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An Open Letter to Investors in the VR and AR Industry

investor_letter

Dear Investors,

Hello! Welcome to the wonderful world of immersive technologies. It’s been a long time coming, but virtual reality and augmented reality are finally making their way into mainstream life. You, as members of the financial elite, can ensure the success of this budding industry by funding and supporting any one of the starving start-ups that have popped up in the last few years.

First, you have to ask yourself two questions:

Should I invest?

Who should I choose?

Should I invest in VR or AR?

Despite what some news outlets report, VR and AR are both definitely going to be sticking around. Sure, they will evolve and possibly event blend together in some way, but neither will die like 3DTVs. If you need proof of that, just ask any 10 year old. The next generation is hungry for immersive tech, and the companies that are standing when these kids become adults will reap the benefits.

Don’t concern yourself about the folks claiming that AR will kill off VR. These people are bloated with too much Apple flavored Kool-Aid, and don’t seem to understand that both technologies can and will thrive independently. Augmented reality is at least three years behind virtual reality in terms of development, and most VR devs are poised and ready to attack both when the situation presents itself. In fact, companies that are offering both forms of immersive tech will have more success in the future.

As investors, your motivation for investing in a company may differ. Most of you want to find a start-up with an idea that will grow into a booming business, with low overhead, high margins, and a great return on your investment. Essentially, you want to give 1 million dollars to a group of people in the hope that they will give you 10 million back in the near future. Unfortunately, the rate of success in this plan is very low, and this may discourage many of you from taking the risk.

As they say, ‘No risk, no reward.’

There are also a few of you out there in ‘Investor Land’ who have a different motivation. Some of you may not be seeking a monetary return on your investment. Some of you see that a technological revolution is upon us. A digital Renaissance is happening, and you want to associate your name with it. Fame and glory are your driving forces. You are more likely to take a risk and invest in the best idea presented to you, despite any form of sustainable business plan.

Whatever your motivation may be, you hold one of the keys to this industry’s inevitable success. For every million dollars you have at your disposal, there are easily 100 brilliant people, staring at a revolutionary idea, and wishing they had someone to fund and nurture it. Not all of them will be a success, but if they are working on immersive tech, they are already smart enough to focus their potential in the right place.

My father always told me, ‘Potential and a dollar will get you a cup of coffee.’

Who should get your money?

It takes more than potential and money to be successful. In the last five years, I have witnessed some well-known, big name investors take a gamble on VR companies that eventually died. Millions of dollars gone with nothing to show for it but a fond memory and a footnote in the ‘History of VR’ textbook.

What happened to these companies?

throw_away_money

The bigger the idea, the more it takes to bring it to life. Like Frankenstein’s over-sized monster, you need a bit more juice than what you can get from a standard wall socket. Once the company has come alive, they need to find a way to sustain themselves, other than sucking off the teats of their investors. The start-ups that have failed in this industry are ones that had no form of obvious revenue, or were building something that had too limited of a customer base. If you are investing in a company that is building a free product or service, please make sure you aren’t expecting any form of monetary return. If they use the words, ‘Enterprise customers’, or ‘Advertising revenue’, in their pitch, be ready for a slow painful decay.

There are plenty of indie developers in this industry that have a great game or app in the works, but can’t fund it. These are people who only need a team of five or six people, and would like to keep food on the table for their family while they try to realize their dream. Their finished product will take a year or two to complete, but it might sell 50,000 copies at $19.99 in the first month of release, and a steady stream of sales over the next few years will ultimately make the investment worth it. On top of that, the indie developers have now made a name for themselves, and are ready to bring their next big idea into the world.

I am not telling you to stop investing in companies, and to focus all of your attention on indie devs. I am simply encouraging you to broaden your horizons a bit. Spread the wealth. You increase your chances of success by giving 1 million dollars to ten people, instead of 10 million dollars to one person. Sure, the percentage of return will be lower, but you are less likely to watch your money disappear into cyberspace.

The other benefit of supporting indie developers in the surge of content you will be funding. More content encourages more people buying headsets. More headsets equals more purchases of your content. Mutually assured success brought about by your dollar.

TL;DR Conclusion

I am writing this letter to you, my audience of investors, in hopes that I can help you make wise choices. I cannot expect all of you to fully understand what is happening in the tech world today, and I’m not entirely certain who you have on your team that is helping you make investment decisions. I know that I have seen some really poor decisions made which cost tens of millions of dollars. I hate to think of what that money could have done if given to the right people.

I am always here and available to offer consultation if you want to know who you should be funding. I, as well as many of my peers, are well-versed in this industry, and would be more than willing to help you avoid the mistakes of your fellow investors.

 

Sincerely,

Rev. Kyle

 

P.S.

If you want a quick suggestion for a small investment, just click the link below and throw a few bucks at my Patreon account. There won’t be any monetary return, but the content you will be funding has limitless value.

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