The Workforce Collapse (And How VR Fixes It) | Jeremy Kenisky x Jason Jerald

My original background is, you know, I went to school for computer graphics, so I wanted to go work in movies and film and things like that. So that's how you and I originally met, doing work with SIGGRAPH and computer graphics conferences, things like that. Pretty quickly though, you know, I decided early on, I've always kind of been an entrepreneur and a figure it out yourself kind of guy and didn't really want to take the path of being what I perceived to be at the time of a small cog in the wheel at a big film studio or something like that. So quickly my—

Yeah.

career started diverting towards other things and pretty quickly got into, got interested in virtual and augmented reality. So since then have kind of been a part of a variety of companies and startups that have done AR stuff, VR stuff, other types of immersive media and things like that. You know, I think one of the first companies you and I worked together on was a company where we were building essentially a touchscreen soda machine for Pepsi. And so it was like a big carousel machine where you could, had all these 3D graphics on it. You could go up to it and interact with it and pour your soda and things like that.

So we started working on interactive things like And then we started getting into, I mean, I gotta say there, one of the coolest things in my life is when I went into a 7-Eleven traveling to wherever and I walked in and there was that application that you guys built that we worked on together. That was, uh, you know, in the real world, in the wild, seeing that, that was a surprise. That was, uh, very gratifying.

Yeah. Yeah. And, uh, so, I mean, I could give you the 2-hour version, but, uh, the short version is, you know, we started, we started doing that. We started then doing a lot of interactives and, and VR stuff in like the museum space. So as you know, we did a lot of, We had a company called ZooAR that did a lot of augmented reality at zoos and learning institutions. So started building augmented reality apps to show what animals would do if they were out in the wild and try to teach kids more things about animals. One of my early observations when I went to a zoo, you know, early 20s, is that the animals don't do anything. They just kind of sleep all day. And so how can a kid really learn about what they do and how they might act in the wild or look in the wild? So we built an app for that and we deployed that to a bunch of zoos all over the world. Then started kind of moving into a variety of other things around AR and VR. And then really that kind of moved us into at some point working with a company called Merge. And so then we started doing a lot of augmented reality, handheld augmented reality stuff. Your viewers probably are familiar at some level maybe with the Merge Cube. So it was like a soft foam squishy cube that when you, when a camera saw it, it had trackers all around it, you could kind of turn it into holograms and things like that.

So Yeah, maybe explain a little bit for those not familiar with the Merge Cube. It was essentially, yeah, holding something physical in your hand. So you felt something, you felt like you were actually holding this hologram that sort of had this tactile sense to it. And it was significant. You guys didn't ship, you know, 20 units. How many, uh, what were the numbers you shipped on those things?

I don't know if I remember the numbers anymore, but I mean, it was in the, uh, you know, north of $20 million worth of product. I mean, it was a lot of between that and I think app downloads, I think we were somewhere I wanna say we were somewhere around 8 or 9 million, something like that at, at one point, like in that first year when we, when we launched, it was originally launched as a consumer product. So it was sold through Walmart, Best Buy, Target, all the major retailers. And it was a Christmas, it was a, it was a holiday product. And so—

I wanna say, when you say 8 or 9 million downloads, why that's so significant is that actually required a physical product that wasn't just, you know, an app. And so, Yeah, there was a lot of those Merge Cubes out in the world.

Yeah. And so if you, if you remember, you actually, again, we worked on this together too, Jason, you know, we hired you and we hired a few other companies to build out, we built an SDK for the, for the Cube and we invited developers. We spun up a development fund. Um, I think we had, we spent around $1 million that first year paying companies to build small, cool little apps for the Merge Cube. And so that was a part of that $9 million was a part of it. So some of it were the downloads you built for, for Dino Digger with Jack Horner and that stuff. Uh, and then some were internal apps, but I think we hired probably Well, I don't know the number of studios, but we released like 35 apps, I think, in the first year, which was a pretty ambitious undertaking to launch that many apps in a single year, you know?

And tell us how that evolved of you moving on and taking on different projects.

Yeah, so after we sold through Holiday at Merge, you know, we kind of quickly found there was a variety of things. I don't wanna get too in the weeds on it, but there was a variety of things that we encountered in the marketplace, right? And so we essentially decided to start, well, I'll tell you about 'em. I mean, that's what the purpose of this podcast is, right? One of the things we did next was we had a, a blaster, uh, product was our next product. And so it was, it was awesome. Franklin Lyons, the founder of Merge CEO, uh, it was, it was his brainchild. Most of the, pretty much everything we did there was, was ultimately I would give him credit as his brainchild. But it was a, it was a plastic Nerf gun, basically Nerf gun looking thing. And you could mount your phone into it. And it was using ARKit at the time with what is now ARKit and things like that. And using spatial, using SLAM.

Mm-hmm.

And you could run around your house and we would build a virtual world and you could kind of run around your house and you could shoot bad guys and stuff like that. But on the phone, it was all VR. So it wasn't mixed reality, but it was all VR. So you were kind of using your physical space to tour a virtual world and things like that. But then you could shoot people and do all this stuff. That was the same year that the Las Vegas shooting happened. And all of the retailers basically said, we don't, we want nothing to do with guns. We want nothing to do with weapons. We want, you know, we're not doing anything. And then, and ironically, that was also the year that where we most people, where we announced our new consumer products was at CES, which is also in Vegas. So we were in Vegas showing off a gun, you know, right after this tragedy. And so that was— so a lot of the retailers were kind of like, pump the brakes on that. We also saw at the same time, so that was kind of a negative thing, but the positive was we saw with the cube that teachers and schools were buying the cube at Walmart like crazy. So they were going in and buying like truckloads, truckloads, if you will, and filling their cars with these Merge Cubes and taking them back to their school. So that's kind of when we thought like, well, hmm, you know, maybe we should focus, maybe education is somewhere we should focus. And I think anybody, I was thinking about this yesterday too, is like anybody that's been in XR, whether you want to or not, you probably don't want to, but you are inevitably a little bit in the education business, right? Because XR just educates people so well. Anyone who's been in XR long enough has probably been in some form of education business, right? That's a company at some point. So we started getting into education and we started building a bunch of different curriculum. We built an entire K-12 NGSS-aligned science curriculum. So the idea was schools could buy lab packs of the Merge Cube and then they could subscribe to our science platform and then they could learn all the things depending on their grade level that aligned with the science standards, the federal science standards.

To back up there a little bit for, you know, I get like education training, all that's such a great fit for XR, but maybe those listeners not familiar of the why, why do you see that as such a great fit for It's just because it's experiential, right?

And that's how memory is ultimately formed, right? There's a lot of research on this by people like you and a lot of people smarter than me, but you know, if you look at how memory and how knowledge is formed and retained in people, it's much better through experience and through, through engaging multiple senses at once, right? Instead of just reading something or instead of just watching something, you're sort of experiencing it and you're, you know, you're, you're getting body motion and all these other types of senses that you're tapping into, understanding space and spatial awareness, things like that. With the cube, you're also physically moving something, which was a cool interaction method. You're not just tapping a screen doing just that. So for all of those reasons, whether it's AR, VR, whatever, right, it just builds memory better. And so as again, I'm sure your viewers all know, but it just builds memory so much better and so much faster. And so, I mean, again, that's why we're seeing it. We'll talk, I'm sure, in a little bit about what we're doing now in the workforce space, but same thing there, right? It just massively accelerates. someone's ability to learn some things.

What about after Merge when you were out traveling the world working with different organizations?

Yeah. So I was just going to, yeah, so it was kind of just talking about Merge. And so we moved kind of directly towards science. I kind of got, the reason I left Merge, I just kind of got burnt out. I was doing a ton of, I was literally reading the entire stack of NGSS science curriculum and trying to come up with creative ways to build AR apps that hit those topics that would then properly track with the standards, right? So that they could actually meet the standards. And we did that for a year and I just got super burnt out. And so left Merge. And then at the same time, someone had shown me the Quest. The Quest had just come out. And up until then, we had built some goofy things with like, this was even before the Vive and all that kind of stuff was using like packaged outside-in tracking system, but we had built like back in, you know, I don't know, 2013 or '14, right? We bought some Kinects, we bought some depth cameras, we would hang 'em in the room and we could do sort of positional tracking and tracking a person in a, in a DK1 as they're walking around the room and stuff like that. So we were building that kind of stuff. And when I saw the Quest, I was like, this is the— I mean, it's just this one thing with 2 controllers and I can walk around and perfectly track my space. Like, this is gonna be—

Yeah.

A bit, you know, I kind of thought that would be a game changer. So this is going to be, this is really interesting. So I got interested in that and I was asked to do some consulting for a defense company that was doing a lot of traditional CVT stuff. So I went and I worked with them for a while and they basically wanted to start a VR training department at the defense company. So I said, you know, they said, can you come build the, build the department for us? I said, yeah, sure. So I kind of went and did that for a while and then short So I say I did that for a while. I went and I did that, committed to it. I hired a bunch of guys and within 8 to 10 weeks, that company lost a major, I think Army contract that was worth, you know, 8-figure dollar amount. And they decided to fold it up. So they were like, we're going to shut this thing down. So I was like, I was like, I just told a bunch of people to quit their jobs and come over here. And now I got, now I got to tell them, sorry, go ask for your job back, you know? And so. Anyway, worked it out with the former CEO. We're still good friends to this day. And we basically just spun out and I said, look, I'm just going to hire everyone at a new company. We're going to go after some of the stuff that was, that was potential job opportunities, potential contract opportunities out there. So we did that. So we started a new company called XR Global. We were doing work in Africa. So a lot of government type work, a lot of work with USAID. I used to joke that I was working for the CIA, secretly working for the CIA, which now with all the news that's been coming out in the last few years, may or may not have been true. Sounds like. But so we were doing a lot of work in like Rwanda, in the Middle East, in Central America and El Salvador and things like that on different types of VR training and things like that.

Um, and I know you sort of had some realizations we talked about after, or maybe during that work that you realized kind of was a paradigm shift for you of what you really wanted to work towards and where the true value was and such. Could you expand upon that?

Yeah. What, what are you referring to? Which part that we were talking about, Jason? Just so I can be specific.

Yeah. Working, joking, you know, working with the CIA. That with USAID and such of, you know, was that adding true value versus where you saw the value?

Yeah, yeah, sure.

Yeah.

So after we spun out, we started doing that. And again, so we're doing work in, again, Rwanda. We're doing agricultural food security type training and things like that so that people have, you know, they can tell when their crops are going bad or, you know, do preventative. I'm not an agriculture expert anymore, but I never was. You know, they could do preventative things to their crops so that the crops wouldn't go bad if they started to look like they were going bad. So we would train them on these kinds of things. And these are like rural villages in the middle of Africa, middle of Rwanda and things like that. But yeah, it just, it started getting to a point where it seemed like part of what we were doing was, let me make sure I, make sure I say what I should say. Make sure I don't say anything to get me in trouble here, but just feels like some of the stuff we were doing was not really of true value for the end user or even for the people paying for it. Right. It was kind of like, Kind of these goofy projects that kind of were funded by some, some method that just didn't seem super valuable to me and didn't seem super scalable.

And so, and then politics involved with it.

Yeah. And then a lot of politics involved. And then a lot of also, I would argue part of the reason I used to joke about the CIA thing was because there was also like, again, without too much inside ball here, it's like there were strange requests.

Right.

And so there started being strange requests of things. Hey, can, can we fly this person to this country and do this thing? And I would be like, nah, You know, and can you use your credit card? Like, well, who is this person? You know, so stuff like that. So I, at some point pretty soon within, within probably 3 to 4 months of starting the new venture, decided, you know what, we don't want to do this anymore. Like we're going to pull out of all of these contracts. We're going to refund all their money. We're going to go do something completely different. We're still going to do VR. We're still going to do, you know, standalone Quest-based training and things like that, but we're going to find new clientele. Um, and so that's what we did. So we started getting into, so I'm, I'm based in Texas and ironically, our first client has an office here in the city I live in, but our customer for whatever reason was, was based in LA. Um, but in Texas, as a lot of people probably know, there's a lot of oil and gas work here and a lot of, um, oil fields, gas fields, things like that in the state. And so there's a lot of oil companies around us. And so we started seeing some opportunity there to build a variety of, uh, training material for the oil and gas space. Um, so we started doing that. We started in downstream operations for a company called Marathon Petroleum. I'm sure most people have heard of them. And teaching the first, one of the first big projects we did was we were teaching drivers how to refill a tanker truck without blowing it up. So there's a variety of things you can do when you're refilling. When you see those big tanker trucks driving down the road, they're usually, they're often either delivering gas to a gas station or they're heading back to a terminal to refill To then go deliver to a gas station, right? And that's how all the gas you put in your car, unless you drive an electric car, but historically before electric cars, that's how people got gas in their gas tanks, right? Is these tanker trucks would go deliver them that last mile from the terminal to the stations. And so when you fill those trucks up, there's a lot of things you can do to hurt yourself and also to cost the company a lot of money. So one of the easy things you can do that won't hurt you, but will hurt the company is you can misfuel the trucks. One of the things I didn't realize, when you go to Shell, when you go to wherever else, you know, you're getting, they'll advertise the additives and all the other things they have in their gas that makes it special. At some level, that is true. There, there are different additives and different recipes for different customers. A group, a terminal group will have a terminal of gasoline and all these different chemicals, and someone like an end customer at a station will request a specific order with a specific formula. So the driver will pull into the terminal, they will plug in the right information, hook up to the terminal, and then they will get all the gas put into their truck at that moment with that mixture. So it's not like it's a big tank sitting there with that, you know, that station's tank is there, the other station's tank is already premixed. They get mixed in real time when the truck pulls into the terminal. So what that means is that if the mix isn't correct, they can actually spoil a whole truckload of stuff, right? So the whole truck can have the wrong mix and then they can't deliver it to the end customers. So that causes big costs, right? Because then that fuel has to get rescrubbed and re— it gets sent out to another line where it all gets reseparated and remixed and all that kind of stuff. So that's a major cost. But the other one is that—

What is the way they learn how to do this or they're trained for it in the traditional way without, you know, wasting an entire tank of, you know, a bad mix?

Yeah, I don't know the entire workflow, but I do know, you know, it's pretty traditional what you would expect, right? You have a CDL, so you go through a variety of truck driving training. But once you have that, assuming you're qualified with that, you start in a classroom. So you go and you sit in a classroom with 30 other operators and they put a big binder in front of you and you flip through the pages and they maybe have the power, maybe have a PowerPoint and they're pointing at things and showing you things and explaining things to you. And then at some point you get to go out into the terminal and someone will pull in a truck and then they'll show how it works and they'll, they'll do it. But then shortly after, you know, so it's, so it goes from classroom to on-the-job training, right? Is kind of how it works. And then at some point you're probably, I believe you, you essentially shadow another operator. And then at some point you are the operator and you drive the truck. And so we started building sort of that gap between the classroom and on-the-job training, right? How can we, how can we narrow that gap? Because as you know, reading a, looking at a bunch of PDFs on paper and then going and doing it, completely different thing.

So that's interesting cuz yeah, we've, and you probably have as well of different industries. That seems like kind of very typical that you're, you know, learning it cognitively and then you have the on-the-job training and sometimes it can take 6 months to get someone up to speed. But it's not just the expenses of 6 months getting that guy up to speed. You gotta, the, the expert's gotta spend time with that person, which, you know, he could be out, you know, being more productive doing his own thing if he wasn't Working with the new guys.

Yeah. And I mean, I, I know you experienced this a lot too, Jason, but as you know, it's, it's also, think about a truck terminal, right? There's trucks going through these terminals 24 hours a day, filling up gasoline and going to their next place. So, so in that example, it's relatively easy to take some trainees out at any time and say, hey, the next 10 trucks that pull through, we're gonna show you how to refill 'em, whatever, whatever. The challenge is you're, you're now limited by each operator that pulls through and him showing that group how he does it might be different, right? So each one might be different. Each operator's gonna do it slightly differently. The trainer who's onsite bringing that group might tell them different things. So there's no standardization either. So, and that's a huge problem, right? Is when you get into process stuff like this, um, and this was one of Marathon's top priorities was we want— a couple of the guys running the department were ex-military. And, and so very structured, very disciplined guys. And they're like, you know, everybody does different. We want 'em to all do it the Marathon way and the same way. And so that was another thing that. Again, as you know, building scenario-based training in VR can really do, because you can really make sure that everybody learns it the exact same way with the exact same process.

Absolutely. And I remember seeing some of, uh, yeah, some of those processes you had with your, your university. I know you'd worked with different universities where they had those sort of online campuses that you could go in VR. Could you, could you talk about that a little bit?

Yeah. So after we started doing, I guess I'll talk to you about the merger into Exalters.

So yeah, evolved into that. Yeah.

So we started doing a lot of work with Marathon. We started building terminals and vapor recovery units, all kinds of different oil and gas nerdy stuff that, sorry, I probably ranted about that for too long. But then we started getting some opportunities to do some, some defense stuff. So we did some training on some Ospreys, the vertical helicopter, the tiltrotor planes that take off, look like helicopters and then turn into planes. So we started doing some maintenance VR training on that. Through that, we were working with a partner named Exalter. Oh, well, a partner named Steelhouse Productions, which is also, again, just small world, is a company that I used to hire at Merge to build some of our Merge Cube apps back in the day. So they had heard that I left. They got a contract with the, with the, uh, with the Air Force to do, it was an SBIR, uh, through AFWERX to do some, some Osprey training. And so they couldn't fulfill it. So they said, hey, can you guys do it? And you guys sub for us on that. So we started working with them on that. And then we decided to go to market together on a, uh, we, we had a big opportunity with OSU, with Oklahoma State University and And to build a big variety of training stuff with them. So we pitched it together. They ended up getting the deal and we said, you know, we're, here's what we're working on. They said, here's what we're working on. We're all kind of working on similar things. And we had kind of a good balance of personnel that were different enough. So we decided to merge the 2 companies. So XR Global and Steelhouse merged and became Exalter. And so that was 2021. And so that's what I'm currently doing. And that's, that's what we're doing now. So through that, we built with OSU, uh, we started building essentially, first we built a bunch of different training for a bunch of their technical trade programs. Uh, think automotive, uh, engine maintenance, uh, engine teardowns, compression skids, mid, a bunch of midstream gas stuff. Uh, and then also culinary, uh, cooking, front of house, this kind of stuff for, for the service industry. And then some, a little bit of electrical and instrumentation work. So we were doing, uh, electrical circuits and, uh, PLC instrumentation type stuff. So we built a bunch of these different training modules for those different programs. And then after the first year and the first year of funding, I was talking to the, at the time, the CEO, and he, he really, he had a really great grand vision, which you don't always see with all, especially in oil and gas. And, and to be honest, even in academia of sort of the vision of where VR was going to take people and how students would eventually interact with, with VR and how they would learn. So he, he started kind of throwing out this idea. This was when the metaverse word was really big. And he started throwing around the idea of a metaverse for OSU and all this stuff. And so I put together and pitched this concept of the metaversity, right? Which again, that word was kind of being used by a few different people. I'm not claiming to have invented the word at all, but we called it the OSUIT, the OSU metaversity, right? And so we basically built a virtual campus for them where all their students, all fully synced with their learning management system, with Canvas, and all their students could log in, see each other, run around. They had a big campus courtyard that we called the Quad. And then they had all these different rooms where they could launch, they could go to the different schools. So they have the automotive school and the gas compression school, whatever, and then they could launch the different programs that they had. And then we built a variety of, we called them collaboration centers. So you could get into creative rooms and spawn 3D objects and build stuff together, kind of Minecrafty sort of. We had conference rooms, we had presentation rooms that had different abilities to share your screen and let people interact with a digital screen together, or have virtual conferences and things like that. So we kind of built this platform, this metaversity platform that allowed for education to plug into it using sort of generic classroom abilities, but then also real specific training material and things like that. And so, and then all of that was hooked into their single sign-on into their learning management and stuff like that. So we kind of built this really cool college metaverse platform for them.

Yeah, and if I remember correctly, it was essentially going through processes, Right, of your standard operating procedures of putting together, you know, an engine or repairing an engine, whatever it might be. And it was sort of, okay, here's what you need to do. Now go do it. Or maybe, well, this is how you do it. Now you try it sort of thing. I'm curious, which seems to be, I mean, essentially learning by doing, it seems like exactly what you need to do. I'm curious if you see that still being the case as sort of the primary value. Are you seeing new trends of how things are moving, of sort of training in new ways? Versus sort of replicating, you know, how you would put something together in the real world?

Yeah, I mean, I think one of the ways I would answer that is to say, you know, we saw a variety of use cases across different customers, right? So, you know, going back to Marathon, we built, we eventually later built, I mentioned earlier, a vapor recovery unit. It's this large, it's probably the size of a basketball court thing with a bunch of pipes and separators and absorbers and all these kinds of things. And it's, so it's a large system that converts vapor From the, from the truck lines back to usable, sellable gasoline. And we built 20 scenarios for that system that allowed people to understand, hey, if this alarm goes off, what do you do? If this alarm goes off, what do you do? If this, if these different things happen, how do you, how do you change the filter? How do you do? We built all these scenarios for them. Then we also built as part of, before we built those scenarios, we basically just built a sandbox where the whole system basically worked. So you could turn on all the X-ray views. You could see the flow going through the system. You could go turn any of the valves and the flow would respond appropriately. We built that whole system and then we built the scenarios on top. We shipped the scenarios to them and they hardly used them. They just used, they just wanted to use the sandbox mode. And so they preferred putting all the kids, I say kids, they weren't kids, they were men, well, men and women, but probably mostly men. They put these operators and engineers that would work on this VRU, they would put them all in the classroom, in the virtual classroom and have them all call in. And the instructor would basically just do what he would do in the field, but do it virtually. Right. And, and, and quickly get a bunch of people up to speed. And so he, they cared more about like the sandbox features than they did the procedural training stuff, because for whatever reason, they, they wanted to do that later, or they wanted to use it differently or something. But, you know, I think there's, depending on the people, there's different use cases across the hardcore procedural stuff versus the sandbox stuff and all that.

So that's interesting. So we found something similar. for hazardous material training that they just, they wanted the instructor in there so you could kind of ask questions as they came up, right? And then you could try different things. So it was more free-flowing, sort of a sandbox situation. And I was thinking that was kind of specific to that use case, but that's interesting. You found something similar in a very different use case.

Yeah. Yeah. I think there's, I think there's a lot of use cases as well. What's that?

Have you seen that sort of, uh, desire to kind of have this freeform training area? to be able to freely do things and discuss and such versus the instructional stuff. Has that been common across different use cases or was that specific to that use case?

I think it's reasonably common. I think, I think I'm seeing it a lot more in different ways, right? It's not always pure sandbox, but it's like, so we're, one of the things we're working on at Exalter right now is we're building, we're building entire sites. So we've got an entire upstream site that mimics a site up in the Marcellus region of Pennsylvania where all the natural gas gets pulled outta the ground. And it's everything from the natural gas coming outta the ground, excuse me, coming out of the ground, going through a gas processor, going through conditioning skid, going through a compressor, goes through some custody exchange piping before it gets exchanged to someone else. And then it goes into the pipelines, everything from the gas coming out of the ground to being in the pipeline and ready to be sold or transported somewhere else. Right. And so we've built all of these major components on this site and they all have procedural training built into them, which are being used. But then they started asking for other types of like sort of sandbox features around like identification ability where you can just walk up to any object, point at it, click it. And I say point and click, but you know what I mean? Pull the trigger and it'll tell you what that object is. It'll highlight it. It'll explain how it works and what system it's a part of, those kinds of things. So yeah, I think we're seeing a lot of, uh, and, and we're building more and more features into that lab. We're calling them labs at the moment, where, and we're seeing more people request features in those lab settings, um, so that they can do more things. So yeah, I think it's natural. Here's why. Here's maybe why, Jason. Whenever you have a procedural-based training, it's, it's almost like a, it's not a burden, but it's almost like a task that you're sort of forced to go do. And you know, you have to go do that thing. But when you can just walk around and mess with things, there's some level of interest and curiosity that naturally just happens. That's more engaging, I think, than Knowing you're on a, on rails and on a path, like, go click this thing. Now go close that valve. Now go do that. You're just kind of going through the motions a little bit. So I think that's what's probably appealing about it.

Yeah. And having that, that true, that choice and that sort of free will versus nothing else works except the exact next procedure and, you know, branching and different choices or, you know, in your case, it sounds like just total play, but applied play because you're actually, you know, using it for your Workforce training versus, uh, you know, only fun, like a game.

Yeah, we never did it, but we actually had a customer. I don't think they'd mind me saying it was them, but I won't just in case, but that, that asked for us to add a paintball feature to some of the training because they thought it would tru— they really thought it would be, and I, I agree with them that it would be, we never did, but they thought it would really be valuable because it would get people into the space and kind of be engaged and goofing around. Uh, and it's a safe place to goof around, right? It's not like you're really out on a site shooting paintballs at each other, but it, it would sort of up that level of interest and engagement.

And we added, we had a request to add a beer to one of our demos in a very serious, like life and death situation. And so we didn't have it, you know, in the actual scenarios, but in the lobby when you started, we just replaced, you know, the device, the, you know, equipment they were using with a beer can because it was at sort of a social event that we were showing, you know, in the evening of one of the conferences. People just loved it. But, you know, you also have to be very careful that, hey, this is a serious job sort of thing, so you have to use it appropriately. But yeah, it, it was like the hit of the show because of that.

Yeah. It's like anytime you can use physics, right? People just like to pick up and throw things in VR.

Absolutely. And that's, yeah, that's something you gotta be careful of because, you know, if you get in there and you just start throwing things around, so again, it's gotta be sort of in a smart, controlled way, right? Like the lobby makes sense, but you wouldn't want to, You know, be practicing your skills on the job and then, you know, pretend you're drinking beer cuz people just not take it seriously and goof off.

Yeah. Yeah.

I'm curious what your thoughts are. I, cuz there's certainly value of having the instructor there in with the person, but then again, a lot of times the bottleneck is the instructor because, you know, you might have one instructor that needs to, you know, that his time's limited to work with a lot of students. And so how do you see AI playing? Playing a role in all of this? Do you see that sort of replacing the instructor? Do you see the AI more of a tool to enhance the instructor's capability to better communicate or teach? Or what are your thoughts on the future of AI and VR integration as far as workforce training goes?

Yeah, I mean, yeah, I think obviously it's gonna be a huge component, right? It seems entirely plausible that you could have an AI model that completely understands how a component works or a Or a system or a group of systems or group of components and be able to interact with it. Again, I'm not putting a timeline on this, so I'm, and I'm not going to predict. I don't know how long, how far out that is, but it seems entirely plausible that you would have an AI avatar represented as some sort of avatar that you could talk to and you could interact with and that could show you how to do certain things and could show you how to take something apart, reassemble something, what the processes are and things like that. I mean, that seems entirely— possible and not only possible, but again, probably in the near future, right? That, that's going to happen. I, we've already started uploading various technical documentation and things to even just basic large language model stuff and gotten some real interesting results out of it that are pretty convincing, right? And so now there's just a few more layers of making that interactable in VR. I mean, Unity's already incorporating a lot of tools. There's third-party plugins you can use. We use Unity, but I mean, there's already a lot of the connectors in place to make all this happen. And so we haven't built a fully autonomous AI agent in any of our training yet, but yeah, I mean, I see that being the inevitable future here shortly for sure.

Yeah. I see one thing happening is right now there's like AI has the knowledge, but not necessarily the physical behaviors or the, you know, the virtualized physical behaviors. And so it might be that in order to train, just like Nvidia's doing with, you know, driving cars, they're using these virtual environments for the cars, not necessarily the humans, which is kind of—

Yeah. I mean, that I was talking, we had an executive retreat here a few weeks ago with some new members of our team, and I was talking to one of the guys and I was like, I see that, especially because we are building entire sites. So if you drive through Pennsylvania to one of the gas areas, You go, you arrive at a site, like I said, from the ground to the pipeline, it has everything there, every major component, you know, building that synthetic data that we could, I mean, I, that's again, I don't know how far in the future this is, but, you know, having that site and having a bunch of people going through it virtually in VR, but then even building maybe with, with our own agents, maybe in some way being able to build a lot of synthetic data around what is happening on that site seems like it could be super useful, right? So.

Yeah, it's funny. It's kind of almost backwards of, you know, the humans training the machine instead of the machine and intelligence training the human, right? It can sort of go both ways, whether it's, you know, VR training or real-time training with, or, you know, as on-demand with augmented reality.

Yeah. I mean, we're also looking into some of like the current state of things, like with just not even current, it's been around for a long time, but I know you've built it too, like essentially using the same way you would record an after-action report type of thing, you know, recording ghosted characters and things like that moving through spaces to show procedures and things like that. So, so we're doing a lot of that too, which, which is probably one of the stepping stones to, to the AI being able to articulate those motions and do those things too. Right.

You guys done much work on the augmented reality side, more, you know, real-time operations? Are you focused more exclusively on the training?

Yeah, we at Exalter, we are not doing a lot in AR right now just because we haven't Well, there's probably a variety of reasons, but one of my personal reasons that I haven't been beating the drum super hard is I just, I haven't found the perfect use case for, or not even the perfect, but good enough use cases financially that makes sense for us that are not already being done by, you know, some sort of video streaming markup service or something like that that some people are using. So I just haven't figured out the use case exactly. So we're not doing a lot of AR. We've done a couple things where we've taken some of the systems and components And deployed 'em to an AR app for a customer, customers before, but nothing crazy.

Yeah. Yeah. And AR is certainly harder to do, right? And, um, yeah, to make it consistent and, you know, a lot of things that can go wrong. And so it needs to be built very well and very carefully and tested extensively, all of that.

Yeah. Yeah.

What other trends do you see happening over the next, uh, starting to see, even if they're, maybe they've already started?

In, uh, just in general VR training stuff?

Yeah.

I don't know. I guess another thing where, you know, a thing we're leveraging a lot, just kind of back to the AI conversation, is we're starting to leverage generative mesh creation and stuff like that, or, or, you know, generating meshes based on basic photos, a single 2D photo type of thing for components, things like that, which, you know, as you know, the reality capture part is pretty expensive and pretty time-consuming. So one of the areas I'm personally interested in is like, how do we perform reality capture faster and better? I know there's a few companies working on this. I haven't really seen anything that's like really amazing that bridges that gap, which we all know exists. Those of us that are intimately building this every day know exists between photogrammetry, point cloud data, whatever, to usable in a game engine at optimized triangle counts or whatever. Right.

Yeah. And there's certainly that, the geometry, but then there's the behavior of everything, right? Of what button does what. You're not going to get that information. Just from a camera. So, you know, building that intelligence and those processes and capabilities into the equipment.

That's probably one of our biggest challenges right now, right? Is how do we get SMEs to teach us the things that we need to learn to build the systems correctly? And often, you know, if you look at a, I don't know, say a 2-month build process for a major system or a major site, the majority of that, more than half of that time, I bet, is us waiting on an SME to give us feedback or to send us a recording of how this system or whatever, right? So, So that's another area we've kind of, again, that's why AI is interesting because can we upload enough manuals, enough information and have it start to get us most of the way there? That's kind of an area I've been looking into a lot is how do we, it's a, it's a, I told someone the other day, it's an arrogant thing to say, but it's a reasonable question to try to ask, which is, can we build this stuff without SMEs? I don't know.

Maybe. We found that actually having the developers Right? Instead of through, you know, the business development people or whatever, getting the requirements, actually sitting down with the developers. And, you know, that can take, be time-consuming. It's not like, you know, they're 40 hours a week sitting down with a person, but, you know, the developer maybe mocks something up and then the developer, I'm sorry, the SME just saying, hey, you know, that's quite right. And, you know, they start brainstorming and it's super interesting because they're almost opposite personalities, right? He's got a sort of a blue-collar working, working with a tech guy. But, um, yeah, that you can actually like see them connect or you take, you know, your engineers to a, a public safety conference or whatever. And actually it's amazing to see these people interact that probably would never otherwise interact in the real world just because they come from just completely different worlds. But we've, we've seen that's where like the real innovation and value comes from because the developer maybe wouldn't come up with that themselves and the SME wouldn't come up with it themselves because they don't know what's possible.

Yeah.

And, you know, the programmer doesn't understand the subject matter good enough, but man, once they start brainstorming, you just come up with these phenomenal, impactful things that you just wouldn't have thought would disrupt things like they can do.

Yeah. Yeah, for sure. I mean, we're, we're trying to largely standardize how we deploy training, right? So, so part of our model, I didn't talk about this at Exalter, but we are, we are hoping to build major components, systems, sites that anyone can use and that are, uh, you know, you don't have to, whoever One of our customers, Coterra, they run this wellhead. It's their hardware, it's their equipment, it's their stuff, it's their operator that operates it, but they're all largely the same, right? And there might be slight proprietary changes to each one or to how the operations need process works on each one, but largely they're the same. So, so really what we're moving into the business of is relicensing the same content to the same people, to different people in that sector over and over again. So from that level, I have tried to put on the hat of, as much as I'm a creative problem solver type person and, you know, intellectually interested in what you just said, you know, we are trying to sort of narrow the scope of how creative these things get. And so there's probably an argument that somebody who's building super bespoke training, it might be slightly more engaging maybe than what I'm building, but it's probably not as scalable, not as producible at scale. Right. And so—

It's a question of scaling versus customized. very specific content, which, um, as always, it kind of, it depends on the use case and what you're trying to accomplish.

Yeah. Um, and not to get too in the weeds, but like we always, I always try to tell the guys to like think through, like one of the lenses to look at something through is like, what am I trying to teach you in this moment? Right. And am, am I really trying to teach you how to use a screwdriver or how to use a drill or how to, you know, whatever the, the thing is, or am I just trying to teach you that, that, that lid needs to come off somehow? Right. Um, so knowing what to teach when and stuff like that is always, I think, part of a strategic approach.

Yeah. What's appropriate? Where are you getting the most value from VR? If you know it's how to twist a screwdriver and put a screw in, you don't need to do that in VR.

It's going to be better to do it in the real world.

Have you guys looked at sort of, have you been doing sort of a hybrid training? I know we've had some discussions of this, mixing the traditional training where appropriate, then the VR where it's appropriate. And, um, you know, using both, it's not just one tool is the answer.

We are not. So we're a little, again, I don't know exactly how you deploy some of the stuff, the hazmat stuff and things you've done, Jason. But we are not involved in the classroom experience or that part of it. We are largely deploying headsets with software and then leaving it to the trainers to determine how to best deploy that. So we're not even super involved when we're doing the university stuff. We're not even super involved with how exactly they deploy that. Some of them are in the classroom with 12 students. They all put on a headset and they jump into a virtual space together. Even though they're physically together. Some of them send their— send them home with the headsets and say, go do this thing on your own time. When you come back, we'll do it in real life. And then some of them are doing both. Well then, sorry, the third one I was gonna mention is we also have a PC client, so you can use VR or PC simultaneously. Doesn't matter. So some of them will even have one student get in VR, the teacher will get on PC, show it on the screen so all the other students can watch on the screen, and they'll do it that way. Right. And so So that's almost good enough sometimes because you can still see, you still see all of the manipulation of objects and moving around things and how pieces come apart and get reassembled. And you still get a lot of that. So it's not exactly the same as being in a headset, but it's pretty close. And then they'll—

We were surprised by that as well, is that the trainer said, that's, you know, that's what they said you gotta have on the big screen so other people could watch. And we were surprised that people got value out of that. just by, you know, discussing, as well as the after-action reviews, you know, up on the big screen that wasn't, you know, that visualization wasn't always in VR.

Yeah. Yeah. So, and then they'll, they'll do that and then they'll go, they'll do that in the classroom right next to the lab where they'll, then they'll go in and take the engine apart physically and stuff.

Oh, real thing.

So we're kind of seeing all of it, but we're not super at the moment, super involved in sort of dictating the class, the entire experience, right?

It's more a tool that you, they get to go use how they, how they see And getting, digging down in more specifics here, you guys are just about, or just recently have, or just about to release a white paper with some findings for workforce training with universities. Is that correct?

We did, we published it already. So, um, I can share the link with you, but we did it in partnership with Coterra and some of the universities that they're working with up in Pennsylvania. So some, you know, it's like your typical VR research white paper where it's like, Before they did it, they knew nothing. Now they did it, they know 100 million times more than anything. So, we did that. We did your standard kind of pre-test, post-test, put them in VR, have them go through procedures. So, like, you know, 9 out of 10 students would improve their score dramatically, you know, from going in knowing a quarter of the information to leaving knowing, you know, 80% of the information type of thing with only spending an hour or so inside the Inside the VR experience. So what we're doing, so that was kind of an early test. I think we put like 75 kids through that or something, and these are all high school kids doing dual credit. So they're in their junior or senior year of high school. They're also getting college credit at a trade, local trade school, local college. And so, yeah, I mean, they're seeing, you know, obviously massive increase in knowledge retention and things like that. But what we're doing now is we're planning a True. We're getting like, we're doing IRB and all that kind of stuff. We're going to do like a full larger research study across New Mexico, Texas, Pennsylvania, and a couple other sites we're doing and stuff. So we're, we're actively working on how we're putting that together right now. Yeah.

And so, yeah, we'll share that white paper and that link that you said you can send. We'll share that in the show notes. I'm curious. So it sounds like there's a lot of data and such in there and a lot more coming with these additional studies. What do you see as like the most important finding in that current white paper? Or maybe another question might be asked, was there anything like surprising to you that kind of, you know, you didn't think about or didn't expect to find?

Man, I wish I had a cool answer. I don't think so. I mean, I guess just doing this long enough and having read so many different white papers like this, ours is not too different than anyone else's. It's just a different subject matter. But the results continue to say the same thing, right? When you can experientially learn something like with VR, you can massively increase the amount of information you understand and retain. And so nothing crazy, man, I wouldn't say, kind of standard thing, double, triple your knowledge by just spending a tiny bit of time actually experiencing something, you know?

Well, maybe that's a good reason to reach out to you because, you know, that may not be odd, maybe obvious to you because you've been doing this for a while, but others that want to sort of study their specific training, right? And how they can justify that training with actually getting results and such. Take, take a look at that. Our listeners, take a look at that white paper and reach out to Jeremy, reach out to, you know, both of us. We always are interested looking at different use cases and working with different organizations to help prove these things out.

Yeah. Yeah, for sure.

Okay. So to close up, what do you see next? Not necessarily what you see as a trend, But what are you specifically like excited about? Where do you see things are going and where the value is, but really sort of what drives you moving forward? I mean, I know you're working with a coworking space in San Antonio, sort of looking at other things and such, but maybe you could talk about what gets you going nowadays. You know, maybe things have changed a little bit over the decades. Yeah.

Yeah. I mean, I definitely have a lot of interest in what we're doing now in especially like, so we are, Exalter is singularly focused right now in energy and even more specifically in oil and gas. When you understand the scope of the workforce problem that the country is facing, it becomes pretty compelling to want to try to help to solve that problem, right? It's going to sound super dramatic to say this, so it'll be great for a podcast clip, but the workforce challenge we're seeing in the energy sector is a national security issue. There are so many people continuing. We've heard it every year for the last 10 years. There's too many people retiring and there's not enough young people, whatever. It's even worse. So yes, it was true then. It's even more true now. Young kids don't want to get these jobs. They think they're dirty. They think that they're— and the truth is they're not completely dirty. Like they're much more technically, technologically empowered now. So that's not even completely true. They all want to be TikTok stars. And to be honest, they all want to do what you and I do. They want to be programmers and they want to be developers and they want to to, you know, make games and all that kind of stuff. So nobody really wants to go do those other jobs anymore. And it literally is like the energy that allows us to have this call right now, that allows your computer to be made, your phone to work, all the things that you do, how you drove to wherever you drove today. All of those things are powered, like it or not, by— I'm sorry, oil and gas. I mean, it really is a massive amount of our energy is generated by this industry. And it's super important that this industry is kept up. I was at— there's a big midstream company in Oklahoma that we work with called Williams, and they're one of the large midstream providers. They basically take custody of gas or oil or whatever when it leaves the site. They are the highway. They control it as it goes to wherever it's going, and then they give it back to somebody at the end. And so that's what a lot of midstream companies— that's a very simplified version of what midstream companies do. But one of the guys told me, he goes, you know, there's a lot controversy in the oil and gas space, like that it's not green and it's evil and all these kinds of things. And he said something to me that was like, I just thought it was super profound. It probably seems obvious, but it's super profound. He was like, if you're a young kid and you want to go change, you want to go make the planet more green and you want to go do all these cool things in the space, you need to go work for the oil and gas companies because they're the ones that are doing all the things that maybe you think are bad or this or that or whatever. But those are the places where you can actually make an improvement and where you can actually make change and you can improve the way this is done. And so I thought that was super profound when he said that to me. And so anyway, I'm super generally excited about—

Yeah, sort of to add to that, these traditional blue-collar sort of jobs like this are ripe for disruption because other industries have already applied the technology and such. And so if you're looking at, you know, to get into a career, you know, to really make a difference, there's just so many things because a lot of those, these technologies have not applied to those industries yet. And so you could have a significant impact where the technology isn't as much, it's still, you know, it's there obviously. Obviously oil and gas uses technology, but not as much as the game industry where, you know, it's all technology. And so that seems like an enormous opportunity to not just have You know, incremental of improve, you know, some software, some in some way, but totally changed the industry.

But yeah, I mean, I mean, back to your question. I mean, as I've gotten older, as perspectives in my life have changed, you know, you have children, you, you know, you start thinking about different things more just in different ways. For me, probably more holistically around like, well, you know, in addition to the oil and gas thing being important, like I was just saying, it's like the workforce challenge in the country is just massive, right? Like how could we better improve the workforce challenge in the country? How could we train people to do more jobs? And be better at those jobs and be better prepared for those jobs. And the reason it's so compelling is there's kids, and I mean kids, 18 years old, I guess technically that's not a kid, but 18, 19-year-olds that are coming out of trade school making 6-figure incomes because they're learning oil and gas welding, whatever the thing is, right? Those people making that kind of money is net, very net good for our country, right? And so like, I just, I love the idea of trying to figure out ways that we can And, and being a part of, not even trying, I'm not even figuring these things out. I'm just a small part of, if we can train people to do these jobs and get these jobs, I mean, it's just, it's a net benefit for everyone, right? It just, it uplifts everything. And so I think that's probably the thing I'm most excited about recently, most interested in. So then quick diversion, you mentioned the coworking space. So somebody set up some pretty epic lighting for me today with these Star Wars lights.

Oh, you mean your coworking space is your amazing podcast studio, right?

Yeah, so we have a podcast studio, so we have a coworking space here in Texas. Um, and so it's got like podcast studio, it's got a cyclorama, 2 cycloramas, uh, some other coworking spaces. So it's really, it's a coworking space, but for creative and technological immersive tech people. So we've got companies that do traditional production shooting, stuff like that. And then we've got our company that does obviously VR immersive stuff. We've got some, some computer graphics people here. Um, we've got everything from permanent monthly rentals to a space like this, which is an hourly rental. So you can come in here, rent for the hour, And book it that way. So we kind of got a variety of things there. It's interesting. It's not like the most interesting thing. It's a bit of a challenge. Just coworking spaces are their own challenge. And we're probably the ones I've seen be most successful are the ones that are very, very well funded. We are completely, you know, we pay, I pay for everything here. So I think you almost need like a nonprofit status and donors to kind of like really elevate the space. But it's cool. We're, we're, we're doing fine.

Yeah, I know. I mean, you've, you've taught at, you taught at schools before. And so, you know, you're known as Professor, uh, Kanisky as well. But my understanding, uh, you mentioned that you're actually teaching sort of crash courses as in part in this coworking space on specifically AI and such.

Yeah. So again, just originally it was a way, as I know you've taught before too, like as a way to learn something, sometimes the best way is to go teach it, right? Or to Like to learn about how to build a curriculum for it. And in building that curriculum, you learn how it works, right? And so, um, with over the last 2 years, like all the AI stuff that's been happening, you know, I'm, I'm trying to stay on top of it and really understand all the different ways normal people, normal people like me can use AI in productive ways. And so, yeah, I built a crash course on a 3-day crash course on AI that we've taught here at nights. So it's like a night class. People can come in 3 days a week and basically do a crash course on everything from, you know, your basic ChatGPT prompting, prompt engineering stuff, all the way to like Cursor, Replit, building your own web apps, deploying infrastructure, everything. So, and everything in between, Midjourney, video generation models, all kinds of stuff. So the hardest part about that is that every week it changes. And so you kind of have to really stay on top of like what the latest things are. It's like, first it's Midjourney's the greatest thing, image gen thing ever. And then all of a sudden, yeah, you can't reuse last year's slides, right? Yeah, exactly. And then a few months ago, Nano Banana came out and then all of a sudden you gotta focus on that. So it's, it's, but it's a great learning experience for me to like really stay on top of like what the latest consumer tools are, you know?

Okay. So, well, normally we end these podcasts like, hey, reach out to Jeremy, right? And we'll get that information from you, including the show notes and such. But if you're in the San Antonio area, Absolutely reach out to Jeremy, cuz you imagine not just listening to this podcast, but actually listening to Jeremy. And I'd even say if you're, you know, not in San Antonio, like consider crazy, right? People move across the country to go to these accelerators. And so if you really wanna work with a veteran in this field that's doing really cool stuff, then consider, you know, talking with Jeremy and seeing if it's a fit. Maybe you want to, you know, spend some time down in San Antonio where you actually have direct access to Jeremy as part of this coworking space.

Yeah. Yeah. Yeah. Thanks. Okay.

And so with that being said, what's the best way to reach out to you?

You can, you know, I guess you should just email me. I'm not super active on social media. I don't really do that. You can add me on LinkedIn. I'll add you, but I don't really go on there much either. Probably email is probably the best way. So jeremy@xalter.com. So probably the best way to get me. Okay.

Excellent. Okay. And I also see your battery's running low on your mic, so I think that—

I was going to say, Can you see that? I was just checking it. It's like I'm at 17%, so I probably got about 12 minutes left here.

Well, I think this is a great place to end. I think there's a lot of value here. As always, I love talking with you and bouncing these different ideas off of each other. So I believe our audience will get some value out of it as well.

Yeah, man. I'm glad you put this podcast together, Jason. I think that doing these is super important and I have a podcast that I do separately. It's This Other Thing.

What is that podcast?

It's more studio film related, whatever, but it's for the coworking space. But what I tell people though is like, the podcast is like, you gotta pound the rock, man. You just do it and do it and do it and do it. And one day it will pay off. That's, you just keep that in your mind and, but you have to do it. So I'm very, I'm glad you're doing it. I'm proud of you for doing it and you have to keep doing it. So.

Yeah. And that's sort of the The reason for doing the podcast is getting really smart people on the podcast like you that, you know, there's these conversations going on. So why not let the world be able to listen into these conversations that are often, you know, behind the scenes, behind closed doors and such? And so getting those concepts of how thought leaders such as yourself actually think, you know, their strategy and what they see, you know, is coming next and those sort of things. And so that's sort of the The motivation for doing these podcasts.

Yeah, yeah, for sure. That's what I was going to say is I don't know if anybody's sort of attacking the angle that you are, and especially with your expertise. So it's pretty cool.

Well, thank you. Okay. Well, thank you, Jeremy. And we will see our listeners on our next podcast.

Yep. Thanks, Jason. See you guys.