard to see it’s just seems like apples especially just so dominant as for developers that it’s, it seems like it’s it’s almost insurmountable it feels like even with even with starting well behind you know where the Oculus is already at right?

25:21

Yeah. Well, I think that’s the play that right like these shifts are the opportunity for that time, right? Remember before the iPhone, right? Everyone’s like, wow, Microsoft is dominating computer unless they are in the best position to create a, you know, pocket computer device, right? And what’s interesting is yeah, like Apple really took that opportunity and really flipped the script, right and really, you know, succeeded where others had failed before. And what I will say too, though, is today’s Apple, the same apple that did that? No, not saying that Apple can’t do it can’t pull it off. But it’s not a sure thing. Like, yeah, it was right. Like, it doesn’t have, you know, like, Tim Cook is amazing. But he is not Steve Jobs. Right. And in terms of like that Apple of today is not that like, you know, they haven’t really launched a significant new platform, right, like the smartwatch the Apple Watch, great product, but it’s not a platform, there’s not millions of developers making money off of that ecosystem. Now, that being said, Do I think like, I don’t discount, you know, Apple and their ability to do something significant, but at the same time, I would say to like, Facebook hat or not SRE has put in the work right, like 10 billion a year. Yeah, that’s, that’s more than Google would dare spend on this, like, you see Google abandoning projects left and right, right. So I think, you know, the fact that meta has built an ecosystem where there’s a billion dollar spent in the App Store, there’s over 100, developers making over a million dollars in revenue, and, you know, top developers making hundreds of million dollars in revenue. Yeah, I think they’ve done a good job of proving that this can be a thing, but at the same time, you know, you’re right, it’s still early, it’s still anyone’s game, right? It is that thing, like, they could be the palm, or the handspring, right. And it could be, you know, an apple, or it could be someone else, right? I think that’s what’s exciting. But if you’re a developer right now, and you want to play in the space, like you definitely have to pay attention to, like, you have to develop on the meta platform or a think about playing, you know, there’s, of course, a PC VR ecosystem that uses steam. But that form factor is very limited, that price point is very limited. And then of course, I will also say, you know, Playstation VR, and PlayStation VR two was Sony is going to be amazing. But that’s really game centric and consumer centric. So a lot of enterprise stuff are not available on that. And so, right now, you know, for better or worse, the meta is still probably the best platform. But again, like, yeah, you start off as a, you know, PC developer, then you become a Mac developer, you go where the platforms are, and I don’t see it fundamentally changing from the form factor. And so I don’t think it’d be too different developing for an apple, you know, mixed reality device than it was developing for him that a,

28:11

technically are most of the AR and VR projects, still using kind of these 3d engines that came out of the gaming space, primarily, like Unity, and epic and so forth. And I guess those are cross platform. So it would seem then this portability across these, if there ends up emerging a couple of, you know, two or three major hardware devices, that it’ll be easier for the developers, right.

28:34

Absolutely. Absolutely.

28:36

So, you know, we talked about some of these big shifts and thinking back to a few, you know, it’s kind of like, divided between software and hardware, like, Yahoo, Google came along, and it was search, right. And then later on, another big shift was social. And I think about that like, like, you know, that was ways of accessing this information that that weren’t that weren’t hardware, it was like software, right? So then we talk about form factors when everybody’s talking about virtual reality. And and AR, people are obviously fixated on headsets and, you know, Google Glass and all that. And people are more fixed on that hardware being kind of like that, that catalyst for that big shift to happen. From what you’ve seen, if you had to bet on one. What do you think will be driving that big shift a piece of software and a change in paradigm shift there or the right piece of hardware?

29:34

I mean, honestly, it’s tough. It’s like both of them are important. And both of them will, and huge improvements in both will lead to brand new, huge or bigger opportunities, right? Like you’d say, like the internet. before smartphones, internet was still huge. It was still a great opportunity, right? Like when it was just connected desktop computers and laptops. But when it got the better form factor of a smartphone, and their apps and yet web two was created and it was much more easier with the interface that changed the game and made, you know the internet, everything, right? And so in that same way, I kind of feel like Metaverse will be the same way or thing where, with a PC and a desktop or game console or a mobile device, you can connect to the metaverse today, and you still get a pretty good experience. But man, when it’s in a very light, comfortable VR AR System, and not just what you see, but also the interaction and how you touch and how you move in the world, and how you play those experiences, that’s when oh my gosh, it’s gonna be billions of people. And the next big trend truly will be the dream fulfilled, right?

30:36

Speaking of, uh, you know, like, the tactile stuff and things you touch. Have you ever, like destroyed anything or hurt yourself for somebody using one of those VR headsets?

30:49

So funny. So fortunately, I have not, although I just today saw an article where it was like home insurance claims had jumped up 30%. And they’re attributing a lot of that to VR and the rise in popularity in the VR. This is from The Guardian. So like a reputable news source. But I found that hilarious for Yeah, you definitely have to watch out. Ceiling fans and TVs. Yeah, I mean, you see pictures on Reddit all the time about these things happening, but I’m very good and very lucky to have enough space. Yeah, and a dedicated space to use for my VR AR activities.

31:24

Yeah, that’s the exact article I was talking about. It said it was like 650 pounds was the average amount of damage, which is like $883. And all I can picture is those little kid videos, whip in the week controller straight into the screen, you know.

31:41

So speaking of week controllers, I know you’ve invested in you know, several the real breakout consumer VR entertainment apps, you know, ranging from BT games, which Mehta acquired rec room, and so forth. If you think about, you know, the the trends impacting in particular VR gaming, I guess, look at AR gaming with the success of like, Pokemon Go, I thought Pokemon Go is dead, by the way by 10 and 12 year old boys, they’re like playing it more than they ever did. I don’t know what they had some update that came out. But when you see the games that are really influencing the culture, what are what are the what are they doing? Or what are the trends that are really catching on right now.

32:24

So it’s really interesting, like, again, I kind of would, on right back to like, the history of games isn’t about so much about the display. It’s not necessarily about the TV. But it’s about the input, right? The joysticks, right? Like it was a bigger jump from, you know, going to a digital pad and a couple buttons to having the dual analog sticks, right, that it was going from a regular CRT, to HDTV, right in terms of like experiences, the types of experiences that you’re gonna do. And so in that same way, you have to really think about that for VR, where sure everyone looks at the headset, and like, oh, my gosh, the immersion, you feel like you’re there. But then it’s that those gesture controls that one to one, you know, delivering on the promise of the week, right, like we saw with the Wii, and they have a cute bowling game. And I only got this amazing to actually do the thing. But then it’s like the tech was kind of clunky. And then when the people try to make like an actual like a sword fighting game or something, it kind of like fell apart. But then with these true gesture controls all of that now as possible, and then seeing it in a real 3d world and being fully immersed in it makes it all that much more compelling. And so I think it’s like people that are really getting it. Start with a VR first game concept and VR first interaction design. And they’re not just trying to create, hey, the VR version of this popular PC game, they’re really creating their own lane or their own Avenue, or they’re taking more cues from physical games, like the things that you do in the real world with real gestures. Then they are thinking about, what buttons are they pressing right? And so that’s why, you know, beat Sabre, I think you did it the best and has the most success. They did that combination of Yo, easy to pick up hard to master. But there’s no button presses except for to select the menu, like you’re swinging and it’s all about control. And then they also realize to how to make the movements feel good. Like I feel like that understanding of, okay, you don’t want to just do one motion over and over like the Wii and spam it. And you really want to encourage people to move in a way that makes their bodies feel good, right? I think that’s something that I never would have thought of, you know, initially when you’re thinking about a video game, but now it really makes a difference. And I think beat Sabre of the myriad of things they did, right that that to me, has helped with the longevity and why it didn’t just become a cool flash in the pan kind of thing and it’s still the most popular game in VR.

34:54

You know, that’s the first thing that I think about when I pick up a classic NAS controller So you play it for like five minutes. And then it’s like blisters. And like, I don’t remember that, you know, back in the day. But nowadays, you notice immediately,

35:09

yeah, I was thinking about because I, we sold our business, which is kind of ad tech for the gaming, mobile gaming space really, back, I don’t know, about five years ago. And I remember at that time, I spent a lot of time with game publishers and developers around the world. And it seemed to be this common understanding that unity as a game engine was sort of surpassing epic as a game engine on the 3d side, because they were less fixated on like, on just having the absolute best graphics in the games from their engine, but making it easier, more approachable and easier to develop games. And I don’t know if this is true or not, I’m not a developer. But I wonder if that sort of changed, because then fortnight came out? And it was like, okay, you know, maybe the visual graphics do matter. But I don’t know, I guess it kind of stuck with me that, like the the actual experience matters more than, you know, say you’re in high def doesn’t really matter. If you go to 4k or, you know, it’s more that it’s more of that experience that matters the most.

36:09

Yeah, I mean, I think fundamentally, right? When you’re talking about a game, it’s the interactivity that makes it different, right. And it’s like, I and this is the thing for VR, boisterous. It’s not about the visual fidelity, it’s about the interaction fidelity, and making sure that it’s rich and an ending, right, like, that’s what you really want. And that’s, typically, those types of experiences do better. But that’s not to say that visuals aren’t important, and you can’t, you know, underestimate how impactful it can be when done right. But just saying, especially when you’re a small startup, and you only have so much budget to spend, it’s like I would put much more on the interaction side. But yeah, it’s really interesting that you say what you say about like, yeah, epic, unreal, it’s really changed so much since Yeah, we were actively in that space, like, yeah, I startups. And, you know, I think fortnight proof, not necessarily not just that visual fidelity is important. But also to that they’re crazy engine that was built for that digital stuff could be performing well, on a mobile device. I think that was kind of the always, like, people always was like, Oh, he can’t, it’s hard to learn unreal, and it’s so much trickier. And I think that was the thing that unity had, at least when I was looking at engines was like, oh, so easy to just like Google and find a tutorial on unity. And it was, yeah, they spent a whole bunch of time creating really nice accessible tools for small one to five person teams. Whereas the epic was more like, oh, we come from triple A and 100 person teams. And that’s kind of like, what you really need for epic, or for the Unreal Engine. And I feel like it’s a combination of unity wanting to be more like Unreal and unreal, real, like they need to be more like Unity, or at least, you know, Unity back in the day. And it’s kind of like equaled out in so many different ways. It’s kind of strange to see now. But one thing that’s really cool, though, are that’s really impressive, just to see, like the quality of games in both engines, right? Where you’re just like, wow, and especially like running on mobile phone hardware, or like, you know, even like basic, you know, the quest type hardware, like, wow, you’re getting really cool, really amazing experiences on pretty inexpensive. Hardware. It’s cool.

38:09

I don’t know, I remember the first time I saw Infinity Blade, you remember this game, it was like the visual, just how stunning it was. I think this was like apples Game of the Year, and probably like, what 2010 are way back. But I remember I didn’t play it very long. I’m still I don’t really go out to discover new games that much anymore. I you know, I’m like a typical suburban dad in the Twin Cities, whatever. But there’s like still a couple games from five years ago. And we were in the game space like I played. There’s this little numbers game called merge that Zynga publishes. And it like gets me in my Zen state where it’s just like a really simple numbers game. And I am so addicted to and I still don’t know, I don’t know why, I think and it’s not the visual studies. This is really like, it’s like rearranging dominoes. It has that kind of appeal. But I play it over and over again. I usually listen to a podcast and then I just play the super simple game from Zynga. And I don’t know why five years later, I’m still playing it. I can’t explain it. There’s something about that. The interaction pattern that just, it’s doing something to my brain. It kinda I know. And I don’t know, I’ve started to read some research on just some of the neurosciences around gaming. Have you read this book? The gamers brain from I think it was Celia Houghton, okay,

39:22

I need to check it out. Okay, so exactly you’re talking about fundamentally though, but

39:25

she was director of UX at Epic working on fortnight, but she’s actually a psychologist and neuroscientist. I are not psychologist I think that I think she’s a neuroscientist. It’s actually a really hard book to read. So this isn’t going to be like a bestseller. But it goes from like the neuroscience and then it gives you practical UX design. It goes from like, like it’s it’s chapters are organized around like neuroscience, like facts and like scientific kind of information, and then application to gaming and I’m like, oh my god, it’s so hard to follow though because it’s like, so I’m not I’m not that I’m not a neuroscientist, so it’s hard to but I checked that one out. It’s really it’s pretty cool seeing like a neuroscience kind of view. And she worked on fortnight. So she’s got a, she’s been thinking a lot about, you know, the brain and the impact on you know, and how it relates to gaming. Right. So

40:15

what you’re describing, and again, I could be putting words, your message, let me know what you think. But like, for me, too, like when I play games, and you get like this level of mastery of the game, that almost you get into like a second state of it. And it’s flow state, right? It’s this experience of like, your brain kind of goes on autopilot, and you just start doing really, really well. And it’s almost like a meditative trance. But it’s super nice to get into, right. It’s like, it’s interesting, like, pianists or musicians, right, with, like, when they’re really in the flow state, you know, they feel like they meld with what they’re doing. And when you’re playing a video game, too, you can get that same kind of sense. And I get the most in beat Sabre, I don’t know, if you actually played it, or, like play it, play it and get to that level where you can start doing like, expert difficulty. And it’s funny, I’ll see blocks, and my brain can’t process it. But my body responds, and, and then I do it. And it’s weird. It’s like, I didn’t think I was gonna do it. Subconsciously, something switched. They’re controlling my body, but it’s that flow state, and that, like, things happening on that subconscious, and it’s very satisfying, right? If it’s such a great feeling.

41:23

Yeah, I played games, since I was probably like five years old, and I’ll 42. So there again, like, I don’t like to play newer games with my kids, cuz I’m not ever gonna get to that flow state, I think you’re you like very eloquently put it. For me, I like to get my kids, you know, into like, the 90s games where I’m like, I you know, it’s just like, it’s like muscle memory. It’s like, it feels so good to play those games. And maybe that’s a factor of also just getting older, where I know you have the brain, you have a tendency to learn more slowly. Now, I think you can address that by, you know, there’s certainly ways to kind of try to maintain an ability to keep learning, but I think I think the natural tendency is you’re going to learn at a slower pace as you age, right?

42:04

Yeah. Going back to what we were talking about before, if you haven’t yet, play half life Alyx on a VR, like a bit, you need a high end gaming PC to play it, but you can actually stream it wirelessly to your quest headset. Or if you have, you know, the PC VR headset. But that is like playing a game from 10 years in the future. Like it’s, you know, triple A quality visuals, but with a full rich experience and like the interactions that you’re doing. It’s so good. And it’s funny. I have a bunch of friends that are gamers, you know, love gaming love VR. And they’re like, oh, have you played half like, Alex, what do you think? Oh my gosh, it’s amazing. I couldn’t play it. Because it was too scary. I had to stop. And it was like the immersion was too good. They couldn’t overcome it. But it was just like, wow, like, it definitely is that like, as someone that grew up playing Pac Man playing Atari and all that kind of stuff. You’re just like, wow, this is the future. Like, this is the masterwork of what video games will be are becoming and you’re like, it’s the Citizen Kane. I think. Like, I feel like, for me, yeah, there’s certain pivotal video game moments, right? It was definitely like, for me, it was like, Yeah, you know, Super Mario. And then it was like, Yeah, Halo, or like Doom and Quake, and then you know, Grand Theft Auto. And now I feel like everything’s kind of been based off of like, these paradigms I’ve been created now polished for like a decade and a half life Alyx builds on top of a lot of that by bringing it into full VR, full immersion. And you know, and again, Valve builds the hardware, right? Like, they love this stuff. They’re not just trying to cash in on this, and half life out. And half life, honestly, was one of those epic video game franchises, right, that brought story into like, you know, first person shooter type games, and it’s like to see them, do it for VR and do it in VR, and say, like, this is the pinnacle of video game, all of our knowledge and to be able to like experience that is so satisfying.

44:02

I gotta check that out. I haven’t seen that yet. I do actually have the I have a nice PC with the like Oculus plugged into it. So I can I’ll check that. Check it out on that,

44:10

dude. And then we’ll be on another podcast just talking about your experience. Yeah, we’ll do kids in it, too.

44:17

We’ll definitely try that. So I have a I keep thinking about though, with Compute paradigm shifts. I mean, usually there’s the thing that happens, I think, where things really get to like I keep thinking about when do we get to a billion people wearing an Oculus like headset? So I had the Oculus Rift when it came out, I think probably maybe a little after when you bought it probably I got it. I got the wired one. It was expensive. He had a really nice computer. And then like two years late, my kids stopped playing it by the way, they were just like, oh, whatever, just sat there and then all of a sudden their friends got that quest to for like a quarter of the cost that you don’t need a PC and you go wow, okay, you can see this. You know, if the cost keeps dropping, you know, maybe that is what ultimately is that what gets us to a billion devices, you know, on a billion different humans, like how do we get to the? How do we get anywhere near the kind of penetration of the smartphone with these 3d glasses? Or is it? Is it something else beyond the 3d glasses? Like how do we? Is it going to be that ubiquitous? Or how do we get to that? And when does that happen? I’ve been wanting that I think for people who are really into VR and AR, we’ve probably been wanting this to happen for like, over, like, for 20 years, or at least 10 years now. But like, is this like, Could this happen in the next two or three years? Or is, is this ever gonna happen?

45:28

So the way I think about is less about the technology and more about the function it provides right in your life. And we can say like, Okay, we know, video game consoles, right, like devices that people buy, just to play video games, that’s about hundreds of millions of devices, right? Like the top selling, you know, gaming console 100,000,200 million, right? Now, it becomes not just an entertainment device, but a productivity device, like a desktop or laptop computer, then that’s like, a billion to 2 billion devices, right? But now, if it becomes a communication device, something that you need to connect with other people, that’s when you get into like smartphone territory, and then everyone needs that. And that’s when you get into like the, you know, 7 billion 10 billion device more more devices than people on the planet, right? Because you have to have a work phone and a person. But that that is how I think about and then you’re like, okay, can VR AR become these things? Right? And it’s like I will say, very clearly like, Yeah, I think Oculus has proven that we’re past the tipping point, it can be a gaming device. So I think going from 10 million now to 100 million. Possible, right? Not not guaranteed, but but possible, right? It’s very simple. Like, I think the bigger verse was going to zero to 10 million was much harder to prove right now can kind of go from entertainment device to productivity device. And like we talked about, like, you know, some of these user use applications that we’ve seen, to me point to yes, absolutely. Right. Now, can it become a communication device, something that will want with us all day, every day? And I think AR could do that? Right? Like, I think there are some, you know, ideas and applications of AR, that could make it happen. Now, I think the problem that we’re getting to is like to make all that happen, too, there has to be fundamental improvements in form factor, and technology and hardware technology that enables these use cases. Right. And we aren’t quite there yet. But I think it’s very clear, like it’s no longer a leap of faith to imagine that. And I think that we’re seeing these technologies. Less so probably, I’m optic side, I’d like to get like AR glasses that give you the full field of view, but still feel like you know, regular glasses, there’s still some physics we have to conquer. But for so many of the other things that we have to do like to have high quality visuals. Well, with 5g, we can stream from the cloud will be low latency. And that will make at least let the computing hardware and the battery life work a little bit better. Right, like so I think there are so many things that’s definitely on the roadmap. And I think within our lifetimes, we’re going to see it we’re going to see, yeah, hundreds of millions of people using these devices daily. Yeah, well, we get to billions. I think it’ll be once you get to 100 million, then it’s a straight shot. And like I said to the driver of that will be the metaverse and creating content for the metaverse, right? If building 3d worlds was as easy as playing with Legos, everyone could do it. Right. If it didn’t feel like CAD, if you didn’t have to go to, you know, a gaming score or design school for like two years to learn how to, you know, 3d model and level design, you know how to use unreal, but instead, you just got a Lego set. And you just put it together? And you could rearrange it right? Like, yes, VR, AR will make it feel like that.

48:58

Right? If it was as easy as capturing a photo for Instagram or creating a tic tock video, you know, then we would have the I mean, we would have so many creators, we it would pull the whole market, right?

49:09

Yeah, exactly. Like, yeah, well, how new 3d sensing technology will also have AI. So you when you take a picture, now, it could be a 3d game character, you know, and, you know, is that possible today? No. But are there startups working on that? And is it within? You know, five years horizon? Probably, right.

49:28

Alright, Joseph, I’m out of the venture business. I’m going to go launch a VR startup on sold AR. We’re away and it’s been great being on the podcast. No, just kidding. Anyway, so I think you have a lot of clarity that I think we’re there’s a lot of us thinking about this, but I think you’re thinking very deeply about it. So really appreciate you joining us on the podcast today. I think Joseph has one closing question which maybe we can ask before this last closing, but around the execution, we try to weave that in.

49:57

Yeah, I’m sitting here just thinking about Taking my general iPhone and using the LiDAR, on the back to scan myself, do you think there’s much of a market yet for, you know, like, immersive podcast experiences where you just are standing behind the guy talking for like, half an hour?

50:17

Not yet, but there will be but imagine to not only, you know, will you see that, what you said what you say, will be created as graphics in the real world that you could play with and interact with. And so it’ll be like, you know, a real time, you know, infographic as well, right? Like, AI will understand what you’re saying, and then give you the visuals to go with what you’re saying to make it more impactful. Right.

50:38

That’ll be fantastic. I like to ask all of our guests who come on here, you know, title a podcast, execution is king. You’ve got such depth of knowledge. And as an investor, you know, you really have a great picture of you know, what’s going on currently in the AR VR, AI Metaverse market. So right now who do you see executing? Maybe it’s a startup, maybe it’s an individual. Maybe it’s someone flying under the radar? Maybe it’s somebody everybody knows, like, Google, right. But who do you really see performing?

51:12

It’s a great question. And I think you’re absolutely right, like, ideas are a dime a dozen. It’s all about the execution. And I think more so especially in the XR metaphors and the web three spaces, right, especially when they all kind of converge. And so then I really want to highlight a company that we had just invested in called chatter. So they create AR, NF Ts, and you know, a lot of buzz words, a lot of stuff going on there. But what’s really interesting is, it comes back to the execution. It’s not about the ideas. A lot of people have similar ish ideas. But the fact is, like, you know, they raise money there, they had tech, and they were an AR, holographic startup, working with like celebrities to create holograms and volumetric captured little videos that up on their phone. And then they realized, you know, the NFT opportunity was happening. And one of the things that they realized, you know, people were buying these profile pictures and lefties, and then they were wanting to interact with, you know, different Metaverse worlds, right? And what they really cared about this idea of like, well, NFT is not just as a profile picture, not just as an art collectible, though, if it had used what if was a utilitarian NFT? What if you could actually buy something and then use it in these different virtual worlds. And instead of just thinking about this idea, and trying to pitch people, they just built it, and sold virtual hoverboards and jet packs, and did over 4 million in sales and the FT dropped for these virtual goods that they could visualize an AR and that the people could try it in different virtual world platforms. And, you know, because they proved it out, then investors double down and wanted to invest in them, right? It wasn’t like, they came to us and said, Hey, we have this idea for something. Invest in us. They’re like, No, no, they executed, they’re like, Hey, we have this idea. It doesn’t cost a lot of money to make these things nowadays, we’re just gonna do it. Try it. And when it succeeded, investors lined up to really double down and so they did a $7 million raise. And I think it’s, it’s, it’s funny, I meet so many people, that I love that they encompass a couple things, you know, they did a pivot, you know, they went into an even crazier space, you know, from AR, which was very early into this crazy NFT space. But through execution, they prove that, you know, they could stand out from the crowd of people that are just sitting there talking about it.

53:31

Well, this is fantastic. having you on the podcast, Tim Potat. Thanks so much for joining us.

53:37

Thank you so much for having me really enjoyed this conversation. And yeah, for being back on after Rob, you’ve either played Half Life Alyx or have decided to start your own VR startup.

53:49

Okay. Yeah, sounds great. Awesome. Thanks for joining us. Thanks.

 

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