Fresh off a successful run of demos at gaming conference E3, Oculus VR, the maker of wearable virtual reality headset Oculus Rift, raised $16 million from Spark Capital and Matrix Partners (the firms confirmed the deal after we broke the story last night). I spoke with Antonio Rodriguez, who led the deal for Matrix.
Erin Griffith: You noted in your blog post that the Oculus Rift headset fits into the trend of wearables. I see it as a somewhat different category than, say, a smartwatch. Can you expand on that?
Antonio Rodriguez: The most interesting change happening is that with Google Glass and the wrist wearables, they all benefit from the same economics that were previously priced out of these devices. You can implement expensive components into smaller wearables now in a way that wasn’t economically viable before.
Most of the first generation of wearables are pretty dumb display and interaction devices that will try to get into our lives from the bottom end, with push notifications and voice activation. Oculus is going top down, with all the horsepower that money can buy and a very high resolution in an immersive interaction pattern. It’s not making sure you’re aware of it as you’re walking around on your way to the coffee shop. It’s not trying to be off in the corner of your vision, it’s trying to be your vision.
So yes, it is something that you wear. But it’s quite different in its design centers.
What about the reports of people experiencing nausea when they use the unit?
That’s with our is dev kit one. It is a very early developer preview. There is a lot of software that goes into making sure the images are in line with moving your head and with small head movements. That is getting fine-tuned. That reaction is due to a combination of the software in alpha stage and the fact that the generation one developer kit is a lo-res display. You can actually see the pixels. Dev kit two is hi-res.
At the highest level, any sort of input device or new display technology. But they are the first people to bring out a mass market VR headset at a consumer-friendly price. [Rumored to be around $300; the company hasn't named an exact price yet.] All others are military use. Most of the ones being built of this quality are drone operators in the Israeli military and whatnot.
Oculus VR previously raised $2.4 million on Kickstarter. Do you or does anyone at the company have experience with transitioning a Kickstarter success story into a legit business with happy customers?
The biggest story around that is the Pebble watch. I know the investors there and they are in that transition now. My closest experience is with the Makerbot guys. I was an early angel investor there. They didn’t go on Kickstarter but they have experienced similar growth and growing pains and I have seen how they managed that. I’m hoping we can learn from what they’ve done and do it even better.
As a consumer, the places where I’ve been disappointed in Kickstarter situations have been all around fulfillment and not the experience. That is all supply chain related. I hope that in shipping as many dev kit ones as we have, that we have a leg up on that challenge there. [Oculus VR shipped 7500 dev kits for its first iteration of the product.] And the management team isn’t dummies — they have been in this space before.
Oculus is really riding the hype cycle right now. The gaming world is transfixed. Do you fear a backlash?
These guys are really, really ambitious. There is a lot of work to be done and software to be written. Unlike something strapped to your wrist, to get the level of immersion right they’re going to have to solve a number of software problems, mechanical problems and hardware problems. It’s super exciting that entrepreneurs can be this ambitious outside of a big company that’s going pour millions of dollars into it.
So was this a competitive deal?
It was very competitive, both because everyone wants to be inventing the future but few startups actually do, and because the management team comes from multiple successes in this space. It was also one of the first times I was willing to do a deal in LA. [Rodriguez is based in Boston.]
Edited for brevity.