Whilst in Arrakis

The Future Will Be Better Tomorrow

Snapchat is now augmented reality-first



Facebook did the deal with Oculus mostly so that they would own the post-mobile hardware platform. PCs are the old platform and Wintel won, current generation platforms are dominated by Google Android and Apple iOS, and it’s unclear if there is room for a third competitor at scale[1]. Facebook decided against making their own mobile phone and instead invest in what was coming next.

So Facebook acquired Oculus.

Virtual reality was always a stepping stone to augmented reality[2], as today you need to find time to actually use a VR headset. As the chart below shows, attention is a very fought-over currency.


This is not the case with augmented reality, as you can double stack minutes doing other stuff and still consumer AR content (via a pair of glasses for example[3]).

Snapchat is rumored to be tossing their hat in the space and go for an AR play but I would argue that Snapchat is an augmented reality company. In the same way Google pivoted into an artificial intelligence company around the time of the Deepmind acquisition [4] Snapchat started with self-deleting messages but their lenses [5] have clearly taken over and their are driving the virality for new users. If you take that experience further then to me the mission of Snapchat becomes clear: it’s the lens through which you experience the world. A better, more beautiful, and augmented world.




Once you acknowledge that, there is no point in limiting it to a phone. Instead use lenses to mediate interaction with reality making a pair of glasses the perfect fit [6] and this is when it gets really interesting.

There are other companies in the AR space but they don’t have the passionate user base of Snapchat or they focus too much on games, which is cool and a big market in itself, but entertainment is tiny compared to say communications or commerce. A Snapchat reality lens powered by artificial intelligence and computer vision would be silly, incredible, and have wide adoption all at the same time.

It would also be a  great developer platform with clear ways to monetize. Expanding the lens to incorporate objects different than faces (e.g. cans of soda, so if you are looking at a Coke can it shows some cool animation) or different input lenses (e.g. an audio lens that generates custom clips when something is played or replaces ambient sound – possibly done with noise cancelling headphones). Like lenses today it doesn’t have to be dominated by advertisements blocking your reality.

Oculus is essentially a game console manufacturer, and it’s not going great with hardcore gamers. The product caters to gamers who can spend big 💸💸💸 on a new PC, but it can only be played for a bit before getting a headache. The design is not quite there yet and will realistically need several iterations more. And the locking down of games is pushing consumers and game developers away from it and onto the HTC Vive [7].

Here’s what I believe is going to happen:

Facebook’s mission is simple and it’s about sharing experiences and content with others. To date Oculus doesn’t really fit that mission and possibly never will. Because of this I expect Oculus to be spun off or sold to a game company[8] or potentially to Microsoft as HoloLens is not a credible product (or even a product) and Oculus could be part of the Xbox unit.

Snapchat however is a fit and also a strategic threat to Facebook already (it’s half the size of Instagram). More importantly its users are all about sharing. So it could fit the vacant space of AR left by Oculus. It’s well known that Facebook tried to buy them for $3bn but the offer was rejected, eerily similar as to when Google tried to buy Facebook for $15bn [9]. Hopefully Facebook will remember that.

Snapchat’s self deleting messages are no longer the main reason why people join, it’s about AR and messaging (with AR). So expect them doubling down on lenses and possibly become a full augmented reality platform with their own hardware. But here’s the big difference with other AR vendors: they are all either stacked into enterprise edge cases (Google Glass at Work) or games. Snapchat is different. Snapchat is Minecraft. It’s simple rules and (mostly young) people have appropriated and explored and created their own language and culture on top of it. It has that new corinthian leather feeling that Facebook used to have. I believe this culture is Snapchat’s biggest asset.

This culture will adopt a new “toy” in the form of AR and go with it, while other competing platform will struggle by trying to meet the expectations set by their bullish hype.

TLDR: Snapchat is an augmented reality-first company, Facebook will divest Oculus and instead try to acquire Snapchat.


[1] Even though there could be an opportunity for a Cyanogen, or a new OEM to conquer critical market share by making it easy to install an OS on a phone. Blackberry is probably toast and ready to be absorbed by some large company like HP.

[2]  But solving VR means solving a subset of technical problems and it can be easier that going AR native.

[3] Even though it could give life to pretty weird scenarios like this “Hyper-Reality” one https://vimeo.com/166807261. Although my point is that they want to make it fun for users to engage with brands and will have the brands pay for it. If the users are not engaged they won’t use the platform and therefore no critical mass for ads – therefore users > advertisers so not expecting weird stuff to happen.

[4] Yes Google was always an AI company but not really. It was a giant search engine with ads. That process was already under way but the Deepmind M&A was a clear demarcation point and right now we are seeing the results. See ‘Inside Sundar Pichai’s Plan To Put AI Everywhere‘.

[5] It’s the video filter that makes the silly faces.

[6] Glasses today and contact lenses in the future.

[7] This is the first time in more than a decade anyone is actually excited about HTC products. Incredible.

[8] I really don’t know who could afford this beyond actual console manufacturers. Plus game studios have no idea how to manage hardware. The other alternative is that they keep Oculus and starve the unit of resources until it’s small enough that can be folded into “Facebook VR Games”.

[9] IIRC can’t find the article, I think it was Megan Smith that was tasked with that directly from Larry Page.


Magic mirrors and AI

If you haven’t yet, read My Bathroom Mirror Is Smarter Than Yours do it before this post.


Smart mirrors show consumers want a multi sensory experience. Touch, vision are primary drivers of Human-Computer Interaction. Voice is a novelty that can build on top but asking people to change behavior in HCI without a clear benefit is madness.

So far only benefit of voice is while driving, people who don’t know how to write or people with disabilities. Clearly not growing markets.

Using voice we can’t receive complex data structures like lists, charts etc easily and the bandwidth is an issue.

Reading 250 words per minute
Listening 150 wpm
Speaking 105 wpm (this assumes the AI will understand 100% of the time. Sci-fi)
Typing 33 wpm

Compare the reception of all the Nest / Echo etc products with the smart mirror. That guy accidentally discovered a potential product market fit with a Medium post (world first?)

Soon we’ll see more smart mirror equipment coming for sale, DIY kits, APIs. Citymapper just released an update that would make sense on a mirror (tells you if there is going to be a delay on your route before you ask for it). In fact while the Apple Watch is a “personal” device, a lot of the apps there might make more sense on a mirror.

I think there is an opportunity to exploit multi sensory AI and nobody has cracked that, I also believe that glass as a material will have an ever increasing role in our lives (Corning mentioned using Gorilla glass for windscreens for example, and there are transparent solar cells coming to the market.)

If you are an entrepreneur looking to build magic mirrors, or a VC looking to fund one (and you should) I’d love to discuss the AI behind it.

20 years of work


Tomorrow it will be 20 years since I started my first company (21st October 1995). Hell of a ride and entirely unforeseeable.

It’s only fitting that this evening at 11pm I have received the weirdest email of my career. Literally out of this world.

I love my work. It is often a harsh mistress but the rewards are spectacular.



Sam is a smart man

These are the two of the most important tweets I have ever read in regards to business and startups:

Filter your world through this lens. Especially government work. Just because we can do something with brute force at the city/national level today does not mean it can scale at the humanity level. We need to think at that scale and suddenly only having this mechanism being viable financially can work.

But there is more. What does this mean for government policy? Do we need a National Startup Foundation that gives out seed grants? Is there a Nobel for business? I can see Cook and Zuck getting it. Do we need special education like a Msc in Lean?

It’s harder than you think (thoughts on Slack)

It’s harder than you think – Public Enemy

Slack just did a massive $100m financing round. Its parent company, Tiny Speck, started in 2009 as a game company. They did 3 rounds of funding for about $15 mil before ditching games altogether and entering the corporate IM space.

Monetizing games is a fight against entropy. They peak in two weeks and then you have to continue pushing out content, promotions, acquire users (as long as LTV > CAC and in a world where LTV goes always down and CAC goes up). If you look at the user activity curve of all successful games it look always the same. There are very few exception and these tend to be very valuable (World of Warcraft, Clash of Clans).

Successful tech companies OTOH have a curve that compounds over time. This is because providing entertainment is a fickle proposition and is due to end at some point in the near future, while solving problems or enabling solution is potentially boundless.

TL;DR raising financing for games is easier harder than tech because the adoption is very different and over time one returns more money than the other. Also you price game companies using present revenues while tech companies tend to be valued on growth and future revenues (as revenues can be built later – see ‘Business models are a commodity‘).

PS. I really <3 Slack. If Yammer was still around as a private company they would have been clobbered. Now that they are Microsoft they are going to be completely wiped out.

The problem with Siri

Dear Siri,

it’s not me, it’s you. Let me give you an example…

“Siri, I would like to book a hotel for tonight”

Here are the list of nearby hotels” [List hotels based on a Yelp search, no indication if any of the hotels has actual availability for tonight. Clicking on the list takes me to the super shitty Apple Maps. Clicking on the hotel in Maps lets me call the hotel]

(The first on the list is the Radisson) “Siri, book me the Radisson”

Here are your Bing search result for ‘raisin’

See? I have millions apps that can book the hotel already installed on my iPhone. I don’t want to call the hotel, thank you. Chances are that if I am talking to a piece of software means that I prefer doing a transaction with another piece of software and not call a hotel, figure out my corporate rate, my credit card number, my frequent flier thingie for hotels. All this data already exists in my phone and in my email account. If not, ASK.

On top of this our relationship is purely transactional. Once you spit out your result you forget about me. Me. Your user. I mean have you ever seen Tron? Users are important! And you need to remember the past few seconds of interaction to understand if the queries are linked, such as it was in this case.

85% of iOS users have never used Siri and the main reason is that it is a gimmick that does not solve any real problem. Yet.

@pmarca’s latest tweetstorm about unsustainable valuations

And here is Sequoia Capital famour “RIP Good Times” from 2008. Can’t believe it has been six years already.

Re Twitch



we have been seriously talking about convergence of TV and games for more than 15 years now and while we always envisioned interactive movies what happened was exactly the opposite: people watching non-interactive streams of other people playing. Similar to watching sports on TV in a sense.

I think we* overestimated the desire for interactivity (after a long day being a mindless couch potato might be favorable) but most importantly we underestimated the impact of belonging to the same culture and sharing our accomplishments (which is incredibly like talking about sports with your buddies.)

In a sense Amazon just bought ESPN for nerds and there’s nothing wrong with that. (UPDATE: Seems I’m not the only one that reached this conclusion: ‘Twitch: Has Amazon Acquired the Next ESPN?‘)

My work on cryptocurrencies



I actually did some work in the summer of 2001 on cryptocurrencies. At the time was big on peer-to-peer protocols and saw them as the solution to move data on the edge faster and without having a single point of failure (both technical and legal). I envisioned having P2P protocols for every major application and decided to work on payments.

My idea was to have the ability to pay for something (digital or otherwise) to a party while retaining anonymity and without a central authority. At the time did not know a lot about encryption (which would become a big part of my life in later years) so was more interested in the protocol itself and missed some of the beauty and innovation of Bitcoin (even though my idea was closer to Stellar).

The name and the examples I chose to make my case were a bit controversial and after 9/11 I decided it was a good idea to mothball everything as there were bigger opportunities elsewhere but I am pleased that others kept working on the problem. The entire financial system needs to be open, extendable and more in line with the internet than being just a financial VAN.

How to develop billion dollar apps


1. Core apps vs. combo apps

My theory goes like this: iOS started as a super early adopter device and the core apps (phone, contacts, email, calendar, etc) were simply a logical step from similar applications that have existed on smartphones for a long time, arguably with a nicer UI.

Fast forward 6 years and the iPhone brand has sold over half billion devices with an additional 200m iPads. The core apps have barely evolved compared to what has happened to the apps that are present in the App Store. There has been significant improvement in the default iOS UX but that’s just a pretty overlay on top of the same actions [1].

By catering to a mass market Apple has left plenty of space for app developers to take hold in their core apps.

2014-07-26 06.58.53

Have replaced most core apps the latest being Humin that replaced the Phone app. Wish there was an alternative for Music

 2014-07-26 23.15.11

Humin really blew my mind and was looking at the common theme behind me using Sunrise, Gmail etc instead of the old ones and the answer is about combos. [2]


2. Enter the combo apps

A combo app is an app that aggregates data from different applications to perform its functions, and then adds a layer of intelligence/context over it to figure out meaning from this data.

With an installed base of up to 700m the mass market is interested in basic simple usability so Apple can reach people like my parents (who get a brain aneurysm every time they have to perform a new action in software that they have not done before). This creates a race to the bottom in terms of features and leave ample space for innovation to cater to early adopters who have plenty of apps rich with data already installed on their phones.

An early example was Sparrow that would use Dropbox for storage. Most apps can now connect to Facebook, Twitter and Linkedin. Citymapper connects with Hailo, Google Maps uses Uber, Gmail uses Google Drive (whatever that is), Moves is used by all health apps and vice versa. The list is long.

What this means is that you can infer additional context form past use behavior. For example you can mine emails and FB to figure out who are your closest friends. Humin automatically filters your contacts by your current location, and then (correctly) assume that you are more likely to call people in SF when you are in SF (and additionally when it’s daytime in SF) apart from the ones you marked as favorites that are always present.

And the more these apps can be connected and the more data can be harvested from each other new forms of service can be provided to the user.

Enterprise communications (whether IM or videoconference) still suck. Photo management blows as we never imagined we could have so many photos. Contacts are a mess (maybe Humin will prevail and fix this), Pocket is not yet fully integrated in other apps or in iOS. Moving unstructured data from one device to another is still a Wagnerian nightmare.

Moreover with HealthKit you are going to have a new dimension of data as well where you can link biological responses to actions and again down the road you could infer the status of a person when certain actions are taken, cluster them and build a predictive model on top.

My final point is that core apps represent the biggest opportunity. Samwer famously wrote: “there are only 3 areas in ecommerce to build billion dollar business: Amazon, Zappos and furniture” and I believe there is an analogy in mobile. Only here we are talking about a twenty  fucking billion dollar opportunity [3] for those lucky ones that can replace a core app and build a business on.


TL;DR: combo apps are the future and you have plenty of shitty iOS apps (Yahoo! Stocks [4], Clock, communications) that you can re-invent. The combo can also create new class of apps that we have not discovered yet (fucking/dating/marrying, professional services, freecycling, knowledge dissemination and tutoring. The list can be pretty long.) Replace one core app and your company will be bigger than Iceland’s GDP.


PS. this idea of leveraging existing data and manipulating it and presenting it in new ways is nothing new. Y Combinator and 500 startups rely heavily on this theory while choosing their investments. Dropbox and Airbnb are prime examples. Neither requires a data entry sales force to populate or maintain any dataset so it’s enormously scalable and easy to kickstart at the same time.



[1] Apple has put effort where leverage is. So focus was (correctly IMO) in improving developer tools to make and sell apps rather than say improve the phone app which might be irrelevant in 5 years.

[2] Yes, I do have Dylan on speed dial ahead of my family. Don’t ask. It’s got something to do with Batman anyway.

[3] Whatsapp, I’m looking at you, without even a desktop app.

[4] Yahoo! Stocks. I can’t believe that SUCH A BUG-INFESTED TURD has been allowed to be on the default page of iOS and every other alternative has been built with the same shitty idea that people want a fucking Bloomberg terminal on their phone with the same fucking usability of a fucking Bloomberg terminal (hello ’90s!)