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Comment by olympus | Hacker News Reader

There seems to be several people with a tech hardware background that doubt that Magic Leap can deliver on their promises. But somehow they have no problem raising money or getting publicity. Either they have something that is real and extremely convincing to investors that they have been able to keep very secret, or they have a really slick slide deck made of lies.

We’ll know for sure if/when the first production devices go on sale, but if Shaq was wearing a real pair then I don’t want them.

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Theranos had no trouble getting funded and even Walgreens to trust them. They were eventually found out to be charlatans. Just because you can raise money doesn't mean you have anything to back it up. When people are skeptical they sometimes have a grain of truth to it. From what I have read about Magic Leap they seem to have vaporware. Even if they didn't the VR / AR space is getting more and more competitive so the longer they don't release even if they have something it may not even matter.

Usually when people present something that is new an innovative you can understand how they did it. Take for example the new iPhone camera with Face ID. They gave enough details for someone to understand generally how it was done. You can look at the physical pieces of it to see how they did it. Sure Apple may have made some claims that were bending the truth to market it but the technology has applications other than security (animojis for instance). Also, it was an extension of previous technology.

When people do the same analysis with Magic Leap they find that they are outright lying and that they can't actually have anything to backup their claims. Instead they are trying to pass off technology that doesn't have the advantages that they state as something completely different.

Walgreens (and CVS) both also sell homeopathic stuff of all kinds, all over.

Even charlatans can sell stuff and make a ton of money. "Can raise money" or "can trick people into buying" (remarkably similar, really) can not in any way be construed as a validation of a product.

Agreed. Just getting on a store shelf doesn't mean you have a good product, it just means that store believes customers will pay for that product.

Like you said, Walgreens, a major pharmacy specializing in real medicine, sells homeopathic crap. They also sell very unhealthy food and alcohol. They also sell cigarettes. Not because they believe the product is good, but because that product makes them money.

If you look at Ponzi schemes or con artistry, a little skepticism and a little peer pressure help part people from their money.

In fact, if you're at all familiar with con, the best marks are the people who think they'll never be a mark and have a little bit of greed in them.

The problem is there are huge gaps between having a great idea, creating something really impressive, and bringing a product to market successfully and selling at scale. That last step is the most difficult of all. Very few companies pull it off.

The best I can tell, once a dev kit is released they still have 3 or 4 years before they will be selling their hardware at a meaningful scale - if everything goes alright. Their burn rate is way too high, guessing by how many people they hired. They will need to have an IPO or they are expecting to raise Uber level funds. Maybe that’s realistic but I wouldn’t bet on it.

>They will need to have an IPO or they are expecting to raise Uber level funds.

neither is possible with no revenue or only dev-kit revenue. you are overlooking the third option: do an ICO.

That might be the most realistic solution, ironically. They might end up in the bin of start up death from pre-mature scaling.

I have no doubt that someone is going to win big in AR. Apple can hit the ground running with all of these ARKit apps. Unless Apple really screws something up, they will have the software advantage by a wide margin.

I'm not convinced that either Google's Series B investment in 2014 or Sundar Pichai's board seat indicate that Google believe's Magic Leap has a high probability of success. The series B was now quite a long time ago. Google has had no trouble getting in to the same line of business as their own investments or companies were the CEO sat on the board.

Or get purchased by a larger entity

And a key part in this is that a lot of experts openly claimed that Theranos was selling snake oil. You can't do those kinds of tests with that little blood.

High expected value can make investment with low probability of success a good investment. Hard to implement and develop optical VR technology could launch company that has similar dominance as Intel has had in the CPU markets.

If the underlying development path of Magic Leap is promising, investors may keep Magic Leap going for a decade even if they don't deliver anything.

Investors include Google, Qualcomm, Alibaba, Kleiner Perkins and a16z.

Huge expected value can also make people fools, without a scrap of real hope of future returns. A lot of money has been flushed down a lot of glittery drains by many a smart person/org in the search for wealth. When you add subtle yet incredibly challenging technical hurdles buried deep within the hype, the odds of flushing greatly exceed fortune.

It’s not as though Google, to pick one example from your list, is some kind of techno-prophet; they’ve killed more projects than asteroids did dinosaurs.

You don't have to know if any particular company has real changes or not, what you need is is reasonably good estimate of how likely you are a fool.

That estimate made in ignorance of the relevant technology is all the answer you need as to foolishness.

> Huge expected value can also make people fools, without a scrap of real hope of future returns

The probability of failure should already be factored into the term "expected return"

> Huge expected value can also make people fools, without a scrap of real hope of future returns.