Tech Brew Ride Home - Tue. 8/8 - The Magic Leap Is Finally A Thing!

Episode Date: August 8, 2018

We can actually, finally find out what Magic Leap does, Snap reports earnings, Slack gets ready for war, Patreon is building a patronage empire and why you’re probably getting ripped off if you’re paying for DSL. Links:I TRIED MAGIC LEAP AND SAW A FLAWED GLIMPSE OF MIXED REALITY’S AMAZING POTENTIAL (The Verge)Magic Leap Headset Test Drive: Off Your Phone and Into Your World (WSJ)Magic Leap’s headset is real, but that may not be enough (MIT Technology Review)Patreon buys Memberful but keeps it indie as patronage consolidates (TechCrunch)Tinder’s business will double this year to more than $800 million (Recode)Study Shows How Bad Most of the Country Is Getting Ripped Off By Their ISPs (Motherboard) Learn more about your ad choices. Visit megaphone.fm/adchoices

So good, so good, so good. Everything you want for summer is at Nordstrom rack stores now and up to 60% off. Stock up and save on the brands you love like Vince, Sam Edelman, Frame and Free People. Join the Nordi Club to unlock exclusive discounts, shop new arrivals first, and more. Plus, buy online and pick up at your favorite rack store for free. Great brands, great prices. That's why you rack. Welcome to the tech meme right home for Wednesday, August 8th, 2018.

I'm Brian McCullough today. We can actually finally find out what Magic Leap does. Snap reports earnings. Slack gets ready for war. Patreon is building a patronage empire and why you're probably getting ripped off if you're paying for DSL. Here's what you miss today in the world of tech.

Well, this is a story I've personally been waiting years to finally get to the bottom of, basically. Magic Leap is that mysterious, secretive augmented reality company that has raised over $2.3 billion from the likes of Google and J.P. Morgan to eventually release something. As I said, they're mysterious. They've only been giving us glimpses and sometimes somewhat bizarre demo videos all these years to the point where they've sort of become a punchline. Possibly a company that's been overhyped, couldn't possibly live up to the air of mystery. Well, guess what, people? The Magic Leap One ARR.

headset is now available on its website. But only if you live in Chicago, Los Angeles, Miami, New York, San Francisco, and Seattle. Why? Because the company wants to set up complementary delivery and setup. If you enter your zip code and you're not in a qualified area, you can get on a reservation list. The Magic Leap One costs $2,2,295, and for an extra $495, you can get what is called a professional development edition. And that's a key point. Magic Leap is making clear that this first launch is for developers, artists, and early adopters, but at the same time, it's stressing this is not a demo unit. This is a full consumer product. There are only a handful of reviews of the Magic Leap One out, and I'll link to them all in the show notes, of course, and we'll get to

them in a second. But what, at long last, is the Magic Leap One? Well, it seems to be, augmented reality headset that looks sort of like VR headsets you're familiar with, but a little more goggly. It has a hip computer that you attach to your waist like a fanny pack and a handheld controller attached via wire to the hip computer, and a wire also goes from the headset to the hip computer. So Snapchat spectacles, these ain't. The best picture of what wearing one of these is like comes from Joanna Stern's review in the Wall Street Journal. bottom line is if you put these on, look out into the world through them, magical stuff pops up in your field of vision.

You can put a web browser on the wall in front of you, say, that you can manipulate. Put a tiny cartoon elephant on the table in front of you that moves around, as if it's really there in real life, and you can interact with that too. So basically, it's kind of the product that we all guessed it would be. Magically calls itself a, quote, spatial computing, company. Magic Leap CEO Ronnie Abavits tells the Verge, quote, Our whole thing with Magic Leap One is we want people to realize this is what computing should look like, not laptops, not TVs, not phones, end quote. So what is it like? Is it mind-blowing?

As I said, there's only a handful of early reviews available, so let's start with The Verge. Addie Robertson said she wanted to describe something impossible, something whimsical, and magical, but, quote, in reality, the dinosaur I see through the magic leap one looks genuinely three-dimensional, but pieces start getting cut off when I approach it. When a man walks behind it, I can see him slightly. My headset doesn't account for the relative distance,

so it's impossible for someone to walk in front of the dinosaur, no matter how close they are. It's still a fascinating, wonderful illusion, maybe the best I've seen in one of these headsets, and far cooler than watching an AR model through an iPhone screen, but it's not the kind of revolutionary or downright magical advance the Magic Leap has teased for years. It's a better version of a thing I've tried before, and that thing is still very much a work in progress. Magic Leap's vision is a compelling alternative to that of Silicon Valley's tech giants,

but there's a baffling disconnect between its vast resources and parts of its actual product. I genuinely believe Magic Leap has given me a glimpse of the future of computing, but it might take a long time to reach that future, and I'm not sure Magic Leap will be the company. that gets there first, end quote. Here's Joanna Stern's take from the Wall Street Journal, quote, the lightware glasses make digital objects sometimes look so real that they play tricks on your mind. I certainly didn't think the flying robot I placed in the corner was genuine, yet the steam

coming out of his jets looked like it was from a tea kettle. During one demo, I picked up an actual chess piece just to confirm it wasn't another illusion. The NBA preview app featuring a LeBron James Fast Break made it easy to imagine watching news, entertainment, or sporting events in a completely new way. Magic Leap's spatial web browser will let developers share 3D models that you can drag and drop into your own environment. Magic Leap is attempting to build the computer and operating system that comes after our laptops,

smartphones, and TVs. It's a bold, exciting, petrifying vision of the future. While the company already faces mega competition, my experience with the one creator leaves me thinking we shouldn't count the crazy floor to start up out. Only developers should buy this. these glasses, but should you try them out? Definitely, end quote. By the way, you should be able to try these out yourself in select AT&T stores later this year. Finally, Rachel Metz at the MIT Technology Review says, quote, while Magic Leap has accomplished what many people said it would not,

it still has a monumental task ahead. Convinced developers to make compelling content for a style of computing that is so new that many people don't know it exists, much less what kinds of things it will be good for. Figuring that out is not going to be easy, and my sense is that the company itself doesn't have a clue what the answer is, end quote. Hey, if someone listening out there gets their hands on one of these, send me an email, and we can set up a call, and you can describe it for all of us for the podcast. Snap reported earnings yesterday. I think they're officially the last major tech company of the earnings season. And it was a mixed bag, not disastrous. The stock is down only about

6% in trading today at the time of this recording. Snap had Q2 revenue of $262 million, which was up 44% year over year and handily beating the $249 million estimate. Snap's net loss decreased by 20%, so that means it only lost $353 million this quarter compared to the $385 million loss last quarter. But the dreaded Mao and Dow are back. Snapchat had 188 million daily active users. which was up 8% year over year, but down quarter over quarter from 191 million just last quarter.

So this is the first quarter in its history that Snap has lost users. As Josh Constine said in TechCrunch, the stories war has officially killed Snapchat's growth. But also, people are continuing to blame Snapchat's infamous redesign. Snap's stock was actually up a bit overnight on the news that famed Saudi investor Prince Oliver. Al-Wal-Walid has purchased a 2.3% stake in the company to the tune of $250 million. Another bright spot was the news that SNAP's average revenue per user in the quote, rest of the world segment grew 65% just this quarter. Until now, Snapchat has largely been seen as a first world phenomenon,

so expanding to the rest of the world can only be good news. A few odds and ends, fundraising and acquisition and other stories. Slack is reportedly raising another $400 million because it can, I guess. This round is being led by General Atlantic at a post-money valuation of $7 billion. You might remember that Slack recently passed 8 million daily active users for its workplace chat and collaboration app with 3 million of those paying accounts. $400 million would be Slack's biggest raise to date. Why the more money, Slack?

because every time you do a raise, it seems like you make a point of saying, we don't really need this, but if people are willing to give it to us, who are we to look a gift horse in the mouth? Well, as TechCrunch points out, with Microsoft pushing its new Teams product and Facebook pushing its workplace product, Slack might be gearing up for some serious marketplace warfare. You might recall that Slack also recently purchased HipChat and Stride from Atlassian, thereby taking out other competitors in the enterprise chat space.

So $400 million might come in useful as Slack gears up for chat marketplace combat. Another notable soft bank investment, possibly. Masayoshi Son's mega fund is reportedly in talks to invest in a startup at a typically ginormous round of between $500 and $750 million. But I wanted to mention this one because I find the company in question to be sort of a wild idea. The startup in question is California-based Zoom, Z-U-M-E. Zoom owns a patent for delivery trucks that are capable of actually preparing and cooking food in the vehicle whilst it is on route to be delivered to customers. So forget Uber Eats or seamless picking up your food from a restaurant. Imagine a pizza delivered to your house that is piping hot and fresh because it got out of the oven literally seconds ago.

Earlier this year, SoftBank led a $535 million funding round in Meal Delivery App DoorDash. And SoftBank, of course, owns a 15% stake in Uber, which of course runs Uber Eats. Josh Constine at TechCrunch again, this time reporting that Patreon is acquiring White Label subscription service Memberful for an undisclosed sum. Patreon will continue to run Memberful as a separate business. memberful lets creators sell exclusive access to content to their fans directly via subscription without having to give a cut to any platform like YouTube or Facebook or whoever as Constine writes quote

by teaming up Patreon and Memberful will be able to provide subscription patronage services for creators whether they want their fan community to live on Patreon or through Memberful or on their own WordPress or website with integrations of Stripe and MailChimp for example Patreon already has 2 million patrons paying an average of $12 each to a total of 100,000 creators and it expects to pay out $300 million in 2018 alone. The acquisition could let Patreon move up market recruiting comedians, illustrators, game developers, and vloggers that already have an established audience elsewhere.

I think membership is on the way up and is going to grow for the next decade, says Patreon VP of product Wyatt Jenkins. Our strategy is to be an open. in neutral platform, end quote, as opposed to a platform focusing on one type of content like YouTube with videos or Twitch with streaming where you're locked into that platform's tools. And speaking of an acquisition slash investment that really, really worked out, Match Group says that its Tinder dating app will make 800 million in revenue this year, more than double what it made last year and almost half of Match's entire total projected annual

revenue. Tinder reportedly added almost 300,000 new subscribers in the second quarter of this year and now has 3.8 million in total. Match Group is the majority owner of Tinder, and IAC Interactive Corp is the controlling shareholder of Match Group. Given our earlier story about Snap, I thought that this was interesting, quoting from a piece in recode. For context, Tinder's business in 2018 will be almost as big as Snap's business was last year and growing at about the same pace Snap was in 2017, too. The big difference is that Tinder is very profitable and Snap isn't. Match has said in the past that Tinder's profit margin is higher than 40%. That suggests the company could generate at least 320 million in profit in 2018.

Snap lost $353 million in the second quarter alone, end quote. So this might be why Facebook is suddenly interested in putting together a dating app that it's reportedly testing. It's potentially an easy way for Facebook to get in on that sweet, sweet recurring subscription revenue. Finally, today there's a new study by the National Digital Inclusion Alliance that shows how millions of customers in the U.S. with very slow broadband speeds are essentially paying the same price as those with much faster speeds. In essence, there's basically a common price point that companies can get away with for charging for home internet access, and they're going to charge that price, whether they're giving you rickety

DSL speeds or cable broadband at something like a more reasonable 400 MbPS or something like that. But hey, that's the advantage of running a local monopoly, right? Quote, according to the report, tens of millions of AT&T, Verizon, and CenturyLink customers are stuck paying an arm and a leg for last generation DSL that fails to even meet the FCC's 25MBPS definition of broadband. frequently, these users are paying the same rate for substandard speeds as those in more competitive markets pay for much faster service. In recent years, AT&T and Verizon, the nation's two largest telco internet providers have eliminated their cheaper rate tiers for low and midspeed internet access except at the very slowest levels, notes the report. Ideally, customers on slower DSL lines, say 1 to 6 mbPS downstream, should pay less money. But thanks to no competition, that's not happening.

Frequently, these users are told they have to pay higher and higher rates for the same slow DSL with upgrades nowhere in sight, end quote. Well, you guys really came through again in a big way from 198 Apple podcast reviews yesterday to 214 today. A lot of you left some excellent reviews yesterday, but I believe the review that put us over the top came from Timicus, who said, quote, I'm a delivery driver for a living.

Instead of music they get stuck in my head, I listen to spoken word content. I'm always looking around 5 p.m. Eastern for the tech meme ride home. Want to know what I missed while I was on the road. Great for the ride home or any delivery I take, end quote. Thank you, Timicus, and thank you all of you that took time to write us reviews yesterday. Big Jim, Arvin Date, Bitwise Guy, Frank and Beans, anti-duplicity, O K-N, Chabonic, Big Tall Chris, Juma, D-B-G, Bill Helm, St. Chris, was very detailed and super complimentary, and I love this from Savvy Mills.

Quote, in a recent conversation with my spouse, I mentioned Jeff Bezos, and my husband made a comment about how impressed he was with my industry knowledge. He asked, did you get that from your tech podcast? My response, yes, end quote. Thank you, all of you. It helps more people find out about. about us on the podcast charts. Thanks for listening and thanks for telling folk about us. Talk to you tomorrow.