What it is: Magic Leap sold only 6,000 augmented reality headsets when they boasted they might sell 1 million.
It’s easy to identify technology failures. They fail to identify a pressing problem.
Every device needs to solve a problem or else nobody has a reason to use it, let alone buy it. Yet identifying that pressing problem always gets ignored in the world of technology startups because these startups are more enamored of their technology than any problems they might actually solve.
The latest predictable failure is Magic Leap, a company that sells $2,300 augmented reality headsets. At one time, CEO Rony Abovitz had told investors he hoped the company would sell “at least” 1 million units of the Magic Leap One in its first year of availability. Eventually, he settled on 100,000 units as a more realistic goal.
Now with sales barely cracking the 6,000 unit mark with no signs up increasing any time soon, Magic Leap is in trouble. The biggest problem is that at this time in history, augmented reality headsets fail to solve a pressing problem.
Imagine if Magic Leap’s augmented reality headset could cure cancer, AIDS, and diabetes. Think they would only sell 6,000 units? The cost isn’t the problem. The problem is that the Magic Leap augmented reality headset doesn’t do anything useful for anybody.
Beyond casual entertainment, why would anyone want to spend $2,300 for an augmented reality headset? If you can’t immediately visualize how an augmented reality headset could benefit your life, then you know Magic Leap’s marketing isn’t going to help you either because even their own marketers don’t know why anyone would want a Magic Leap headset. If company employees can’t state an obvious use for their headset, why would anyone else want one?
The Magic Leap headset is a perfect example of companies throwing millions of dollars down the toilet because they love the technology rather than loving the problems their technology can solve. With no clear purpose, the Magic Leap headset has no use even if they gave them away for free. What would you do with a Magic Leap headset if you got one for free? If you can’t answer that question, you now understand why nobody wants to pay $2,300 for the privilege of owning one.
Technology is only as useful as the problems they solve. The iPhone put a PC in your pocket. The iPod put thousands of songs in your pocket. The Magic Leap headset? All it can promise is that it will separate you from $2,300 and give you nothing in return.
Why technology startups pour millions into products without identifying a use for their products is one of the major mysteries of the 21st century. Venture capitalists will continue backing obvious losers like Magic Leap and then wonder what happened.
When Apple releases their own augmented reality headset, it will succeed only if it offers a clear solution to a pressing problem. If it does, such as offering improved vision for eyeglass wearers, then it will be a success. If it lacks any use, then it will go down the drain like Magic Leap.
Solve a problem and make a bundle. That’s an easy formula for startup success that even Silicon Valley can’t figure out.
