What the Failure of Blippar Says About the State of the AR Market
In case you didn’t already hear, the Augmented Reality (AR) startup Blippar this week announced that it was shutting down operations after burning through over $130 million in funding without finding market success for its products. While failures of this size aren’t uncommon in the fast-moving startup world, it’s important to take a step back and discuss what this means for the AR market and companies that are considering augmented reality for their own operations. Here’s our view based on our work in the AR and VR space.
AR Is Not Ready for the Mass Market
Despite some advances in augmented reality hardware and an increasing proliferation of mobile phones capable of supporting on-screen augmented experiences, the simple fact is that the technology needed to enable broad, meaningful consumer engagement is still a few years away. Until then, AR experiences are limited to less-than-stellar “hold your phone up and see some things” apps for the average user. This is simply not a compelling offering for companies seeking to create a real business model instead of fun gimmicks or “me too” sales apps. Companies that are looking at AR today as a way to engage with millions of users should take a step back and reconsider their market timing.
Low Quality = Low Traction
Even though many tools are available to create virtual and augmented reality experiences, there is no magic bullet to create high quality content, overlays, or environments. Untrained teams quickly pumping out AR experiences are more likely to create something that harms your brand than something that will resonate with users. Good AR content requires a combination of code, 3D modeling, texturing, rigging, lighting, and compositing to stand out. You should really be thinking of AR projects as small film special effects projects – just like with film special effects, audiences notice when you go low budget. Companies considering AR should ask if they really have the right expertise in-house or if they need to find a professional studio to make something memorable.
Targeted Use Cases Are Where the Value Is
To date, the best applications of augmented reality have been those that address concrete needs with specific, limited-scope solutions. Think IKEA’s augmented reality catalog for testing out furniture in your room or DAQRI’s field solutions for oil & gas workers. In specific environments and with clear, problem solving goals in mind, AR can definitely be a winner. However, if you can’t give a straight-faced answer of how AR is going to realistically help provide value to end users beyond what current tech offers, there’s a good chance AR is not the right choice. Many other projects where AR is simply tossed into the ring because it is a popular buzzword will join the ever-growing pile of unused apps and services that get left behind.
It’s an exciting time to be working in the virtual, augmented, and mixed reality space, but it is also a time when adopting new technology just because it is there can land companies in trouble. The winners in this space, as always, will be those who use these new technologies to create real value and sticky experiences for users.