Virtual Reality: Why Now? | Eric Romo

Let's give a big round of applause to Mr. Eric Romer. Thank you very much. Let me see. Yeah, cool. That works. So I thought I'd talk about a couple of things today. So we are a virtual reality communications company. So I thought one of the things I could touch on is a little bit about the state of the VR industry. I think it's an industry that has a lot of interest, but nobody really knows what's going on in the space yet. We've been operating in this space for 3 years. I started the company in 2013. And so we know a couple of things that are going on, so I thought maybe I'd share that. And then the second thing I thought we'd talk about is a little bit of lessons learned in fundraising, in VR in particular, but also more generically. I know a lot of you are interested in starting companies or have companies you've started. Fundraising is a lot of what you'll do as a founder of a company, and so talking about that process and Some of the things that I've learned in doing it for roughly the last 10 years of my life. So yeah, as you said, I came out to California in 2001 originally. I came out here for grad school at Stanford, did my master's in mechanical engineering, and then was really fortunate to end up at SpaceX kind of by dumb luck. I think nobody else applied for the job, and so I got a job down there. And so I was there before Elon Musk. Elon was all in capital letters, Elon. But it was a cool thing to work with somebody who had been at PayPal and had been an entrepreneur in Silicon Valley and had that kind of startup experience, but in LA at the time. And so we were literally building rocket engines in Southern California and then flying them on Elon's jet to the middle of Texas and then blowing them up and then flying back to LA to try and figure out why they blew up. And I did that for a couple years. probably the best experience a young engineer could possibly have. But I was really interested in doing something a little bit more, and so I thought that I might want to be an entrepreneur and start a company one day. And so I decided that the right way to— these types of things didn't exist at that time. There were no places where you learned to be an entrepreneur. And so I went back to Stanford and did my MBA there. And coming out of school, I started a solar technology company. So I did that in 2006, which was It went from a really good time to start a company to a really bad time to start a company and back and forth a couple of times in the duration of my experience there. And so I spent about 6 and a half years working on that company. We ended up raising about $120 million in venture capital. So that was a lot of my life was talking to people about raising money. And so I've spent a lot of time doing that. And then we ended up shutting down the company at the end of 2012. And this was kind of a space virtual reality that had been popping around in my head for a while before that, and then decided to give it a go in 2013. And so we are, by background, about 30 people in the company now. We've raised about $16 million in venture funding over the last year and a half. So the first thing I'll talk about is VR in general. So, you know, this is a funny picture. It's from, I think, the '80s. Virtual reality technology has been around for a really long time. Basically, since anybody was talking about computers, people were talking about How do you trick your brain into feeling like you're in a different place? How do you use hardware and software together to make you feel like you're somewhere else, transported? How do you put the computing environment around you? These are conceptually things that, literally, since people were writing code, people were thinking about how to do this. And so the question that often comes up in the industry is, OK, well, why should we pay any attention now? What is different about the VR industry now than what was happening decades ago? And fundamentally, as with all things recently, the mobile is the answer, which is kind of counterintuitive. But so these headsets, the things that are the cornerstones of VR, and we'll talk about some of the makers of these headsets and what they're doing later, basically what they are is a smartphone screen strapped to your face with some fancy sensors. And so to do this, to make a headset of the equivalent quality of what you could do if you strapped a smartphone to your face. To have that quality, like, 5 years ago would have ended up costing you $30,000 to $60,000. It would have been basically a prototype that some big company put together that would be used in labs, that now you can buy for, like, $300 to $600. OK, so there's literally a 100x change in the price of the underlying component costs of building these headsets. And that's what all of a sudden got everybody's attention, is this ability to think about, OK, now I can build a headset for a price and sell it for a price that people will actually think about buying. So this is what I think it was one of the Chrises at a16z says, one of the peace dividends of the smartphone wars. So from all this innovation and competition in smartphones around getting display technology better and pixel density displays and the sensors in phones— I mean, this is— I'll go on a tangent for a second because I find this interesting. Maybe I won't. But the things that measure Whether you've turned your phone, gyroscope in your phone, to get a gyroscope accelerometer, what's called an inertial measurement unit in a phone, to get that quality like 2 or 3 years before the iPhone came out, the thing would have been about this big, and it would have cost like $1,000, and it would have been made for putting on a bomb or something like that. There was literally no market for this. And then all of a sudden, iPhone comes out, smartphones come out, Android comes out. There's tons of innovation in the technology. the technology behind those sensors, and now they're like $5 and the size of the tip of your finger. Okay? So this is an example of the type of thing that needed to happen to enable virtual reality to become a massive consumer market, and it all happened because of smartphones. Okay? So that's why people are talking about it. So the other side of the equation, of course, is the computing power required to make a virtual reality experience. So you've got— you're pushing images to this smartphone strapped to your head. OK? I need to push those images at 60 to 90 frames per second or 60 to 90 hertz. That's kind of the ballpark. You're pushing— for those of you who've ever played video games, you're pushing something like 1440p or above to those displays in stereo at 90 hertz. So if you had talked to somebody a few years ago in the games industry about trying to do something like that, they would have said you're incredibly crazy, especially if you said, OK, I'm going to do that using the processor out of a smartphone, they would have just laughed you out of the room. So there's been tremendous innovation, in particular on small form factor graphical processing units and on game engines, that came mostly out of the games industry that all of a sudden is enabling all of this disruption in the virtual reality industry. So all this stuff kind of came together right at the right time, basically now. You know, if you looked a few years ago and kind of plotted out the, the charts of pixel density displays and, and how fast processors would be on mobile phones and how much all this stuff would all of a sudden, all the lines would converge right around 2016 to say, oh, wow, there— now we can make virtual reality devices that people can actually afford to buy, that work well enough that they don't make you sick. And this is what's changed in the industry, this big thing. And so, so it's not that these ideas are new. It's not that people are coming up with novel things to— how to build virtual reality. It's just that all of a sudden, it's finally ready. Thank you.