Scobleized

Brian: [00:01:06] Welcome to Future Commerce, the podcast about cutting edge and next generation commerce. I'm Brian.

Phillip: [00:01:11] And I'm Phillip.

Brian: [00:01:12] Today, we have the Robert Scoble with us. Robert, why don't you go ahead and introduce yourself?

Robert: [00:01:22] {laughter} I don't know. I'm a futurist, I guess, as you would call me. A tech journalist. And I go around the world and talk to people who are building the future. I've been very blessed to be able to do that for, I don't know, a few decades now. I had the first ride in the first Tesla. Siri was launched in my son's bedroom and many, many companies I've been early or first to see and to show my readers on Facebook and Twitter and all that.

Phillip: [00:01:55] And if his name sounds familiar, you've probably heard Robert on many places like Twit Tech TV and from many other sources.

Brian: [00:02:07] His own blog.

Phillip: [00:02:07] His own blog, Scobleizer. You can't miss that one. So it's a pleasure to have Robert on. And we want you to leave your voice with us about today's podcast, so make sure that you do that. And you can do that best on FutureCommerce.fm, and hit up the Disqus coming box for the episode on that site. You can also subscribe to listen to Future Commerce on Apple podcasts. Formerly iTunes. Rest in Peace. And Google Play. You can listen from any Amazon Echo device on TuneIn radio with the phrase, "Alexa, Play Future Commerce podcast." All right. So, Robert, there're a million things that we could talk about with you. I don't even know where to begin. But, you know, for those who are not familiar, could you give us, like, the two minute backstory and tell us a little bit about how you came to be a futurist?

Robert: [00:02:59] {laughter} Part of it is luck. My dad was an engineer and got hired out of college at Ampex in Silicon Valley. And he moved us to Cupertino in 1971 before Apple Computer started up in Cupertino. And so when I got to junior high, I was at Hyde Junior High, and we got our first Apple 2s. And so I was in the first computer club there and my dad bought one.

Brian: [00:03:31] Nice.

Robert: [00:03:31] So that's part of it. And then part of it is just falling in love with new things and working on journalism for three or four decades now and getting around and seeing some really cool things. But a lot of it is luck of being here. If I wasn't in Silicon Valley, I bet I would be doing something else. You never know. But, you know, because there's other tech journalists from around the world. But it sure is a gift to be here.

Brian: [00:04:00] Nice. And you've been able to focus really heavily on augmented reality and virtual reality tech. And do quite a bit of your journalism about those particular pieces of tech, and mixed reality I guess, too.

Robert: [00:04:17] Yeah.

Brian: [00:04:18] Could you maybe give our listeners a quick rundown of the history, of the evolution of augmented reality? It's really tech.

Robert: [00:04:29] I just met the grandfather of augmented reality, and he got, I guess he first did his first augmented reality in 1965. So I'm not going back all the way. {laughter}

Brian: [00:04:41] Maybe just pre Google Glass or something like that.

Robert: [00:04:46] The first one that I remember that it made an impression on me... I went to Matyo in Germany in 2011, and the CTO there was showing me monsters on the sides of skyscrapers. And Apple then bought that company a few years later, and Matyo's tech is the core of what's coming in the next IOS 11. So it goes all the way back to like early 2000s, the 2010s when this stuff was just coming out of R&D labs and starting to get interesting. But you can see how long it takes for technology like that to show up in consumer products.

Brian: [00:05:36] It's funny because you say seven years ago, like it was really, really long time ago. And the tech world that is. But really, it's like seven years ago. {laughter}

Robert: [00:05:47] It feels like a long time now, but it's not that long. And a lot is happening. At CS four years ago, I interviewed the founder of Prime Sense, which back then made 3D sensors. And he showed me a sensor that from three feet away could tell how hard I was pressing on a table, and he showed me a bunch of other demos, and then Apple bought his company. So I started seeing this pattern like, "Hey, wait a second. Apple's buying all these cool companies and doing all this weird stuff. What are they doing? Why do they need a 3D sensor? And an AR company and an AI company?" I mean, they buy the whole bunch of companies.

Brian: [00:06:28] Something's coming together.

Robert: [00:06:30] And that's part of it is understanding how companies think. So I worked at Microsoft for three years. And so I understand how big companies sort of react to markets and how they think things through and how committees work and putting it together, "Oh, wait a second. These guys are about to bring a big iPhone," because patents started showing up, and rumors started showing up, and my friends started talking about it. My best friend was one of the 12 guys who built the first iPhone. So we'd talk about it all the time, like, what's this industry doing?

Brian: [00:07:06] That helps. Helps keep you in the know, for sure. Yeah. Oh, for sure.

Robert: [00:07:09] Like I said, it helps to be in Silicon Valley. I'm walking distance down to SpaceX and Tesla's best investor and two doors down as an executive assistant for Facebook. It's just crazy. GoPro was started on one side of my house. It's nerd heaven here is the way I put it.

Brian: [00:07:34] {laughter} That's awesome. And not only is Apple investing, but you see a lot of other major tech players investing as well. You've got Google that's heavily invested in Magic Leap. You've got Facebook...

Robert: [00:07:47] I think Google is probably the most aggressive mover because they've invested in VR, they have Google Tilt brush and Google Maps, Google Earth. And they just announced this thing called Google Docs on Oculus Rift and HTC Vive just last week. So they're making aggressive moves, and they're going to use the AI that they developed for the self-driving car to be the basis of their mixed reality glasses when they come along. The next few years you're going to see some crazy things.

Brian: [00:08:23] Yeah, I believe that. Although I've been waiting for some crazy things for a while. Like, especially with Magic Leap.

Robert: [00:08:30] Yeah. The latest rumor from inside the company is that they're going to come out with a developer preview probably by the end of the year, closer to the end of the year, so December.

Phillip: [00:08:42] So for those who are not initiated, could someone explain what Magic Leap is?  

Robert: [00:08:46] There's AR, augmented reality, which means you're seeing through the optic or through the phone to the real world. And you got a little taste of that with Pokémon Go. When you looked at the phone, you would see the virtual Pokemon on top of the real world. These things are augmented reality glasses that they're developing. I call them mixed reality glasses, but Magic Leap calls them spatial computing glasses. And they let you see a next generation augmented reality, augmented reality that actually is stuck to the tables that you're looking at or properly occluded. So when a virtual actor or a cartoon character runs around the table, it looks proper. And someday it will also be joined with AI, which then will learn everything about what you're looking at. So in front of me now is a couch and a coffee table and a regular table. An executive table. If it knew those things, then it could put virtual things on top of those things much more accurately than, let's say, Microsoft HoloLens does today. So I just brought up HoloLens. HoloLens is the first example of one of these mixed reality glasses that really does this kind of room tracking. We call it Slam based tracking or for simultaneous location and mapping. This is a technique that was developed for the Mars rover, so that the rover could navigate around the surface of Mars without human interruption, because if we see it going toward a cliff and we tell it stop, it takes 12 minutes for our stop sign to get up to Mars. It's already over the cliff, right? So it has to see the cliff before it gets to the cliff. And it has to know what to do before it gets there. And by the way, this is how self-driving cars navigate through the world and how robots do it. Now drones soon, as well, if they're not doing already. Well, the DGI Spark is using a Movidius chip to see the world and see objects and fly around trees were stop before they hit something. And they use similar techniques to Slam, if not Slam.

Brian: [00:11:10] Wow.

Robert: [00:11:12] So we can go all day long. We're getting really nerdy here.

Phillip: [00:11:16] That's just a little bit. {laughter}

Brian: [00:11:18] {laughter} We like the nerd. Bring all the nerd.

Phillip: [00:11:20] Yeah. Please. Yeah. This is the audience.

Brian: [00:11:23] Now, a lot of people have heard Magic Leap, but there are some other companies out there that are piloting some of these glasses. There's Medda. I think you've documented Medda to some degree.

Robert: [00:11:35] Yeah.

Brian: [00:11:38] And there are a few others out there that are really pushing forward on this front.

Robert: [00:11:43] And some of them disappeared already that were trying to get into this game and... Gone. What would be an example that? There was one that just went away a couple weeks ago. I forget the name now. Cast AR. So there're companies that thought they had something going, gets funding and then realizes, oh, we are not going to be able to compete with Apple and Microsoft and, you know, SNAP and Amazon and Google and not to mention all the Chinese companies. Because really if I were at Apple right now, I wouldn't be worrying about anybody except for the Chinese.

Phillip: [00:12:26] Yeah, sure.

Robert: [00:12:26] So I would be only thinking about how is the Chinese going to use their supply chain against me and their internal market because their internal market is much more VR heavy and much more interested in mobile than American market is even, right? When I go to China, they don't use business cards, they scan each other's WeChat. That does not happen here in America.

Brian: [00:12:50] No we still use business cards, which is mind blowing to me.

Phillip: [00:12:53] Yeah.

Robert: [00:12:55] It is, but you know, old habits die hard.

Brian: [00:12:58] True. True.

Phillip: [00:12:59] Yeah, I don't know. I can tell how unbelievably excited you are, Brian. You touched on something that Robert that I think is really important, especially for our audience, because we've sort of centered a lot of our future discussions around retail and its impact on retail and how technology is impacting commerce. And I think that, at the end of the day, what we always try to drive back to where does potential commerce component come into these things? And I think you touched on a couple there. The commercial opportunities in China are immense, especially being a digital native society and this incredible growth that's happening in China and in millennials and in the adoption rate being just incredible, of technology. So my guess, based on what you said, is that a lot of the technology breakthrough that we're going to see and the mass market adoption is not happening in North America. It's happening in China.

Robert: [00:14:08] A lot of it will come here pretty quickly. But I'm watching companies, right? Big companies battle it out. And China has some advantages that they haven't had before. They have a huge internal market now. I think 721 million Internet users in China. America only has 380 million citizens. So their market is way bigger than our market is, just in terms of sheer size. And then you look at the supply chain and their ability to drive price into the ground. And a good example is... In front of me I have an Insta 360, a 360 degree camera. When I was the first person to use a camera like that at Coachella, my camera cost about six thousand dollars. And this camera now costs two hundred dollars, so they can apply... And this is a new company out of China. They can build things faster and cheaper than we can, or than anybody can.

Brian: [00:15:13] Is that a livestream 360? For $200?

Robert: [00:15:15] Yeah. Facebook just turned that on two months ago. Yeah. Two hundred dollars. You slide it on your iPhone or your Android phone. They have another one called the Insta 360 Air. These are small little cameras, and you put them on them on your phone, and now you're shooting in 360 degree. It's pretty cool. And yeah, you nailed it. YouTube and Facebook and Periscope all support 360 video. And there's others. But those are the ones that matter.

Brian: [00:15:43] Yeah we actually got to do a little podcasting live in 360 video just a couple of months ago. And did that through YouTube. It was a pretty interesting experience. It was very cool.

Phillip: [00:15:55] Yeah, it was anything but easy, though.

Robert: [00:15:58] Yeah. It's getting there. It's still a little early adopter, and the ones with Facebook, the resolution just isn't there. And unfortunately, because you're using a camera company's app, you don't see a lot of the things that you would see on the normal Facebook app side. In reality, it's really tough to do for me as an influencer. It would be great for a kid's birthday party or something like that. But my expectations are higher when I'm doing these things.

Brian: [00:16:34] Right. Yeah. And to get back on on the train that Phillip was on there, I think we're all kind of looking forward to what we have ahead with glasses and what we'll be able to do from a commerce perspective there. In the meantime, we sort of have AR light and even that is still fairly... It's not very well adopted here in the US. Like, Snapchat is obviously doing some basic stuff, and obviously their Spectacles are kind of groundbreaking, but they're still fairly rudimentary. But, you know, you kind of have to have the right phone to even really utilize a lot of that AR, like Google Tango type technologies on your phone.

Robert: [00:17:22] That'll be really interesting to see when Apple comes out with the next iPhone. They have three different models, but the high end one has two 3D sensors, one front facing, one back facing. And it'll be real interesting to see the kinds of things that Apple enables with that phone and how fast developers start to really use those sensors to do interesting things. Because it is a small percentage of the market, you know, even on iPhone. You know, modern iPhones, there's gonna be... Somebody figured out there's going to be about 200 million people running IOS 11 before the phone comes out in phones that can run the AR kit or the platform that does augmented reality. And that requires a fairly modern phone, a 6S or a 6S plus or a 7 plus or 7. And I don't think it goes back to 5. I might be wrong about that. I have to look that up. But anyways, it's 200 million phones, which sounds like a big number. And it is when you compare it to VR. Because VR, like I'm looking at an Oculus Rift right now, and that only that sold less than a million units according to the latest number. So, you know, 200 million units is more interesting, but it's still only a portion of the entire phone market. So this is a multi year process. Even if it's hot next year and all the influencers are talking about it, you know, it'll be a while before it really gets broad based support from Android and everybody else.

Phillip: [00:19:14] What I'm really kind of coming back to is all well and good. I feel like we like... I'm still waiting for Apple to open source Bonjour. Like they said they would. So it's like, they go ahead and march forward and do all this really cool stuff. You know, some of that groundbreaking stuff that happened last year is still not being picked up and run with by developers. So it's going to hinge entirely on the developer community. I mean, never mind what the NPD Group says about, you know, Google or Oculus sales. I think having the capability is one thing. How many iMessage API based conversational commerce apps are there that exist? Well, that capability has been built into iMessage now for over a year. Nobody's picking it up and running with it. And that's frustrating to someone who sees such potential in the market. Like myself. I see so much potential in the market for really transformative commerce experiences that are happening on these devices. But the developers have to pick it up and run with it and create engaging reasons for adoption.

Robert: [00:20:24] I think this is going to be different for a few reasons. One, it's very visual. And if you've been watching any of my Twitter or Facebook, you've seen lots of examples of AR Kit apps that have come out in the first couple weeks because keep in mind this technology has only been on the market for two to three weeks since Apple at its WWDC developer conference. And already you're seeing some really interesting apps. One guy built a measuring tape app, so you hold up a virtual measuring tape up on your wall, and it tells you how wide that wall is. Another guy made it so that you could aim your phone at your Tesla and see different kinds of colors, which the auto industry will really appreciate. You come into the virtual showroom, Oh you want pink? Here's what it looks like. You can order it if you want." {laughter} And there're others. You know, there was one app that's teaching somebody to dance with footsteps on the floor in front of you. Stuff like that. There's some really interesting playing around, but there's nothing that's come up to the level of Oh my God killer app. But all of these require you to hold your phone in front of you in a new way that most people don't do today unless they're playing Pokemon. And even if they're playing Pokemon, they're not doing it for very long. These things are going to get you to really hold your phone up a lot, to do different kinds of things. And shopping is a good example. If you walk into the shopping mall and say, "Siri, tell me where the blue jeans are in this mall." Why doesn't that put a blue line on the floor taking into the blue jeans? Right? And that's coming.

Phillip: [00:22:13] Yup.

Robert: [00:22:13] Westfield Labs is working on that. They're the labs for many of the shopping malls in the world, and they know it's coming, but we haven't yet seen it. But, you know, if somebody walked into a shopping mall holding their phone up like that and not just looking at it the usual way, you'll notice that, and you'll notice something really cool on the screen, you know, like a green line taking people around or something. And you'll be much more likely to ask a question like, "What the hell are you doing? What is that?" "Oh, this is the new iPhone. Haven't you seen the new augmented reality capability?" Or whatever you're going to say to your friend. "Have you see new AR stuff yet on this new phone? It's cool."

Phillip: [00:22:54] Sure.

Robert: [00:22:55] Yeah. And that'll get people going. Plus, it makes really great looking Facebook and Twitter page posts. So, you know, that's why they're getting a lot of heat because somebody is showing you something cool in augmented reality, makes for a good demo video. And that's not true of, you know, PayPal, for instance.

Brian: [00:23:15] {laughter}

Robert: [00:23:15] If we could get the world to use PayPal, that'd be great. But it's not that interesting for most people.

Phillip: [00:23:24] {laughter}

Robert: [00:23:24] AR I think it's going to be different, though.

Brian: [00:23:27] You bring up one example of a commerce experience where it's sort of directing you to products. How else do you see it being applied to commerce? I mean, there's pretty obvious ones to me, like additional product information or experiences or discounts that all display on your phone as you kind of hold them up, which will allow for less packaging and...

Robert: [00:23:55] Yeah. But those are boring uses.

Brian: [00:23:56] {laughter}

Robert: [00:23:57] The ones that get excited are like Sephora. So, you know, in my intro I didn't explain. I wrote three books with Shel Israel. Each book has predicted decade decade long trends and the latest ones is the fourth transformation, which is all about this stuff. Augmented reality and AI. And we visited Sephora's R&D lab in San Francisco, where they have a full on store inside a warehouse, so they can test out all sorts of concepts and then different things. And they've put a lot of augmented reality into the current app on the current iPhone. You don't need to wait for this new stuff. And one of the things that they did is augmented reality lipsticks. So you could test out different kinds of makeup on your face because it images of your face and then wrap's virtual makeup around you. And that makeup is color matched and matched to the physical product you would actually buy in the store. So if you tried pink lipstick and you like it, you go buy pink lipstick, and it looks exactly the same on your face in real life as it does in augmented life, which tells you something. And they're also working with the signers. So you're going to walk around with your phone in AR mode and look at signage and it would see a lot of the stuff that you're talking about, you know, extra information about the products or a video showing how it would be applied or something like that. And that's a good I think that's a good starting point for stores to start thinking about. Okay, next year you're going to have a lot of people who are going to be looking to augment their world by holding the phone up and trying this new AR thing in the store. And what can it add to the customer experience? And start getting people ready for this world where, you know, four years from now, me and you are all wearing glasses and we're walking in stores with glasses on, and the glasses will react to the store and show us all sorts of stuff. That's a little bit further away. Three, four, five, six years. But we know it's coming. We're seeing it coming out of R&D labs and getting ready to be shipped. So, yeah, it's a fun time. I see lots of examples like that. You know, once we get the full on... If you think about a decade from now and you get full on glasses that you can talk to, that you can use eye sensors with. We have even talked about eye sensors. But Apple, Google, Facebook have all bought eye sensor companies. So that tells you those are coming. And, you know, if we're walking around with a pair of glasses that we're controlling with our voice and our eyes, and we can look at something and menus pop off that physical thing, then we're going to see real explosion in what it means to be a retail store, and what it means to build a fake virtual store in your living room. Because like I just buy the $2200 PC on Amazon, and the pictures are shitty. Sorry. It just doesn't give you that much information. I'd love a video demo of that PC from a really user, so I know it's just as bad as all the specs make it look like it's bad ass, right?

Brian: [00:27:23] Yeah. In home shopping is definitely going to happen as a result. So we talked a lot about augmented reality...

Robert: [00:27:32] If you can build some of this stuff. Walmart's hiring. Amazon's hiring. Microsoft's hiring. Google is hiring. Autodesk is hiring. We should talk about Autodesk. And on and on. So if you have computer science skills, you're fully employed if you want to be in this industry.

Phillip: [00:27:52] Yeah, for sure. You mentioned shopping, virtual shopping within your home. And I'm sort of on record as being skeptical of what that looks like. If you follow the trend...

Robert: [00:28:06] You didn't get your Amazon Wand, yet?

Brian: [00:28:13] {laughter}

Phillip: [00:28:13] I don't have any Amazon Wand, yet. Though we did discuss...

Robert: [00:28:16] It's Prime Day.

Phillip: [00:28:18] I know. It is. We are discussing this on Prime day. And what's really great about Prime Day is never discount a technology adoption driven entirely by manufactured holidays that have built incentivized deals.

Robert: [00:28:37] It got me to buy, so... {laughter}

Brian: [00:28:37] If I seem distracted,  it's because I'm shopping at the same time. {laughter}

Robert: [00:28:47] Yeah, what page are you on? I want to hear what the deals are. Come on. {laughter}

Phillip: [00:28:50] But, Robert, I have to ask you, you know, what would you say to the people that think that there is a use case for shopping virtual aisles that are modeled after the real world as opposed to some future paradigm in virtual reality space that could only ever exist in that space as being, you know, the right and appropriate setting for commerce?

Robert: [00:29:09] We used to call that SKU morphic design because it was designed so that it looks like the real world. If you see a game, it has green felt because that's how card games are played. And in virtual world, why do you need green felt? Why don't you make it purple? And same thing's going to be true in a store. Why do you need aisles? If you're the only one walking down it, and why do you want to even try to bring that into the home? But I can certainly see and I don't know if I want to set off everybody's Siri or Echo...

Brian: [00:29:53] Yeah. Do it.

Phillip: [00:29:53] Do it.

Robert: [00:29:54] I mean we're already buying things. If I go. "Hey, Alexa. I need some toilet paper." It answers me back. Right? And says, "Hey, what would you like the Charmin 20 ply you bought last time?" Right? And with this new Wand that I'm talking about, it's a twenty dollar little gadget. If you have Amazon Prime, you get it for free basically, and it lets you scan the barcodes, and it lets you talk to it because it has Alexa inside of it. So you can do the same thing. "Can I buy some toilet paper, and I need some milk too. And I need some Cheerios for the kids." And so now you're buying and transacting without having a physical store at all. The physical store is the wand in your hand, if there is a physical thing, or the Alexa that's in your kitchen. Even though you get mixed reality glasses into that mix, why do you need something that looks like a store? Think and you're going to just talk to and say, "Can you show me the blue jeans that are available?" And boom, boom, boom, boom. There's five pairs of blue jeans for my size wrapped around my body. Because keep in mind, we're gonna have 3D sensor soon that we're gonna do amazing things. I've already been imaged in a 3D sensor, so I could be 3D printed and stuff like that. But that's gonna happen with your iPhone soon, right? You're just gonna walk around yourself with an iPhone and scan yourself and put yourself into Amazon or Walmart or wherever, and they're gonna show you clothes, you know, virtual clothes that are on you, standing in the living room in front of you.

Brian: [00:31:38] We had Body Labs on...

Robert: [00:31:41] What's that?

Brian: [00:31:41] Do you know Body Labs? We had a Body Lab on.

Robert: [00:31:45] Yeah.

Brian: [00:31:45] They're doing some pretty cool stuff with 2D to 3D rendering. So you don't even have to get a full body scan now. You can get a 2D like full body shot 2D picture, and they can actually extrapolate what your body looks like from that 2D picture.

Robert: [00:32:02] Yup.

Brian: [00:32:02] It's pretty unbelievable. And they're using an AI to do that. AI technology to sort of fill in the blanks, if you will. Yeah. It's amazing. The interesting thing about augmented reality is it's kind of a personal experience and you can kind of set, you know, different things to see different things. And each person may or may not be seeing the same thing. But we also are looking at a lot of hologram technology coming up. How do you see sort of the interaction between AR and holograms? And, you know, holograms are sort of, like I mentioned, a shared experience without any tech necessary. Do you think...

Robert: [00:32:46] That's not necessarily true. A hologram is a 3D object, right?

Brian: [00:32:53] Right.

Robert: [00:32:54] At least in the context of augmented reality. So, for instance, in my Microsoft HoloLens, I can select a shark, and I could put a virtual shark right here in my living room.

Brian: [00:33:03] Sure no, I'm talking about like technology that's not AR, like a hologram that's just stand alone. Did you see that Cortana hologram that was a demoed at the latest Build conference?

Robert: [00:33:19] That was demoed with a HoloLens wasn't it? When you say hologram, there's the marketing term that Microsoft uses to define 3D objects that are in my HoloLens. That's a hologram. When you talk to somebody in the AR industry who's been doing a holography for a long while, if you've seen a hologram, a real old school hologram on a photographic plate, that's a hologram, right? And it shows you depth with one shot. It doesn't need a lot of data. It's a little different, but it's very similar. I'm starting to see monitors that are coming along that use the old style holographic technique of showing you a 3D object on a standard 2D monitor. And that is going to be really interesting.

Phillip: [00:34:07] Yeah.

Robert: [00:34:08] But I don't think it'll get to the place where... Well I can't say because those monitors might be put in front of your eyes and all of a sudden you're getting a really amazing 3D imagery with  monitors that look like they're 2D monitors. We haven't yet seen those demonstrated in a real way yet. The guys who build the red camera company just announced a holographic phone. But I don't know that that's truly holographic. They didn't demo the screen. They just said it's a holographic screen. So we have to see a demo of that and understand the technology before we can call it real old school holographic technique.

Brian: [00:34:54] For sure.

Robert: [00:34:56] But anybody who's seen one of those holograms in a museum or something like that that's done on a photo plate, that's done with lasers on a piece of photographic film. And they're beautiful, right? You can walk all the way around and get a look at that 3D thing or that image from all the different points of view that you can. And anyway, now that I understand what you're asking. I didn't see that one demo. I thought I did. I thought I did, but I thought it was on a HoloLens. And so it's a mixing of these terms a little bit, which Microsoft is doing. They call their virtual reality headsets mixed reality because they're using the same sensor technology that's in the HoloLens to make the inside out tracking work and to me, that's blurring the lines of the terms beyond what they really should be.

Brian: [00:37:37] Yeah, new technology always has a little bit of this problem, even new techniques in commerce sometimes have that problem.

Robert: [00:37:45] Yeah. It's really hard because, Mellgren, an academic, actually defined all these terms for the industry, and we've been fairly well understood. But when Microsoft did that, they broke the academic term. And I wish they hadn't because it makes it a lot harder. It makes it a lot harder to do stuff like what we're doing right now. Trying to tell people what this stuff is. You know, it's hard enough because how do I explain a virtual shark on my living room floor that you can walk around? It's bad enough when you have to explain it in a way that people understand it. And then when we add this terminology and all that, people get really confused pretty quickly.

Brian: [00:38:31] Yes. I can't help but think, and I'm gonna go out out of the commerce realm here for a minute, but I can't help but feel that a lot of the experiences we're gonna take on, and I don't know if they'll all be in our home or if they'll be elsewhere because they will require a fairly hefty investment to actually bring into your home. But maybe experience centers with VR where you actually, like, live a full story and there will be like a full on haptics experience that, you know, includes maybe even like mood enhancing drugs and different things that affect your emotions and, you know, different ways to experience. And this is strictly entertainment, but...

Robert: [00:39:13] First of all... Let's stop and talk about drugs for a second. It's a topic I like talking about. Pfizer's head of innovation, Pfizer the drug company, says augmented reality is a drug. They're doing studies on Alzheimer's, ADHD, depression, pain, autism and other things. And they're finding early promising results in all of those. There's a University of Washington study done with burn victims about pain. And they found that VR is more effective at that kind of pain than morphine is. So VR and AR is a drug. You don't drugs to experience drugs. {laughter} And in fact, I visited an eye doctor down in South Africa. Sherylle Calder. She runs EyeGym.com. She works with professional athletes and she fixes their perception system. She's brain hacking. And she shows you a pattern on a screen. And it fixes your eyes. In other words, light is a drug. It's something that changes your brain. So we haven't even started really understanding how all that works and where the end of it is. Right? We've only started doing a lot of this kind of work lately. And so, yeah, I'm quite convinced this is the beginning of a new field called brain hacking. The glasses are going to help you experience life in a new way. And where are we going to go from there? MindMaze is one of the companies in our book, and they do a whole bunch of brain sensors around the VR headset, so it can start to integrate with your brain. So now you're already seeing people talking about building new kinds of interfaces where you think something and a menu pops up, or you think something in a blog post appears. Right? That's freaky. It's freaky for me to think about it. But I've seen early attempts at getting there, and I'm pretty convinced it's not too far off, you know. Is it 10 years off? Probably less.

Brian: [00:41:44] Mm hmm. Well, in the meantime, we've got, you know, ear pods, which which was actually a pretty big step forward, I feel like, towards having a AI in our ears that all times, and getting people used to the idea of interacting with an AI like they would of a person on a phone, if you will. And so I think, you know, with AR, you've already said it, we're gonna be using our voice to do most of our controlling interaction and voice first interaction is going to become much, much more pervasive way of interacting with technology. Phillip, you've been quiet for a while. You have some thoughts you want to interject here?

Phillip: [00:42:28] Yeah. I mean, I think this is all well and good. But, you know, the cynic in me sort of makes me wonder. We're on this wonderful streak of progress. We've had pretty much almost ten years of uninterrupted economic growth. And I just have to wonder, one day the Fannie's and Freddie's and the Lehman Brothers happened and the AR and VR space and a lot of things just come crashing down. What are the kinds of things that you can you know, maybe you could prognosticate a bit, Robert, about what are some of the pitfalls that might be out there that might interrupt that kind of mass market adoption or the rapid, accelerated pace that we're on right now?

Robert: [00:43:15] That changed the question. Rapid pace. The early adopters are going to use this and use it in a big way. I'm wearing a pair of glasses probably in the next twelve months, and I'm going to wear them all the time, like I wore Google Glass. What is going to keep it from going mainstream quickly is resistance to glasses. A good number of people, when I talk to them say I'm sorry, I don't care how cool they are, I'm never gonna wear glasses. I'm like, well, you're gonna be other huge disadvantage eventually to everybody else, and you're gonna be convinced to wear him. But let's go with that. I've heard this before, by the way, in many other contexts. Oh, never use email.

Phillip: [00:43:57] If anyone's heard this before it's you.

Robert: [00:43:59] People can't remember the time before email. But I remember when I brought e-mail to the office and said we were switched to use an email. And they're all like, what's email? Oh, you send memos electronically to people. Oh, why do we want to do that? The paper ones are working just fine. All right. And of course, everybody in the world uses email today. Kids at college said, oh, nobody needs a Macintosh, that's a computer with training wheels on it. Now they all use Macintoshes or Windows machines that do the same thing. And I'll never do Facebook. That's stupid. That's for social media douchebags. Whatever it is. Right? And I know that people change behavior. The CEO of Ford, said nobody is ever going to buy a self-driving car. I said, you're stupid. First of all, why would you ever make a statement like that?

Phillip: [00:44:55] Right.

Robert: [00:44:58] Because you know how stupid that statement might look if the world changes. The world changes. At Microsoft, if you go to their history museum. They have a wall of quotes. You know, things like the patent office believes there's never, never going to be an interesting patent. Stuff like that. Even Bill Gates getting quoted, "The world doesn't need more than 640 of RAM." He claims he never said that. But it sounds like something that he might have said, you know, sort of. Why do you need so much RAM sort of joking, maybe even. But I  visited a startup in Israel, they have Orville Wright's, quote, on the wall and says nobody will ever fly from I think it was from Dallas to Paris. And of course, that happens like twice a day.

Brian: [00:46:01] Flight is the great example.

Robert: [00:46:04] Yeah. It's really hard for people to think about how the world is going to change and then how behavior is going to change when it does change. So when you say I'm never ever going to wear a pair of glasses. Well, don't you want as many monitors around you as you want? Maybe. Don't you want to be able to look at, you know, a NASCAR race and see where Danica Patrick is on the track and see all the cameras and see the temperature tire of her tires and see, you know, everything about her car? That sounds sort of cool. Don't you want to see an IMAX movie wrapped around all the way around you? You paid 20 bucks to go see an IMAX movie. Why? Because it's high res and it's wrapped around you. Well, what if you could do that in your living room? You know, and then they start going,"Maybe. Maybe. I don't know. I still don't want to wear glasses." Same thing if you talk to, you know, a thousand people about self-driving cars. "Oh, I'm a control freak. I like to drive. What are you talking about? I'm never gonna let a car drive." "You're not going to switch to the save your life?"

Phillip: [00:47:19] Yeah. It's the famous Henry Ford quote of, you know, if you had asked somebody what they wanted, they'd tell you they they want a faster horse or something. It's like we can't even divine, the consumer can't divine what it is that they need or want because they they can only think about it in the context of what they already know. And this breaks that context. This is totally not just a paradigm shift, it's massive disruption of life, as we know it. And I do believe that we are on the verge of technology in the first wave of technology in our lifetimes that actually will change human evolution. And I really believe that. Now, whether that happens for good or for bad, I think it's happening and we're on a course to make it happen. I think the question, to kind of bring it back to the original question, which is what do you see out there that could disrupt the adoption of this technology or is it just inevitable? Is it just going to happen?

Robert: [00:48:22] There're lots of problems. I mean, I've nailed them out. Right? It's too nerdy. It's too expensive. It's too heavy. There's not enough content. Blah, blah, blah.

Phillip: [00:48:32] Sure.

Robert: [00:48:32] We know the problems. And each one of those problems is being worked on. So if you don't like today's product, stay alive for five years because they're going to be a whole lot different in five years. People can't really adjust to that. I got kicked out a Kodak's booth in 1989 because Steve  [00:48:54]Wisenac [00:48:54] showed me his dye sublimation color printer with Photoshop 1.0 and a 400 megabyte hard drive RAM disk, all of which costs I think about, I don't know, one hundred thousand dollars. His printer alone was forty five thousand dollars. And today a seventy dollar printer does better. Right. So if he can't afford a rich person's toys, just stay alive. {laughter} You know, exercise a little bit and stay alive. Because 20, 30 years down the road, it's gonna be cheap. And then there'll be something else that's expensive that everybody wants to do.

Brian: [00:49:31] Speaking of exercise, augmented reality is gonna help with that, I think.

Robert: [00:49:35] It already is. My friend and I are using VR and we're losing weight and not cause we're trying we're just using VR a lot. And when you're in VR, you're moving around. You're getting sweaty. You're shooting things. You're running at things. You're swinging at things. I play selfie tennis with myself, so I'm playing tennis with myself. All of which is exercise. It just is fun. You know, we don't call it exercise.

Brian: [00:50:03] Yeah. Exactly. People that don't like exercise are gonna probably really enjoy exercise.

Robert: [00:50:09] Don't tell them it's exercise. Just say this is really fun.

Brian: [00:50:13] Have fun. Yeah.

Robert: [00:50:14] Tell them it's a drug. They'll, go for it. {laughter} Here's some more drugs, man. Electronic drugs.

Brian: [00:50:24] Exactly.

Robert: [00:50:27] Which, by the way, we didn't talk about some of the downsides. Addiction, I think, it's gonna be one of the problems in here. You're going to see people who don't want to come out, particularly when we get really good AR or mixed reality, whatever you call it. The world is gonna be nicer at some level, at least it will be cool looking. And we'll have lots of stuff to do in the world. There's a Pokemon over there. I got to go over there and collect some Pokemon points.

Brian: [00:50:56] We talked about some other, you know, transformative places. We talked about how this is gonna change how we culturally view technology and how appropriate it is to spend, like how long you might spend. We talked to Saku Panditharatne about that a few episodes back. And it's also gonna change how we think about housing and communities and how we organize ourselves. And there's a lot ahead around... And actually I think there's a good example that's about to take take flight. Facebook is gonna be developing, it's basically an entire village just outside their office. I'm sure you're probably aware of that.

Robert: [00:51:44] Yup.

Brian: [00:51:45] And I can't help but think that they're going to build in opportunities to include augmented reality and other tech that they're working on as a part of that community and sort of use that as sort of a flagship for usage.

Robert: [00:52:03] Yup. They're not the only ones. The Warriors are building a new stadium. And we've talked with the head of innovation there about that. They're thinking about it. So there's a lot that's gonna come in the next few years along that route. Yeah. It's also, keep in mind, AR is just the user interface for everything, right? For your smart cities, for your Internet of Things, for your drones that are flying around, for your robots that are walking around or navigating your world, for your self-driving car. So in ten years your glasses are gonna be how you control your world, how you get Uber to pick you up or Lift or whoever you like to use. How to get Amazon to deliver groceries because they just buy Whole Foods. On and on. You're gonna do it in the glasses because the glasses are gonna have a 3D sensor that sees every barcode in front of you. Like, I'm looking at a product with a barcode. If I was wearing glasses, it would see that barcode. And it would say, "Do you want to buy more of this? Do you want information on this? Do you want a video on how to put your Ring doorbell on the front door? We could show that to you."

Phillip: [00:53:20] Right.

Brian: [00:53:20] So right now retail... This has been pretty pervasive in the news, so you've probably seen it. But retailers in quote unquote crisis right now. There's a lot of disruption going on in retail and a lot of retailers are going out of business, like major retailers that you wouldn't have expected.

Robert: [00:53:41] Yup. Oh I did. I did because I worked in a retail store. And we went out of business because Best Buy put us out of business. Now Amazon is putting Best Buy out of business. So fair play, baby. Walmart put all of us little people out of business in the United States, so fair play that Amazon is giving you a little bit of a discomfort at the moment because you guys didn't and didn't work on innovating the way that they did. And you didn't see that the world was going to change and you couldn't change. This is the innovator's dilemma, right?

Brian: [00:54:18] How imperative do you see investment in augmented reality technologies? Should people be building their own experiences or should they be ready to build in to future platforms?

Robert: [00:54:33] Let's say in December, Marriott announces a new augmented hotel, bring your new iPhone to the hotel and everything is augmented. If you're a Hilton, what does that mean? Oh, you're dead because already Marriott built the brand that is... They're the ones who are innovative and cool, and they're the ones who are going to get the new customer. You're dead. By the time you figure out that you missed the boat, you're dead. Because if you have to start hiring programmers in December to compete with some with a competitor that's already 18 months ahead of you, you're dead. You're not coming back. So either you innovate or you die in this new world. And if you're going to innovate, and you're really going to innovate like bet the company, a kind of innovation, you're doing that internally. You're not doing that with just contractors or consultants.

Brian: [00:55:27] That's a pretty bold statement. So you're saying that retailers should be developing in-house teams that have a discipline that are part of the business vs. pulling in consulting?

Robert: [00:55:42] I would. Walmart's hiring. I guarantee you that. I know people. I know the AR team at Walmart. They're hiring. They know they're in trouble. And they are betting big on this stuff to try to figure out how to keep Amazon from taking over their entire world, because they're going to if they don't do something about it.

Brian: [00:56:07] What about sort of mid tier retailers?

Robert: [00:56:12] I think those are going away in a lot of ways. I'm sorry to say that. The clothes I war from SCOTTeVEST... I just talked to Scott Jordan the other day, and all of his sales on Amazon aren't going straight up and sales everywhere else are going straight down. So the writing is on the wall. Amazon is going to eat everything.

Brian: [00:56:31] So go get acquired. That's what you're saying, Robert..

Robert: [00:56:36] That's one exit possibility is to get acquired. But soon you're not going to have any value to acquire.

Brian: [00:56:42] It's an imperative now.

Robert: [00:56:43] Right? I've been there. I was killed by Best Buy. I know how this game goes. It doesn't go nicely for small people, particularly ones that aren't innovative and don't stay relevant to their customers and don't try to build a better customer experience. You go away.

Phillip: [00:56:58] Wow.

Brian: [00:56:59] Yeah. No, I mean, I think that your words have more truth in them than I think a lot of retailers want to believe right now. In fact, we were just talking with another retail analyst recently who kind of alluded to the same thing, which is... I don't know if she would say it at quite the extreme that you're saying it, but...

Robert: [00:57:21] I'm not in the industry. So I don't have to go to the cocktail parties with everyone. {laughter} I'm sure I'm still going to take some heat over that statement. Hey, I'd rather be truthful and say, hey, your industry has a real problem, and you're losing people, and you're going to lose more in the future if you don't figure out how to do something really innovative and really forward thinking and bet the entire company on it, you're going away.

Brian: [00:57:51] Target, pay attention.

Robert: [00:57:54] Everybody. Every manufacturer, every brand has to pay attention to this because in four years we're wearing glasses, and we're going to look at products, and we're going to stuff happen on those products. And if the products don't make that happen, we're going to go, "That's a lame product."

Phillip: [00:58:09] I mean, there is a show title right there for you. I'm just going to transcribe that verbatim. {laughter} You know, one of the things that we like to do is bring some of the futuristic point of view. And we usually sort of close out the show with a what's your five year outlook? But I think that's like the entirety of this show has been really about that. So I would say I would almost kind of bring it back to right now. If you had to give some, let's say... You aren't a retail analyst, and maybe that's a good thing. If you had to speak directly to merchants today, you say innovate or die. Tell us one way that they can be innovating. Is it just focusing on R&D and building internal teams to enable new AR?

Robert: [00:59:04] You know, this year we're getting iPhones to do augmented reality. And there're several things going on at one time. It's not just AR. If it was just AR you might be able to just say, oh, that guy's an idiot. I'm not going to listen to him. But it's AI, it's self-driving cars, it's a range of things that are just about to hit. And you're gonna see more technology change in the next five years than you've seen probably in the last 40. So if I'm walking into... Think about how people buy stuff. Think about Google assistant. Did you guys use Google assistant yet?

Brian: [00:59:43] All no time. Yeah.

Robert: [00:59:45] Do you have a Pixel phone?

Phillip: [00:59:46] Yeah. I do.

Robert: [00:59:47] Or do you use it on your iPhone or Android?

Brian: [00:59:50] Android.

Phillip: [00:59:50] Yeah. I'm doing it on Android. I don't have a Pixel but we use it in Allo, and we use it in other contexts as well for Hangouts.

Robert: [00:59:57] See, I had it on my Pixel that I played around with a little bit. But I really use an iPhone. So a month ago this thing came out on iPhone called Google Assistant, and I'm going to ask it, "Where are the best nightclubs in San Francisco?"

Robert's Google Assistant: [01:00:15] I found a few places.

Robert: [01:00:17] And it lists Monarch, DNA Lounge... Stuff like that. And it has reviews so you can easily swipe over and see it. Oh, the Cat Club has a lot of four and a half star reviews.

Robert's Google Assistant: [01:00:31] Here it is. Cat Club.

Robert: [01:00:32] All right. That's a bar. It's not appropriate. So let's say Monarch. Let's see what that does.

Robert's Google Assistant: [01:00:39] Monarch. Here you go.

Robert: [01:00:40] Has a vintage look. Wow, the basement level serves as a dance club. That sounds good. Four point two stars, one hundred sixty three reviews. This is how we judge your business, right? Tomorrow, we're going to see how many people are actually dancing in that club. And we're going to see live video from that club. And we're going to see sensor readings that are being read from all the clubs because it knows how happy people are, because I've seen computer vision technology that can tell whether you're happy, sad, how old you are, are you male or female? Right. Just from a standard old shitty web camera.

Phillip: [01:01:17] Wow.

Robert: [01:01:17] So someday soon that's going to show up here. So you have to build a nightclub. If you want my business as a nightclub potential customer. You have to build infrastructure into your nightclub and experiences to get people to dance. Get them happier. Get the right gender makeup. Get the right sexual orientation into your club that you want to serve and all that. That's what it is for every business, because that's how we're going to buy things in the future. Right? So if you're not thinking about how you're going to build experiences that are going to get lots of people to give you good reviews and have a great time in your business or buying your products or wearing them or whatever, you're not relevant. And that's a real problem if you're not thinking like that.

Brian: [01:02:14] Great place to end. Absolutely.

Phillip: [01:02:18] Wow. That just brought it home, especially for me. And I talk about this stuff every day. You know, you have to put it in context sometimes of real world experiences of how consumers engage with you and your brands. And to think of it in that perspective, that's... Yeah. That's phenomenal.

Robert: [01:02:41] The reason I bought Google Assistant up, it's the first time where voice recognition for me works 100% of the time. At least when I'm accurate. It caught a piece of my first word. That's why the first time didn't work.

Brian: [01:02:56] I've had it pick up my words even when I stutter. And that is mind blowing. Google Systems is amazing.

Robert: [01:03:03] Yeah. And why is it amazing? Because they have every Google search ever made. And they built AI systems that look for those patterns in our speech. And it's really interesting to watch it because it'll flip a word once in a while. And when it does that, it's trying to fit your sentence into a pre known pattern where it knows it has an answer. Right?

Phillip: [01:03:27] Yeah it will. Yeah, that's incredible.

Robert: [01:03:30] So it is amazing. But that just got good enough this year. OK, late last year for you Pixel people. But on iPhone, we just got it a month ago. And I've been using it. I've been forcing myself to use it to understand how good it is. And it's stunning how good it is. So now think about glasses. When we get glasses in three, four or five years, whatever. How much better is Google Assistant going to be than it is today? A huge amount.

Phillip: [01:04:03] You sold me on one word, Google. And I'll tell you why. If you're a retailer and you're listening to this and you've been sort of yawning or rolling your eyes, I want you to think back to a year and a half ago, two years ago, when I was sitting across from you in a consulting role, and I said, "Every site needs to be full site SSL." And you said, "That costs too much money, and I don't see the benefit. And consumers don't understand that. We need a colorful badge that says the site is secure from Verisign." And every single one of you pooh pooh poohed me on it. But the moment that Google made it a ranking, all of a sudden everybody cares about having full site SSL. Nobody actually cares about the end result or the social good that's done by securing the site or any of that. Nobody actually really cares about security, let's be honest. But when it affects Google rankings, and it drives traffic, and it's the thing that's going to give you the edge over your competitor, and it becomes a requirement for you to do business... Absolutely, you wind up implementing full site SSL. So as Google goes, so does everybody else. And that's where we're at. That's where we're going to be.

Robert: [01:05:10] So here's a hint about Google. They bought a company called Eyefluence last year. And when Jim Marggraff, the founder of Eyefluence, showed me it, he had me pull a bunch of stuff out of my pocket, and he said, "Just look at it. Look at it with the glasses," he gave me, and I pulled an iPhone 6S Plus out of my pocket, put it on the table and I looked at it and two menus popped off the side of the iPhone. One said, "That's an iPhone 6S Plus, would you like more information?" And that the other said, "This is $699 on Amazon right now. Would you like to buy it?" Only with using my eyes, not touching it, not anything else. So it's using AI to know what most of the products are in the world. And you can look at them and a menu will pop off those products. So if you're not thinking about this stuff... This isn't R&D lab, it's coming in the next 36 months. Google is building a new kind of operating system that's going to do a lot of amazing things like that. And you're seeing signs of it this year. Right?

Brian: [01:06:19] Yeah.

Robert: [01:06:19] If you didn't see the WordLens out that they showed off at its developer conference, where you just aim your phone at a store front and it tells you about the store, you're not paying attention and you're not thinking through what that means.

Brian: [01:06:33] Yeah, actually, Samsung hit that first with Bixby vision.

Robert: [01:06:39] There've been lots of examples of this. But like you said, when Google does it, everybody has to react. And if you're behind because you have been investing in this stuff and you haven't or even just been reading about it and thinking about it, you're behind and you're going to be slammed. Plus, hiring a unity programmer today is pretty cheap. In two years, it ain't gonna be cheap.

Phillip: [01:07:05] That's where it comes down to, I think. And it's a great place for us, I think, to wrap, which would be you are at a disadvantage as a retailer if you're not watching these things now and organizing your business to mobilize and be able to pull the trigger when it becomes no longer is just, you know, an early adopter, but it's becoming, you know, part and parcel of doing business.

Robert: [01:07:24] And we know the masses are coming. The mass change is coming. I can't promise it'll happen in 2019 or 2020 or 2021. But sometime between now and 2021, you're getting self-driving cars. Full level five cars. You're getting mixed reality glasses. You're getting AI that's going to blow people's minds. I'm starting to see it in products. I saw a security camera the other day that you can ask the security camera, "Can you show me all pictures when my dog was on my couch?" How does it know that? Because it uses AI to recognize your dog, and it knows what your couch looks like because a couch is a couch. And it can see your dog hopping on your couch. And now it can pull all the video snaps from the past two days of when your dog was on the couch. And so now you can ask all sorts of stuff like, "Can you show me when my kids get home? Can you notify me that they got home okay?" So now you know your kids came home an hour late and were smoking weed behind the backstop with their friends. And then you can have a talk like, "Where were you? You were supposed to be home at three. You came home at four." Or you can see all sorts of weird people coming into your house. And you can turn on the video camera and see what's going on. I already have video cameras in all my rooms that I can turn on and watch. Not my bedroom. So you hackers, you might catch the naked picture of me going into the kitchen, but you didn't to catch that.

Phillip: [01:08:58] And it's interesting that if you want, again, a real world, this is happening right now example... Right now go to your Facebook and I want you to type in your sister in law's name and then the words "in a bikini" and then prepare to be shocked and amazed that Facebook will deliver every picture of your sister in law that's ever been in a bikini that's on Facebook. And that's the reality. Like that literally exists right now. You can do that today. Natural language search on top of, you know, extensive amounts of image recognition and machine vision that have enabled us to have that sort of thing, a very creepy example, in today's world in today's context. And I think...

Robert: [01:09:41] It doesn't quite work that well on Scoble. {laughter}

Phillip: [01:09:51] {laughter} I'll give you that one. Brian, any any last words or thoughts here? Because I think it's these about wrap time.

Brian: [01:09:57] Yeah. No it's been great, Robert. Where can people find you? What's the name of your book? One more time. Give us some final promotion here.

Robert: [01:10:05] The Fourth Transformation: How AR and AI is going to change everything. I'm on Facebook all day long. That's the best place to find me. But I'm also on Twitter and LinkedIn and email and all that.

Brian: [01:10:17] Awesome. Well, thank you so much for coming on the show. We had a great time. Lots of good stuff in this podcast. I'm really excited for our listeners to dig in. I personally was just having a blast. So with that, thanks for listening to Future Commerce. We want you give us feedback about today's show, so please leave us some feedback on our website. If you're subscribed on iTunes, we'd love a five star review. You can subscribe to Future Commerce on I should say, Apple Podcast or Google Play or listen right now with Amazon Echo with the phrase, "Alexa, play Future Commerce podcast." With that, keep looking towards the future. Thank you so much.

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