An Inside Look At The Mysterious Tech Company Magic Leap
This story starts out in the future, say five years from now, and you’re running late to a meeting. In the road ahead, an arrow appears from nowhere, floating just above the asphalt, pointing the way to the turn you need to take.
After following the arrow, a sign pops up in front of a garage, advertising the hourly parking rates. Knowing better, you hold out. After spinning around the block a couple times, the sign lowers its rate to tempt you in.
Along the walk to your meeting, advertisements appear in the sky. Pass a coffee shop and a coupon offers a buck off the drink you order the most. Just when you think you have no time, an email appears out of thin air, announcing that your meeting will start late. You reach out and click the coffee shop coupon, and the barista begins making your drink before you open the door.
This scenario is all a very likely, very near future of augmented reality. Unlike virtual reality, where a headset allows you to look essentially into a video game, in augmented reality a pair of special glasses allows you to add new information to the world around you. Imagine a contractor looking at the finished building hovering above a construction site. Or an interior designer moving around virtual furniture in a living room. Or a police officer scanning faces in a crowd, criminal histories and warrants appearing like thought bubbles above them.
For some, it’s a dystopian future where we will constantly be hoarded by spam and unable to disconnect. For others, augmented reality will bring about an era of efficiency, where we multitask every moment we’re awake.
And, if everything goes right, this future will be brought to you by a mysterious company headquartered in Broward County. It’s called Magic Leap, and it’s one of the world’s largest and most talked-about startups of the moment.
What the company does with augmented reality could dictate how all of us live in the future. Or maybe, if you believe the critics, Magic Leap is wildly overrated, with little shot of pulling off what executives have promised to do.
It comes down to this simple question: do you believe in magic?
In the world of tech startups, there is little that’s normal about Magic Leap.
Instead of a showy Silicon Valley location, it’s headquartered in a beige suburban office building built in 1972. Two stories of windows and concrete partitions are laid out in utilitarian midcentury design. At the southeast corner of Sunrise Boulevard and University Drive, neighbors include a Denny’s and Papa John’s.
Unlike many of the talked-about startups, the company also has no track record in the industry, no past successes that explain why it became so big, says Jason Sherman, a web designer, author and expert in startup companies. “Magic Leap quite simply breaks all the rules of a traditional startup,” Sherman says.
Aside from the atypical location and the lack of achievements, Sherman says the main surprise with Magic Leap is the background of its CEO. Typically, startup founders became experts in a specific technology before starting a company specializing in it.
At Magic Leap, CEO Rony Abovitz is a Nova High School graduate who got a biomedical engineering degree at the University of Miami. He was still a student when he started Mako Surgical, which developed robots that could perform surgeries. It sold in 2013 for $1.65 billion.
Abovitz founded Magic Leap in 2011. In a somewhat vague but visually stunning promotional video released in October 2017, a voice that sounds like Abovitz’s describes the idea for Magic Leap was dreamed up during a road trip to Austin in 2010. The narration explains: “It did start out as an art project first, and it turned out like, maybe [if] there’s some science behind this, we could turn it into something real.”
Back then, augmented reality was still something of science fiction movies, played out especially in “Minority Report,” in which Tom Cruise interacts with a computer by swiping through images in the air and has a hologram saleswoman pop up at The Gap. Both of those scenes have now become a close prediction of what Magic Leap has promised to do. An early Magic Leap prototype shown to a writer from MIT Technology Review used a small projector to display images on a pair of glasses, creating realistic monsters that seemed to interact with the world around them. Asked by MIT when his product would be ready, Abovitz promised: “It’s not far away.”
From the start, Abovitz managed to attract staggering levels of funding. In two rounds of fundraising in 2015 and 2016, Magic Leap brought in as much as $1.6 billion and hired 200 employees in Broward. Among the investors were tech giants Google and Alibaba, seeming to underscore the legitimacy of Abovitz’s vision. In October of this year, the company sought to raise another $1 billion, and while the company has not publicly confirmed how much it has collected, estimates put the total at as much as $2.6 billion.
To keep Magic Leap here, the city of Plantation, Broward County and the state of Florida agreed to give the company more than $9 million during five years if it meets a series of incentives. In exchange, Abovitz agreed to station an additional 725 employees making an average of $100,000 a year in Broward. In total, Magic Leap promised to invest $150 million locally.
That makes Magic Leap one of the fastest-growing companies in the world, and experts say the money is needed to keep up with tech giants working on the same types of devices. The augmented reality market will top $61 billion by 2023, a recent research paper published by WhaTech Channel claims.
In response, industry experts have valued Magic Leap at as much as $6 billion.
With the funding in place and taxpayer money to keep it in South Florida, Magic Leap set out to literally invent an industry. In May 2015, Magic Leap released a demo video of “a game we’re playing around the office right now.” It showed someone watching YouTube videos floating in midair, checking emails that popped up in front of them and then shooting robots that broke through the walls. Another video showed a whale jumping through a gymnasium floor as children cheered on bleachers nearby.
Rarely since its founding has Magic Leap allowed reporters inside, and the company did not respond to emails and phone calls requesting comment for this article. The highest-profile bit of press coverage came in May 2016, when Wired magazine published an article that called Abovitz “the perfect misfit to invent this superpower.” A writer from Wired claimed the company granted access to a prototype that allowed her to see a robot magically appear in a room, as she circled around it.
But in December 2016, the investigative news site The Information claimed Magic Leap had oversold what it could do and remained way behind. The videos of the jumping whale and robot attack were actually created with special effects and did not show what its eventual product could do. One big clue that gave it away: the children cheering for the whale were not wearing augmented reality glasses. (Magic Leap later amended the YouTube videos to remove language claiming the company was actually playing the demos in the office and to explain that they were just samples of what the company will someday produce.)
In December 2016, multimedia platform The Verge wrote that Magic Leap’s product is perhaps still years away from ready.
In April 2017, Magic Leap uploaded a demo video that, while less visually appealing, showed a to-do list and graphs floating in front of a desk. Near the end, jellyfish float through the office. Text beneath the video claims no extra special effects were used to create it.
In October 2017, The Verge published a second piece with a headline that asked: “Why do people keep giving Magic Leap money?”
In November 2017, Atari founder and tech expert Nolan Bushnell weighed in at an industry conference in San Antonio. “Magic Leap looks like a real disaster,” Bushnell claimed. It’s impossible for a company to scale up so quickly, and with such quick hires, it’s inevitable that Magic Leap will bring in the wrong people, he said.
In the meantime, companies including Microsoft have released augmented reality products to market, and Apple says it’ll have its own augmented reality product out by 2020. Tech experts have speculated that Magic Leap may be too late when it does finally release a product.
“Two years ago, Magic Leap was just days away from a demo of a product that it was going to reveal at a tech conference,” says Jason Jerald, a tech consultant and adjunct professor at Duke University. “What’s going on there now is anybody’s guess.”
It’s quite likely the delays can be blamed on the difficulty of innovation, Jerald says. There are wildly complex problems keeping augmented reality from becoming the next toy everyone needs. As of yet, nobody has invented the solutions.
It’s quite literally like a company in the 1890s promising to invent the airplane. The technology is possible, as long as someone can dream it up.
Among the issues with augmented reality is that the technology causes headaches for its users, Jerald says. Like with 3-D videos, the issue is that your brain is confused about the true location of the objects, unable to understand if that floating coffee shop ad is actually in the sky or just on the surface of the glasses you’re wearing.
Then there are the problems with the hardware. Consumers have rejected the idea of wearing odd-looking glasses, like the failed experiment Google made with its web-connected Glass. Perhaps even trickier, augmented reality requires loads of processing and battery power, meaning users might be asked to wear glasses plugged into a bulky device they’d have to carry.
Solving those problems, Jerald says, would be a major step forward in technology. “[This is] really just one of the 50 problems that still have to be solved with augmented reality,” Jerald says. “The biggest one is still this: Are people really ready for it? It’s hard to tell.”
On Dec. 20, the company announced on Twitter that it would be releasing a product in “early 2018” called Magic Leap One. A photo accompanying the announcement showed a three-piece device: a headset that looks akin to steampunk goggles, a handheld controller and, connected by wire, something the shape of a Walkman hooked to the front of a pocket.
While the company’s release was light on details, the Magic Leap One doesn’t look like the kind of device that users would wear, for instance, strolling through the mall. That means the applications will be somewhat limited, without the consumer augmented reality that many see as possible someday soon. In somewhat coded language, the company release claims the device “allows web developers to optimize for content extraction and spatial browsing, enabling new ways to shop and explore with 3D objects.”
Whether Magic Leap One succeeds or fails, what might dictate Magic Leap’s future is whether the company can create the environment where further innovation can happen, Jerald says. And without a doubt, there have been questions raised about Magic Leap’s office culture.
Crystal Jones says she was employee No. 240 when Magic Leap hired her in October 2015. By the time she left in April, she says she had more than 1,000 coworkers. And with few exceptions, Jones says they all had one thing in common.
“The people worked there for a reason,” Jones says. “Everyone thinks this company is going to change the world.”
Just exactly what Jones did in the operations department of Magic Leap, she won’t say, not wanting to give away secrets from her former employer. Jones is now writing code in Fort Lauderdale for her startup called Wend, which aims to make traveling safer. She says she left Magic Leap because she wanted to work in software development and the company wouldn’t transfer her from operations. And even though she sold her stock options when she left, she remains bullish about Magic Leap’s future: “I know they can pull off what they’ve promised. It’s more of a when game now.”
Jones is far from alone in her optimism for the company. Investors and tech experts still hold out hope that the company can deliver something truly groundbreaking.
“My hope is that Magic Leap is still going to amaze us,” says Jerald, the augmented reality expert from Duke University. “Yes, they can do what they’ve promised. The question is simply, ‘Can they solve the problems before their competitors?’”
As far as whether Magic Leap has begun to fulfil its promise of investing $150 million locally, documents the company filed with the state in March claim it is well on its way. The company hired 418 new employees, putting it among the top 20 largest companies in greater Fort Lauderdale. Those new employees will make an average wage of $108,074, two times more than the median household income in Broward County. Magic Leap has also invested $42 million locally and pays nearly $66 million in yearly wages, the documents claim. The filings should have qualified the company for a large chunk of the $9 million in government incentives. But Karen Smith, press secretary for the Florida Department of Economic Opportunity, says the payout has been held up by auditors who typicall take months to process such payments.
Among those watching Magic Leap closely is Bob Swindell, president and CEO of the Greater Fort Lauderdale Alliance. Swindell helped lead the efforts to get millions in taxpayer incentives to assure Magic Leap remains in Broward.
“Not being revenue positive yet or shipping a product yet can be a concern,” Swindell admits. But he noted that the incentives are not guaranteed—if the company goes out of business, it won’t see a dime of the local money. “I remember something Rony Abovitz said to me: ‘We’re in a race with the titans.’ I hope they win,” he says.
Meanwhile, two lawsuits by former employees have questioned the culture at Magic Leap. Documents in a lawsuit by former executives Gary Bradski and Adrian Kaehler claimed the Magic Leap board had attempted to oust Abovitz. In an email made public during the lawsuit, Bradski claimed Abovitz had created “a reality distortion field” around himself. Magic Leap settled the lawsuit in August, but the terms were not made public.
In May, the company also entered an undisclosed settlement with former Vice President Tannen Campbell, whose lawsuit claimed a “macho bullying” and “boys club” culture at Magic Leap. Campbell claimed among her key responsibilities were to deal with the “pink/blue” problem, a term used by Magic Leap to define a marketing problem: a company largely made up of men, designing a product that largely appeals only to men. “The only solution the company has been able to come up with is to make a pink version of the product,” the suit claims.
The suit describes upper management as “comprised largely of Abovitz sycophants” who fear questioning the CEO. She claims this “fosters a dysfunctional culture, which creates chaos and lack of process and structure” and has kept the company from hitting deadlines, including launching a product. Campbell describes Abovitz as “pouty and prone to temper-tantrums” that could boil into “child-like fits of rage, threatening retribution when he didn’t get his way.”
Campbell claims she was fired December 2016 after complaining about a hostile misogynistic work environment. Campbell, who in August became a vice president at homeaway.com, did not return an email, and her attorney, Karen Coolman Amlong, did not return messages.
There’s another fundamental problem at Magic Leap, claims Alysha Naples, who is the company’s former senior director of user interaction and experience. At a tech conference in February 2017, Naples says nobody has questioned whether the technology the company wishes to create actually should go to market. Naples alluded to a dark future where augmented reality could drown us in constant input. “Technology without ethics,” she told the crowd, “will lead us to dystopia.”
Abovitz responded to these concerns as part of 14 different Tweets the CEO posted. They appeared at about 1 a.m. on Nov. 16 and got the attention of the tech world. “Spatial computing is easily the next 100 years,” Abovitz wrote in one tweet, following it with: “What will matter most is our humanity and empathy to each other.” (Abovitz also alluded to a product under development, writing, “We will ship when it is ready” and, “Anyone who cares about this field would do the same. No shortcuts.”)
Despite Naples’ dire prediction, it’s also possible that augmented reality could lead to a future that’s far better, says Blair MacIntyre, a professor at Georgia Tech and a principal research scientist at web browser creator Mozilla.
“Right now people walk around and spend half their day staring down at their phone,” MacIntyre says. “Instead of that, augmented reality can display content that’s relevant to you as you go through your life.
While some fear that augmented reality will equal nonstop ads barraging us wherever we go, MacIntyre instead imagines the technology making workplaces and classrooms far more collaborative. He says someday we will walk through offices and see text, pictures or models above coworkers who have shared what they’re working on, allowing others to weigh in if they have answers to a problem. In classrooms, students can answer questions or weigh in during lessons with text boxes that hover above their desks. “It’s pretty easy to see how augmented reality can be used to achieve true collaboration and input,” MacIntyre says. “I see the worst and best possible future out there for us.
Which one will we actually get? That could be dictated by a company in Plantation with a couple billion dollars to spend.
At a Miami Beach conference in June 2017, Abovitz compared Magic Leap’s technology to a rocket ready to launch. “We’re trying to make science fiction real,” he promised. “That’s about to happen.”
Headquarters: 7500 W. Sunrise Blvd., Plantation
Investment raised: $2 billion (est.)
Valued at: $4.5 billion to $6 billion
Investors include: Tech giants Alibaba, Google and Qualcomm; venture capital firms Andreessen Horowitz and Kleiner Perkins
How augmented reality works: Augmented reality uses computer-generated images to interact with the world around you. Typically, augmented reality products use tiny projectors that display images on semi-translucent glasses worn by the user. Microsoft’s HoloLens, while still in development, leads the market, with a futuristic device that costs $3,000 to $5,000. The wildly popular Pokémon GO phone app also uses a cell phone screen to make animals appear in the world around the user.