What it is: Daqri, a 10-year old company that built enterprise-grade AR headsets, has shut down.
Ten years ago, Daqri decided to jump into the augmented reality market before anyone else. The company targeted enterprise customers with augmented reality headsets. The big problem was that there’s no clear use for augmented reality headsets. In other words, what problem does augmented reality headsets solve that can’t be solved through today’s technology?
The key to identifying the value of a product is to look at the problems it solves. The telephone solved the problem of the telegraph by providing voice communication directly between people, eliminating the need for a middle man (the telegraph office). Mobile phones displaced landline phones because mobile phones are more convenient to use wherever you go.
So when any startup jumps on new technology to be first to the market, they’re succumbing to the delusion that the mythical “first-mover” advantage will sustain them. Big mistake.
Daqri tried to sell augmented reality headsets to enterprise customers without clearly identifying a meaningful problem that enterprise customers needed to solve. Without a clear problem to solve, few companies saw a need to buy augmented reality headsets for any purpose.
The fastest way to sell any product is to show how it solves a dire problem. Someone dying of thirst in the desert would gladly pay for a glass of water. That same person dying of thirst would pay nothing for an augmented reality headset since it wouldn’t solve that person’s biggest problems.
Watch as multiple augmented reality companies will fade away just as multiple wearable computer companies and tablet companies faded away before people found a use for them. Before Apple introduced the iPad, a company called JooJoo sold a JooJoo tablet. Not surprisingly, the iPad killed the JooJoo tablet.
Before Apple introduced the Apple Watch, Pebble sold one of the first smartwatches, but few people saw a need for it so Pebble died. Yet once people recognized that the Apple Watch excelled at real-time health monitoring, sales of the Apple Watch skyrocketed.
The failure of Daqri doesn’t mean that augmented reality has no future. Rather it means that companies that fail to identify a problem to solve have no future.
Augmented reality needs to focus on enhanced vision in a niche market first before smart glasses will become widespread. Daqri is gone because they arrived too soon and couldn’t survive long enough to carve out a substantial market. When Apple introduces their smart glasses, they’ll succeed only if they can demonstrate a compelling need. If not, then Apple’s smart glasses will likely stumble about like HomePod currently is doing, attracting a niche market and little more.