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Comment by beager | Hacker News Reader

Have any other companies raised at this valuation pre-product, much less pre-market fit? Where does this value come from? Have they booked even 1% of that valuation in sales, or is it all speculative?

And I'm baffled in light of the space (AR), where I feel like there are a lot of high profile players and fast movers. Not delivering seems incredibly untenable.

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Trilogy Systems perhaps. (It seems they IPO'ed pre-product? Someone on this forum was probably around when this happened.)

Trilogy Systems Corporation was a computer systems company started in 1980. Originally called ACSYS, the company was founded by Gene Amdahl, his son Carl Amdahl[1] and Clifford Madden. Flush with the success of his previous company, Amdahl Corporation, Gene Amdahl was able to raise $230 million for his new venture. Trilogy was the most well funded start-up company up till that point in Silicon Valley history. It had corporate support from Groupe Bull, Digital Equipment Corporation, Unisys, Sperry Rand and others. The plan was to use extremely advanced semiconductor manufacturing techniques to build an IBM compatible mainframe computer that was both cheaper and more powerful than existing systems from IBM and Amdahl Corporation.

...

In 1983, the company had an initial public offering and raised $60 million.

By mid-1984, the company decided it was too difficult to manufacture their computer design. Gene Amdahl stepped down as CEO and Henry Montgomery was brought in as replacement.

https://en.wikipedia.org/wiki/Trilogy_Systems

I thought maybe Skycar since it spans 40+ years, but even they've apparently "only" spent 100 million (although inflation adjustment would boost it a bit).

Wow thanks for the TIL Skycar.

https://en.m.wikipedia.org/wiki/Moller_M400_Skycar

Theranos is the only other one that comes to mind and we all know how that played out.

I'm skeptical, but the Magic Leap engineers I've met have been really confident that their tech is going to be a game changer (and of course wouldn't tell me anything about it ;)). Guess we'll see when they show their product publicly - it's weird that they've decided to stay stealth for this long.

> the Magic Leap engineers I've met have been really confident that their tech is going to be a game changer

Sure, but I'm sure there were engineers at Theranos who thought their tech was going to be a game-changer as well. Being confident in a product doesn't mean the product is actually any good.

> Not delivering seems incredibly untenable.

I would happily place a bet they will never deliver, or if they do deliver it ends up being lackluster and nowhere near what they originally promised. They showed a demo video two years ago (that turned out to not actually be a demo), and haven't released anything since.

Technology does not stand still in that time: in 2015, the iPhone had a single rear and front-facing camera. Soon you'll be able to buy one with stereographic rear cameras and a dot-projection IR depth mapper on the front, with what is from all accounts an extremely good AR software framework.

Oculus, Apple, and Google aren't just twiddling their thumbs waiting for Magic Leap to release a product. They are actively putting money into R&D, and shipping iteratively. Apple's going to have real-world AR experience and feedback from iOS 11 and the iPhone X that Magic Leap won't have.

I'd love to be wrong - it'd be great to have another player in the space, and maybe their tech is awesome. But if you look at what everyone else is doing compared to what they've released...it doesn't look good.

But phones are not exactly the same thing are they ? You are supposed to put a magic leap device on your face which then projects images onto your retina. Even if Apple and google gain AR experience, magic leap could still be game changer

> But phones are not exactly the same thing are they?

I guarantee you that Apple is researching the same kinds of display tech that Magic Leap is (they have patents today on head-mounted displays). If/when they release their hardware their SLAM architecture will have been tried and tested across millions of phones. That is a massive advantage.

Sure, they are researching similar stuff, but is it really the same kind of Retina projection Magic leap is doing? That seems to be like their main selling point, of course if Apple can replicate the same tech and have all of their experience from software, Magic Leap will be DOA

I've heard from insiders Apple has the same tech as the Hololens andthat the Hololens and the Magic Leap tech are essentially the same (Microsoft seems to be actually ahead with the inside out tracking solution). Magic Leap was ahead with their first prototype but it was the size of a fridge. Microsoft and Apple probably had or have acquired similar tech since then.

And yes iPhone X is really smart.

Yeah except Google is one of the backers. If one of the companies actively working on R&D is backing it, isn't that saying something?

Google Ventures is legally distinct from Google. And Google Ventures is actually a mediocre venture firm based on their history.

Google Ventures passed on Magic Leap but Sergey liked it so produced an investment directly from Google's balance sheet.

> And Google Ventures is actually a mediocre venture firm based on their history.

Mediocre relative to which CVCs? Intel Capital?

Intel Capital has been around for quite a bit so that would be an unfair comparison. I am curious to how you reached your conclusion?

Google Ventures backed Uber, but that doesn't stop Google from running its own self-driving car unit.

Didn't stop that lawsuit either.

Google Ventures also backed Juicero...

Have you spoken to current or former engineers? I have spoken to a few former engineers, and the responses ranged from neutral to negative on the prospects of the product appeal of the tech. Obviously both groups will be biased in their own way. My own impression is that the stealthiness comes from the lack of a quality deliverable, and not a holdout of some mind-blowing reveal.

Yep. Pretty clear they haven't demoed a consumer-ready product because they can't yet.

The pace of the product space and the profile of players in the space both indicate that sandbagging is an awful strategy. I'm likely to believe it's a lack of deliverable.

I would give them the benefit of the doubt, but still, confidence does not a six billion dollar valuation make.

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