VR - The Rewards ... The Risks -- EXCLUSIVE Interview with Mike Rothenberg of River VR Accelerator

[My interview below first appeared yesterday in VideoInk .]  

Virtual Reality (VR) and Augmented Reality (VR), together “Immersive” technologies are increasingly meaningful actual realities for the business world and not just media and entertainment.  Much is written about the incredible promise and potential power of Immersive technologies for all of us (I too have written several times on that subject).  But, much less is written – at least in the industry press – about the known and, even more importantly, unknown risks associated with full sensory immersion. 

I became intrigued about this topic a few months back when I moderated a VR panel that featured Mike Rothenberg, a VR pioneer who runs the first VR accelerator, the “River Accelerator.”  (Here is a TechCrunch feature story of Mike from a couple years back -- am proud to say that my company's Manatt Venture Fund is an investor in Mike and his VC and Manatt Digital Media is heavily involved in the VR/AR Immersive space).  I recently interviewed Mike on this highly complex, fascinating topic.  Mike is one of VR’s strongest champions – and puts his money directly where his mouth is by financing VR startups through his venture capital firm Rothenberg Ventures.  Here is my interview.

Question (Csathy): Tell me at a high level what led you to not only be champion of VR’s amazing potential, but also a voice of caution with the cause?

Answer (Rothenberg):  I feel a social responsibility to address all aspects of VR given my role within the industry.  Like all great leaps in technology, there are really powerful things that could be positive or negative. VR is an entirely different type of visual medium because it bypasses your biological system to directly affect your memory.  It is not just visual; it is the difference in thinking that you are watching something and thinking you are there, which we call “presence”.

Csathy: Give me some non-obvious examples of Immersive’s potential to do great good.

Rothenberg: Definitely.  DeepStreamVR is a VR startup that helps cope with pain by refocusing attention. Some Washington hospitals have found that they can dramatically reduce the pain that child burn victims experience when changing bandages by immersing them in a VR world of snow.  In the snow world, the mind refocuses and the children report pain reductions comparable that of opiates.  It’s incredible.  Another example is FOVE, a company building a hardware system with eye-tracking software that translates a user’s eye movements to specific action.  An inspirational example of FOVE’s ability to change lives can be seen on its website, where a university student with muscular dystrophy in Japan plays a piano in a live performance using his eyes in a VR headset by looking at the piano keys with eye-tracking software.  Psious is another amazing startup changing lives. Its immersive technology helps people practice coping with fear, whatever they may be.  Fear of flying, fear of heights, etc.  If you can experience that fear in a controlled environment, you can learn to overcome it.  And think of the elderly and others who are immobile and confined to beds.  Now they can be transported anywhere in the world from their bedroom and be constrained only by our imaginations.

Ultimately the power of virtual reality is in its ability enable a permanently higher quality of life.

Csathy: How about on the other end of the spectrum.  What are some non-obvious examples of Immersive’s potential to cause great harm?

Rothenberg:  Watching a war movie makes you think you watched a war movie.  Inside a virtual reality war experience, you may feel like you are actually in a war.  VR could make a very different imprint on your memory and your brain that could lead to actual post-traumatic stress disorder.  If “Pirates of the Caribbean” is rated PG13 just due to the sight of blood, then how do we even begin to rate the potential impact of feeling what it’s like be there if someone cuts off a pirate’s leg right in front of us? We do not yet understand the implications there.  The ability to scar people is greater, and researchers will conduct studies to gauge how real those risks are.  I am not a proponent of blind censorship, but I’m afraid of what we don’t know.  That’s why we are not investing in potentially traumatizing VR.  We simply don’t know the real-life implications of experiencing terrifying content in VR.

Csathy:  In the panel I moderated, you used an example of how VR potentially could be used by terrorists like ISIS to create unimaginable impacts.  Are you aware of anyone yet – any group or company -- who has created VR content specifically designed to harm and cause pain?

Rothenberg:  Not yet, but they will come.

Csathy:  River seems to be mentioned in just about every VR investment conversation.  What is your investment strategy?

Rothenberg:  We invest in the intersection of where the world is going and where we want it to go We form proactive theses around next generation technology like VR, AR, and Artificial Intelligence, as well as invest actively in enterprise software and reactively in consumer.  Then we work with our network of hundreds of founders and startup CEOs to find and invest in the fastest-growing technology startups, most often as their first institutional investor, and help them get to the next stage with the right people for their company.

Csathy:  How would you describe the Immersive world as it is today, compared to where it will be?

Rothenberg:  I think VR in 2015 is like the Internet in 1994 or mobile in 2007.  It’s been in the preseason for decades but now it’s in the first inning.  There’s still so much exploration to be done!  So, although I don’t anticipate society’s immediate mass adoption of VR and AR technology, ultimately it is inevitable.

VR - Not A Separate Category - Rather A Broad New Form of Customer Engagement, Period.

Virtual reality (VR) is rightly top of mind in the media/tech communities - and in my own writing and mentorship.  Virtually all with whom I discuss virtual reality talk about VR like it is a separate and distinct "product" category -- something divorced and distinct from their day-to-day businesses.

Only it isn't -- that's the reality.

VR is -- or certainly will be -- an integrated and integral part of business period.  And of customer engagement and an overall customer experience (not just another media and entertainment immersive experiential story-telling platform).  VR visionary Mike Rothenberg of Rothenberg Ventures -- who puts his money where his mouth is (by funding VR companies through his first-ever VR accelerator, River) -- drove this point home to me in a recent conversation.  He pointed out example after example of VR's broad application in the business world -- architecture, for example (imagine exploring spaces realistically, immersively).

In this holistic way, VR is not unlike the digital video and social worlds that gather later this week at VidCon in Anaheim.  Video and social are not just about story-telling -- not just about media, entertainment and tech.  These are simply new and transformative modes of communication, interaction and engagement.  That means that they are fundamental to any business, including yours and mine.

Worth contemplating, immersively ...

Peter Diamandis - My Conversation with XPRIZE's Founder & Noted Futurist

The world's greatest problems.  Climate change, longer human lifespans testing the limits of society's resources, the downside risks of artificial intelligence (machine v. man).

"All of these things are engineer-able, fixable."

So says Peter Diamandis -- entrepreneur, author, thought leader, visionary, futurist and one of the world's great minds.  "The number of people solving these things has exploded" -- as a result of the pace of new technologies enabling mass, democratized participation.  That's why Diamandis is an eternal optimist who preaches his thoughtful, inspiring -- and frequently convincing -- gospel to the world (literally) via an endless string of ambitious, audacious and passion-fueld mega-endeavors.

After all, Diamandis is Founder and Chairman of the XPRIZE and XPRIZE Foundation, to which he devotes about 30% of his time.  But, when he's not sleeping (which I can't imagine he does much), he today also splits his time with (1) Singularity University (which he co-founded with noted futurist Ray Kurzweil), (2) Human Longevity, Inc., a company he also co-founded that focuses on extending the healthy human lifespan, (3) Planetary Resources, Inc, yet another company he co-founded that has the simple "everyday" ambition of mining asteroids via spacecrafts that also have earth-based agricultural applications, and (4) journalist (he has written multiple best-sellers), speaker (he travels the globe), advisor (serving on boards of some of the most innovative society-engagement technology companies in the world, including virtual reality (VR) companies Oculus and Magic Leap), and educator (he runs and leads executive thought leadership courses).  This is just a partial list of his endeavors.

And, I thought I had a lot on my plate!

Yesterday, I had the special opportunity to sit down one-on-one with Peter at his offices at the XPRIZE Foundation.  I had no agenda (both figuratively and literally).  No script.  Just wanted to learn more about his views on these massive, daunting global issues.  And also get his views on the new world of media, story-telling, and increasingly immersive and virtual social engagement and interaction.  He was engaging, generous with his time, charming, convincing.  I hopped from topic to topic during this hour -- and we touched upon all of these issues and more.  One of the most thought-provoking discussions I have had in my life.

And, here it is -- Peter's thoughts on those subjects.  All sentences with quotation marks and that are  italicized and in bold are direct quotes (I frantically took copious notes).  I'll start with the brave new -- and frequently daunting -- digital media world (especially focusing on VR's total immersion and what he calls today's "Hyper Connectivity").

I.  ON VIRTUAL REALITY

-- VR "will lead to brand new virtual worlds, virtual communities, across all ages."

-- Second Life (the virtual world global game phenomenon) pointed the way to VR, but "VR is fully immersive.  You will feel."

II.  ON THE DOWNSIDE RISKS ASSOCIATED WITH VR, TOTAL IMMERSION & TECHNOLOGY-CHANGING HUMAN INTERACTION

-- I asked him about the deep societal risks of VR's total immersion, some of which include (1) feeling too much (imagine your kids playing "Call of Duty" in a VR world where the combat (and killing) become real to your brain and body, and (2) being used in the wrong hands (imagine terrorist groups like ISIS leveraging VR as core components of their engagement and intimidation strategies).

-- His responses: "You can't change it" (i.e., the reality of new technologies).  It changes you."  "It changes social norms -- how we interact."  Technology "re-wires how society interacts, even how our brain interacts, even the plasticity of the brain."

"Whether it is good or bad.  It just is."

-- And, that thought -- i.e., "It just is" -- is at the core of Peter's mind-set.  There is no judgment about how things are today in the world across all issues.  "It just is."  So, he concerns himself with thinking about how societies can mitigate those risks -- and "fix" the world -- and "better" the world.

-- After all, Peter underscores that "technology has always done these things."  "And what's to say that our interactions 50 years ago were better?"  "They were just 'different.'"  He "is absolutely positive that the same conversations would have taken place in the age of the Gutenberg Press."

-- He cites Steven Pinker's book "The Better Angels of Our Nature" that concludes that -- contrary to widely-held ... and media-propagated global belief (he doesn't watch traditional news outlets) -- we are living in the most peaceful time in human history.  He points out that in medieval times, different tribes essentially thought of others as being non-human -- which enabled violence and killing with emotional detachment.  "But communication has made us understand how inter-related we are."

-- I asked him about the transformational nature of our increasing virtual social interaction and "always on" information exchange via social media that has inundated our lives and the lives of our kids.  What he calls "Hyper Connectivity."

-- He underscored that Hyper Connectivity leads also to what he calls "Hyper Transparency" -- "the ability to know anything, anytime, anywhere" -- which, he believes, ultimately is a good thing and leads to a safer world (even amidst its frequently seeming daunting and brain-altering impacts).

III.  ON ARTIFICIAL INTELLIGENCE (AI) AND MACHINE V. MAN

-- I asked about his concerns about AI-driven machine turning on its human creators via the not-too-distant expected singularity (which media recently depicted in the excellent "must see" movie Ex Machina).

-- That is a Hollywood sensationalist myth, in his view.  He is an optimist that AI will be harnessed for good.

IV.  ON CLIMATE CHANGE

-- He is absolutely certain that we have the ability to solve climate change.

-- As an example, he says we have the technology today that can block a certain percentage of the sun's rays.  "Structurally, that is not difficult to do."  The real question is rather whether society has the will to implement such technologies.

V.  ON EXTENDING HUMAN LIFESPANS AND AN AGING AND EVER-GROWING GLOBAL SOCIETY THAT TAXES THE LIMITS OF EARTH RESOURCES

-- First, he points out that his friend Elon Musk is actually concerned about long-term shrinking global population numbers.

-- The goal of new life extending technology (including his company's) is not simply to extend life.  Rather, it's about extending the quality of life, without over-populating the planet.

-- "The goal is not just living older.  It's living better."

-- As an example of his optimism about technology's potential with human lifespans, he points out that many humans retire at the peak of their professional lives.  And, he asks me to imagine if that wasn't the case.  "That would increase the GNP of a nation substantially."


After all, "all of these things are engineer-able, fixable."

Virtual Reality Update - Latest Developments - Manatt Digital Media Newsletter

	June 17, 2015 Manatt Digital Media – June Newsletter: Virtual Reality Update VR—Power, Potential, Risks . . . VR—The Engine of Empathy and Real Social Change Jaunt, VR and the Future of Media and Entertainment River—Accelerating Virtual Reality Start-Ups VNTANA Extends Live Experiences Globally MDM Spotlight Profile “VR technology will transform every industry over the next decade or two, just as the Internet was nascent twenty years ago but now is ubiquitous.”—The River Manifesto In MDM’s previous newsletter on Virtual Reality (VR), we covered some of the basics and gave an overview of the VR landscape. Since then, we have continued to immerse ourselves in the space, and engage with and advise some of its foremost leaders. In this month’s newsletter, we share with you insights from these experiences and innovators and from VR’s countless, game-changing applications—from games and media and entertainment to education, travel, healthcare and beyond.  VR—Power, Potential, Risks . . . By Peter Csathy Earlier this month, I moderated a VR and augmented reality (AR) panel at the SLUSH Future Brunch, hosted by organizers of Helsinki’s “must know” SLUSH digital media and tech conference held annually in November. My panel included some of the most important thought leaders and innovators in the VR space—Mike Rothenberg of Rothenberg Ventures (in which Manatt Venture Fund is an investor)—Rothenberg runs the first VR accelerator, called River; Danny Gabai of Vice Media, which produces some of the most inspired VR “experiences” to date; Andy Cochrane of Mirada Studios; and Neville Spiteri of WEVR. We covered a lot of ground during the session, including: 1. The state of VR today—and the prospects for the future—with all on the panel predicting mass consumer adoption of tens of millions of VR headsets within a couple of years (MDM completely agrees with that assessment). Read more VR—The Engine of Empathy and Real Social Change By Peter Csathy MDM recently visited Silicon Valley—and one highlight of that trip was pioneering VR company Jaunt (more on Jaunt in the profile below). Jaunt demonstrated just some of VR’s possibilities. Yes, media and entertainment. Yes, games and adventure. Those are obvious and frequently discussed. Read more Jaunt, VR and the Future of Media and Entertainment By Peter Csathy On MDM’s recent trip to Jaunt, CEO Jens Christensen first sat me down in the Jaunt demo studio (pictured here to the left),where I sat through and experienced four different demos. First demo: On the stage at a recent Paul McCartney concert (yes, these will sell big time). Second demo: Extreme climbing and parachuting off cliffs in Yosemite and other extreme lands. Third demo: Immersed as a character in a horror movie (complete with a blanket thrown over my head by one of the demons that made my entire body flinch). Fourth demo: A CGI EDM-driven segment. Read more River—Accelerating Virtual Reality Start-Ups By  Mary Ermitanio In December 2014, two-year-old fund Rothenberg Ventures first opened its doors to applications for River, its new virtual reality-focused accelerator. The three-month program aims to be the “world’s VR classroom” and offers start-ups $100,000 investments, mentorship by industry veterans, and office space at the Rothenberg Ventures’ 8,000-square-foot space in San Francisco.  Read more VNTANA Extends Live Experiences Globally By Sarah Chambless Earlier this year, MDM visited the Santa Monica offices of VNTANA. Tucked away in the rear parking lot of a multiuse space near Bergamot Station, VNTANA enables immersive, multilocation live experiences through high-definition, real-time hologram technology. Read more MDM Spotlight Profile Sarah Chambless leads Manatt Digital Media’s Virtual Reality initiatives. Sarah specializes in start-up company formation, early-stage finance, venture capital investment transactions and private company mergers and acquisitions. She advises emerging tech companies in digital media, technology, consumer products, social enterprise and nonprofit sectors, and represents both emerging companies and venture capital investors in seed and venture capital financings. She also has experience in fund formation and joint ventures. Prior to joining Manatt, she taught elementary school in Compton, California, as a Teach for America corps member.  View her full profile here.

VR 101: Lesson 1 -- DISTRIBUTION (& Its Challenges) -- #1 In a Series

[The following is the first in a series of posts about the burgeoning world of Virtual Reality (VR) by guest blogger Omar Noureldin of Manatt Digital Media.  He previously wrote a VR-focused "Cheat Sheet" overview of the VR space (and key players in it).]

To understand what the virtual reality (VR) distribution pipeline will look like, a stroll down memory lane vis-à-vis online video will be instructive. It took time for the online video ecosystem to develop into what it is today -- and that was largely because of disjointed and competing distribution platforms in its early years. Anyone with a smartphone, tablet or computer knows that YouTube -- despite new "real" significant challengers like Facebook -- continues to dominate this space with over 1 billion users.  But, this took time (and an acquisition by Google, which merged Google’s less than stellar Google Video platform). Still, the vast majority of YouTube’s content is user-generated.

Then there are the premium content platforms like Netflix, Hulu and Amazon, all of which have turned the prime-time TV model on its head. First, by reusing content, and now by creating original content. Vimeo is a growing player in this space (among numerous others) and has laid its stake in the ground by focusing on high-quality, high-resolution content and on content creators -- and it is now dabbling in VOD and SVOD models.

So, what does this mean for VR? What is the opportunity?

Well, the opportunity is for new digital distribution platforms to emerge that focus solely on VR content. The reason some believe nnovation will happen with these new distribution platforms, rather than from giants like YouTube, is because VR distribution will require advancements in packaging and transferring vast amounts of data across existing networks that are not necessarily ready to handle that kind of traffic.

Herein lies a massive challenge. High-quality VR content is not mobile friend ... at least not yet ... for a couple of fundamental reasons. First, current bandwidth capacities limit the amount of data that can be transferred, and mobile devices are limited in their storage capabilities. Second, mobile processors literally overheat and melt when trying to play high-quality VR content that is more than five minutes long.

Today, the big online video distributors are all about mobile, which creates a disconnect in strategy and focus if they want to move full force into VR. Moreover, YouTube is still trying to figure out how to be profitable in the traditional online video space, so many pundits believe that makes little sense for them to spend a lot of time, money and effort to develop new distribution channels for VR (especially when YouTube is now focused on developing its own premium original content, as original premium VR content is a ways away).

Instead, many predict a proliferation of VR-focused distribution platforms and companies experimenting with different ways to deliver the content—Vrideo is one of them. The company recently hosted a VR Meetup and panel discussion on this very topic in Santa Monica. As discussed earlier, there will need to be technological innovation at every level of distribution—packing, transfer, storage and processing.

Do not get me wrong, there is already talk of the big media and online video companies (Google, Amazon, Netflix, Disney, etc.) and telecoms (AT&T, Verizon, etc.) eventually going to war to acquire these smaller VR distribution companies.  But, it is likely to be an M&A war, not a technological advancement war.  Google has already invested a whopping $500 million into MagicLeap, which is developing VR technology that merges the real and virtual worlds -- so-called augmented reality.

Massive sums of money are being poured into VR right now -- and distribution is one of the keys to unlocking its potential.

[NEXT IN OMAR'S CONTINUING VR SERIES WILL BE LESSON 2 -- SOCIAL, followed by Lesson 3 -- Hardware, Lesson 4 -- Advertising, and Lesson 5 -- VR Rights.  Stay tuned ...].

VR 101 -- Your "Cheat Sheet" of The New Immersive Landscape -- Guest Post

[The following is a Guest Post by Omar Noureldin of Manatt Digital Media.  I work closely with Omar -- he is a rising star in Manatt Digital Media and knows his stuff.  Equally important, he shares the passion of innovation ... and possibilities.]

Beyond Gaming—Understanding the VR Landscape

Virtual reality is not new. The technology has been around for 20+ years, but has lacked widespread distribution and consumption due to limiting factors in technology and content. That is changing now.

Currently the biggest player is Oculus VR—the headset and software developer—made famous by Facebook’s $2 billion acquisition of the Southern California startup. Other hardware companies including, Samsung and Sony, are quickly moving into this space, adding some competition to the mix. At the same time, content developers are rapidly prototyping the impact the technology will have on all sorts of content.

WHAT IS VIRTUAL REALITY?

Virtual reality (or “VR,” as it is often referred to) is a computer-generated interactive environment that simulates 360-degree views in multiple dimensions by wearing special headsets. For many years VR environments were hard to sell because they made users motion sick due to slow computer processing speeds and tunnel vision. However, the Oculus Rift headset is being dubbed the first “affordable” device that overcomes these problems (I am very sensitive to motion sickness and have used the Rift without any problem).

Breakthroughs in rapid computer processing and lens manufacturing now allow devices to simulate multidimensional experiences while keeping the body’s sense of equilibrium. For example, Oculus uses new processes to better conform to the body’s sense of movement, and new magnifying lenses expand the scope of vision.

WHO ARE THE OTHER PLAYERS?

The short answer is there are a lot and many more coming. In terms of hardware there is the Oculus Rift, Sony’s Project Morpheus and Samsung’s Gear VR. Google has been making some strategic investments in addition to its DIY Cardboard headgear set.

On the content side, it’s a free-for-all. There are small VR production companies popping up everywhere, and a high concentration of them in L.A. Digital LA recently held a #VRLA Meet-up to demo some of these products. It was also the first-ever VR live-streamed event.

On the Hollywood side of things, the major studios—not wanting to be left behind—have caught on and are investing in some of these VR production companies. More to that point, at Sundance more than a dozen short VR movies were presented and the Sundance Lounge staged a demo room for some of these devices and developers.

WHERE ARE THINGS GOING?

This is a hard question to answer, but one thing is for sure—it’s beyond gaming. Movies are the first obvious choice, but there is (virtually) no limit. Live music events, medical procedures, investment analysis, defense training and aerospace simulations are a few of the areas that are being primed for VR technology.

Another unknown is the use of mobile. All the current headset devices are large, clunky and expensive. It is and will continue to be hard to sell a $300 headset to consume VR content that is still in its infancy when there is so much standard content available at no or little cost. Thus the advent of mobile VR through devices such as Google’s Cardboard and mobile headset is very interesting. This has the potential to explode because it’s cheap, familiar and readily available.

Many media and technology companies are still adjusting to the brave new world that is digital. The learning curve will be even steeper with VR, so it’s best to understand what is going on early.