Web-Based Augmented Reality for E-Commerce, with Seek’s Jon Cheney

XR for Business

English - November 11, 2019 10:15 - 37 minutes - 34 MB - ★★★★★ - 12 ratings
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Getting started in AR marketing and
virtual try-ons can be tricky for enterprise, especially if — like
Walmart or Amazon — you’ve got hundreds of thousands of products to
model and host. Or, it could be easy, with the help of services like
Seek, which hosts 3D content like YouTube hosts videos. CEO and
founder Jon Cheney drops in to share the details.

Oh, and Alan gets a spaceship.

Alan: Thanks for joining the XR for Business Podcast with your host, Alan Smithson. Today’s guest is Jon Cheney from Seek XR. I’m really, really excited to have Jon on the show. We traveled all through China together, pitching to rooms full of Chinese investors. And it’s been an amazing experience. Jon is the CEO and founder of Seek. They’re a leading provider of web-based augmented reality for e-commerce brands. I just found this out about him: he’s a composer as well, for films. SeekView is his web-based product built for e-commerce brands. They’ve won several business competitions, including Pluralsight LIVE, where they won $50,000. They’ve announced some really big partnerships with Walmart and Lego and some other stuff. We’ll get to that. But if you want to learn more about John and the work they’re doing at Seek, it’s seekxr.com.

Jon, welcome to the show, my friend.

Jon: Thanks so much, Alan. Great
to be on the phone with you today.

Alan: I’m so excited, man. It’s
been a minute since we got to just talk and hang out. We had a great
time in China. And since then, you guys have done some amazing work.
Talk to me about what you guys are doing. I saw some things from Lego
and Walmart. And you’re building 3D visualizers for big companies.
What’s going on?

Jon: Yeah, man, it’s been quite a journey. Where we are today is way far away from where we started. [chuckles] There’s a lot of people in the XR industry that could probably chime in with similar stories. With this industry that changes so fast, you got to be ready to move with it. But from the very beginning, we’ve had one overarching goal that actually hasn’t changed. We wanted to make augmented reality easier to find and access, and make this a technology that was more accessible. And where we’ve landed is in web-based AR. And there’s obviously hundreds of use cases for web-based AR, but where we really decided to focus is on the e-commerce realm of things. And you’re talking about Walmart, Lego, and those were a couple examples of some of our recent partners. But we’re really focusing on the e-commerce and the retail sector, because there’s just huge benefits when a customer, the end-user is able to use this technology to see a product that they’re considering purchasing. Whether it’s a little Sonos speaker, or a new couch, or a new shoe, or whatever that is, to be able to see it in your space, in your environment, and kind of have all those questions answered that you don’t really know until you get the product, typically. It’s just a huge benefit, and so because of that very obvious benefit, it’s taking off in a big way, and we’re fortunate to work with some of the big, big companies out there at this point.

Alan: So you created this web-based AR visualizer. Walk us through, like I’m on a website, I’m scrolling down, I see a product, I’m like, “Man, that’s really cool, but I don’t know if it’s gonna fit my living room.” — maybe it’s a coach, we’ll just use a couch as an example — I don’t know if it’s going to fit. You can press a button, using the camera on the phone, now it’ll project that couch in

Oh, and Alan gets a spaceship.

Jon, welcome to the show, my friend.

Jon: Thanks so much, Alan. Great
to be on the phone with you today.

Jon: That’s exactly right, yeah.
And the cool thing about what we’re doing here, is it’s appless,
right? You don’t have to download the Amazon app, or the IKEA app, or
whatever. This can happen right on any browser, on Chrome, on Safari,
Android, iOS, it doesn’t really matter. We’ve kind of worked on
building out this ecosystem, so you just tap on this link or this
button and it opens up the camera. It measures the environment in a
really quickly, and then that object appears in its true size, right?
And so we’re using a lot of the technologies that Google and Apple
have been working on — the ARKit and ARCore and things like that —
of being able to measure the room around you, and then be able to
engage with it and start to interact with it and start to answer
those what-if questions without having to order–

Alan: Without having to answer
them at all.

Jon: Yeah, exactly. Without even
having to ask. And that’s exactly right. It speeds up that decision
process for the consumer, they’re more likely to buy it. And on the
back end, because they made a more confident purchase in the
beginning, there’s a lot less returns, too. So it saves problems from
the buyer’s standpoint, as well as the hand that doesn’t want to have
to deal with returned products and that whole process.

Alan: What are some of the
companies that you’re working with? Can you talk about specifics?

Jon: Yeah, sure. Again, we’ll
talk about Walmart for a second, and then we’ll talk about Nestlé. I
think they’re an interesting use case as well. But Walmart is
obvious, they have 300 million products and the task of getting 300
million products turned into 3D objects is something we can talk
about a little bit. But really, they just focus on different
categories. Obviously, furniture and home goods, things like that are
an obvious starting point for most stores, most retailers that sell
lots of things.

But where we started with them actually
was with Lego. Lego’s a very visual products, it’s a very fun
product. And Lego has actually been kind of an innovator in the AR
space for a long time, for five or six years. If you go to their Lego
stores, they have iPads, tablets there where you can see things come
to life. And so they’ve been doing a lot of really cool things, but
they have a lot of problems around the deployment of that. It’s
really, really difficult to update apps, the iPads break, and things
drop, and there’s a lot of just kind of forcing it, right. And so
we’ve worked with them to make the experience much, much easier.
Really, what Seek does the best– easiest way to compare what we do,
is we’re a lot like YouTube in terms of just the hosting. With
YouTube, you upload a video to YouTube, and they give you a link,
right? And then you, as the video uploader, don’t even have to worry
about which devices your content is compatible with. YouTube takes
care of that. They make sure every screen out there plays that video.
Because that makes their service more valuable. And it’s a great
service to you. And so we did the same thing with 3D models. You
upload a 3D model to our system and we give you a link. And so
because it’s just a web link that then works within a browser, you
can do all kinds of things with it, including accessing it from a QR
code, which is one of the ways that Walmart and Lego are doing it.
You can honestly access it at Walmart.com. You can try it out, I
think it’s a Walmart.com/lego and just click on the “see it in
action” button and you can try it out. And then there’s a banner
that says, “see it in action”, you can click and play with
any of those things.

On on mobile browser, you can try that out, or if you’re on your desktop and see it work in 3D. But then in-store, they just have QR codes right next to the products. It says, “Hey, here’s this new Star Wars set! Scan this QR code to see it come to life!” Boom! And so you click it and your camera opens and there’s a 3D Lego set in front of you with the AT-ATs walking around, AT-STs walking around and shooting things. And it’s pretty cool to have that come to life. So that’s a really interesting use case because it’s working, of course, on the website, but also in-store in retail. And so that’s a really cool crossover.

I think that AR can be used to enhance that in-store process, because while it’s cool for Legos, think about that from a furniture perspective. You’re going in and you say, “Hey, you know, I like this couch.” I sit on it. I like it. I’m at the furniture store. I just don’t know if it’s going to fit in my house. And so the sales rep says, “Hey, you know, don’t worry about it. Here’s a link. When you go home, make sure that it fits. And if it fits, just push this button and we’ll complete your order and send it to you.” That’s a really cool use case to combine this online and offline experience using a very, very easy to use simple technology. Nestlé is pretty interesting. They actually started working with us originally to help their sales reps. They sell Nescafé machines to convenience stores and grocery stores, and they have end caps. Where it’s like, “Hey, here’s this KitKat aisle end cap in a grocery store.” And so they have sales reps that go around tens of thousands of malls around the world, they go around and sell these things. And up to now, all they do is say, “Hey, here’s a picture of the latest thing.” But with Seek, they’re now able to say, “Hey, here is exactly what that new KitKat end cap is going to look like in your grocery store. How many of them do you want?” And they can leave a link with the store manager. And it just becomes a much more immersive process. And so they started out there and it went really, really well and started growing.

And now, due to some of the new partnerships that we have that we brought to the table with Google for them, we’re enabling some of their content through Google AR Search. Now they’re moving that to their consumer-facing websites, so that customers can see what a coffee machine looks like in their kitchen, before they buy it. So it’s fun to watch even progression within a company. And the different use cases they find about technology.

Alan: I’m watching a Lego
airship fly across my desk right now.

Jon: [laughs]

Alan: Then land on the desk, and
there’s like a battle going on.

Jon: That like the Avengers one?

Alan: I have no idea, but it’s
so good. Hold on, it is the… Avengers. Yeah, the Avengers one. So
cool. Oh man, you got to try this, walmart.com/lego and then “see
it in action.”

Jon: Yeah, it’s a pretty– I
don’t know about you, when I was young I was building Lego sets more
often. To have this available, let alone from the benefit that there
is from that e-commerce perspective. But it’s just fun, right? I
mean, kids love this stuff. It’s really fun.

Alan: I love it. You point your
phone, and it basically puts a little flat plane and then drops the
Lego set in. And you can zoom all around, and it’s animated so that
the Lego people are walking around. There’s a girl on a horse right
now, I’m trying a different one. It’s just incredible. Dude, this is
amazing.

Jon: How easy was that?

Alan: You know, how easy was that: press the button and it worked. I don’t know.

Jon: Yeah, exactly.

Alan: Really?

Jon: Right? And compare that to
where we were just a couple of years ago. “Oh, you want to see
this in AR? OK, that’s fine. Here’s the app you download. Go and do
that, and maybe you have to create an account, and then you have to
go find the product again, and figure out how to get to the link.”
This is just: boom, tap it and it shows up.

Alan: It’s so much fun. I’m
going to post a little video of it tomorrow on my LinkedIn, because
this is so much fun. Well, how do you deal with then — I guess the
question becomes — with Lego, for example, there’s maybe, I don’t
know how many you’ve got in there, but let’s say there’s 20 sets.
You’ve animated them. You made them in 3D. But how do you deal with
the fact that they have 300 million products?

Jon: Yeah. Walmart is a very interesting one. Another one of our customers is Overstock and they’re very similar. And we’re much further along in the process with Overstock, we’re fully launched with tens of thousands of products with them. And ultimately, it really isn’t possible for one organization to say, “Hey, we’re going to tackle even 100,000 products.” That’s very expensive, prohibitively expensive for most people, and for Walmart to take on even a fraction of the 300 million products is crazy. For Amazon to take on– Walmart has 300 million products; Amazon has 300 million sellers.

Alan: Amazon’s got 1.4 billion
products.

Jon: Yeah, it’s crazy. And how do you deal with that? And I know that you’ve done some work in this area, Alan. And the point is, I think in the long run, it’s gonna have to– I think that phone technology, scanning technology is going to get way better and you’re going to be able to do it just with the handheld devices in your pocket all the time.

Alan: Yeah, the new Samsung 10
does it.

Jon: Right. It does it, but it’s
still not quite there. It’s pretty good, don’t get me wrong.

Alan: It’s good, but it’s not
perfect. It’s not retail quality.

Jon: Exactly. It’s not to where
Walmart’s going to feel like, “Oh, I can put that on my
website.” We’ll get there.

Alan: Yeah. I think honestly
it’s going to be solved with AI, to be honest. I–

Jon: Totally agree.

Alan: Yeah. Having studied this
exact problem quite a bit, I know that it’s going to come down to AI
algorithms taking the six photographs that you already have on your
website: front, back, left, right, top, maybe the bottom, if you
don’t have the bottom just put a black bottom.

Jon: Yep.

Alan: And now you got a 3D
object.

Jon: Totally.

Alan: I mean, I’ve seen early
attempts at this and they work for very, very, very basic things like
a box or a chair, but it’s not even close to where we need to be. But
I think give it another year and I think we’ll be there.

Jon: Yeah. A year, two years,
three years, however long it is. It’s not very far out. And I agree
that the way to really scale it is to automate that. But in the
meantime, what these retailers are doing is saying, you know,
Overstock says, “Hey, suppliers, we now are enabling this 3D or
AR technology on our website. Here are all the benefits that
increases conversion by 80 percent, reduces returns by 25 percent”
or whatever the numbers are. And then they just say, “Hey, if
you want to be in, send us your 3D models.” And so that’s cool.
But the problem is, as you probably also know, there are literally
hundreds of different variations of 3D models, even if you take the
same OBJ or FBX filetype or glTF, one of these extensions. There are
tons of variations within that. They don’t all work. Some of them are
too big. They’re missing–

Alan: You have to create a
standard for them.

Jon: Exactly. Exactly. And so
part of what Seek has done that has allowed us to scale up to work
with these really large scale operations, is we have built that
automation that can take a 3D file and spit out the proper version on
the other end.

Alan: What is the version that
you guys– what is it, is it a glTF from the backend?

Jon: So, yeah, there’s a few
things that we do on the backend. One is Draco file, one’s a USDZ and
one is a glTF, and then we have a couple other ones that we use that
were playing around with, especially for things like Magic Leap that
we’re working with, and some other kind of newer file formats that we
just want to be able to support them. But the point is, we want to be
able to have the whole process be automated. Upload 5,000 3D objects
and then our system goes through and analyzes them and figures out
all the inconsistencies. And on top of that, another piece, it’s
important that we do is it compresses the file down to where it’s
under two or three megabytes, where it needs to be to be used at a
consumer level. You click on those Lego sets and you see how long it
takes, it’s not very long at all, it’s really fast. But if it was a–
I can tell you this, when Lego sent us those files — because Lego
actually created those animations, we didn’t do that, we just enabled
the technology — but when they sent us those, they were 150 to 500
megabytes each. And that’s just completely unusable. That’s why they
have had to — up to now — pre-load them onto an iPad or something
like that, because you just can’t have the consumer depend on some
sort of 4G or LTE, 5G would maybe handle it, but we’re not even close
to being that large scale. So they needed us to come in and say,
“Hey, let’s bring this down by a factor of a hundred and then
make this available to our users.” So that’s where Seek has
really been able to shine, is in that processing and dealing with
thousands, tens, hundreds of thousands of 3D models and preparing
them and getting ready. And then, of course, that’s not to discount
the technical challenges of supporting all of these platforms.

Alan: Let me ask you a question,
speaking of supporting all these platforms. Does your WebAR platform
work on Chrome on an iPhone?

Jon: Yes, sir.

Alan: Really?

Jon: It does.

Alan: How do you open the camera
on Chrome on an iPhone?

Jon: You know what? If I were
the CTO, I might tell you, but I’m not. [laughs] I’m not going to
tell you. But, yeah. Try it, try it on Walmart’s thing right there.
You go to Chrome and watch it work.

Alan: Amazing.

Jon: So, yeah, that’s an
important thing. I mean, tomorrow is the Apple event, right? The big
day, we’re all saying, OK, what’s going to happen next? Are they
going to talk about AR glasses?

Alan: How many AR start-ups are
they going to put out of business?

Jon: Exactly. [laughs] Exactly. They come out with their new ARKit 3.4, what are all the new features that are going to come out? And so, yeah, I mean, there’s really cool things happening there. But one of the things that they did, they actually changed the way that they handled textures in iOS 13 here. Anybody that doesn’t know and doesn’t hear this today — which they’re not going to — doesn’t know that that’s happened, every single model that they are hosting in USDZ file format will fail. They will all be broken and they’ll have to go through and fix every single one and adjust the textures and re-deploy all of their content. And so that’s another big problem that we’re solving for brands that work with us. Overstock can’t keep up with that. And they can’t say, “Oh my goodness, we have to reprocess and recreate 50,000 pieces of furniture and 3D objects related to it, knowing that it’s going to happen and knowing when it’s going to happen. Oh, my goodness. As soon as people upgrade to iOS 13, all their stuff breaks.” But for Seek, we just update our installation that’s on these websites. And we’re updating the backend system. Just like if YouTube all of a sudden supports some new device, you don’t have to re-upload your videos, right? YouTube just transcodes it again and sets it right, or fixes the player and makes sure that it works. And so we’ve done that. All of our customers, as iOS 13 comes out, they won’t notice any difference. They don’t even know what happened. They may even know that we saved their bacon. But we learned about this only about a week ago, actually.

Alan: Wow.

Jon: Wrangling with a couple of
our developers to say “Alright. Let’s put in some fixes that
will make sure that the entire ecosystem that we’ve built — hundreds
of thousands of 3D models across dozens of major websites across the
world — don’t just die overnight.” Big problems, lots of
change. And again, it’s a fun problem to tackle, as we try to help
this become more democratized.

Alan: I love the work that you
guys have done in such a short amount of time, too. I mean, when we
were in China it was about, what, a year and a bit ago.

Jon: Yeah. Yeah, a little less
than a year and a half.

Alan: And this was on the
roadmap, but I don’t think it was– definitely wasn’t at this point?

Jon: Correct, no. We launched
this almost exactly a year ago, September 15th. And it’s grown just
at an incredible pace since then.

Alan: Amazing. So what are some of the actual numbers on ROI? How much does a 3D model cost to make? How much does the platform cost? What is the ROI on this? Is there an increase in sales? Let’s talk turkey here.

Jon: Yeah, definitely. In the end, that is why we chose the e-commerce field. That is where the most demonstrable ROI is. You could just run straight Google Analytics and say if they used AR, what was conversion? If they didn’t, what was the conversion rate? And the numbers are pretty astounding. So just to speak, we’ll start from the end, and then I’ll go backwards and talk about some of the costs and how you get there. And I can’t share specific brand names, but we’ll just say a large retailer.

Alan: “[Insert Large Retailer Here.]”

Jon: [laughs] “Insert large retailer here.” That’s right. So we work with quite a few, but one that we’ve done about $10-million of testing with. In terms of not $10-million for us, but $10-million of sales, measured through them is a 150 percent increase in sales conversion. A 150 percent increase! That means if they were going to sell $400,000, they actually sold a million dollars, because AR was used. If AR is used, sales conversion increases by 150 percent. On the flip side, on the back end of that sale, they’re measuring currently a 25 percent reduction in sales returns. So the savings on just both of those number, on each of them individually, are just absolutely immense. The ROI is very, very demonstrable. Seek charges based on tiers. So, maybe if you have a million views to your website a month, then 10,000 a month or something like that. Just depending on– those aren’t exact numbers. But that’s kind of how it is. It’s just a consistent SAS model based on different tiers, based on how big your website is and how many product page views you’re getting, and how many– how often the Seek service is being called, or the Seek view service is being called. And then on the front end, yeah, there’s the setup. And then you have to also have 3D models. If the company has 3D models, occasionally we need to have them pay us to process them. Maybe they’re in some crazy format or they’re CAD, files which are just ridiculous to deal with. I’m sure you’ve done that before.

Alan: Oh yeah.

Jon: But depending on that, lots
of times that they have 3D models, they avoid that setup across
altogether. But if they don’t, then we can create them. And it just
depends on what the 3D model is of. If it’s of a table, then you’re
talking lower, 100-200 dollars per model. If you’re talking a Harley
Davidson, might be a little bit more than that, by a factor of 10. 3D
model creation depending– it all depends on the quality. Do you want
PVR? Do you want physical base rendering? Do you want it to be super
high quality? Does it need to be cinema quality? We received a CAD
file one time, of Bumblebee from Transformers, and it was like
literally *the* file they used in the movie.

Alan: Oh my god, how big was
that?

Jon: Four gigabytes, Man, it was
crazy to deal with. And they said, “Can you guys get this down
to like two megabytes?”

Alan: [laughs]

Jon: So we had one of our
developers spend three weeks on it, and we got it down. Yeah. So
that’s fine. That’s not quite a manual process. [laughs] Hopefully in
the future that gets more automated. But we do that very– that’s
very rare. Something like that. Most of the time, people are sending
us files that are 15 to 30 megabytes, and they’ve got great textures
and then we can reduce them by a factor of 10. Pretty straightforward
with our system. The cool thing about what we’ve done, you know, if
you go to our website, you can look at price at seekxr.com. Even if
you’re a startup, you’d want startups to have access to this, too. I
think our startup pricing is $79 a month. You can have one object,
maybe two objects. And we’re pretty flexible with our startups. If
you’ve got five objects and one uploading, you need one on your
website. Great, let’s make it happen. But we want people to be able
to show off their product and sell more. As a startup and to have
access to this new technology, so we can work with the small
business, the startup, and all the way up to the biggest companies in
the world.

Alan: That’s amazing. I think
that’s really great. I think– I don’t know if you guys have plugins
for Shopify yet, but I mean, there’s a whole market there of smaller
companies that now with things like the Samsung Galaxy S10 or
whatever it is, the one that has the scanning capability.

Jon: Yeah, right.

Alan: If you sell, maybe you
sell 10 products and creating them into 3D is not that difficult if
you know how this phone device. It’ll take you some time, and it’s
not as easy as just taking a picture. But you spend a bit of time,
you make a nice 3D model, now you’ve got 3D on any website,
democratization of it.

Jon: Yeah. That’s so awesome. We
want every eBay listing, every Craigslist listing. You know, we want
to be so easy that anybody can do it in the future. So we’re trying
to build that infrastructure out to be able to handle the big and the
small. It’s the future of shopping. I mean, this is not just some
cool fad or cool thing. This is the future. Look a little more into
the future. You’re going to have holodecks. You’re going to have
holograms and you can build things in a whole new way. Now, the next
step between here and there is wearables. Apple glasses and other
things like that come out. But this is the new way to do it. It’s–
2D pictures, while they do have their place and they’re not going to
go away completely, are not going to be the ultimate visualization
that you fall back to on your shopping online in the very, very near
future.

Alan: Wow. If you project out a
couple, you let’s call it five years. I don’t think it’ll be longer
than that, but we’ll be wearing glasses. And I predicted this a
little while ago. It was part of my presentation in China is that
every product in the world that’s sold will need a 3D version or a
mirror world version.

Jon: Yep.

Alan: And I still stand by that.
Every single product in the world will be converted to 3D in the next
10 years.

Jon: Any company today that is
creating new products — like, for example, a furniture company — if
they sell– right now, when you onboard a new product in a product
company, you need a description, you need pictures, you need all the
links, you need a developed product page. Anybody that isn’t
including “build 3D model” in that process right now is
just shooting themselves in the foot. Because all the other
companies, all the other furniture companies that are thinking about
this are going to be there. And they’re going to be the ones that
win. If I go to a website and IKEA and Wayfair sold a lot of the same
products, and Amazon. There’s a lot of furniture companies out there
that sell on multiple retailers. And if one website offers me this
premium experience, where I can see the product in my home and the
other company doesn’t and the prices are the same, take all else out.
I’m buying from the one that gives me more information. No question.

Alan: Yeah. It’s not even
information, it’s just being able to experience the product in a very
natural– it feels natural. I mean, AR– we talk about augmented
reality this and that, and it’s just opening the camera and dropping
it into the real world. Let’s get rid of the titles of AR and XR, all
this crap. It’s just a better way to experience the product in the
real size that it’s going to be. If you look at Snapchat, they’re the
biggest AR company in the world right now. They’re using the most AR.
And not once ever did they mention AR. Never. They probably had from
down on high that said “Do not ever mention the word AR”,
because you never see it. We get caught up in the technology speak,
and forget that the rest of the world doesn’t care. They just want
really cool ways and impactful ways to shop.

Jon: Definitely. And we’ve tried to avoid using the word AR in any consumer-facing content. So on Walmart, on Overstock, it’s “view in my room.” It’s “see in my environment.” “View in room” seems to be the best phrase. But again, using those terms that make it feel just really natural. I completely agree with that. You know, I think we’re just hitting the very, very beginning of this. It all comes down actually to tracking. Tracking is the technology that really Seek is working on and focusing on right now as the next step.

Alan: What do you mean?

Jon: Right now ARKit and ARCore
are pretty dang good at tracking flat surfaces. They can track the
ground, they can track a wall, and that’s about it. Maybe there is
some face tracking and some other things in there. But as trackers
get better and quite frankly, I hope that Apple and Google come out
with them, so that we don’t have to–

Alan: Me too. It’ll be a lot
easier than us building everything.

Jon: Hand tracking for jewelry,
foot tracking for shoes, body tracking for clothes. I believe that
the biggest AR industry — for e-commerce, at least — will be for
clothing.

Alan: That’s the hardest one
too.

Jon: Oh, it is. It’s so hard,
there’s so many pieces of the puzzle you gotta fit to get it right.
You need exact measurements of that clothing. You have to get exact
measurements of the shape of that person’s body. Then you have to
track it and put it on and have it look real and feel good. And
there’s a lot of issues with it. And I think we’re still quite a few
years away from really the future of shopping there. But when we get
there, clothing in shop for way more often that furniture is, or than
appliances are, what a lot of the really good use cases for AR are
right now. Shopping for a hot tub, yeah, super helpful to see what
that’s going to look like in your backyard before you drop 10 grand.
But you just don’t make that purchase very often. And so the number
of clicks that are happening, the number of engagements that are
happening just aren’t very high. But often you’d shop for a new
shirt. Or new shoes or a new hat. And it’s almost every day for some
people. And so when that technology gets to the point where that is
really true to size and really accomplishing what it’s supposed to
and letting you see what’s this going to look like? The clothing
industry actually suffers the most from returns. It’s upwards of 40
percent. Because people buy, it doesn’t fit, they send it back.

Alan: Yep.

Jon: And it’s horribly difficult
for clothing companies to deal with it. You know, what are you going
to do? You have to– all your competitors are offering free returns
and free shipping and all these things. You have to jump right in, or
else they’re going to go to your competitors. So I’m really excited
about the future in that regard. I think that all the trackers, you
got body trackers. But then what about a car tracker? They can
recognize, “Oh, those are the tires. Let’s switch those out”
or “Oh, those are the windows. Let’s tint those a little bit.
Let’s see what that looks like. Let’s change– That’s the body, let’s
change the paint job here.” But you need to build, somebody has
to build a really good car tracker that can use AI to recognize all
the different parts, and be able to accurately place a grill where
it’s supposed to go, or headlights where they’re supposed to go.
We’re essentially going to need AI to be able to recognize and track
and then interact with using the 3D objects, to be able to see what
they look like on everything in our lives.

Alan: You know, I actually saw a
demo of this exact thing at the PTC LiveWorx conference. It was
incredible. They held up and iPad, it recognized the 3D shape of a–
I think it was an ATV. And then it captured the shape, it gave the
outline and you lined up the outline with the thing, and then it
locked in. And then I could add things to the machine. I could add
fenders and extra lights and running boards, and it was nuts! And it
was adding it on as if it was right there.

Jon: So awesome.

Alan: Oh, dude, it was amazing.
And I’m thinking to myself, “This is it. This is the future.”

Jon: Yeah. Yeah. And so you have the ATV tracker. And that’s great. But there’s just thousands of products where this can happen. And there’s so much opportunity out there. For anybody that might be an entrepreneur listening to this, looking for an opportunity, figure out how to do that. Pick something you really care about where there’s a decent industry size.

Alan: Yeah. Mine’s learning,
man. I’m going after learning.

Jon: Yeah, education is just– I
mean, we had an opportunity to do something with a nonprofit this
year, here in Utah for the Transcontinental Railroad. It’s the 150th
anniversary of the railroad being connected to the west. Here in the
United States, “the Crossroads of the West” is one of the
nicknames of Utah, because that’s where it connected. And so there’s
about an hour and a half from where I live here, is where that
happened. And so we got to recreate the Golden Spike. The spike that
went in, and the trains that met the Big Boy train. And all these
cool things, and even an AR version of Abraham Lincoln that people
got to see. And so then that got pushed out to all the schools here.
And we had over 15,000 children that just on one day, all using the
technology, we tracked it on all of our analytics. And kids all over
the state of Utah were able to bring history back to life and
experience this in a way. I mean, these trains, these Big Boy trains,
literally. Just the engine’s 60 feet long, it’s huge. And so they’d
have their class take an iPad and go into the gym in the school, and
spawn this train right in front of them, have it just appear. And
then they just go walk around it together. They get to look at this
train, as if it was sitting right there in the gym. And so, I mean,
there’s just– education’s awesome. I love that you’re tagging–

Alan: Yeah. It’s funny, because
originally when we met in China, we were basically working on exactly
what you guys are doing. We were down the road of commerce and our
ultimate goal was always to build a new education system. But I also
realize that the e-commerce side of things was a way to fund that.

Jon: Yep.

Alan: And so we were going down
that road. And recently we just decided we can’t walk on that line.
We need to just focus on education. We can’t do both. And we tried to
do both and did everything poorly. So now it’s– we really have to
focus and we’re really focused on this.

Jon: We have to choose one. I mean, that’s something that both you and I have learned in this industry is, yeah, there’s a lot of AR agencies out there. As a company, you can go to them and say, “Hey, can you build this custom thing for me?” And they say, “Yep, sure.” Great for the company. They get a nice custom product. But the problem is, the company that built that custom product for them is going to fail probably, in the long term, because they’re not going to be able to stay in their business with project-based work. You have to build a sustainable business model and focus on one thing and do it better than everybody else. That is really the only way to build business, really, in any industry. But in this industry especially, you can’t say, “Yeah, we’ll build anything you want.” We have gotten really good lately at saying no.

Alan: But hold on. Let’s go back
two years, let’s say.

Jon: Yep.

Alan: You guys were building
everything for everybody.

Jon: Totally, man. We had a
platform and we were trying to build our vision of YouTube of AR, in
this platform for consumers, and at the same time taking all these
projects on. That’s just impossible.

Alan: I learned something recently from another company in Toronto here. They’re an app development company. They do basically websites and really complicated apps for banks and stuff. And then they spun off this side project or the side company. It was totally separate. And they said, “OK, we’re gonna build our own products because we’re sick of building products for people, we’re gonna build our own.” So they siloed everybody off the development team. And what happened was they were starting to make products, they were making great progress. Some products failed, but it was like a– they were working on everything. The problem that they had was, as they got these big projects, a million-dollar project comes in and they’re like, “OK, we need all hands on deck.” And they pulled the people away from the products to work on the projects. And all the products just failed, because now you don’t have the team working on it. You just took the team away from what they’re working on, to work on someone else’s problem.

Jon: I know.

Alan: Yeah. And I learned in
that one conversation, I was like, “Oh my God. It makes total
sense why we’ve had such a struggle.” We just basically put a
kibosh to that immediately. [chuckles]

Jon: You got it, man. It’s been
a journey, but we’re excited with where we’ve gone to here.

Alan: You guys are doing
amazing.

Jon: The future is bright, I
think, for both of us. I’m really excited about what you guys are
doing with XR Ignite, and supporting the whole ecosystem.

Alan: Thank you, man.

Jon: Of course, your education
product and everything that’s going on there, and we would love to
support you in whatever way we can.

Alan: Well, I truly appreciate
that. I mean, this is a small world, this XR world, and it’s getting
bigger by the day. But I think one of the things that I’ve really
noticed in doing these podcast interviews is that almost every single
conversation out of the entire — maybe 99 percent of them —
training and education comes up.

Jon: Yep.

Alan: And it may be my
influence, but I try not to influence the conversation. But it comes
up, because it’s something that I think everybody realizes is going
to be a big challenge for humanity. This is a problem that we– IBM
released a study this morning, that says more than 120 million
workers will need to be re-trained and re-skilled in the next three
years, as a result of AI and intelligent enabled automation.

Jon: 120 million people.

Alan: In three years.

Jon: I read the same article,
it’s absolutely insane. How do you do that?

Alan: I don’t know. I mean, I
have an idea.

Jon: I have some ideas, too. But
bringing those to life quickly and then implementing–

Alan: The problem isn’t so much
that– I know we can do it, but can we do it in three years? [laughs]

Jon: Yeah.

Alan: I don’t think so.

Jon: Mm-hm.

Alan: That’s why we’re raising
an enormous seed round, and it’s like when I presented this to an
investor, he’s like, “That’s not a seed round. That’s a series
A.” I’m like, “It may have been a series A in the past, but
this is the seed round now. So get used to it or get out of the way.”

Jon: Mm-hm.

Alan: It’s nuts.

Jon: Well, thanks so much for
having me, Alan.

Alan: Oh, it’s my absolute
pleasure, my friend. Thank you so much. I’m so glad for all your
successes and I’m really looking forward to seeing you again. I’ll
pop down to Utah and we’ll have dinner. It’ll be great.

Jon: Oh yeah. Come down. Let’s
ski this winter.

Alan: Ooohhh! Done, done! I’m a
snowboarder, though. So don’t hold it against me.

Jon: That’s fine. We’ll to go to
Snowbird or Park City or something, let’s make it happen.