VR is the Multi-Trillion Dollar Opportunity.
Thirteen years ago I was in a car with my Dad (Tim Draper, also a VC) driving back from San Francisco, we had just come from the Angel Pad Demo Day. Mobile was the hot thing at the the time and so we started discussing where the next changes would come from.
Dad: “What do you think the next big computing advancement will be”
Me: “Computers on the body… probably the eyes.”
I remember brainstorming down that pathway for a bit, we probably said some incredibly insightful things that I can’t remember right now, but that planted the seed for me to invest in eye based computing over the next decade.
Four months later I invested in a company called Vergence Labs, a company that was acquired 5 years later by Snap, and became Snap Chat spectacles. I still have the first versions of the glasses. The founders once used computer vision to control a drone in our offices, it was wild.
An interesting thing that you may not know is that Virtual Reality and Cryptocurrency both have 40-50 years of research, development and experimentation, the technology wants to be in the world!!
At Boost VC, we have been having a debate about how new technologies scale. We have been fortunate to have had a front seat to a few “Deep Tech” waves, and I wanted to just discuss my observations of the differences in “Crypto Scale” vs. “Virtual Reality Scale” and why I’m so excited about VR right now.
The beginning of this post was more establishing that I have been investing in “Eye Computers” for more than a decade, and I have been invested in decentralized computing for a similar time frame. Despite the ups and downs, Boost VC has been steadfast in our belief in both.
About a year after I had invested in Coinbase, I was at their offices for one of their highest volume days in history ($27m in a day). I was sitting with Brian Armstrong and Fred Ehrsam. Brian had proposed an observation that Bitcoin grows in “Shelves”. Meaning it flies sky high and then settles down, it doesn’t grow linearly. I have since been using this phrase to describe the adoption of Bitcoin and other technologies. They grow in waves or shelves in a very condensed amount of time, and then settle down. It’s like taking a deep breath, holding your breath, and then exhaling.
I believe that VR is growing in a similar capacity, but where I made a major mistake a long time ago, was undervaluing the NEED for distribution. I’ll explain this by first explaining why VR and Bitcoin adoption are actually quite different.
The difference between the adoption of “Decentralized” computers, and “Eye-based” computers is similar in many ways, but different in one very important way, and it’s the constraint for growth.
It seems obvious, and maybe it was always obvious to others, but the decentralized world is hooked up to the current internet distribution - this means that anyone with a computer or phone could participate in this world once a web app existed. This means that the constraining factor for growth is not “Distribution” but “Education.” People need to understand why they needed Bitcoin, and if they want some, they can figure out how to get it. *There are a few caveats here, like linking Bitcoin buys to bank accounts but in general the reality is the same, any digital display was a gateway to decentralized computing.
The opposite is true for Virtual Reality. The constraining factor to experience virtual reality or “Eye Computers” which is what I have been calling it in this post for some reason, the constraint is distribution! Distribution means the number of physical headsets. Over the previous 40 years there has been enough education around what virtual reality is and people generally want to try it for a low enough cost, however when Boost VC began investing in this category - there were very few headsets…. and definitely not enough headsets to build a Billion dollar business.
So in many ways these two technologies are growing in opposing ways. VR being widely understood by the market, yet under-distributed, and crypto being mass distributed yet less understood. Distribution and education both are expensive, which is why it has taken time for both of them to grow!
So what’s next?
We look at these computing devices (Crypto is decentralized computing, and VR is eye computers) like they are different in some way and at the core - there always needs to be demand. Humanity figures out a way to manufacture enough if they know and understand the need for the technology. So what we need is more use cases and more customers.
Us old people believe that all products should be useful to them, and they are — But this next generation is natively hanging out in worlds without immersing themselves, and currency is all digital.
Our data suggests that the next adopter of the VR headset is the 13-21 year old. The natively digital Roblox/Minecrafter. This is a very important moment for Virtual Reality — Can we build enough interesting content for the next wave of VR users.
Boost VC is investing. Please send me VR and Crypto.
VR is about to be “Cool” in highschools everywhere, and that to me is a multi-trillion dollar opportunity.