Ikea, the Swedish home furnishings and decor giant, has been one of the leaders among retailers when it comes to adapting to tech innovations that impact its business, being one of the first to launch augmented reality applications, partnering with others to develop smart home devices and launching a business unit to build that out further, investing in relevant startups, and even picking up of logistics startups to expand its reach. Today, it’s taking another step in that trajectory with a tech acquisition: the company, by way of Ingka Group (founded by the founder of Ikea, and the primary franchisor of Ikea and owner of Ikea.com), has acquired Geomagical Labs, an AI imaging startup based out of Mountain View.
Geomagical Labs has not had a lot of fanfare, but quietly it’s been developing a number of computer vision-based technologies. Its first product — which allows a user to quickly scan a room using any smartphone, render that into a panoramic 3D picture in a few minutes, remove all the furniture in it, and then, in the words of Geomagical’s founder and CEO Brian Totty, “play dress up” by adding in new items to scale — will be implemented by Ikea into its website and apps to let people start to create more accurate visualisations of their spaces, and how they would look with Ikea pieces in them.
To be clear, Ikea already had developed an AR-based visualisation tool, as one of the first to use Apple’s AR developer kit a few years ago, but this represents a far more accurate and useful development on that, besides also giving Ikea the tools to build more features and tools in the future in house.
(That is the kind of technology that is always useful, but perhaps especially right now, when physical stores are being shut down in many countries around the world to stave off spread of the coronavirus.)
“We’re excited because the user can really play around with this and see how something would fit immediately,” said Barbara Martin Coppola, Chief Digital Officer, Ikea Retail, in an interview. She added that Ikea decided to acquire the startup rather than just partner with it for “a lot of different reasons, with the first being that the tech is exceptional and groundbreaking.” The app and online experience that Ikea is developing will be free to use, and for now, there are no plans to offer the tech as a service to other retailers, a la an AWS model, she added.
Terms of the deal — which technically is being made between Geomagical and the Ingka Group, which is also the company that acquired Task Rabbit and made other investments under the IKEA brand — are not being disclosed, the companies said. But Totty — a serial entrepreneur who was an early Groupon exec (by way of acquisition of a previous startup) as well as one of the founding employees of Inktomi (remember them?) — said that the startup and investors were “very happy” with the terms.
Those investors and how much it had previously raised is also not fully disclosed but they included Totty himself, Andrew Mason (Groupon’s cofounder and former CEO) and a number of other individuals.
From what we understand, the startup had been talking to a number of other interested parties, including other retailers and a couple of large tech companies. (For some more context, computer vision has been a very hot area for acquisition, both to pick up products and talent, and Apple and Google are among those that have been aggressively acquiring in this area in recent times to expand their own platforms.)
The reason why Geomagical Labs went with Ikea versus a tech exit, Totty said, was because the company was keen to make sure that its technology saw the light of day — rather than potentially get subsumed into a bigger tech machine that might or might not use it, or instead choose to redeploy the team (which includes six PhDs, including Totty himself) on something completely different, experience Totty would know given his track record.
“There has been so much progress in cell phones and AI, finally giving us this dream of waving your camera in front of you and to do cool things,” he said. He described going to Ikea as “a great bird in the hand” play.
“You plan all your options and you could decide to wait, but you don’t always have the ability to get partnerships of this kind. The question for us was, do we raise another round of funding, or do a 50 or larger percent acquisition? I don’t really want to talk about scenario planning but I believe what we’ve built is broadly valuable to all of the industry right now. And the challenge of a general purpose tech with a special product is that your domain of applicability is lower. We didn’t want to be talented people with a little technology but a game changer.”
Before Ikea, Coppola spent her entire career working for big tech companies, including many years at Google, as well as Samsung and others, and she sees this acquisition as an essential move in focusing the retailer even more squarely on its technology opportunity, by not just adopting new innovations but by owning the IP and building the technology itself.
“Ikea has spent more than $200 million investing in or acquiring 23 companies to date,” she said. “both to make a positive contribution to the sector and fulfil Ikea’s vision. This will continue to be the case. Acquisitions and investments will not stop and will increase,” she added.
The investment behemoth had been rumoured to be getting cold feet, when the WSJ reported last month that it was using regulatory investigations as a way to back out of its commitment to buy $3BN in shares from existing WeWork shareholders.
Under the terms of the share buyback deal negotiated last year, WeWork founder Adam Neumann had been set to receive almost $1BN for his shares in the co-working company. The former CEO had already been forced out at that stage after public markets balked over his managerial acumen, as we reported it at the time.
In a press statement issued today SoftBank SVP and chief legal officer, Rob Townsend, writes:
SoftBank remains fully committed to the success of WeWork and has taken significant steps to strengthen the company since October, including newly committed capital, the development of a new strategic plan for WeWork and the hiring of a new, world-class management team. The tender offer was an offer to buy shares directly from other major stockholders and its termination has no impact on WeWork’s operations or customers. The tender offer closing was conditioned on the satisfaction of certain closing conditions the parties agreed to in October of last year for SoftBank’s protection. Several of those conditions were not met, leaving SoftBank no choice but to terminate the tender offer.
SoftBank lists the unfulfilled conditions that have led it to terminate the offer as:
A spokeswomen for WeWork declined to comment on SoftBank withdrawing the offer. But Reuters has reported that a special committee of WeWork’s board said it was “disappointed” by the development and is considering “all of its legal options, including litigation.”
At the time of writing SoftBank had not responded to a request for comment.
Its press note makes a point of emphasizing that “Neumann, his family, and certain large institutional stockholders, such as Benchmark Capital, were the parties who stood to benefit most from the tender offer”.
“Together, Mr. Neumann’s and Benchmark’s equity constitute more than half of the stock tendered in the offering. In contrast, current WeWork employees tendered less than 10 percent of the total,” it writes, adding: “SoftBank previously worked with WeWork to complete an earlier phase of the tender offer that allowed over 4,000 employees to reprice out-of-the-money stock options at lower strike prices, delivering value in excess of $140 million to these employees in the form of reduced exercise prices (where such options would have been worth substantially less or nothing absent such repricing).”
Earlier this week WeWork announced the sale of Meetup, a social networking platform designed to connect people in person, for an undisclosed sum that’s reportedly far less than the $156M acquisition price WeWork paid for it back in 2017.
The novel coronavirus has certainly brought disruption to the hipster white collar co-working and social networking business, as populations are encouraged do to the opposite of mingle. The near term prospects for co-working spaces in a new age of social distancing and encouraged (or enforced) home working look bleak.
Yet, outside Asia, WeWork has to date closed only a tiny minority of its locations globally as a result of the coronavirus pandemic.
Even in heavily affected cities in Europe, such as Madrid and Milan — where governments have imposed strict quarantine measures to try to stem the tide of COVID-19 deaths — WeWork has not taken the step of shuttering co-working spaces.
Instead, in Europe and the US, it has only been temporarily closing buildings or even just individual floors if infections are identified.
It’s a different story in Asia. Per an updated list of building closures on WeWork’s website, the company closed more than 30 locations across cities in India on March 23 — but only after the government imposed a three-week nationwide lockdown, instructing India’s 1.3BN people to stay at home.
Elsewhere, WeWork members may see little reason to break quarantine in order to travel to a shared workspace when, provided they have Internet at home, they can stay where they are and be just as productive without risking spreading or catching the virus — hence the Zoom videoconferencing boom.
WeWork’s handling of the coronavirus crisis has also caused some rifts with its membership, with press reports of members angry at it for refusing refunds for spaces they can’t (in good conscience) use.
It has also faced criticism from members angry it’s prioritizing rent collection from now very cash-strapped small businesses rather than closing down during a public health crisis. (We’ve heard similar stories from members who did not wish to be publicly identified.)
WeWork, meanwhile, has justified staying open in a pandemic by claiming its locations contain people doing essential work.
When we asked the company about its response to the coronavirus last month, it told us: “We are monitoring the coronavirus (COVID-19) pandemic closely and have implemented a number of precautionary measures” — saying then it had strengthened “on-site cleanliness measures” and suspended all internal and member events until further notice, as of March 12.
On the same date it had offered its own staff the option of working from home — though its doors remained open to keycard-holding, fee-paying members.
Roto VR, startup which markets an interactive, ‘360 degree’ chair, has raised £1.5 million in a funding round led by Pembroke VCT. Others in the round include TVB Growth Fund, managed by The FSE Group.
The chair is designed to make VR more accessible to a mass audience, many of whom have turned to VR and gaming to while away the hours as much of the world is locked-down during the COVID-19 pandemic.
Founded in 2015 by video games industry veterans, Elliott Myers and Gavin Waxkirsh, Roto VR is an interactive chair that addresses the physical problems of consuming VR whilst seated, such as motion sickness and tangling cables, whilst also enhancing the immersive experience with haptic / vibration feedback in the chair.
The Roto chair is motorized and can auto-rotate to wherever the user is looking, allowing for 360-degree viewing, and thus allows the user to stay in the VR simulation for longer periods of time.
The inbuilt desktop also supports input devices such as a keyboard and mouse which means it can be used in 360-degree desktop computing.
“Most people sit down to watch movies, work, play games and browse the internet whilst seated and we see no reason why the exciting new medium of VR will be any different,” said Myers.
The product is compatible with most VR Head Mounted Displays and is also compatible with all movies and games, as well as additional accessories such as racing wheels and joysticks.
The company is due to launch the consumer and office version of Roto imminently. In addition, it will be marketed to cinemas and arcades.
Andrew Wolfson, CEO Pembroke Investment Managers LLP, said: “In Elliott we have found an entrepreneur who has solved a problem for the VR market with a solution that addresses the physical issues encountered whilst consuming VR content, as well as significantly enhancing the experience. We see future customers coming from both the B2B and B2C markets, in fields such as experiential attractions, home, cinemas and shopping centres.”
There’s a joke* being reshared on chat apps that takes the form of a multiple-choice question — asking who’s the leading force in workplace digital transformation? The red-lined punchline is not the CEO or CTO, but: C) COVID-19.
There’s likely more than a grain of truth underpinning the quip. The novel coronavirus is pushing a lot of metaphorical buttons right now. “Pause” buttons for people and industries, as large swathes of the world’s population face quarantine conditions that can resemble house arrest. The majority of offline social and economic activities are suddenly off limits.
Such major pauses in our modern lifestyle may even turn into a full reset, over time. The world as it was, where mobility of people has been all but taken for granted — regardless of the environmental costs of so much commuting and indulged wanderlust — may never return to “business as usual.”
If global leadership rises to the occasion, then the coronavirus crisis offers an opportunity to rethink how we structure our societies and economies — to make a shift toward lower carbon alternatives. After all, how many physical meetings do you really need when digital connectivity is accessible and reliable? As millions more office workers log onto the day job from home, that number suddenly seems vanishingly small.
COVID-19 is clearly strengthening the case for broadband to be a utility — as so much more activity is pushed online. Even social media seems to have a genuine community purpose during a moment of national crisis, when many people can only connect remotely, even with their nearest neighbours.
Hence the reports of people stuck at home flocking back to Facebook to sound off in the digital town square. Now that the actual high street is off limits, the vintage social network is experiencing a late second wind.
Facebook understands this sort of higher societal purpose already, of course. Which is why it’s been so proactive about building features that nudge users to “mark yourself safe” during extraordinary events like natural disasters, major accidents and terrorist attacks. (Or indeed, why it encouraged politicians to get into bed with its data platform in the first place — no matter the cost to democracy.)
In less fraught times, Facebook’s “purpose” can be loosely summed to “killing time.” But with ever more sinkholes being drilled by the attention economy, that’s a function under ferocious and sustained attack.
Over the years the tech giant has responded by engineering ways to rise back to the top of the social heap — including spying on and buying up competition, or directly cloning rival products. It’s been pulling off this trick, by hook or by crook, for over a decade. Albeit, this time Facebook can’t take any credit for the traffic uptick; a pandemic is nature’s dark pattern design.
What’s most interesting about this virally disrupted moment is how much of the digital technology that’s been built out online over the past two decades could very well have been designed for living through just such a dystopia.
Seen through this lens, VR should be having a major moment. A face computer that swaps out the stuff your eyes can actually see with a choose-your-own-digital-adventure of virtual worlds to explore, all from the comfort of your living room? What problem are you fixing, VR? Well, the conceptual limits of human lockdown in the face of a pandemic quarantine right now, actually…
Virtual reality has never been a compelling proposition versus the rich and textured opportunity of real life, except within very narrow and niche bounds. Yet all of a sudden, here we all are — with our horizons drastically narrowed and real-life news that’s ceaselessly harrowing. So it might yet end up a wry punchline to another multiple choice joke: “My next vacation will be: A) Staycation, B) The spare room, C) VR escapism.”
It’s videoconferencing that’s actually having the big moment, though. Turns out even a pandemic can’t make VR go viral. Instead, long-lapsed friendships are being rekindled over Zoom group chats or Google Hangouts. And Houseparty — a video chat app — has seen surging downloads as barflies seek out alternative night life with their usual watering-holes shuttered.
Bored celebs are TikToking. Impromptu concerts are being live-streamed from living rooms via Instagram and Facebook Live. All sorts of folks are managing social distancing, and the stress of being stuck at home alone (or with family), by distant socializing: signing up to remote book clubs and discos; joining virtual dance parties and exercise sessions from bedrooms; taking a few classes together; the quiet pub night with friends has morphed seamlessly into a bring-your-own-bottle group video chat.
This is not normal — but nor is it surprising. We’re living in the most extraordinary time. And it seems a very human response to mass disruption and physical separation (not to mention the trauma of an ongoing public health emergency that’s killing thousands of people a day) to reach for even a moving pixel of human comfort. Contactless human contact is better than none at all.
Yet the fact all these tools are already out there, ready and waiting for us to log on and start streaming, should send a dehumanizing chill down society’s backbone.
It underlines quite how much consumer technology is being designed to reprogram how we connect with each other, individually and in groups, in order that uninvited third parties can cut a profit.
Back in the pre-COVID-19 era, a key concern being attached to social media was its ability to hook users and encourage passive feed consumption — replacing genuine human contact with voyeuristic screening of friends’ lives. Studies have linked the tech to loneliness and depression. Now that we’re literally unable to go out and meet friends, the loss of human contact is real and stark. So being popular online in a pandemic really isn’t any kind of success metric.
Houseparty, for example, self-describes as a “face to face social network” — yet it’s quite the literal opposite; you’re foregoing face-to-face contact if you’re getting virtually together in app-wrapped form.
The implication of Facebook’s COVID-19 traffic bump is that the company’s business model thrives on societal disruption and mainstream misery. Which, frankly, we knew already. Data-driven adtech is another way of saying it’s been engineered to spray you with ad-flavored dissatisfaction by spying on what you get up to. The coronavirus just hammers the point home.
The fact we have so many high-tech tools on tap for forging digital connections might feel like amazing serendipity in this crisis — a freemium bonanza for coping with terrible global trauma. But such bounty points to a horrible flip side: It’s the attention economy that’s infectious and insidious. Before “normal life” plunged off a cliff, all this sticky tech was labelled “everyday use;” not “break out in a global emergency.”
It’s never been clearer how these attention-hogging apps and services are designed to disrupt and monetize us; to embed themselves in our friendships and relationships in a way that’s subtly dehumanizing; re-routing emotion and connections; nudging us to swap in-person socializing for virtualized fuzz designed to be data-mined and monetized by the same middlemen who’ve inserted themselves unasked into our private and social lives.
Captured and recompiled in this way, human connection is reduced to a series of dilute and/or meaningless transactions; the platforms deploying armies of engineers to knob-twiddle and pull strings to maximize ad opportunities, no matter the personal cost.
It’s also no accident we’re seeing more of the vast and intrusive underpinnings of surveillance capitalism emerge, as the COVID-19 emergency rolls back some of the obfuscation that’s used to shield these business models from mainstream view in more normal times. The trackers are rushing to seize and colonize an opportunistic purpose.
Tech and ad giants are falling over themselves to get involved with offering data or apps for COVID-19 tracking. They’re already in the mass surveillance business, so there’s likely never felt like a better moment than the present pandemic for the big data lobby to press the lie that individuals don’t care about privacy, as governments cry out for tools and resources to help save lives.
First the people-tracking platforms dressed up attacks on human agency as “relevant ads.” Now the data industrial complex is spinning police-state levels of mass surveillance as pandemic-busting corporate social responsibility. How quick the wheel turns.
But platforms should be careful what they wish for. Populations that find themselves under house arrest with their phones playing snitch might be just as quick to round on high-tech gaolers as they’ve been to sign up for a friendly video chat in these strange and unprecedented times.
Every day there's a fresh Zoom privacy/security horror story. Why now, all at once?
It's simple: the problems aren't new but suddenly everyone is forced to use Zoom. That means more people discovering problems and also more frustration because opting out isn't an option. https://t.co/O9h8SHerok
— Arvind Narayanan (@random_walker) March 31, 2020
*Source is a private Twitter account called @MBA_ish
All co-working isn’t WeWork . And not all entrepreneurs are 30-year-old guys.
I know this well, having built my first startup in the mid-1980s after a potential employer said women wouldn’t be accepted in technical sales. Within five years, their large computer manufacturing business was gone, but we were selling our products around the world.
About twelve years ago, my partner and I saw how the workplace was changing as laptops and WiFi allowed people to work anywhere. At the same time, endless commutes and long office hours were separating families, generating excess CO2 emissions and making work-life balance almost impossible.
We understood that enabling people to work close to home, rather than in their home, could address these issues while reducing isolation and distractions. We could apply our startup, manufacturing, building and operations backgrounds to this problem to develop automated, welcoming workspace centers in neighborhoods and small-town cores, and we could make this replicable.
This was 2008 — nearly a decade before Masayoshi Son plowed billions into WeWork with the directive to be crazier, go bigger. Our model was very different from WeWork’s model of large centers in large cities that primarily targeted large corporations. It was more than a real estate play and with an interesting problem to solve: community focused centers were valuable to regular people, but could these be created sustainably and profitably over the long term?
We thought it could. So we built it.
The crux of what we developed was smaller, replicable, technologically-enabled and automated centers, outside big cities, that could meet the needs of their members and do it profitably and with minimal staffing. We developed our co-working management software, Satellite Deskworks, along with our now patented tracking and automation, to run any type of shared use center, and to do it simply, intuitively, and comprehensively.
I do not get funded. Several guys — without cynicism — suggested that I get a 30-year-old front man.
With the model proven, we began working on funding to scale the enterprise. The business plan, slide deck and pro forma were written. The pitches started, all the while running and growing the business from personal and generated funds. More pitches. And more pitches. Clearly we weren’t making it interesting enough. Or it was too early. Or the people with funds didn’t understand how important this was for the vast majority of workers and their local communities. Or perhaps there was just something wrong with us, since the business was already working.
Some of the pitch meetings felt like walking through the looking glass: One VC group provided us with an internal sponsor who advised us to only talk about software. Then his associate took over and said that advice was all wrong: our strength was in the combination of real-world and software.
On pitch day, before our presentation, a single-function app was pitched — just an idea, no product. It got funded. Subsequently, even though we had three profitable centers and several software clients, I was told that we weren’t far enough along to validate the market. Another group declined to fund us, then a year later asked me back as an expert on co-working to explain this emerging industry to them. But, again, no funds were forthcoming.
Over and over again, I’d be told that the presentation was spot-on, and yet, no funds.
I’m an older woman. I got my undergraduate degree at 43 years old and a masters at 46. I had started, run and sold my first startup to a large multinational by the time I was 40. I am good at what I do; I build and scale businesses.
Another group declined to fund us, then a year later asked me back, as an expert on co-working, to explain this newly emerging industry to them.
But I do not get funded.
This is not a complaint. This is a fact. I understand what happened at those pitches. Despite our scalable, successful business model, the decision makers were trying to gauge what others at the table would do, how they would perceive me. And the double-whammy of being older and a woman was a bridge too far.
Like picking at a scab, I talk to people knowledgeable in venture who nod their heads at the idea that I’d have trouble getting funded, no matter how well the model worked or the software functioned.
Several guys — without cynicism — suggested that I get a 30-year-old front man. But instead, I focused on growing my business organically, perhaps missing the opportunity to truly scale something that communities of all sizes need.
There is a serious flaw in how businesses are funded, and it is the same discussion we had twenty and thirty years ago about who was at the table in managing businesses.
Vibrant, innovative concepts and businesses are frequently started by people who aren’t happy with their options inside the box of the corporate world. 45% of small business owners are from minority ethnic groups. Women start businesses at twice the rate of men, yet female founders got 2% of VC dollars in 2017. Black women are the most educated group in the U.S., yet they receive about 0.2% of VC funding.
Older founders are seen as less dynamic, less adventurous, while the reality is that half the startups in the U.S. are by people over 50 — and older entrepreneurs are actually more likely to succeed.
Despite the fact that many acknowledge this as a problem, the solutions seem elusive. But they shouldn’t be. Corporations are stronger because of bringing diversity to boards, and the VC model would be stronger by employing many of the same tactics. The likelihood that funded startups will succeed increases by appealing to a broader audience, and the best way to do that is to fund a broader segment of entrepreneurs. Although these shouldn’t be new concepts, let me propose a few ideas:
Set up and support funds at an intermediate level. There is a crying need for funding in the $1 million – $3 million range, particularly for women- and minority-owned businesses. We know how to successfully bootstrap, but however good we are, it takes investment to scale.
If you measure it, you get it. Set up metrics. 10% of your board will be women within a year, 30% within three years, and 50% within six years. Set up similar metrics for ethnic and racial diversity. Set a goal for the percentage of your portfolio that will be minority- and women-owned startups each year over the next five years. And measure the performance of these startups against the past portfolio.
Increase the diversity of VC management and boards. By including decision-makers at the table from a broad range of backgrounds, ethnicities, ages, and genders, the industry should get to a more diverse portfolio with a greater likelihood of overall success.
Get to critical mass. Token diversity accomplishes little. You need enough people to truly provide a voice and echo. It’s easy to ignore a single voice from a different perspective. Research has shown that for a group to even hear a woman’s voice in a meeting at least 30% of that group needs to be women.
So, yes, I walk into the VC pitch rooms, and I know I’m not walking out with funding. No one is going to wire me a generous seed round and tell me to go break things.
Because of who I am and how this particular world perceives me, I have to build a business that works, that stands on its own from the beginning. This is not the end of the world. Businesses should work.
But the VC model needs to work, too.
The game developer behind Second Life has abandoned its grand efforts for a virtual reality follow-up to its early 2000s hit.
SF-based Linden Lab announced today that they’ve sold off assets related to Sansar to a small, little-known company called Wookey Search Technologies, which will take over development of the title. Linden Lab will continue developing and maintaining Second Life and it sounds like some of its employees will be joining Wookey. The deal was reported by Protocol.
The game studio had already announced layoffs last month.
Though Second Life has remained in the limelight of popular culture, the studio claimed to still be hauling in substantial revenues from the game in recent years. That said, the failure of Sansar is a disaster for Linden Labs which has focused considerable resources on the effort since it first teased the platform back in 2014.
When the title was announced, VR was at the peak of its hype following Facebook’s Oculus VR acquisition. Though Sansar launched in beta with support for both VR and desktop usage, the slow adoption of VR certainly didn’t help the title’s popularity. The studio’s leadership has detailed in interviews that the majority of Sansar’s users are desktop-based.
Given the evident turmoil at the studio, Sansar’s user base will likely be relieved to hear that the studio did their best to give the title a soft landing, though it’s unclear what resources its new acquirer has access to.
After years of hype, the AR/VR space has certainly grown quieter as of late, but some investors are still coalescing behind a vision that the technologies could one day replace mobile if the technical kinks can be worked out.
Creal is a Swiss startup that’s working on some fundamental display technologies that could make VR and AR headsets more comfortable with more life-like optics.
The startup raised a $7.4 million Series A last year from Investiere and DAA Capital Partners. The company announced this week that they received grant funding from the European Union’s Horizon 2020 research and innovation program to continue working on their light field display tech.
Light field displays are a category of displays that are quite a bit different that anything you’ve seen. While existing AR and VR headsets can show you stereoscopic 3D by displaying slightly different images to each of your eyes, future headsets will allow you to change what’s in and out of focus based on where your eyes are looking. The big optics issue this solves for is called the vergence-accommodation conflict and it allows for interacting with objects closer to your face and functionally makes reading in VR quite a bit more effective as well.
Here’s a “through-the-lens” demo of the startup’s technology from a video posted last year:
There are varying degrees of how the technology is implemented. Magic Leap rolled out a lightweight version of its technology in its headset that leverages a pair of focal planes that are switched between with eye-tracking. This “varifocal” approach is also something that Facebook is investing in, they’ve showcased prototype headsets that allow users to shift their focus between multiple planes.
Creal is having to deal with some of the same struggles as its big company counterparts have when it comes to making sacrifices in order to miniaturize the technology. Integrating their tech into a virtual reality headset is the nearest-term target for the company, though they have ambitions to integrate into lightweight AR headsets within the next several years.
Startups building tech like Creal may be particularly at risk to a global recession, when investment in frontier technologies typically takes a big hit. A prolonged period of economic instability will almost certainly tilt the scales in the favor of big tech companies like Facebook as startups approaching the same advances will likely be forced to push out roadmaps and cut costs in order to survive.
While Oculus has seen some recent success in expanding the VR market niche, augmented reality hardware has been an incredibly tough sell for startups. A number of companies in the space shut down last year, including Meta, ODG and Daqri. Earlier this month, Bloomberg reported that Magic Leap was positioning itself for a sale after raising billions of dollars in funding.
Several months ago, we surveyed more than 20 leading real estate VCs to learn about what was exciting them most in the real estate tech sector and hear their opinions on proptech trends like co-working, flexible office space and remote office space.
Since we published our survey, COVID-19 has flipped the real estate sector on its head as more companies move toward mandatory remote work, retail businesses are forced to temporarily shut their doors and high-traffic properties thin out. Suddenly, the traditionally predictable world of real estate is more chaotic and unclear than ever.
What are the short and long-term impacts of pandemic-induced volatility? Does this open up opportunities for proptech startups or shutter them? What does this mean from an investing point of view? We asked several of the VCs that participated in our last survey to update us on how COVID-19 is impacting real estate startups, non-proptech companies in general and the broader real estate market overall:
Despite its banner year in 2019, proptech will not be immune to the pressures venture-backed companies face in a market pullback, and we are preparing ourselves and our portfolio companies for a bumpy year.
Compass, the real estate brokerage startup backed by roughly $1.6 billion in venture funding, has laid off 15% of its staff as a result of the shifting economic fortunes created by the global response to the novel coronavirus pandemic, according to an internal email seen by TechCrunch.
Citing economic fallout that has seen stock markets plummet 30 percent in just 22 days Compass chief executive Robert Reffkin wrote that the company has seen an over 60 percent decline in real estate showings and is modeling a 6-month decline in revenue of 50 percent.
“We aren’t just facing an economic recession, we are facing an economic standstill,” Reffkin wrote. As the country’s unemployment rate soars to a projected 10 percent, Reffkin wrote that the company had no choice but to cut its workforce.
The 15 percent reduction in staffing is being accompanied by an 80% reduction in its concierge business and a shift to entirely virtual delivery. As part of the reductions in corporate spending, Reffkin cut his own salary to nothing and reduced the entire executive team’s salary by 25 percent.
For the employees that are laid off, the company said it would provide an “enhanced severance and COBRA health insurance” along with letting employees hang on to their company laptops and providing tools, training, and networking help so that they can try to get a new job.
The news from Compass is just one indicator of a potential reckoning coming for the booming property tech investment category.
Zillow said it decided to halt its offers to sellers after several states, including California, Illinois, Louisiana, Ohio, New York and Nevada, implemented emergency orders requiring people to stay home and all non-essential business activities, including some real estate-related activities, to stop.
Opendoor and Redfin made similar decisions to pause homebuying. Meanwhile other real estate companies are also laying off staff. The co-working startup Convene laid off staff as well, citing current market conditions.
Reffkin is hopeful that the economy will turn around and predicted that the economy could turn around in the next 100 days. And he ends his email looking forward to a return to normalcy for Compass and the broader market.
“I feel hopeful that China’s apparent success at reducing the spread of the Coronavirus and restarting their enormous economy may provide a blueprint for our future, as well,” Reffkin wrote. “And I feel hopeful because of the ways I see people throughout our company and throughout our society stepping up during this challenging time.”
To date, Compass has raised $1.6 billion in financing from investors including the Canadian Pension Plan Investment Board, Fidelity, Wellington Management, Softbank Vision Fund, and the Qatar Investment Authority, according to Crunchbase.
If you weren’t playing games when Half-Life came out, it’s hard to drive home just how shocking a departure it was from what had come before. Though some familiar mechanics served as a base to build off of, the injection of elaborately scripted sequences that put you into the action, mature humor and genuinely engaging set piece-driven plot put Half-Life into its own special section of the stratosphere.
It’s not often that you can say that a product changes everything in its category from that moment on. Half-Life did that.
And then when Half-Life 2 debuted, it did it again with its method of delivery, incredible building tools and yes, inventive-as-hell gameplay.
Half-Life: Alyx does that again for VR, making such a direct impact that this will be a demarcation line forever in the way we craft immersive virtual experiences.
Alyx begins in the period of time between Half-Life and Half-Life 2, taking place mostly just before the action in the latter. The world is familiar, as are most of the cast of characters (along with some bespoke new additions). Given their high-fidelity look and carefully stepped variety, even newbies to the Half-Life universe should be kept entertained as they encounter new threats.
Those of you returning will find a large part of the new experience in inhabiting the same virtually physical space as headcrabs, barnacles and combined forces. Let me tell you, seeing the underbelly mouth of a ‘crab flying toward your face in VR versus on your monitor definitely hits different.
That sense of presence that is so pivotal to VR is something Valve leaned into hard with Alyx. You are rewarded for treating environments and encounters as a place to pretend to be rather than progressing through. There are a variety of tricks that Alyx uses to make you comfortable existing in this world, not the least of which is the presence of a voice in your ear in the form of an engineer named Russell.
Played hilariously by Rhys Darby, Russell’s voice serves to mitigate issues that many VR aficionados may recognize. One of VR’s primary powers is that of embodiment — making the experience of being there so convincing that you generate real memories of presence. Along with that, though, comes isolation. Long VR sessions can make you feel cut off from reality, and horror experiences, especially, can become overwhelming. Having Russell there offering humanity and humor to punctuate the darkness of this supremely dystopian environment is a fantastic choice. You’re a solo operator, but you’re not alone.
The environmental intensity of Alyx is well paced, too. An intermix of heart pounding horror with moments of harsh beauty and humor can often be a difficult cocktail.
“There’s a lot of different things that we give you the opportunity to do that give, I would argue, different types of players, different things to go deep on,” says Half-Life:Alyx character animator Christine Phelan. “With intentionality, we definitely spent a bunch of time trying to figure out what is that line?”
Phelan notes that when there are horror elements, VR is well known to be an intense experience, and modulating that was key to not alienating players. Rather than a relentless onslaught, you are brought up and down.
I checked my Apple Watch heart rate data over the past week that I’ve been playing Alyx and, sure enough, there were the spikes in rate during my play sessions to prove the impact of those choices. Some of the more intense segments play like the best horror action movies you’ve seen — Aliens comes to mind, as well as more recent fare like A Quiet Place.
Keeping you engaged in that environment, of course, means that control schemes are incredibly critical. Valve’s choices on Alyx reflect a desire to make sure that the widest array of people can experience the game. They offer all of the accepted travel modes including teleporting, a continuous travel mode like walking and my favorite, shift — a sort of zooming snap that keeps a sense of context to your movement.
Personally, I am unable to walk continuously in VR without wanting to toss my cookies, and Alyx is no different here. In fact, the game takes a lot of pains to make sure it moves the character involuntarily as little as possible, even offering a ‘toggle barnacle lift’ setting to avoid the motion sickness some people may feel being virtually hoisted in the air. A wise choice as there’s a lot going on in Alyx already, with some encounters forcing you to move rapidly through the environment to combat enemies or solve puzzles.
The sheer accessibility of Alyx’s options speaks to the desire by the team to make sure it accommodated as many people as possible. Standing, seated, either hand, choice of dominant eye, room-scale or not — if there’s a way to play a VR game, Valve has you covered.
One of the biggest effective bits is the presence of Alyx’s hands in the game world. Because most people interact with the world via their hands (though not all), Phelan notes that you get a lot ‘for free’ when you make those the primary interaction method. People already know what to expect when they do things with their hands and at that point your job just becomes to make them act exactly as you’d expect in as many situations as possible.
And they do. Your hands realistically grasp, tap, push and poke the environment (and there is a lot of environment with the most interactive objects I’ve ever seen in a VR game).
The hands even adapt to the contours of things, curving or turning corners as you slide them across objects. The fingers are used to tell you that you really can’t interact with this, but you can feel it — this is not an action point for you. But then, when there is an action point, the hand naturally curves around something, and you get the message “Oh, yeah, I can grab this.”
A lot has been said about the Knuckles controllers that come with the Valve Index headset, and they’re great. But the marquee feature for me is the soft hand strap that keeps them attached to you. This frees you up to make grabbing and grasping motions with your whole hand, as you would normally.
I have the Vive controllers, the Oculus controllers, and the Knuckles. Certainly, the Knuckles, with the individual finger control, absolutely locks it in, I think, for people on the hand interaction. If every company doesn’t dupe the work that Valve has done with these, they’re dumb.
“I think the Knuckles and the Index broadly is essentially Valve’s attempt to say, “This is pointing towards a heightened VR experience. This is what we think of as a really great direction for this hardware to go,” says Valve’s Chris Remo, who also added that they did a lot of work to make sure all the compatible VR hardware turned out a great play experience. “It was obviously pretty important that this wasn’t a Valve Index game. It’s a VR game. We genuinely tried our best to support those features, [including] all the finger tracking the Index does on the Knuckles controllers and everything else.”
A lot of the work on interactions mirrors what other creatives have done in VR, but polishes it up a level. And a lot of that work is hidden unless you look very hard for it. Doors open in the direction of your hand’s travel, for instance. Magically outwardly opening doors that open inward is a perfect affordance. Most people will never notice. The people that care will, and that’s fine, but most people will just have a better time of going through this way versus that way without fussing too much.
The gravity gloves shown off prominently in the gameplay trailers are another such affordance. They neatly avoid the VR problem of people constantly inching out or down and ramming into things outside of their play area while trying to grab objects on the ground or inside containers. They also give the player the ability to quickly utilize the environment to fend off enemies or distract them with a speed and agility that you’d never be able to realize otherwise.
Call it fate or design that Half-Life 2’s gravity gun offered the perfect in-world explanation, but it works incredibly here. Grabbing a gas mask off the ground and attaching it to your face, fending off a headcrab with a trash can lid, throwing a brick to stagger a zombie, it’s all possible with the Russells.
“You can move through a space just as quickly physically, but people do end up taking longer, because you’re naturally invited to do so,” says Remo. “You can look around something in a physical way that just, there’s no equivalent to that in a non VR game. It also meant that you can get up close to props in a way that isn’t really possible or feasible as much in a non VR game, which meant that all that stuff has to actually hold up and be worthwhile.”
I can vouch for the time put in. At one point I grabbed a random half-crushed water bottle laying in a corner and looked inside the mouth to find the interior dimples of the bottom lovingly rendered. One person’s trash, etc.
There’s so many other things that I could talk about here. The use of spatial audio anchored in what seem to be gaussian spheres that attach sound and (incredible) music to environments, with nested encounter scores inside. The dynamic loot system that keeps the balance of the resources you have available to you tuned so that the game remains fun. The encounters that take those early scripted scenes in Half-Life and plus them to create a symphony that taxes and rewards the player for creative and thoughtful gameplay.
It’s not so much that Valve has executed One Weird Trick for making VR good. Many of these major ideas has been tried by one team or another over the past few years. But the execution has never been more precise and thoughtful. One after another the good choices keep coming — and the whole adds up to something truly special and bar-setting.
Inventive, clever and completely engaging, Half-Life: Alyx is the first masterwork of VR gaming.
But that could actually be understating its eventual impact on VR, if that’s possible. Though the template for what a truly A-list title looks like has now been truly sketched, it has always been Valve’s willingness to share its tools that has made the most impact on the gaming scene at large.
That’s why I’m looking forward to an eventual SDK. Hammer 2 is easily one of the best game building tools ever created. Valve is already going to ship Source 2 tools for building new VR levels in Alyx, but as fans of history will remember, the level building scene really took off once the deeper tools to craft a game became available. The ripple effect on the industry will be felt long after people have dissected every sliver of what makes this game so fun. You can trace a major portion of the $1B e-sports industry directly back to mods enabled by Valve being generous with their internal tools.
Imagine what that kind of impact looks like for VR, a field that has been experimenting like mad but has no real coda of best practices for building. It could be massive and though members of the team have said that they’re not currently planning to release an SDK, my hopes are high.
Until then, we have Alyx, and it is good.
Zillow said Monday it will temporarily stop buying homes in all 24 markets where it operates in response to public health orders related to the COVID-19 pandemic, the latest real estate startup to shift how it operates as the disease caused by coronavirus continues to spread.
Zillow said it decided to pause making offers to sellers after several counties and states, including California, Illinois, Louisiana, Ohio, New York and Nevada, implemented emergency orders requiring people to stay home and all non-essential business activities, including some real-estate related activities, to stop.
Zillow follows action from other real estate startups such as Opendoor and Redfin to temporarily pause making offers on homes.
“We plan to restore Zillow Offers full operations once health concerns pass and local health orders are lifted,” Zillow Group CEO and co-founder Rich Barton said in a statement. “In the meantime, we are working to support our customers and partners in these uncertain times when home has never been more important.”
The company started to slow its pace of buying homes last month, while accelerating sales in the quarter, Barton said. Zillow’s inventory is now 1,860 homes, a 31% decline from 2,707 homes at the end of 2019.
The company said it will continue to market and sell homes through “Zillow Offers,” and will temporarily suspend plans to open additional Zillow Offers markets. Zillow also halted open houses in all markets, beginning last week.
We have a strong balance sheet and cash position, and are taking proactive steps to reduce spending to offset the important financial support we’re giving our industry partners so we may continue to best serve our mutual customers,” added Barton.
We’ve been diligently following the development of virtual worlds, also known as the “metaverse,” on TechCrunch.
Hanging out within the virtual worlds of games has become more popular in recent years with the growth of platforms like Roblox and open-world games like Fortnite, but it still isn’t a mainstream way to socialize outside of the young-adult demographic.
Three weeks ago, TechCrunch media columnist Eric Peckham published an in-depth report that positioned virtual worlds as the next era of social media. In an eight-part series, he looked at the history of virtual worlds and why games are already social networks, why social networks want more gaming, what the next few years looks like for the industry and why isn’t it mainstream already, how these virtual worlds will lead to healthier social relations, what the future of virtual economies will be and which companies are poised for success in this new market.
Given all that has changed in just the last three weeks — who would have thought that large swaths of the knowledge economy would suddenly find themselves entirely interacting virtually? — I wanted to get a sense of what the rising popularity of virtual worlds looks like in the midst of the outbreak of novel coronavirus. Eric and I had a call to discuss this and decided to share our conversation publicly.
Danny Crichton: So let’s talk about timing a bit. You wrote this eight-article series around virtual worlds and then all of a sudden post-publication there is this massive event — the novel coronavirus pandemic — causing a large portion of the human population to stay at home and interact only online. What’s happening now in the space?
Eric Peckham: I wrote my series on the multiverse because I was already seeing a surge of interest, both in terms of consumer demand for open-world MMO games and in terms of social media giants like Facebook and Snap trying to incorporate virtual worlds and social games into their platforms. Large companies are planning for virtual worlds in a way that is actionable and not just a futuristic vision. Over the last couple of years there has also been a lot of VC investment into a handful of startups focused on building next-generation virtual worlds for people to spend time in, virtual worlds with complex societies shaped by users’ contributions.
Talking to founders and investors in the gaming space, there has been a huge increase in usage over the last few weeks as more people hang out at home playing games, whether it’s on the adult side or the kid side.
Most of these next-generation virtual worlds are still in private beta but already popular platforms like Roblox, Minecraft, and Fortnite are getting substantially more use than normal. A large portion of people stuck at home are escaping via the virtual worlds of games.
You wrote this whole analysis before you knew the extent of the pandemic — how has the outlook changed for this industry?
This accelerates the timeline of virtual worlds being a mainstream place to hang out and socialize in daily life. I think people will be at home for multiple months, not just a couple of weeks, and it’s going to change people’s perspectives on socializing and working from home.
That’s a really powerful cultural shift. It’s getting more people beyond the core gaming community excited about spending time in virtual worlds and hanging out with their friends there.
We have seen this most heavily with the youngest generation of internet users. The majority of kids 9-12 years old are users of Minecraft and Roblox who hang out there with friends after school. We’ll see that expand to older demographics more quickly than it was going to before.
One of the complaints that I’ve seen on Twitter is that even though we have one of the largest global human lockdowns of all time, all the VR headsets are basically gone. Is VR a key component of virtual worlds?
Well, you don’t need VR headsets in order to spend meaningful time with others in a virtual space. Hundreds of millions of people already do it through their mobile phones and through PCs and consoles.
This is at the heart of the gaming industry: creating virtual worlds for people to spend time in, both pursuing the mission of whatever a game is designed for but also interacting with others. Among the most popular mobile and PC games last year were massively multiplayer online (MMO) games.
Talking about gaming, one facet of the story that I thought was particularly interesting was the fact that gaming was still not that high in terms of market penetration in the population.
More than two billion people play video games in the context of a year. There’s incredible market penetration in that sense. But, at least for the data I’ve seen for the U.S., the percent of the population who play games on a given day is still much lower than the percent of the population who use social media on a given day.
The more that games become virtual worlds for socializing and hanging out beyond just the mission of the gameplay, the more who will turn to virtual worlds as a social and entertainment outlet when they have five minutes free to do something on their phone. Social media fills these small moments in life. MMO games right now don’t because they are so oriented around the gameplay, which takes time and uninterrupted focus. Virtual worlds in the vein of those on Roblox where you just hang out and explore with friends compete for that time with Instagram more directly.
Theater chains like Regal and AMC announced this week that they are entirely shutting down to wait out the pandemic. Is that going to affect these virtual world companies?
I think they are separate parts of media. Cinema attendance has been declining quite substantially for years, and the way the industry has made up for that is trying to turn cinemas into these premium experiences and increasing ticket prices. Kids are just as likely, if not more likely, to play a game together on a Friday night as they are to go to the cinema. Cinemas are less culturally relevant to young people than they once were.
We’ve seen a massive experiment in work from home, which is a form of virtual world, or at least, a virtual workplace. When it comes to popularizing virtual worlds, is it going to come from the entertainment side or the more productivity-oriented platforms?
It will come from the entertainment side, and from younger people using it to socialize, in part because there’s less fear around cultural etiquette compared to people meeting in a business setting who are worried about a virtual world context not feeling as professional. Over time, as virtual worlds become pervasive in our social lives they will become more natural places to chat with people about business as well.
As more and more people are working online and interacting virtually, a big question is how you get beyond Zoom calls or the technology that’s currently in the market for virtual conferences to something that feels more like walking around and chatting with people in person. It’s tough to do without the ability to walk around a virtual space. You can’t have those unplanned small group or one-on-one interactions with people you don’t know if you’re just boxes within a Zoom call or some other broadcast. It will be interesting to see what develops around virtual business conferences that stems from virtual world technology. I’ve seen a few teams exploring this.
Last question here, but we are looking at a major recession in the economy, and so how does the landscape of people earning money from virtual worlds change with coronavirus?
The second-to-last article in my series is about the virtual economies around virtual worlds. Any virtual world inherently has commerce and people have already been making real-world money from games and from early virtual worlds like Second Life.
Both people staying home amid the coronavirus and the recession that we seem to be entering are pressures that will push more people to look online for ways to make money. That will only increase the activity of virtual economies around some of these worlds, whether those are formally built into the game or they’re happening in a gray or black market around the games (which is more common).
Twitter CEO Jack Dorsey might not spend six months a year in Africa, claims the real product development is under the hood, and gives an excuse for deleting Vine before it could become TikTok. Today he tweeted, via Twitter’s investor relations account, a multi-pronged defense of his leadership and the company’s progress.
The proclamations come as notorious activist investor Elliott Management prepares to pressure Twitter into a slew of reforms, potentially including replacing Dorsey with a new CEO, Bloomberg reported last week. Sources confirmed to TechCrunch that Elliott has taken a 4% to 5% stake in Twitter. Elliott has previously bullied eBay, AT&T, and othe major corporations into making changes and triggered CEO departures.
…Focusing on one job and increasing accountability has made a huge difference for us. One of our core jobs is to keep people informed. We want to be a service that people turn to… to see what’s happening, to be a credible source that people learn from.
— Twitter Investor Relations (@TwitterIR) March 5, 2020
Specifically, Elliott is seeking change because of Twitter’s weak market performance, which as of last month had fallen 6.2% since July 2015 while Facebook had grown 121%. The corporate raider reportedly takes issue with Dorsey also running fintech giant Square, and having planned to spend up to six months a year in Africa. Dorsey tweeted that “Africa will define the future (especially the bitcoin one!)”, despite cryptocurrency having little to do with Twitter.
Rapid executive turnover is another sore spot. Finally, Twitter is seen as moving glacially slow on product development, with little about its core service changing in the past five years beyond a move from 140 to 280 characters per tweet. Competing social apps like Facebook and Snapchat have made landmark acquisitions and launched significant new products like Marketplace, Stories, and Discover.
Dorsey spoke today at the Morgan Stanley investor conference, though apparently didn’t field questions about Elliott’s incursion. The CEO did take to his platform to lay out an argument for why Twitter is doing better than it looks, though without mentioning the activist investor directly. That type of response without mentioning to whom it’s directed, is popularly known as a subtweet. Here’s what he outlined:
On democracy: Twitter has prioritized healthy conversation and now “the #1 initiative is the integrity of the conversation around the elections” around the world, which it’s learning from. It’s now using humans and machine learning to weed out misinformation, yet Twitter still hasn’t rolled out labels on false news despite Facebook launching them in late 2016.
On revenue: Twitter expects to complete a rebuild of its core ad server in the first half of 2020, and it’s improving the experience of mobile app install ads so it can court more performance ad dollars. This comes seven years late to Facebook’s big push around app install ads.
On shutting down products: Dorsey claims that “5 years ago we had to do a really hard reset and that takes time to build from… we had been a company that was trying to do too many things…” But was it? Other than Moments, which largely flopped, and the move to the algorithmic feed ranking, Twitter sure didn’t seem to be doing too much and was already being criticized for slow product evolution as it tried to avoid disturbing its most hardcore users.
On stagnanation: “Some people talk about the slow pace of development at Twitter. The expectation is to see surface level changes, but the most impactful changes are happening below the surface” Dorsey claims, citing using machine learning to improve feed and notification relevance
Yet it seems telling that Twitter suddenly announced yesterday that it was testing Instagram Stories-esque feature Fleets in Brazil. No launch event. No US beta. No indication of when it might roll out elsewhere. It seems like hasty and suspiciously convenient timing for a reveal that might convince investors it is actually building new things.
On talent: Twitter is apparently hiring top engineers “that maybe we couldn’t get 3 years ago”. 2017 was also Twitter’s share price low point of $14 compared to $34 today, so it’s not much of an accomplishment that hiring is easier now. Dorsey claims that “Engineering is my main focus. Everything else follows from that.” Yet it’s been years since fail whales were prevalent, and the core concern now is that there’s not enough to do on Twitter, rather than what it does offer doesn’t function well.
On Jack himself: Dorsey says he should have added more context “about my intention to spend a few months in Africa this year”, including its growing population that’s still getting online. Yet the “Huge opportunity especially for young people to join Twitter” seemed far from his mind as he focused on how crypto trading was driving adoption of Square’s Cash App
“I need to reevaluate” the plan to work from Africa “in light of COVID-19 and everything else going on”. That makes coronavirus a nice scapegoat for the decision while the phrase “everything else” is doing some very heavy lifting in the face of Elliott’s activist investing.
Photographer: Cole Burston/Bloomberg via Getty Images
On fighting harassment: Nothing. The fact that Twitter’s most severe ongoing problem doesn’t even get a mention should clue you in to how many troubles have stacked up in front of Dorsey
Running Twitter is a big job. So big it’s seen a slew of leaders ranging from founders like Ev Williams to hired guns like Dick Costolo peel off after mediocre performance. If Dorsey wants to stay CEO, that should be his full-time, work-from-headquarters gig.
This isn’t just another business. Twitter is a crucial communications utility for the world. Its absence of innovation, failure to defend vulnerable users, and an inability to deliver financially has massive repercussions for society. It means Twitter hasn’t had the products or kept the users to earn the profits to be able to invest in solving its problems. Making Twitter live up to its potential is no sidehustle.
Oyo said on Wednesday it is laying off 5,000 people from its global workforce as the Indian budget hotel startup looks to cut its spendings and chase profitability.
The latest round of job cuts would reduce Oyo’s headcount to 25,000 in over 80 countries where it operates. An Oyo spokesperson said the job cuts are part of restructuring that the startup announced in January.
“The global restructuring exercise at OYO was announced in January 2020 and the recent developments in China are in line with the same. China is a home market for OYO, and we will continue working with our thousands of retained OYOpreneurs to deliver against our core mission of creating quality living experiences for millions of middle-income people around the world,” the spokesperson said.
“During the tough Coronavirus situation, we will continue to support the benevolent and resilient Chinese society, in every possible way. We want to thank our partners, employees and customers for standing strong together.”
Bloomberg reported that the job cuts would largely impact Oyo’s business in China, where the company plans to let go half of its 6,000 direct full-time staff, the U.S., and India. Oyo also plans to “temporarily” lay off 4,000 discretionary workers, some of whom will be invited back once the business recovers, the report said.
Founded by Ritesh Agarwal and heavily backed by SoftBank, Oyo has aggressively expanded to international markets in recent years and sought to become the biggest hotel chain globally.
During its journey, it has also raised more than $1.5 billion. In October, Agarwal, 26, announced that the firm was seeking to raise an additional $1.5 billion, with him financing $700 million personally.
But the startup’s aggressive expansion came under scrutiny last year after things went spectacularly south, and quickly, at WeWork, another SoftBank portfolio startup.
The New York Times reported earlier this year that many of the hotel partners of Oyo felt cheated and in dire financial condition after the startup reneged on its committed promises. Indian business outlet The Ken further documented the increased pressure the startup put on its employees to meet unrealistic expectations.
Oyo reported a loss of $335 million on $951 million revenue globally for the financial year ending March 31, 2019.
“As difficult as some of these decisions have been to make, especially when it comes to changes to our staffing model, we have reasons to believe that this is the right thing to do for the business and for the 25,000+ OYOpreneurs who remain with the company. We are mostly through, and will complete this restructuring shortly, as we prepare for a strong and sustainable growth in 2020, and beyond,” Agarwal wrote in a blog post in January.
It turns out the virtual and augmented reality companies aren’t dead — as long as they focus on the enterprise. That’s what the Los Angeles-based extended reality technology developer Talespin did — and it just raised $15 million to grow its business.
Traditional venture capitalists may have made it rain on expensive Hollywood studios that were promising virtual reality would be the future of entertainment and social networking (given coronavirus fears, it may yet be), but Talespin and others like it are focused on much more mundane goals. Specifically, making talent management, training and hiring easier for employers in certain industries.
For Talespin, the areas that were the most promising were ones that aren’t obvious to a casual observer. Insurance and virtual reality are hardly synonymous, but Talespin’s training tools have helped claims assessors do their jobs and helped train a new generation of insurance investigators in what to look for when they’re trying to determine how much their companies are going to pay out.
“Talespin‘s immersive platform has transformed employee learning and proven to be an impactful addition to our training programs. We’re honored to continue to support the Talespin team through this next phase of growth and development,” said Scott Lindquist, Chief Financial Officer at Farmers Insurance, in a statement.
Farmers is an investor in Talespin, as is the corporate training and talent management software provider Cornerstone OnDemand, and the hardware manufacturer HTC. The round’s composition speaks to the emerging confidence of corporate investors and just how skeptical traditional venture firms have become of the prospects for virtual reality.
The prospects of augmented and virtual reality may be uncertain, but what’s definite is the need for new tools and technologies to transfer knowledge and train up employees as skilled, experienced workers age out of the workforce — and the development of new skills becomes critically important as technology changes the workplace.
Cornerstone, which led the Talespin Series B round, will also be partnering with the company to develop human resources training tools in virtual reality.
“We share Talespin’s vision that the workforce needs innovative solutions to stay competitive, maximize opportunity and increase employee satisfaction,” said Jason Gold, Vice President of Finance, Corporate Development and Investor Relations at Cornerstone, in a statement. “We’ve been incredibly impressed with Talespin’s technology, leadership team and vision to transform the workplace through XR. Talespin’s technology is a perfect fit in our suite of products, and we look forward to working together to deliver great solutions for our customers.”
Talespin previously raised $5 million in financing. The company initially grew its business by developing a number of one-off projects for eventual customers as it determined a product strategy. Part of the company’s success has relied in its ability to use game engine and animation instead of 360 degree video. That means assets can be reused multiple times and across different training modules.
“Creating better alignment between skills and opportunities is the key to solving the reskilling challenges organizations across the world are facing,” said Kyle Jackson, CEO and Co-Founder of Talespin, in a statement. “That’s why it’s critical companies find a way to provide accelerated, continuous learning and create better skills data. By doing so, we will open up career pathways for individuals that are better aligned to their natural abilities and learned skills, and enable companies to implement a skills-based approach to talent development, assessment, and placement. Our new funding and partnership with Cornerstone will allow us to expand our product offerings to achieve these goals, and to continue building innovative solutions that redefine what work looks like in the future.”
Throughout this series on the rise of multiverse virtual worlds, I have outlined the collision of gaming and social media into a new multiverse era of social media within virtual worlds due to technological and cultural changes. The result will be a healthier ecosystem of social media than what currently exists and the economic development of these virtual worlds such that many people turn to them as sources of income.
The critical question that remains in this final part of the series: Who will be the dominant companies of this multiverse era who build the most popular virtual worlds? Will one virtual world achieve a monopoly or will there be many worlds we hop between on a daily basis? Will the most influential company be the developer of a certain world or an infrastructure layer underpinning many worlds?
(This is the final column in a seven-part series about “multiverse” virtual worlds.)
There are three categories of competitors in position for this new stage: gaming incumbents, social media incumbents and new virtual world startups.
Fictional portrayals of virtual worlds such as “Ready Player One” and “The Matrix” typically portray the physical and virtual worlds as distinct realms siloed from each other. Characters escape a dystopian, impoverished physical realm and enter a separate, utopian virtual realm in which they are wealthy and important.
Our non-fictional future won’t have that dichotomy. One main reason is money. Any virtual world has a virtual economy, and when that virtual economy gets really big, it integrates with our real-world economy. That is in equal parts due to market forces and government intervention.
This is part six of a seven-part series about “multiverse” virtual worlds. We will explore the dynamics of games’ virtual economies, the exchange of virtual assets for real money, challenges with money laundering and underage gambling, the compliance infrastructure needed for virtual economies, and the challenges in balancing a virtual economy’s monetary supply.
To many people, the idea of spending time in virtual worlds amassing in-game currency and trading goods still sounds like the geeky science fiction hobby of someone who needs to “get a real job.”
Our society gauges the worthiness of pursuits based on their social and economic productivity, and most people don’t view virtual worlds as productive places. As more people find enjoyment in virtual worlds and respect people with accomplishments in them, however, vying for accomplishment with those worlds will increasingly be viewed as socially productive. As more people start earning an income through work in virtual worlds, perception of economic productivity will quickly change, too.
Virtual worlds will be viewed as digital extensions of “the real world” and working a full-time job in a multiverse virtual world will become as normal as someone working in a social media marketing role today.
The basis of the classic James Bond film “Tomorrow Never Dies” is an evil media mogul who instigates war between the U.K. and China because it will be great for TV ratings. There’s been a wake-up call recently that our most popular social networks have been indirectly designed to divide populations into enemy camps and reward sensational content, but without the personal responsibility of Bond’s nemesis because they’re algorithmically driven.
(This is part five of a seven-part series about virtual worlds.)
The rise of “multiverse” virtual words as the next social frontier offers hope to one of the biggest crises facing democratic societies right now. Because the dominant social media platforms (in Western countries at least) monetize through advertising, these platforms reward sensational content that results in the most clicks and shares. Oversimplified, exaggerated claims intended to shock users scrolling past are best practices for individuals, media brands and marketing departments alike, and social platforms intentionally steer users toward more extreme content in order to captivate them for longer.
Our impending cultural shift to socializing equally as often through virtual worlds could help rescue us from this constant conflict of interest between what we recognize as healthy interactions with others and how these social apps incentivize us to behave.
Virtual worlds can have advertisements within them, but the dominant monetization strategies in MMOs are upfront purchase of games and in-game transactions. Any virtual world that gains enough adoption to compete as a social hub for mainstream society will need to be free-to-play and will earn more money through in-world transactions than from ads.
Thus far in this series we’ve outlined “multiverse” virtual worlds — a concept different from the metaverse — as the next stage of social media and what this future will look like. It begs the question though: if video games have been massively popular for many years, why hasn’t this shift to online virtual worlds as mainstream social hubs on par with Facebook and Instagram already happened?
(This is part four of a seven-part series about virtual worlds.)
The thought of virtual worlds for socializing evokes Second Life (launched in 2003), where users created unique avatars to socialize, build and trade with each other. Contemporaneous press hype told us that our entry into “the metaverse” appeared imminent, and a 2006 cover story in BusinessWeek magazine featured an analyst who predicted that Second Life could displace Windows as the leading PC operating system.
That didn’t happen.
Granted, Second Life is still around, albeit with only a few hundred thousand active users. Eve Online is another long-running, open-world MMO where the experience is shaped by users’ contributions and social interactions. It’s been the subject of numerous studies on economics and psychology, given the depth of its data on human interaction, but it remains niche as well.
The popularity of Roblox, which surpassed 100 million MAUs and 40 million user-created experiences in August, and Minecraft, which surpassed 112 million MAUs, shows this movement gaining traction in a bigger way among the youngest generation of internet users.
There are both technical reasons and cultural reasons why participation in virtual worlds will finally go massively mainstream in the next few years.
On the technical side, most consumers have lacked the high-performance hardware necessary to meaningfully participate in advanced MMOs while going about their daily lives. And even if they had the right hardware, they weren’t entering one shared virtual space with all other users, they were just entering one instance of that world which was limited in scope and player count by the capabilities of a single server.
That’s all in the process of changing: