On this episode Josh speaks with Samuel Huber, founder of Admix. They discuss virtual reality, augmented reality, and the role advertising is likely to play in it.

Samuel is the founder of Admix, a funded startup based between London and SF. Sam is considered a VR/AR thought leader, frequently invited to speak at industry conferences, from Virtuality, Tech Open Air, or VR World. He is a contributor at VRFocus and VRScout, and his work has been featured on websites like Venture Beat.

Before Admix, Sam has 4 years’ experience running startups in the adtech space, as co-founder of Kout.io, and founder of a mobile game studio, which he exited. Before that, he spent 2 years as a strategy engineer for Mercedes Formula One. Samuel has a MSc degree from Cranfield University (UK), and BSc Physics from EPF Lausanne (Switzerland) and Uppsala University (Sweden).

In today’s episode you’ll learn:

  • What is virtual reality (VR)?
  • And what is augmented reality (AR)?
  • Why do you need to be paying attention to AR/VR if you own a small business?
  • How can you use it your business?
  • Is AR/VR ready for primetime?


Transcript

Narrator:         Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful. Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.

Josh:                 Hey, how are you today? This is Josh Patrick. You’re at The Sustainable Business. My guest today is Samuel Huber. I hope I got his name right. I generally massacre names. Hopefully, not this time.

Samuel:           Not this time.

Josh:                 We’re going to be talking about the wonderful world of virtual and augmented reality and why you need to be paying attention to this if you own a small business. And, more importantly, how can you use it your business to make your life a little bit better. Let’s bring Sam on and we’ll start the conversation.

Hey, Sam. How are you today?

Samuel:           Hey, Josh. I’m doing well. Thanks for having me.

Josh:                 Is it Samuel or Sam?

Samuel:           Samuel is fine. Sam as well. Up to you.

Josh:                 Okay. Well, we’ll use whatever you prefer which is Samuel.

You’re the CEO of admix.in. What is it that you guys do and how is that going to help with world?

Samuel:           We are a monetization solution for VR and AR – virtual reality/augmented reality. The reason why we’re doing this is we are starting to see a transition from 2D content on the screen to 3D content which is content that you will consume with a headset. We think that whether it’s in the world of gaming, education, training, shopping, entertainment – more and more content will eventually evolve to be more immersive.

This is not a new trend. We’ve started to tell stories verbally. We then put it on paper. We then use pictures, then videos. We’ve always tried to get closer to the action, to tell stories in a much more natural way. A way that is more conform to reality and, to some extent, the transition towards VR and AR is just the next step towards that.

Right now, video is probably the closest way that we convey stories from reality. We think that the next step is actually to be in the video, to some extent, which is exactly what VR is all about. It’s about being immersed in the content. Not looking through a little window that is a two-dimensional screen but really being part of the action.

We recognize this massive opportunity. What we are doing here is basically giving the content creators the ability to monetize these contents – make money from these contents. We know that advertising has been the backbone of the internet industry and many other industries. Anything media related has been powered by advertising and we see the same trend continuing, of course, for VR and AR.

Josh:                 I’m going to bet there are lots of people who are listening to this right now who have no idea what the heck we’re talking about. First of all, let’s get to a definition. What is virtual reality? And what is augmented reality? And what is the difference?

Samuel:           If you imagine a spectrum of reality – starting from the real world, and then you immerse yourself more and more into the content. On one hand, you have the real world. And, on the other hand, you have virtual reality which is you put a headset on your head and you’re literally immersed into a virtual world. It’s you being at the middle of a game or something like that, for example, within 3D content – fully immersed into it.

And then, augmented reality is in between. It’s where we overlay digital content on top of the real world so you have a mix of the real and the digital together. The beauty of augmented reality is that the devices don’t just overlay digital content on top of the real world but they actually understand what the real world is. If there is a table, they would overlay a digital item on top of the table. It can map the environment to really basically blend the realities – blend the boundaries between real and virtual.

Josh:                 It seems to me that it’s going to be a lot easier to put together augmented reality content versus virtual reality content. Would that make sense?

Samuel:           The beauty of augmented reality is that, right now, you can consume it through a smartphone which, of course, reduces barriers to entry. You don’t need to buy specific devices. But in terms of the technologies, actually virtual reality is simpler because the developer – the content creator will just create a separate world and then immerse you in it. You don’t need the technology such as machine learning, artificial intelligence that AR needs to understand the environment and properly overlay digital content on top of it.

If you want to tell a story in VR, you just create your own thing. If you want to create a story in AR, because it’s going to be overlaid with the real world, you cannot actually control the entire scene. You don’t know if the user is going to consume that experience in his bedroom or in outdoors so you don’t know what’s going to be in the background. For storytellers, AR is actually a lot more complicated because they do not control the entire experience.

Josh:                 Okay, so I’m a local plumbing company, do I care about this stuff at all?

Samuel:           That’s a great example actually. There is lift maintaining company that has been using, I believe, HoloLens which is called mixed reality but let’s call it augmented reality. And that, I think, has seen an improvement of 40% in their maintaining work. The work was done 40% quicker, so you can imagine, right?

The problem that is being solved is what we call the attention shift. The attention shift is what you currently do when you have to look at the real world and then look at your device, your screen. A lot of engineers or people who maintain the lift, in this case, have to look at the lift. And then, they might not know how to fix something so they have to look at their phone for the manual or they have to look at a paper. The shift between the lift and paper and back and forth is costing them a lot of productivity. What they’ve been able to do, using augmented reality, is simply giving their engineers instructions just by looking at things. They might look at a spanner or a part of the lift and, on top of the real world, they have information coming, telling them, “Okay, this is where the problem is” or “to unscrew this, you need this type of tool.” they are basically saving a lot of time, avoiding this back and forth, this attention shift between the real world and the digital world that they use to understand. So, as a plumbing company or as an educational company or anything, you can actually apply that to your own business by enabling people who work in it or your clients to be more efficient in the way that they would go about their business.

Josh:                 In other words, instead of me looking up on YouTube to find out how to hook up my stereo, I might use an augmented reality with the stereo in there and it would take me through and say, “Hook here. Hook there. Hook there,” and you’re all done?

Samuel:           That’s pretty much it. Yeah, absolutely. In theory, that’s what it is. The device understands your environment and, based on the objective that you have, can guide you through it. Of course, in practice this is obviously very complicated. There is, at the moment, very limited use cases. But there are some really, really interesting projects that are being created at the moment.

Josh:                 It sounds to me like it’s not quite ready for primetime but is going to be ready for primetime in the next two or three years.

Samuel:           First of all, this is an industry that is about two or three years old. The VR industry really started when Facebook bought Oculus which was one of the first modern headsets. The AR industry really started a year ago when Apple and Google released their framework to build AR apps easily. Obviously, AR/VR have been around for maybe two decades, but this is only now, with the existing computing power that we have and the devices that we have that it’s kind of ready for primetime.

Now, we are – if you look at the adoption cycle, we’re definitely starting to go onto the mainstream, staring to cross the chasm, so to speak. There is a lot of really, really interesting projects that are, at the moment, working very well in the B2B sector whether it’s, like I said, maintenance or education. We’re starting to see really good traction on the entertainment side of things. Gaming, of course, is big.

But, as you said, it’s not mainstream yet mostly because the devices, to actually consume this, is still relatively expensive, relatively pricey. And so, I believe that what we need is contents that actually help people to do something that they really need to do. Not just cool things or gimmicks but actually solving real problems. And this is what the industry is working towards.

Josh:                 I have a question for you and this is kind of off topic but it’s one of the things I look at. Every time I see an ad on television about virtual reality or someone using virtual reality, I ask myself, “Who the heck is going to walk around with those dumb headsets?” And, first of all, how do you keep from falling over things? Is the industry going to make it so it’s easier to use, so they’re less ugly?

Samuel:           VR and AR are very different in that respect. VR is, obviously, isolating you from the outside words and, therefore, it’s going to be something that you can only use at home. Everything you do right now, at home, on a screen, you’re going to be able to do it in VR. It’s really about home entertainment, location-based entertainment where it doesn’t require you to move.

AR, on the other hand, will be different. AR will be what you use on the move. Effectively, the new mobile. You’re totally right that the company that cracks consumer AR is going to have to the think of it as a fashion problem. This is why Apple, for example, is very well-placed in this race because they are somehow considered also a fashion company. You know, you like to wear Apple product. You like to show that you have Apple product. This is not the case with a Google product or a Microsoft product, for example. And so, I do believe that one of the reason why Google Glass wasn’t successful is because it really looked weird. And it looked very geeky and not something that people would want to wear. But companies that are working on AR headsets right now, besides the obvious technology challenges, they also need to think to make it go mainstream. “How can we make that look good so that people are actually happy to wear it all the time?”

Josh:                 Yeah, that makes sense to me.

Let’s talk about where your company does which is monetize this stuff. What specifically, if I’m an online entrepreneur and I want to be thinking about the VR/AR space, how would I go about monetizing?

Samuel:           Our idea is that advertising is going to be, again, the backbone of this new media. If you create VR games, contents or anything that you want to do in VR or in AR, you can try to sell this app. But if we learned anything from the mobile market is that only a fraction of the apps are actually getting bought. Most people expect the apps to be free. And, generally, they complain about advertising. But what they hate, even more than advertising, is paying for content. Advertising is kind of a necessary evil and it has this really bad reputation. But this is where we think that we can do a better job.

I used to own a gaming studio developing apps or e-commerce websites for mobile. I was always very frustrated with the options available to me as a publisher to monetize. Back in the day, when you had a mobile app, you had very little options but putting a banner at the bottom which would destroy the experience and your users would get annoyed. I always thought that I would try to find better ways to do it.

I think that for the first time, virtual reality and augmented reality are giving us the opportunity to do a much better job. Because they are an immersive media, there is a lot more real estate available around you for the advertisers to be a part of. You don’t need to put a boring banner at the bottom. The real estate of the available field of view is much, much bigger and, therefore, we can try to really integrate brands within the environment. And so, that’s really what we are providing. We are providing the connection to all the brands. And you can imagine, in programmatic way, brands who then are able to buy these available spaces in your app.

To come back to your question, if you are an entrepreneur and you are building VR/AR content to promote your offline business or whatever it may be, you can actually integrate brands as part of it, almost like product placements, to then monetize this experience. Every time a user gets in that VR experienced or AR experience and sees the brands that are integrated with your experience, you generate revenue. That’s a classic advertising model but adapted to a 3D world where, for the very first time, brands do not interrupt but are just part of the conversation.

Josh:                 If I’m going back to being my plumbing company again and I want to sell this new fancy water softener I have, I could essentially shoot a VR video and then sell advertising to that manufacturer to be in my VR video?

Samuel:           That’s right. So that could be an option. Most of the developers that are most interested into our solution, of course, are building consumer content which wouldn’t be necessary to promote an existing brand because it could be difficult to include other brands. But if you imagine that you’re an entrepreneur. You’ve built, in the past, e-commerce websites or games on a laptop. And now, you want to do the same thing in VR because you realize that there is this big audience that is virtually untapped. How do you create a business model around it, the way that your ecommerce website was monetized, of course, selling products, but also maybe through advertising? This is what we’re now able to do also in the virtual world.

Josh:                 I’m sitting here saying, “Okay, it’s easy for me to shoot a video today. I can go and get my phone or a camera. I sit down in front of my phone. I shoot it. It takes me an hour or two to do the editing and it’s up and ready to go. How long does it take to produce a VR or an AR piece of content?

Samuel:           There is different things that we need to distinguish here. The first thing is, the way that we talk about VR is really computer-generated VR. It’s more like a game content that is created by computer that you can then navigate in all the dimensions. That’s very different from a 360-video. That is simply a video that is flat but effectively wrapped around a 360-degree angle in which case you don’t have any depth. You can literally just turn around and see what the difference is.

The second type, the 360-video, is something that can be done very quickly. You can literally move your phone around, capture a panorama, and compile that into a 360 picture or do the same with a video but that’s really not where the industry is going. This is basically a low-hanging fruit that is very similar to videos. It’s effectively a new type of videos.

On the other hand, if you want to create 3D content, that becomes very cost intense. Of course, it’s like building a game or building a 3D animation. That becomes a very different process. It’s not something you can capture but it’s something that, instead, you would have to develop from scratch.

Josh:                 That makes sense.

It appears to me that AR is what’s going to be practical for the vast majority of businesses, to start off with, unless you’re in the content production business and you have the ability and the equipment to actually build a virtual reality world.

Samuel:           Yeah, for sure, VR is going to be more entertainment. It is going to be about taking your customers, your users, to a separate world whether you want to sell them something or just you want to entertain them. That’s what it’s going to be.

AR, on the other hand, is going to be more practical. It’s going to be about augmenting – thus, the name AR, augmenting your everyday life. It’s not that you will be constantly bombarded with content on top of your reality. But I really imagine a world, in 10 years, where everyone wears glasses who are, most of the time, not pushing any content. But if there is something-relevant, something that the glasses understand in your environment – for example, you are looking for directions or you’re lost in a city that you don’t know, or you’re looking for a recommendation, then you could have a simple notification that doesn’t really disturb you or disrupt you. You don’t need to take your phone out. You don’t waste any time. It’s right there in front of your eyes and it just tells you, “Just follow this road.” or “Next street is one of your favorite restaurant,” or these kinds of things. That’s really how we see AR, as this augmentation of your real-life experience that is powered by, of course, artificial intelligence, and try to overlay these tips, recommendations really in line with your environment.

Josh:                 I’m assuming that you’re funded, in some level by venture money?

Samuel:           Yes.

Josh:                 Just out of curiosity, what is your timeframe before you expect you’ll be cashflow positive?

Samuel:           We don’t generally show this kind of things. We still are a few years away from that. At the moment, what’s really important for us and for our investors is to basically increase our market share and become a market leader.

We are very early on the market – the curve, as in really starting to grow. Therefore, what really matters is you’re already land grabbing as many brands, as many developers, to walk with them to create a successful economy. We have patient investors that know that it’s not going to be something that is going to be massive overnight because it requires a big change for people, a big behavioral change, almost, to accept all these devices. But they understand that this is a massive economy. This is an inevitable transition.

Like I mentioned before, we went from text, to pictures, to videos. There has to be a next step. This next step is immersive technologies. And there has to be a way to monetize it. Knowing these things are inevitable. It’s really just a matter of time.

And we see very, very positive sign in the industry of growth every year, people spending more and more time consuming these kind of things, the technology growing quicker, the headset price divided by two every year. It’s just very positive market. Our objective at the moment is to make sure that we are in the best possible position to be a market leader when it actually becomes a mainstream market.

Josh:                 One more question, and then we’re going to be out of time unfortunately because we could go for quite a while on this. I find it very interesting. Would your major competitors today — or you can think your major competitors is YouTube and Facebook?

Samuel:           We have small, equivalent sizes like us, startup competitors right now. But, of course, the one that we are paying the most attention to us, like you said, Facebook and Google. They invested a lot of money into VR and AR – hardware and software, and they are media companies. So, eventually, they will definitely try to monetize it somehow with a kind of advertising. At the moment, the way that we work is more partnering with these kind of companies by giving them access to our specific inventory rather than trying to compete for the advertisers. But we could be a very interesting target for them, eventually, when they want to move in the space, so there’s a lot of options there.

Josh:                 Yeah. that’s really interning. I’ve been finding that a lot of what’s going on at Silicon Valley is talent acquisition when they acquire a company, so that may be something for you too.

Samuel, unfortunately, we are out of time. If somebody wants to find out more about you, your company and what you guys do, how would they go about doing that?

Samuel:           The best way would be to go on our website admix.in, A-D-M-I-X.in where you can find everything about the company. Finding more about myself, you’ll find a link, from the website or you can go directly to SamHuber.com. And, yeah, that’s about it.

Connect with me on Facebook or LinkedIn. We’re very active. We’re really trying to promote the whole VR and AR community. Just more than promoting what we’re doing, it’s all about empowering developers to create better content.

Josh:                 Cool.

I also have an offer for you. I published my first book last January. It’s called Sustainable: A Fable About Creating a Personally and Economically Sustainable Business. You can get the book at Amazon. It’s Kindle version and there’s a print version. But if you happen to go to my website which is www.sustainablethebook.com. You can buy the book there, same price as on Amazon but, with it, you get a free 20-minute strategy session with me and you get a 37-page ebook I wrote which is how to implement the stuff we talk about in the book.

Thanks a lot for spending some time with us today. This is Josh Patrick. We’ve been with Samuel Huber. You’re at the Sustainable Business. I hope to see you back here really soon.

Narrator:         You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around a hundred years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802-846-1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an email at jpatrick@askjoshpatrick.com.

Thanks for listening. We hope to see you at The Sustainable Business in the near future.

 

Topics: sustainable business podcast, Sustainable Business, future trends, augmented reality, virtual reality, advertising, trends, small business

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