5 ms·

$2.4B wasted on this. They weren't smashing atoms together to discover world-changing new physics. They didn't send people to space or develop some new revolut

$2.4B wasted on this. They weren't smashing atoms together to discover world-changing new physics. They didn't send people to space or develop some new revolutionary type of transport that could transform society. They made some really average AR glasses. Two point four BILLION dollars. The Tesla Model S cost ~500M to develop from start to finish[0], so Magic Leap has spent 5 times that amount. The ENTIRE Starlink satellite network will cost ~$10B total to develop, build, and deploy [1]. So Magic Leap spent a quarter of that. Apple developed and released the original iPhone on a budget of $150M. Magic Leap has spent 16 times that. These aren't apples to apples, of course. But I think it puts in perspective just how much of a scam Magic Leap is in general. [0] https://teslamotorsclub.com/tmc/threads/model-s-development-costs-so-far.7294/ https://teslamotorsclub.com/tmc/threads/model-s-development-... [1] https://en.wikipedia.org/wiki/Starlink https://en.wikipedia.org/wiki/Starlink [2] https://en.wikipedia.org/wiki/IPhone_(1st_generation) https://en.wikipedia.org/wiki/IPhone_(1st_generation)

cma 6y ago
For $500million did Tesla invent the cell chemistry?
- gruturo 6y ago
  No, but for $2.4B Magic Leap didn't invent much physics or chemistry either (or anything, really). Seems like a fair comparison. Hell, Cards Against Humanity achieved more (and faster, cheaper) with their hole in the ground Black Friday fundraiser: https://www.npr.org/sections/thetwo-way/2016/11/27/503502142/people-donated-nearly-100-000-to-dig-a-big-pointless-hole-in-the-ground https://www.npr.org/sections/thetwo-way/2016/11/27/503502142...
  - cma 6y ago
    I'm not saying Magic Leap is better, I'm just saying what is their tech advantage and innovation and how is it comparable to people doing novel nuclear physics? So far they have lost money and paid out more in a celebrity fundraiser bonus than all profitable quarters combined.
gizmo 6y ago
I agree with all your observations. But Magic Leap can't be understood as a scummy company in an otherwise healthy industry. There are --so many-- SV startups that raise money on hype they can't possibly deliver on, but VCs and founders get rich anyway. LP money gets incinerated, but they're the 'dumb money' anyway so nobody cares.
numpad0 6y ago
How does that compare to General Magic and Magic Cap -- by the way the name can't be an innocent coincidence, could it be? [0] https://en.wikipedia.org/wiki/General_Magic https://en.wikipedia.org/wiki/General_Magic
- Stratoscope 6y ago
  You could say the same thing about Leap Motion, but sometimes you have to admit that a coincidence of names is nothing more than that.
TheSpiceIsLife 6y ago
I dunno. I just view it all as a spot of gambling. All the 2.4 billion sunk in to Magic Leap didn’t prevent any of the other things you mentioned from happening. Could it have been better allocated? Perhaps. But who am I to tell others what to do with their money? I’ll leave that up to the Snake Oil salesmen, politicians, and marketing-types.
- JumpCrisscross 6y ago
  > the 2.4 billion sunk in to Magic Leap didn’t prevent any of the other things you mentioned from happening Opportunity cost is real. That capital could have funded other projects. The engineers could have worked on real research. The marketing team could have been promoting something that mattered. Yes, this is principally the backers’ loss. But that doesn’t preclude broader costs .
  - darawk 6y ago
    There's no shortage of capital floating around, though. In fact, the surplus of capital is probably what caused an investment this bad in the first place. There is no shortage of funding for good ideas. The shortage is in the idea space.
  - TheSpiceIsLife 6y ago
    This cuts both ways. The resources were allocated to something fairly innocuous, rather than to something potentially detrimental.
jl6 6y ago
On the other hand, cash is very cheap at the moment and there is an enormous amount washing around looking for opportunity. It’s not insane to try a few high-risk high-reward gambles. (Although maybe it is insane not to pull the plug once deceptive communication from the senior leadership becomes apparent).
walkingolof 6y ago
You could say that none of it was "wasted", people earned their salary there (I assume) and learned something, that led to consumption and investments elsewhere. Unless someone literally burnt the money, it did some good. Then again, yea, $2.4B is just ridiculous, wonder what Jeri Ellsworth and Tilt5 (https://www.tiltfive.com https://www.tiltfive.com) could have done with those resources...
- blasrodri 6y ago
  But there is an opportunity cost attached to it. Such a large sum of capital, on other hands could have created real value. This created none.
  - TheSpiceIsLife 6y ago
    As I mentioned elsewhere, this cuts both ways. The 2.4 billion could have been used to create something bad.
    - zapzupnz 6y ago
      It did create something bad: it made it tremendously harder for tech companies that might actually be able to produce some good to get funding because, for every investor other than the one's who're still throwing money at Magic Leap, this is a gigantic warning sign.
- codegladiator 6y ago
  They would probably had to literally burn up $2.4B with nothing to show frankly. It did some good in the sense handing out money to people I guess ?
- nadavlidor 6y ago
  "people earned their salary" and "learned something" aren't great arguments. Building a bridge that collapses minutes after construction also entails workers earning salaries, and perhaps learning something. that still doesn't mean it's a good use of funds, it's waste. you want the investment to create actual value for someone.
flyinglizard 6y ago
You can compare to phones, cars and satellites but the best comparison would be of course HoloLens development costs and Facebooks acquisition of Oculus. I couldn’t find how much Microsoft spent on HoloLens but insiders that I talked with mentioned an investment bigger than Magic Leap. Magic Leap developed an entire platform and also tried to develop content, not just glasses. A lot of that effort was wasteful and mismanaged, but likely not by an order of magnitude. I don’t think the word “scam” is appropriate here though. Just poorly managed.

cma 6y ago

For $500million did Tesla invent the cell chemistry?

gruturo 6y ago
No, but for $2.4B Magic Leap didn't invent much physics or chemistry either (or anything, really). Seems like a fair comparison. Hell, Cards Against Humanity achieved more (and faster, cheaper) with their hole in the ground Black Friday fundraiser: https://www.npr.org/sections/thetwo-way/2016/11/27/503502142/people-donated-nearly-100-000-to-dig-a-big-pointless-hole-in-the-ground https://www.npr.org/sections/thetwo-way/2016/11/27/503502142...
- cma 6y ago
  I'm not saying Magic Leap is better, I'm just saying what is their tech advantage and innovation and how is it comparable to people doing novel nuclear physics? So far they have lost money and paid out more in a celebrity fundraiser bonus than all profitable quarters combined.

gizmo 6y ago

I agree with all your observations. But Magic Leap can't be understood as a scummy company in an otherwise healthy industry. There are --so many-- SV startups that raise money on hype they can't possibly deliver on, but VCs and founders get rich anyway. LP money gets incinerated, but they're the 'dumb money' anyway so nobody cares.

numpad0 6y ago

How does that compare to General Magic and Magic Cap -- by the way the name can't be an innocent coincidence, could it be? [0] https://en.wikipedia.org/wiki/General_Magic https://en.wikipedia.org/wiki/General_Magic

Stratoscope 6y ago
You could say the same thing about Leap Motion, but sometimes you have to admit that a coincidence of names is nothing more than that.

TheSpiceIsLife 6y ago

I dunno. I just view it all as a spot of gambling. All the 2.4 billion sunk in to Magic Leap didn’t prevent any of the other things you mentioned from happening. Could it have been better allocated? Perhaps. But who am I to tell others what to do with their money? I’ll leave that up to the Snake Oil salesmen, politicians, and marketing-types.

JumpCrisscross 6y ago
> the 2.4 billion sunk in to Magic Leap didn’t prevent any of the other things you mentioned from happening Opportunity cost is real. That capital could have funded other projects. The engineers could have worked on real research. The marketing team could have been promoting something that mattered. Yes, this is principally the backers’ loss. But that doesn’t preclude broader costs .
- darawk 6y ago
  There's no shortage of capital floating around, though. In fact, the surplus of capital is probably what caused an investment this bad in the first place. There is no shortage of funding for good ideas. The shortage is in the idea space.
- TheSpiceIsLife 6y ago
  This cuts both ways. The resources were allocated to something fairly innocuous, rather than to something potentially detrimental.

jl6 6y ago

On the other hand, cash is very cheap at the moment and there is an enormous amount washing around looking for opportunity. It’s not insane to try a few high-risk high-reward gambles. (Although maybe it is insane not to pull the plug once deceptive communication from the senior leadership becomes apparent).

walkingolof 6y ago

You could say that none of it was "wasted", people earned their salary there (I assume) and learned something, that led to consumption and investments elsewhere. Unless someone literally burnt the money, it did some good. Then again, yea, $2.4B is just ridiculous, wonder what Jeri Ellsworth and Tilt5 (https://www.tiltfive.com https://www.tiltfive.com) could have done with those resources...

blasrodri 6y ago
But there is an opportunity cost attached to it. Such a large sum of capital, on other hands could have created real value. This created none.
- TheSpiceIsLife 6y ago
  As I mentioned elsewhere, this cuts both ways. The 2.4 billion could have been used to create something bad.
  - zapzupnz 6y ago
    It did create something bad: it made it tremendously harder for tech companies that might actually be able to produce some good to get funding because, for every investor other than the one's who're still throwing money at Magic Leap, this is a gigantic warning sign.
codegladiator 6y ago
They would probably had to literally burn up $2.4B with nothing to show frankly. It did some good in the sense handing out money to people I guess ?
nadavlidor 6y ago
"people earned their salary" and "learned something" aren't great arguments. Building a bridge that collapses minutes after construction also entails workers earning salaries, and perhaps learning something. that still doesn't mean it's a good use of funds, it's waste. you want the investment to create actual value for someone.

flyinglizard 6y ago

You can compare to phones, cars and satellites but the best comparison would be of course HoloLens development costs and Facebooks acquisition of Oculus. I couldn’t find how much Microsoft spent on HoloLens but insiders that I talked with mentioned an investment bigger than Magic Leap. Magic Leap developed an entire platform and also tried to develop content, not just glasses. A lot of that effort was wasteful and mismanaged, but likely not by an order of magnitude. I don’t think the word “scam” is appropriate here though. Just poorly managed.