Flash Talk: Building for Emerging Computing Platforms (Virtual Reality)

1. Flash Talk:
Building for Emerging Computing Platforms
Sarah Guo

2. There are only five
publicly traded tech
companies created since
2000 that are now worth
more than $10B.
Greylock backed four of
them.
$10 Billion
4 5:

3. At Greylock, we partner with extraordinary
founders building enduring, multi-billion
dollar businesses.

4. New computing waves are rare.
PC Internet Cloud MobileSocial

5. Startups can ride (and shape) these
waves early to become special
companies.
PC Internet Cloud MobileSocial

6. It’s challenging for existing winners to
catch the next wave.
PC Internet Cloud MobileSocial

7. What’s next?
PC Internet Cloud MobileSocial
?

8. Apps on flat 4.7” screens are a (powerful)
imposed constraint, introduced by a
single company.
Now, many companies working outside of
those constraints.

9. We have a sudden diversity of new
computing devices (VR, AR, Robotics,
Connected Cars and IoT).

10. 2D —> 3D.
Flat —> Immersive.
One device —> Many.
Computing everywhere.

11. But, your VR app will not be

12. Smartphone
3.3B
PC (55% Laptop)
1.5B
Some numbers to orient you
WW Installed Base (2016)
Game
Console
270M
PC
Gaming
100M
VR
??

13. It will take time
estimates range from
1-5M HMDs in
‘16, (ymmv)
>2 orders of
magnitude
less vs. smartphones
Biz. models for
content on phones
will not work for VR
(in the short term)
~2B

14. And not all hardware adopted equally
Still not much
of a market Maybe the beginning
of a very big market
LOL

15. Some things that change the curve
Positional tracking + sufficient
fps on mobile
Compelling content w/
distribution not blocked by
1:1 hardware adoption
Capture/post-processing tech
that improves UGC quality

16. Forming your view of adoption
ASP matters. Dependencies matter.
Real ASP of Rift/Vive = $600+$1,000 for PC
Who will push/subsidize? Samsung giving away GearVR.

17. Best experience != largest hardware volume
Volume is 🔑
What experience is “better enough”?
Catch-22

18. We are very early
API’s still fluid
Better hardware coming
UX metaphors unclear
…
Stay flexible
Don’t over-optimize
Be intellectually honest about quality of experience

19. Survive the adoption period (1/4)
Modalities:
Is it better with VR, or only with VR? Mobile web players?
Can your content be experienced without hardware?
How will it be consumed in shared spaces?

20. Survive the adoption period (2/4)
Enterprise:
Can you sell to motivated buyers at lower volumes?
Breaks piggy bank, buys cardboard
to play 360 cat videos.
Recaptures $B of value in property
discounts to remote buyers.

21. Survive the adoption period (3/4)
Partnerships:
Cash-rich platforms seeking
compelling experiences,
want to show off new capabilities,
and big publishers not yet
investing
Brands are willing to pay for
“agency” work — pros and cons,
can be a trap
🤑🤑

22. Survive the adoption period (4/4)
Capital
Pace of team growth/spend should match milestones
Venture funding?
- What’s the case to invest now? Why not in 6-12m?
- What’s the defensible land grab?
- What are your adoption goals? Units —> Users —> $
Leverage “alternative” funding sources (partners, customers) — sometimes
a boon, sometimes a trap

23. TL;DR
This is tricky. Too early, and you
may run out of $. Too late, and you
may miss some opportunities
Not all gloom and doom —
consumer computing adoption
cycles have been compressing
Apple drove smartphone adoption
— several players focused on VR
2016/2017 pivotal year
Years to 40% Adoption
15
10
5
Source: MIT Tech Review

24. Thank you.
www.greylock.com
@GreylockVC
medium.com/@GreylockVC
Follow Greylock:
@saranormous
Sarah Guo
Contact me:
sarah@greylock.com