a16z Podcast - a16z Podcast: QR. AR. VR.

Episode Date: April 25, 2017

In this hallway-style episode of the podcast, a16z partners Connie Chan and Kyle Russell discuss recent announcements at Facebook's annual developer conference, F8, in the context of trends such as: messaging and QR codes; brain computer interfaces; augmented reality and social VR; and, bots (again). As online platforms built on "real" identity and brands bring more of the real world into the digital realm, will we experience filter fatigue... or will the mundane become more profound? The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments and certain publicly traded cryptocurrencies/ digital assets for which the issuer has not provided permission for a16z to disclose publicly) is available at https://a16z.com/investments/. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information.

The content here is for informational purposes only, should not be taken as legal business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund. For more details, please see A16Z.com slash disclosures. Hi, everyone. Welcome to the A6 and Z podcast. Today we're bringing you one of our internal hallway style conversations about some of the things that Facebook announced last week at F8, its annual developer conference. And A6 and Z partners Kyle Russell and Connie Chan talk about everything from parametric QR codes. They touch briefly on brain computer interfaces and then move on to AR augmented reality, social VR, virtual reality, and even revisit a topic we covered on the podcast last year with a popular episode on bots to talk more about bots. Over to Kyle and Connie. So did Facebook announce anything at F8 on the messaging front? You know, with your writings on WeChat, you're kind of a resident expert on that. So I'm really curious to hear how you thought about their announcements. I think they made a couple of announcements. But the one that caught my attention was the launch of the parametric QR codes. And I think it's great that they're putting this big push into getting users more familiar with this idea of using your phone as a scanner to scan QR codes that can take you.

I think in Facebook's case, to a particular messaging bot conversation. And what I also liked in what they launched was that particular company or a restaurant or a venue or whatnot can use multiple different codes to take you to different experiences. So one example that I've seen talked about is a restaurant that can put a different code on each specific table so that each table can bring up an experience where a user can order food specific to that table. So I'm not sure what the uptake is going to be, given that QR codes have been around for many, many years, but has never been popular in the U.S. But I love that Facebook is doing a big push into getting users more familiar with the concept. So a little bit of maybe naive analysis, I'd love to hear any pushbacker response you've got is, you know, three, five years ago in Silicon Valley, if you asked about QR codes, people would have kind of scoffed and said like, yeah, that was a fun little experiment. but very small fraction of people actually have apps on their phone that are just going to scan these things. And so they're not really this, you know, people aren't using them to link to things in the real world.

But now if you look at all of the kind of top social apps, Snapchat, Twitter, Facebook, they're all baked in there to some extent. Typically on the like account identity sharing side of things. So you share your snap code so that people can find you on Snapchat. Right. It's like baked into your profile picture. So is basically what's changed the fact that instead of needing this kind of random arbitrary utility app that you have to hunt down the app store, it's just because it's baked into these applications that have hundreds of millions or billions of users, like now it'll work. I think that's the hope of it. Yeah.

If you ask the average American how to even scan a QR code, even now, they probably have no idea. Right. They don't know where you even find a scanner. A 16-year-old using Snapchat and you say like, oh, yeah, do you use the SNAP, like, QR codes? to share your account all the time. They'd be like, well, I don't really know what a QR code is. But yeah, I like sharing my profile picture. Right.

So there's an education element that I'm hoping Facebook will contribute in terms of teaching the population how powerful a QR code can be. Is there anything, I guess, qualitatively different about how QR codes are used either in the real world or on the app side in China that reflect why there's been this kind of different set of outcomes here versus there? Well, QR codes have been around in Asia for a long time, not just in China. But I think in China, what really helped it take off is WeChat made it front and center a primary way of adding a friend. So as opposed to having to scan for a particular username because the username is not even required when you set up a WeChat account or knowing their phone number, for example, you could just scan their QR code.

And so people were trained to use WeChat as a QR code scanner very early on. And now you see QR codes implemented throughout WeChat in lots of really creative ways, not just payment. and internet connectivity and so forth. But mini programs is something that they've launched, which I actually think is totally underappreciated. And you haven't really began to see, you haven't begun to see the power of the mini programs concept in China yet. Okay, so again, just to briefly summarize, mini programs, what's that look like?

Many programs is where in WeChat you use a QR code. And it will basically take you to an experience that mimics whatever, you can do an application without having to download the apps. So the closest Western parallel would be when Google announced their instant apps. When Google announced instant apps. These are apps that basically make their way onto your phone, almost like a web page, download just the parts you need with like a deep link to it. Yeah, yeah. But it can take you to a specific page in the app, and that's the powerful part.

It's not that it takes you to the homepage of the Amazon app. It takes you to a particular sign in. No, it goes straight to the product you want or the PC. of content or media that you're going to consume. And that's why I think, even though Facebook's solution's not as elegant, the fact that it can take you to a specific page, that's the really cool part. That it's not just taking you to a front home page that everyone sees. So you look at messaging, we chat, China.

I look at weird emerging computing things like AI and VR. So I'm going to segue. Tell me what you think about the spaces announcement, for example. Well, actually, so a segue I was going to do because it kind of touches on both of our areas was from day two, the announcement that Facebook is working on a brain computer interface. They talked about wanting to look at the speech center of your brain and telepathically, basically figure out what you're hoping to type out just by looking at those electrical signals. And they even said that they have a goal of typing 100 words per minute just from looking at your thoughts.

So before we dig into the tech or even what that would look like as product, thoughts on letting Big Coase read your brain? Oh, gosh. at least just based off the way my brain thinks, I think that would be a very bad product for me. So I think it's an interesting concept, but I have no idea how well it's going to play out in terms of real life. Yeah. So just for a little bit of context and history on the brain computing interface space, the subject and the jargon in the name has been coming up a lot recently because of our buddy Elon Musk announced he's CEO of another new company now, Neurilink. It wants to come up with a neural lace, basically put electrodes onto your brain and do all kinds of things with that as input. Similar telepathy pulling your thoughts right out of there, but also using it instead of needing touch or a keyboard and mouse for other forms of input.

So what's interesting about Facebook's announcement is unlike Elon, who seems to be totally okay with the idea of digging into our skulls because if it provides enough value, people will probably kind of convert their norms and get comfortable with it. They want to be totally non-invasive. It'll sit on kind of the surface of your head. And so devices like this have existed before, I'd say, kind of in the mid to late 2000s, there are these devices that were pitched basically as kind of a new form of gaming input. You'd put them on your head. You'd kind of look like this little cap that would fit closely against your hair. Maybe you had to put some electrodes on like your ears or something.

But the idea is you'd use as an input for like a video game where you shoot a fireball from your left hand. And so when you put this thing on and use it for the first time, you'd have to train the software. to recognize or map a specific input. So you'd think, like, okay, I'm shooting a fireball from my left hand. So to train this thing, you'd think left, left, and it would look at the electrical signals kind of at the surface of your skin

and then come to associate that specific pattern with left. Then when you thought that in a game, you'd actually shoot a fireball some of the time. Yeah. Kind of the problems with it, you have to actually think about, you know, a specific input in that way. And maybe thinking about another input

will look so similar that it'll trigger the same action. Right. And so problems, it's, you have to actually specifically think, okay, I have to think about this word whenever I want to use this input, whereas most inputs that we're familiar with and come to love, the mouse, touch, or, you know, game pads for video games, they tend to be more like muscle memory as opposed to thinking about it. Right. And so that generation kind of, in the same way it was like VR in the 90s was like, oh, that's cool. That one day might be really interesting. I think that this previous generation of bring computer interfaces was not great, but showed kind of where things might go. And now with this current generation, it seems like between Elon, Facebook, probably something from Google, that we're actually going to start to see these things that kind of invisibly actually just let you think something and have some kind of action show up on your computer. It seems to me really impractical for the vast majority of people.

I think the argument for it is, you know, eliminate as much friction as possible. Most people can't actually type it even like 60 words per second, especially as we've transitioned, you know, to bring up the argument from about 10 years ago. Can they think at 100 words per? per minute, right? You think about, you know, like 10 years ago, the discussion about the switch from BlackBerry's with physical keyboards to the iPhone with touch that was a little bit slower and all the complaints people had. I think people do care about optimizing, like, words per minute and getting their thoughts down on, you know, digital paper. You know, they just want to get things out and down. And then they can edit it if 100 words ended up every couple words had some gibberish in there because our heads are actually spitting out random words.

So then why skip and leapfrog the whole audio input? Well, think about, for instance, the use of these devices in public. I think, you know, you talk about some of the concerns of using things like Siri out and about. To some extent, that concern is probably lessened by the fact that you just walk around in New York or San Francisco and you see people talking into their phones all the time. Yeah. People don't actually have that many concerns. But, you know, if you're in maybe a smaller space, like a subway, somewhere where you don't want to intrude on other people's kind of attention space, being able to just kind of brain feed into the computer seems like a way to eliminate those kind of privacy concerns. I don't know. I mean, audio comes with some benefits and nuances around intonation and speed and your emotion behind it.

But when you think about the brain, there are so many ways to translate a phrase. And depending on which words the system chooses for you can give a completely different meaning. Right. And this is where, so we had a discussion on the investment team here about this when they announced it. And what wouldn't shock me despite the lofty goals of getting this 100 words per minute, you know, kind of success rate, I have a strong feeling that what we're actually going to see is kind of. of getting ground truth reactions to, for instance, posts on social media where, you know, right now, Facebook last year gave you the ability to, instead of just giving a like to something that you see in your feed, okay, now I can say that it makes me happy or mad or sad or wow. And, you know, you have to kind of think about what is my reaction, what do I want to signal

to the original poster my reaction was, even if it wasn't actually what my brain thought about it, like, ah, the story actually kind of made me sad. but it's, you know, a very personal moment for my friends. But there's so many examples where that can go wrong, right? Like, say you see like an ex is now dating someone else. Of course you're furious or really upset, but you don't want to show that. Yeah. No, but basically the idea is, you know, maybe it's for you in that communication or maybe it's

for Facebook to know how you actually feel about that moment, you know, separate from the input that you provide kind of intentionally. interesting implications there on privacy and what do the social networks know about you versus what do you want to put out there? So to I guess hop on other things related to cool future of social that Facebook talked about. Yeah, I'd love to hear what you think about

all the filters. Yeah, so again, to kind of summarize Facebook announced that in the same way that they've slowly been kind of taking inspiration from Snapchat with features like stories and they acquired this company Masquerade that they do the kind of apply 3D models to your face to have fun selfies.

They announced something called an AR content studio where basically the Facebook, Messenger, Instagram cameras are going to be an AR camera app platform. You're going to be able to create fun little things that will map onto your environment. You're out at a restaurant and you hold your phone up while in the line at Starbucks and it says how people specifically rated each product. Or you go to Coachella and hold your phone up and there will be arrows highlighting exactly where you should go to get to specific shows at particular times. It's interesting to think about kind of the difference in how the big companies are looking at this.

Snapchat, obviously, it's kind of continuance practice of we're just going to own the entire experience. This is a, when we think about AR, it's a canvas for Evan Spiegel to run product experiments and push social, you know, user experience forward. Also, brands will be able to do fun ads with it. Facebook, it's in the same way that Messenger, it's a platform for anyone to build on top of it, to make Messenger itself more valuable. Now, Facebook's cameras will be a platform for people develop on to make people spend more time in those apps. Do you think these filters will ever get old? I mean, there comes the point where you have 50 people posting their Starbucks cup with the animated smoke coming out of it. I think that there's enough hooks to provide in terms of what do you overlay on top of what context, that there's a lot of runway for novelty.

There's a lot of kind of unique, fun experiences where it only takes you five seconds to discover it because you're already in the habit of swiping through. the filters of the week because they're regularly updated. You find one that the novelty lines up with whatever you're doing and, hey, I'll use it today. A broader question, though, is, you know, if you look at the discussion around augmented reality, there's the idea that AR in the form of things like headsets like HoloLens magically what Apple is maybe working on is the idea of, you know, overlaying information as you need it on top of the things where it's relevant. You know, the example being you walk into a conference room and it puts people's LinkedIn profiles on top of their heads so that you never forget anyone's name. Right. Or you go out

to a bar and it puts their Tinder profiles over everyone's faces so you know kind of what their interests are. So I love all of those use cases. Yeah. I worry that some of the face masks will get old over time. Yeah. Well, face masks and also kind of the rest of the arbitrary content coming from the AR content studio. Right. I mean, headsets, what's nice about the form factor, especially as you move towards things like glasses is you can just kind of have things overlaid everywhere where it's relevant and you don't have to think about will there be something useful here that's my concern with AR on your phone is yes we all have phones and yes they all have these cameras and sensors to be able to pick these things up and know when to project but do we always want to have to go around being like

oh I have to stop mid text message because I just walked into Starbucks and I need to switch over to the Facebook app so I can check if there are any holograms here that are interesting to look at. I don't know just the nature of it requires kind of switching out of whatever flow or workflow or process you're in to go over to that. Yeah, that transition is not

natural. Yeah. It doesn't feel as smooth as you'd like for this kind of, it's supposed to be magical things everywhere and that inherently means like leaving what you're doing it all the time. The hardware form factor might not be the phone of course for this long term. It's just we're so far from that still. Right.

You look at HoloLens and it's $3,000 and maybe a couple hundred people own it. I do think for me the face filters was a reflection of Facebook giving people more tools to have more reasons to create things. Right. And to show off their everyday lives even more so than they do today. So to me it was more a reflection of, wow, how do I get someone to share their day that seems a little bit boring perhaps and make it seem more interesting? So they want to share more content. Yeah, no, if you look at things like that or features, again, similar to, but with their own take from things like Snapchat, you know, overlaying specific stickers or emoji onto video, but using kind of smart, you know, machine learning to be able to persistently place a sticker on a particular point in a video. And as the camera moves to something else, it stays, you know, you put a sticker on your friend's face, but you move the camera from that friend to someone else.

The sticker stays on that particular friend. Yeah. It's all these kind of light touch ways to make something kind of mundane into a little bit more interesting. I think you're right. It just kind of promotes casually making content even in a situation where it's like this isn't particularly like a big event for us. It's just we're out and about and we just kind of want to sing with the people that we're doing these things. That's great. And it's just another place for someone to get their creativity out.

But I worry that that almost dilutes the kind of content that's thrown at you on it. day-to-day basis. If I'm just looking at all my friends post these mundane everyday events but made into beautiful pieces of art, no matter how beautiful or creative they are, over time it makes me less interested. So a little bit of a counterpoint or pushback against that is, if you look at Instagram or Facebook, the nature of having metrics publicly exposed to people and comment counts and things like that means that content typically can devolve. into something like happiness theater. You post your photos from the big family trip

or when you got to go see that great concert, but you, oh, we got the VIP tickets and so we got to be even closer and we took a selfie near the stage. It's oftentimes you're going for impact and it makes your social feed evolve into something that's, oh, I'm in touch with my friends and family because I want to know what they're doing

to kind of everyone's in this like arms race of I'm having the cooler life. Yeah. And by making the mundane more interesting, I think it pushes back against that trend, which is maybe actually healthier. I guess I'm not sure if the filters are enough to cover the fact that our everyday lives are more mundane than I think we'd like to project them to be. And this is where I find it so fascinating to contrast that with WeChat moments. So WeChat moments doesn't have that public count of likes or comments.

And therefore, at least I look at myself and anecdotally with my friends, people share in a very different mindset. So if you post something on WeChat and say a mutual friend of ours comments on it, I'll see it. But if I'm not friends with that mutual friend, I won't even see that comment. So people comment and like things much more freely because it's not part of your, I guess, social record. Yeah, no. And I mean, from, again, just my own personal time on Facebook, interjections from second cousins when you post a family photo. Oftentimes it's, oh, now I almost regret having to do this because now you're interacting with me. And I have to deal with that.

Yeah. And it's like, oh, I haven't spoken with you in years. And so I don't know how to respond to your friendly comment, even if it's nice. It's just a weird, almost burden. And so to illuminate that pressure by, hey, keeping the reactions and comments specifically to the people who would care about them. Yeah, I can see that illuminating a lot of the pressures. You actually can never see how many likes any post has. And so say if I see one of your posts and I only see three likes, well, maybe it's only because we have fewer mutual friends. Yeah. Right. It's been someone else. And to connect this to another big tech business narrative, you know, one of the big questions for Snapchat is they make it really hard to discover other accounts. They don't really tell you how any of your posts are doing. And so it doesn't lend itself to building a brand in the same way that you do on Twitter or on Facebook. And, you know, strength to that is very tight graph. You're not concerned with those things.

You're just interacting with people you care about. Downside is potentially hinders growth in the future. And so, you know, you can see. see how you can see the argument for doing that, for illuminating this kind of model of track how every single post you put out there does and try to like optimize even even if it's not something that's like explicitly told like no one is told hey like try to get more attention on Facebook. It's one of those things where you optimize what's measured. And so that's true for consumers in addition to businesses. And so I get dopamine releases every time I get

a like, and so I'm going to try and get more likes. It's totally triggering different emotional needs. I think all of these different platforms, right? Kind of the last big product announcement that actually does kind of move along those lines that came out of Facebook F8 was Facebook Spaces. They're finally released social application for Oculus Rift, which lets you hang out with your friends from your Facebook graph in a virtual space. Doing really interesting things like playing 360 video around you while in a space,

also having like a 3D rendered environment, but the idea, like one example they showed off was playing a 360 video of a riverboat tour that some friends were going to take on a future trip. And so they could almost like plan slash preview what that experience is going to be like even though they were in different places looking at a 360 video of an entirely different location than either of them were in, something there feels like it's going to be really powerful. I'm actually curious to see kind of evolution and combination of that kind of experience with things like Airbnb of, you know, you're planning your weekend getaway with your significant other. You happen to both be at the, you know, your separate offices, but you want to quickly coordinate something.

You hop into your $50 VR headset that is an add-on for your phone and very quickly can have this kind of spatial experience. That gives you much more information that you get from just like sending an Airbnb listing with five photos that are really pretty. but maybe you don't really get, like, how do we compare this house versus that house? Yeah. The other side of it, though, is... It reminds me a little bit of Within's latest piece, Life of Us. Yeah. Have you seen that one?

Yeah. Recently, I got to experience that. Unfortunately, I missed it when it was doing the run of the film festivals. But, yeah, that was really cool one where it's multiple people in a narrative experience. You're kind of walking through the timeline of life itself, starting as single-cell or, you know, very tiny multi-cell organization. all the way to humanity and beyond. Now, there's something really powerful, and I wrote about this late last year, something really powerful to social experiences in VR.

Yeah, I agree. I've said this before on the podcast, but something we hear all the time as VR enthusiasts is, oh, but isn't VR so antisocial? And this is actually a talking point that Tim Cook uses when he's doing his hyping up AR in the same way that he hyped up the smart watch space before they announced the Apple Watch of, oh, yeah, we think the wrist is interesting. Now he's saying things like, yeah, we think AR is more compelling than VR because you're not blocked off from the people immediately around you, which is true, but that means you have to make a headset that you're not embarrassed to wear in public. So maybe Apple can do it, but probably going to be a couple of years. But with VR, so in the same way that when smartphones or phones were messaging was made easier with things like keyboards and just, you know, decent data connections, people would tease people walking down the street while texting, like get your head out of your own. phone. What are you doing? What looks like antisocial behavior is actually social behavior because there's

more interesting people on the other side of that screen, I think is the overall argument I'd make for social VR. So what I found fascinating around this entire concept is if you think about games like World of Warcraft, this concept of living in this alternate world and having a different personification of who you are, it's a concept that has proven out to be really sticky for generations of gamers, right? And if you look at Warcraft and then you compare it to the way spaces kind of personifies you in that world, and then if I compare that to what within produced with Life of Us, where you are depicted as a cell and then a reptile and all kinds of different creatures, I think it's really interesting to think about how does Facebook use your identity and how do

they show you visually or even through audio in this new spaces format. Will people naturally all go towards this bitmoji cartoon character that looks like you, or are they all going to turn into gorgeous female characters like they often do on Warcraft? And how does that interplay with how on Facebook you're supposed to be your real self? Yeah, this is interesting. Facebook made the system that they made a giant data set of celebrity photos plus bitmojis associated with those faces to train a machine learning model that then generalize to regular people. And so it looks at your profile photo then makes a kind of cartoonish avatar that looks like you. But in a virtual reality where you and the environment are completely digital and

fabricated, why should you have to be you? Right. Yeah. And it's maybe I want to be a robot. Maybe I want to be a cartoon alien. Maybe I just want to be me but different. I actually saw interesting arguments raised. from kind of, you know, thinking about being open to new and different identities, you know, for instance, transgender users on Facebook, do they want their avatar to have their voice or do they want the ability to have a voice changer, make their, the voice that comes out of them actually sounds like their own, you know, kind of imagined identity of themselves, the identity that they think of when they, like, present themselves to the world.

In the real world, there's some constraints about how you can present yourself versus, again, in this entirely digital world, why not be 100% you? That's an interesting thing for Facebook to consider. So kind of another question on the messaging and applications kind of living within messaging front is it's coming up on a year since kind of the big push towards chat bots and other forms of conversational interfaces from Microsoft and Facebook and Google. with Facebook, you know, they talked about Messenger as this new platform for these different kinds of interfaces with, yes, there would be things using NLP you'd talk to services, but it also have WeChat style kind of guis that show up in a conversation to kind of just make workflows more seamless or made more straightforward. But we haven't really seen huge adoption of any of these apps. And again, my kind of read on this has been that Facebook hasn't been, let's say, the best steward of Messenger as a platform. For instance, for the first six to nine months of it, other than the kind of bots that Facebook itself specifically highlighted and linked to in press releases and things, I had no idea how to discover interesting applications within Messenger. And so felt like there was interesting experiences that could be built, but they weren't really set up to succeed among users.

And so coming up a year later, has Facebook done anything to make that platform better for developers that they can actually get traction? At F8, they announced that they're including a new discovery tab into Messenger so that you can find these bots. My concern is that the issue around bot usage and adoption is not actually the discovery piece. It's that the great use cases for the bots haven't been created yet. And that's more a function of Facebook educating developers or developers coming up with the right use cases and Facebook figuring out how to get people to attach their credit cards and payment credentials to their account. Because until you have a bunch of users that can buy things, a lot of developers don't have an incentive financially to even create an interesting bot, right? A lot of these things feel like they're each necessary but not sufficient.

There is, can you actually, you know, complete a transaction within this bot in Messenger to kind of, you know, complete the loop? You interacted with the service, came upon a product or service that was interesting for, you know, in terms of you giving them money and then, okay, now I can actually execute on that here. But in terms of the monetization versus distribution, there's also, if you can't get a user base in the first place to monetize, assuming those features are there, how is the platform itself going to be interesting for people? So it feels like... But then that almost goes and tells me that they aren't providing enough value, right? Like the whole point of having payments integrated is that it's taking away friction for a user to be able to buy things more quickly and get it shipped directly to them. And I don't understand why we're doing this big jump to using our brains to automatically know exactly what we're thinking, but we can't even help people not have to type in their credit card numbers. Yeah, no, I often think about the weird discontinuities and what works and what we're still working on.

It's amazing how many pitches I'll be in for self-driving cars or, you know, flying cars. And we have trouble getting video from our laptop up to a projector. People should be working on both. Yeah. Thank you. Thanks for listening.