5 ms·

It's easy to think of reasons why this isn't a sound investment. However, here are some thoughts why this may be sensible: * This is largely Google's investmen

by emcq 11y ago

It's easy to think of reasons why this isn't a sound investment. However, here are some thoughts why this may be sensible: * This is largely Google's investment to cover possible future success of Facebook's Occulus or Microsoft's Hololens. * They could have valuable non-tangible patents or employees. This is way past the "acquihire" funding levels, but perhaps the technology itself is valuable. Perhaps they get around that valuation with 100M/year in patent licensing. For perspective, IBM Research provides ~O(1B)/year in revenue from licensing patents. * Magic leap has a technology that is going to revolutionize entertainment consumption. It could simply be good execution of augmented reality, but I don't think this is sufficient to get the market excited and stop using their mobile devices or TVs to consume a lot of entertainment. It seems like at best here it is a "better mousetrap" than Occulus or Hololens. I'd love to hear other thoughts why this could be a useful investment.

ksenzee 11y ago
I guess this makes me a pedant, but it bothers me to see big O notation used as a shortcut for "within an order of magnitude." It would probably be fine if everyone on HN had taken an algorithms class and knew the formal definition. In reality, a lot of people here are still learning what that capital O thing means, and if they see it used as "within an order of magnitude" we're doing them a disservice. (As someone who wormed their way into the field without a CS degree, I had to learn it on the job, so maybe it matters more to me than it should.) The point you were making, however, is well taken. There's just no way for us to know what patent-related assets are involved in a deal like this.
- emcq 11y ago
  Good point - it is kind of a lazy shortcut. Next time I'll type out the extra words :) It probably would have been sufficient just with the approx ~
- S4M 11y ago
  Also nitpicking, but in the mathematical sense, 1000B/year or 1k/year are also O(1B)/year.
  - ksenzee 11y ago
    Yes, which is precisely why it bothers me. All I see in my head is a flat line on a graph.
    - ghayes 11y ago
      yeah, O(1)
  - StavrosK 11y ago
    Are they really? AFAIK you need to have a variable in there, so all those simplify to O(1) (not 1B). Which is in line with your point, I guess.
    - S4M 11y ago
      Yeah, O(1) or O(1B) is the same. However, 1B is o(0.01 * (age of the company)), even though the sun will have exploded before a company who's revenue is 1 cents * its age reach 1B.
josephpmay 11y ago
As I compete with Magic Leap, I'm probably in a pretty good position to answer this question. The main reason why ML is able to attract this level of investment is that their technology is literally decades ahead of what anybody else has. I haven't had the opportunity to try their headset out, but I know some people who have, and I haven't heard a single bad thing about it. The closest metaphor I can think of is seeing a GUI for the first time or seeing a TV set for the first time. I've used almost all of the other technology on the market or in development, and nothing comes anywhere close to what Magic Leap has. Not many people realize this, but Microsoft, Apple, Facebook, Google, and everyone else is pouring millions into AR/MR technology. You only hear about Google and Magic Leap because internal R&D budgets aren't public, but this is a huge area of research for everybody. A number of the largest tech companies have recently opened up small research shops in Seattle, Israel, and Cambridge, where AR/MR researchers have traditionally been based. Proper AR/MR won't revolutionize entertainment consumption. It will revolutionize all of computing, especially productivity. That's one of the reasons why I love AR/MR so much more than VR, even though I've never experienced AR/MR that's anywhere near the quality of good VR. Good AR/MR is a significantly bigger leap for computing than iOS and Android were over Blackberry, Palm, and Windows Mobile. Again, the best metaphor I can think of is the GUI vs. text-based computing. Lastly, ML does have an amazing patent portfolio and a world-class workforce that would be a dream acqu-hire for any large tech company, but top-notch VC's don't invest in startups for their patent portfolios.
- hellofunk 11y ago
  "decades" ahead? That is a bold number if you are speaking literally.
- jbhatab 11y ago
  What do you mean by revolutionizing computing? I assume you mean the way we interact with computers, not something like computer processing speed. I definitely agree that AR has huge potential in changing how we interact with the world. Although I'm much more interested in technology that leverages things like projects to augment my reality without having to wear a headset. Very related things though. How do you feel about headset vs no headset AR?
paulftw 11y ago
> Perhaps they get around that valuation with 100M/year in patent licensing. Patents expire after 25 years, so at 100M p.a. deal for investors is spend 1B to get $2.5B back, two decades later. I'm not sure that even beats fixed interest. Even with continuation it's still around 10% return. As others have pointed out O(1B) is same as O(1).
- pravda 11y ago
  >Patents expire after 25 years, Twenty years. At least in the USA. Carry on.
  - aetherson 11y ago
    And they start from time-of-approval (or filing?), not when you first put together a salable proof-of-concept, so for patents like which are not trivially possible to implement, you won't get all 20 years of it.
RustyRussell 11y ago
> For perspective, IBM Research provides ~O(1B)/year in revenue from licensing patents. That is a (common) myth. If you parse IBM statements closely, they talk about that number for intellectual property licensing. I'm not aware that they have ever made a precise statement on patent revenue.

by emcq 11y ago

ksenzee 11y ago

I guess this makes me a pedant, but it bothers me to see big O notation used as a shortcut for "within an order of magnitude." It would probably be fine if everyone on HN had taken an algorithms class and knew the formal definition. In reality, a lot of people here are still learning what that capital O thing means, and if they see it used as "within an order of magnitude" we're doing them a disservice. (As someone who wormed their way into the field without a CS degree, I had to learn it on the job, so maybe it matters more to me than it should.) The point you were making, however, is well taken. There's just no way for us to know what patent-related assets are involved in a deal like this.

emcq 11y ago
Good point - it is kind of a lazy shortcut. Next time I'll type out the extra words :) It probably would have been sufficient just with the approx ~
S4M 11y ago
Also nitpicking, but in the mathematical sense, 1000B/year or 1k/year are also O(1B)/year.
- ksenzee 11y ago
  Yes, which is precisely why it bothers me. All I see in my head is a flat line on a graph.
  - ghayes 11y ago
    yeah, O(1)
- StavrosK 11y ago
  Are they really? AFAIK you need to have a variable in there, so all those simplify to O(1) (not 1B). Which is in line with your point, I guess.
  - S4M 11y ago
    Yeah, O(1) or O(1B) is the same. However, 1B is o(0.01 * (age of the company)), even though the sun will have exploded before a company who's revenue is 1 cents * its age reach 1B.

josephpmay 11y ago

As I compete with Magic Leap, I'm probably in a pretty good position to answer this question. The main reason why ML is able to attract this level of investment is that their technology is literally decades ahead of what anybody else has. I haven't had the opportunity to try their headset out, but I know some people who have, and I haven't heard a single bad thing about it. The closest metaphor I can think of is seeing a GUI for the first time or seeing a TV set for the first time. I've used almost all of the other technology on the market or in development, and nothing comes anywhere close to what Magic Leap has. Not many people realize this, but Microsoft, Apple, Facebook, Google, and everyone else is pouring millions into AR/MR technology. You only hear about Google and Magic Leap because internal R&D budgets aren't public, but this is a huge area of research for everybody. A number of the largest tech companies have recently opened up small research shops in Seattle, Israel, and Cambridge, where AR/MR researchers have traditionally been based. Proper AR/MR won't revolutionize entertainment consumption. It will revolutionize all of computing, especially productivity. That's one of the reasons why I love AR/MR so much more than VR, even though I've never experienced AR/MR that's anywhere near the quality of good VR. Good AR/MR is a significantly bigger leap for computing than iOS and Android were over Blackberry, Palm, and Windows Mobile. Again, the best metaphor I can think of is the GUI vs. text-based computing. Lastly, ML does have an amazing patent portfolio and a world-class workforce that would be a dream acqu-hire for any large tech company, but top-notch VC's don't invest in startups for their patent portfolios.

hellofunk 11y ago
"decades" ahead? That is a bold number if you are speaking literally.
jbhatab 11y ago
What do you mean by revolutionizing computing? I assume you mean the way we interact with computers, not something like computer processing speed. I definitely agree that AR has huge potential in changing how we interact with the world. Although I'm much more interested in technology that leverages things like projects to augment my reality without having to wear a headset. Very related things though. How do you feel about headset vs no headset AR?

paulftw 11y ago

> Perhaps they get around that valuation with 100M/year in patent licensing. Patents expire after 25 years, so at 100M p.a. deal for investors is spend 1B to get $2.5B back, two decades later. I'm not sure that even beats fixed interest. Even with continuation it's still around 10% return. As others have pointed out O(1B) is same as O(1).

pravda 11y ago
>Patents expire after 25 years, Twenty years. At least in the USA. Carry on.
- aetherson 11y ago
  And they start from time-of-approval (or filing?), not when you first put together a salable proof-of-concept, so for patents like which are not trivially possible to implement, you won't get all 20 years of it.

RustyRussell 11y ago

> For perspective, IBM Research provides ~O(1B)/year in revenue from licensing patents. That is a (common) myth. If you parse IBM statements closely, they talk about that number for intellectual property licensing. I'm not aware that they have ever made a precise statement on patent revenue.