SPEAKER_01: Hey, how's it going? This is Craig Cannon, and you're listening to Y Combinator's podcast. Today's episode is about augmented reality, and it's with Diana Hu. Diana co-founded Escher Reality, which went through the YC summer 2017 batch. They were acquired by Niantic, so she's now ahead of their AR platform. Diana's on Twitter at sdianahu. All right, here we go. All right, Diana Hu, welcome to the podcast. Thank you for having me here, Craig.
SPEAKER_01: So maybe we should start from now and then go backwards in time. So you're working on AR at Niantic after your company Escher Reality has been acquired. How did you serendipitously stumble into AR?
SPEAKER_00: Into AR? Well, AR is a funny feel. It's not like a single discipline. AR is a culmination of so many fields. To really build a great experience for augmented reality, you need, of course, part the computer vision aspect to be able to take sensor image data to understand the world, graphics to render it. Then there's actually a lot of engineering to make all this run in real time. So systems, distributed systems, to make the experience just gel together. Plus, to get it working at some point in devices, you have hardware, optics, and there's so many of those pieces into it. Personally, I've come from a very diverse technical background. I've done before, I worked a lot in cloud television before in recommender systems and doing analysis on television streams with computer vision techniques. That was one space. I was in the space of semiconductors at Intel. I understood a few things about hardware. Coming into AR was an interesting point because it's the next technology evolution. So we went from desktop, mobile, and next one in terms of representing information in a very rich way. It's going to be the space of mixed reality with AR, VR, and beyond.
SPEAKER_02:
SPEAKER_00: That will take many, many disciplines to join in to do something interesting. The reason coming into AR was that part. Plus, I think I've always been interested in some sense of the possibilities of what AR could do. There's a lot of curious, very curious about that. What it could take us to be able to see information, blend in, in the real. This concept of pixels, photons. Where's the line to narrow between pixels and photons?
SPEAKER_01: Do you recall the kind of first exposure you had to it, where it clicked? Where it clicked? First exposure.
SPEAKER_00: I think part of it is the thing that I really enjoyed about AR is about being engaged in reality instead of escaping it. Where imagination to show or tell a story is really used to engage even more so, more deeply, with more layers of information represented. Rather than really escaping it. Where the magic in AR is not just whimsical. The reason why magic is so magical is that in AR you see a lot of the digital representation believable there. The first time I... A couple of projects that I... There's some in the past that helped some startups build some projects way, way back.
SPEAKER_00: One of them was building a 3D light fill display. Basically you could see 3D without glasses. It's like, oh, that's really cool. It's like holograms in Star Wars. That was one part. Then you start peeling the onion of what are all the pieces needed from the technology. AR is a fundamental piece to build this new kind of infrastructure to just change the way we do computation for information.
SPEAKER_01: Obviously, like Niantic, you're working on games. At what point do you think AR becomes this kind of first-class citizen in media, alongside video, photo, I guess audio?
SPEAKER_00: Yeah, I think it will take time because we're at the early stages. I think the progress of technology has different cycles. If you read some of the work by Carlota, Paris was an economist talking about innovation cycles. There's like big two stages. Stage number one is when technology gets installed. Installation types of technologies are when the applications are not ready to be built because you really need the tooling to be able to express those applications. Examples of installation types of technologies are network infrastructure, operating systems, programming languages, all these levels of abstractions that are needed. Because you're not going to, let's say an example, today it would be crazy to program a website based on assembly. So you really need those abstractions to be built to be able to have a richer way of creating experiences that are more advanced. Because you want to build on top of the abstractions always. So AR is kind of in that phase of really building the installation phase, solving all the hard problems so that you get to a very expressive world in the future. I imagine where AR, programming AR, could be just as simple as spinning up a website. Because right now it does require a lot of very specialized understanding to create AR experiences. There's things with 3D environment development that are very good mix for game. This is why game is also very good for AR in the early stages. That's kind of part one. And just to close this, the second stage for this technology cycle is the deployment phase. That is when really you see the explosion. Because you have this kind of solid infrastructure built. And deployment is when you have all these applications built into different industries. At that point, let's say, just to give you another example, the installation phase for mobile is just getting the hardware devices and the operating system with iOS and Android.
SPEAKER_02:
SPEAKER_00: And then the deployment was all this proliferation of apps. And it just explodes when the tooling and level abstractions is right enough. So for AR, just to close that, we're not there yet at all. There's a lot of groundwork that needs to be done. There's some early showcases because you do need examples of applications to be able to inform and build the right kind of OS infrastructure to accelerate that. And in particular, for Niantic, it's an exciting place to be because we do build a lot of real world games that are in the bread and butter. And function is a very good information internally with the company to really take that knowledge to really build this platform that we call it the real world platform, the Niantic real world platform.
SPEAKER_01: Yeah. And going further than that, as you talk about expanding past games into other markets, what are the signals you're looking for that you're even building the right thing? Think about it in the context of product market fit, right? How do you even know you're going in the right direction? Because you can make analogies to the software stack in the web, but it could be the wrong direction, right?
SPEAKER_00: Yeah, it could totally be the wrong direction, right? I mean, it's just kind of making educators guess sometimes. Yeah. And the thing about AR is actually it's not a completely new concept. The concept of augmented reality actually has been since came out way, way back even in the 70s or with the first, actually the first VR headset might have been even the 6A. Don't recall the exact date. Yeah. But it was by this kind of monster thing called the Sword of Damocles. It was like this giant thing. Yeah. OK. It's like early in days where people were just exploring things to what would it mean to display things directly to people's retinas. But of course, the computation power wasn't there. The optics weren't there. There's a lot of challenges not quite there yet. But things with AR more concretely got a head start in the 90s with flight simulators. But that's like super high end stuff that's only available to like the government, right? Yeah. And it takes a couple of cycles to really get the technology at a price point ready for consumers. Still kind of in the process of it. So I think the timing and knowing AR is when it's not necessarily new, new, new. But it is kind of the timing is getting there. There's a couple of things that are exciting why we decided to tackle AR. And one of the things actually about starting companies, you can have a great idea. You can have a great team and also great investors.
SPEAKER_02:
SPEAKER_00: But sometimes the timing is just something you don't control. And you could have all those other things be amazing. But the timing is so hard. And that's what gives you sometimes that multiplier effect. And the fact of it is just so many things coming back to the first question, things outside your control and in the environment. So for AR, it came to be two couple trends in technology that really made sense. So a couple of them. One, it is AR is tagging along a lot of the infrastructure that the mobile world built. Like it is very easy now to build like a phone if you want it. There's like the supply chain for all the components, sensors and cameras and even processors, SoCs. Super cheap. And that is easy. And that is getting reused, in fact, for a lot of the now versions of AR headsets to hit the consumer price point. So riding that wave was like building on top of that infrastructure built by mobile, like repurposing and swapping some things. And still the optics needs to be figured out. But a lot of those can be reused from the mobile space. So second technology trend that really hitting for AR to be something real. Besides Moore's law, everyone is familiar with it, with computing getting faster every 18 months, twice, kind of. Sometimes. Kind of, sometimes. I mean, now it is more about many cores.
SPEAKER_02:
SPEAKER_00: So you could do more complex computation for algorithms in tiny devices, right? The other thing is, I don't hear many people talk about, but there's many versions of Moore's law. But for other things like Kumi's law. Okay.
SPEAKER_00: It's very similar. Every 18 months, with the exact same computation, is going to be half the power efficiency. So what that means, which is if you really look at the numbers, which last time I looked at it, the iPhone 7 beats an all benchmark for CPU and power and, sorry, for CPU loads or GPU loads where you compute something. As much as any MacBook Air that has been launched at a fraction of the power. Isn't that crazy, right? That's insane. So it tells you how powerful mobile devices and computations got at the exact same.
SPEAKER_00: You think of a MacBook Air as pretty beefy, chunky computer that can do a lot of things. Your iPhone 7 beats it at a fraction of the power.
SPEAKER_00: You could apply that to, if you really track it, is really getting to that point where you're having compute that's becoming a lot more power efficient. And to get to headsets in AR, it would at some point hit that magical total power cost, which they want to be in the single digit watt range.
SPEAKER_01: So you feel certain constraints on the actual hardware side. And they're getting there.
SPEAKER_00: So shrinking. So that's another one. Power efficiency. The third one, another law, third law is Edmonds law. He was the CTO for Nortel that predicted way, way back talking about the technologies with speed bandwidth of a wire line. So basically, if you have wired connection for internet, wireless, that's the other one. And the other one, you call it the, they call it nomadic.
SPEAKER_00: But what nomadic really means in our language is like 3G cell tower, LTE, 5G type of connections. They all kind of also moving exponentially as well, tracking behind the other ones. So at some point, the concept is that right now our LTE connection is just as good or better than dial up in the 90s.
SPEAKER_01: Relative to AR.
SPEAKER_00: For networking, right? So that applications built in AR and VR, they will be very data hungry because there's a lot of, you're pushing pixels, a lot of content. It's not just with mobile apps, it's a lot of kind of more text information. Pixels are expensive. So at some point, the thing that's exciting right now is just to give you some numbers too, is like 4G or LTE. Right now, your cell connection is about one megabit.
SPEAKER_00: With what 5G infrastructure is supposed to get you, it's going to get you to 10 gigabits. It's like 10 times more. I guess... Like 100 times more, sorry. Yeah. Tens of megabits to 10 gigabit, which is as much as you would get in your wireless at home.
SPEAKER_01: So expanding that out, if you're thinking about starting a company in a relatively, I mean, like as you describe AR, VR has kind of been around for 50 years, whatever. But relatively nascent area. What is your advice for like a founder thinking about starting something? Because you went through the whole thing, right? Like you did YC, like raised money, you got acquired, like all that kind of more traditional startup stuff. Yeah. How would you tell a founder to strategize around even choosing a product to build?
SPEAKER_00: It depends for the industry. The challenge with spaces with AR and VR is that there's a lot of unknowns, right? Okay.
SPEAKER_00: And it's hard to be in the space right now when there's so many things that are moving. It's super difficult. I mean, I know kind of in a sense, AR is following on the footsteps of what's happening in VR in the maturity cycle a bit. Where for VR, it was at some point, I mean, the hype when Oculus got acquired, it's like hyped up the whole space. But after that, it's been difficult for sometimes to raise money for that space for content creators. Can be difficult sometimes.
SPEAKER_00: I mean, not impossible, but sometimes difficult. For AR has some, a bit of that is just people still right now testing the waters. What is like the killer app for AR that's still early to be determined?
SPEAKER_00: I mean, the one that we see right now is the Pokemon Go and Antic. Yeah. One of the few, maybe only AR games that is significantly profitable. So it's hard. So as a founder, starting right now, well, my bet on it would have been talking about this technology trend on economic cycle.
SPEAKER_00: It is personally thinking, betting more on the installation phase kind of style of companies, which have to do more with our core technology that gets built out. Because a lot of those, there's tons to do. There's so many problems to solve before any of that, before going into the application, right? Right. Those I think have better chance right now, if you ask me about now. Later could swing and change.
SPEAKER_00: But those are some of the companies I see in AR a bit better chances right now.
SPEAKER_01: Right. So you can kind of like have conversations with investors around tooling, around developers. Those are the kind of paths you found more interest.
SPEAKER_00: Yeah. But it's also a bit challenging because as a tooling and infrastructure company, the investor going to ask you, okay, do your customers who are developers make money?
SPEAKER_01: Right. Yeah. Are they just like kids goofing around in their basement? Yeah.
SPEAKER_00: It's hard to, you kind of have to sometimes find the believers in that. So creating technologies and kind of this emerging tech sometimes is difficult because of this. Yeah. What was that process like?
SPEAKER_01: How did you find the right folks?
SPEAKER_00: So in one sense, we had the good timing that ARKit just got launched at that time. I mean, that's another funny story when it got launched. So there was a lot of positive enthusiasm for the space around that. Yeah. That was one. The other one we were lucky to really get connected with investors that really believe in this future and with us that it would take a long time. So we got backed up. Our lead investor for SeedRan was Jeff Clavier from Encore Capital, who really was with us in really believing where all these pieces were coming about and really taking that bet on us. And besides that, it was also Founders Fund, also seeing that vision with us that, yes, this makes sense. So kind of finding those kind of people. So were those folks through Demo Day, through intros, how did they find you?
SPEAKER_01: Because I think where invariably people are asking me, say, how do I find the right investor to support my vision?
SPEAKER_00: So part of it is through the YC brand carries a lot of gravitas in a sense. Hopefully. Part of it is before Demo Day, we had shown one of the first AR multiplayer cross-platform at that time, point in time, like two years ago that worked. And that created a lot of that buzz that we got contacted. And that was one of the big things. It's really driving the technology to have provable points with emerging tech.
SPEAKER_00: You kind of have to show that it's doable and where it's going to give a sense. So it was actually building it at a minimum. Showing functional products. A demo. Which is a bit different than I know other Founders Fund with sometimes that first thing is really having more actual paying customers early when the technology is more straightforward. It's more about nailing down the market. For us, it was kind of nailing down the tech early on.
SPEAKER_01:
SPEAKER_02: OK.
SPEAKER_01: And then once you showed people, they were like, either, I don't think so, not right now. What were the responses like?
SPEAKER_00: I think when they saw it, the demo we showed was Pong in AR. We took a classic one, classic game, and showed it how you have a ball of fire bouncing on the ground or the wall, and it would scorch the ground. And that just really connected with people. It's just that kind of thing that people's like, oh, wow.
SPEAKER_00: So it took some time to figure out that exact time. It was a weird, more technologist to come up with that. So that was working with a lot. I guess what I'm kind of asking is the people who didn't say yes, who maybe gave you a no,
SPEAKER_01: or maybe if this develops further, which is basically no, how did those conversations play out? Because I'm trying to put myself in the shoes of someone else who's trying to raise money in one of these newer markets.
SPEAKER_00: Yeah. The thing about those is that at times, it is kind of scary to bet in this space when there's very unknown. It is finding really those investors that are independent thinkers.
SPEAKER_00: Because sometimes it's funny when someone invests, then all the other people follow. That's kind of it. But you keep trying. Sometimes just connecting those.
SPEAKER_00: I think I'd rather really take someone really on board with the vision to be with you, to weather the future, to do it. That's way better.
SPEAKER_00: But yeah, with everything, for us, it's a bit of an anomaly how it happened. We did get some no's, but it's OK. You kind of go and keep trying, right? It worked out. It worked out.
SPEAKER_01: Yeah. So related to working out, you're now at Niantic as a founder. I mean, because you guys weren't around that long before the acquisition happened. Yeah. That's another unusual thing, too. That was super. I mean, it had to be one of the fastest in YC.
SPEAKER_00: Yeah. We were just joking. But it was like, I don't know if that's a good record to set.
SPEAKER_01: Yeah, yeah, for better or worse, for sure. But regardless, it happened. So there are some founders who have been on the podcast before who are now at larger companies that have acquired them. What's your advice to a founder who's now at a big company, who is managing people, leading team working on stuff? How do you make the most of it? Because you would just put kind of like your heart and soul into something that you started. And there's a degree of passion in your thing that's really hard to feel for someone else's thing.
SPEAKER_01: So how do you make it work and get satisfaction out of it?
SPEAKER_00: It's a very good question. I mean, part of it for us why Niantic was a good fit is that the vision of what Azure Reality started as, we are still building it. So that's a huge motivator to continue to do that. That's huge. To be able to at least do that. I know it's not a luxury for every acquisition, but to be able to do that and still have some of the freedom and the trust from the founders at Niantic is great. The other thing is, I guess the way I like to tell, Niantic is still also a startup, but it's a much larger scale. The way sometimes it's thinking about it is kind of taking Azure, which was a seed stage, skipping it and going into Series B. So skip fast forward. That's what it felt like. The other thing is to take this opportunity and reframe it a bit is still a very valuable space to learn other kinds of skills. So now it's kind of more taking in that hyper growth company. I mean, when we joined the company, I mean, from last year to this year, it's like at least 5x. It's crazy.
SPEAKER_02:
SPEAKER_01: 5x employees. Yeah. Yeah.
SPEAKER_00: So that kind of growth and be part of that. That was so exciting and learning other kinds of skills and reframing those because it is kind of leading in a bigger scope. And that's part of it that kind of worked out. And I know it's like a lot of it comes down to relationship with people is having a good rapport with the leadership, executing and getting all those things aligned.
SPEAKER_00: And I know sometimes it can be difficult because it's different cultures, right? It's kind of like immigration. Immigration. There's a mutual respect for things that we can learn from each other and work together. Eventually, there's a path to feel as a single company to feel like now I feel it's a Niantic employee, right? And that is when it starts kind of more working out to really feel that bought into where Niantic is going. And that I am excited with where we're going. Yeah.
SPEAKER_00: And at this point, it is exciting to see all the things that we've done. I mean, a lot of the demos that we showcased last year created the splash with AR where a lot of the work in my team is great. And other things this year announced in Niantic that are also great. We announced the developer context where we allowed invited. Made it a contest, invited 10 selected. Does it work? Selected 10 developers to work on our platform to see what else they could build outside of the Niantic world. So that was like started as a conversation with one of the leaders at Niantic with Ed, who is one of the platform leads a platform, the other parts of the platform for Niantic. So it was a conversation last year, and then it became a thing this year. Yeah. And it's been great to be welcomed by people like Ed and to work on something bigger together. So I think if we executed this as Azure, it would have been in a smaller scale than what Niantic we were able to do at Niantic.
SPEAKER_01: Or a longer time frame. Or a longer time frame. Or both.
SPEAKER_00: We got the luxury of the rest of the Niantic machine to get this out.
SPEAKER_01: Did you find that there were tricky elements culturally and transitioning the team together?
SPEAKER_00: There's always those when you join it. I mean, right? Sure, yeah. Those kind of happen. And part of it is taking time, patience to work through those things and having faith in the long term.
SPEAKER_01: It's kind of making it happen. And so this is funny. You mentioned it already. But it's all tied back to also you being an immigrant to the US and that whole experience. So you should explain it, because it's actually a super interesting story. But to set it up, you immigrated from Chile to the US during high school. But maybe you can provide the backstory.
SPEAKER_00: Yeah. Perhaps I think as you integrate with different things in your life, it is a series of immigrations. Thanks, Charles. Think of it that way. So a bit of a summary of a life story. I grew up in Chile. I'm still a Chilean citizen. And the way I ended up in the US is, or Chile, maybe start with that. My parents were trying to find a better life outside of China because of all the situations that was happening back in the 70s.
SPEAKER_00: So they applied for a visa and went wherever they took them first. And the first place that they followed was Chile, because another family member had been there. So they went there.
SPEAKER_00: So then I was born. Normal life, things happen, right? So I didn't know anything about the US. I knew I had an aunt in there. But apparently, my parents also applied for a family visa lottery to the US before I was born in happenstance, which is really bizarre.
SPEAKER_00: That went through when I was around 16, 17. And then my parents said it was very difficult to immigrate because you leave all your roots, learn a new language, unknown environment, start your life from scratch, from zero. You drop in the middle and do that. We've done that once already. We could do it again, but it's really hard. But think of it as taking this opportunity to do something. I know there was a scene that I've been always curious and been good at tinkering with things and math. It's like, take this opportunity to do something. You might end up doing something interesting. I was like, I never had to take that chance because otherwise, I would regret it forever and then moved with my aunt for a bit. And then the last two years of high school in there, that was boot camp for me. I had to catch up with everything because the education chill is not great. Just for comparison, you learn algebra in your senior year. So it did a crunch for a lot of things.
SPEAKER_00: And because in a year and caught up to calculus in a year, up to calculus, like that pre-cov geometry and all that algebra crunch it in one year, plus also physics and all these things, except English. English, I've been in ESL. I was still in ESL in college. So I had to take ESL when I went to college. So English was hard. Still hard. So that was kind of the resilient part of really understanding what I could do. And it was really challenging. I mean, coming to this new space and being by myself in school. And it was the hardest thing I had to do back then.
SPEAKER_00: And also all of that. And because I had to really do something good out of it and it was hard for my parents too because they were earning in pesos and then I was living in dollars. So I really wanted to figure out how to cut college short too. So then I managed to also take AP classes in the last year and finish college early.
SPEAKER_00: And then go to job and take loans and pay all that back. That's kind of the story of immigrating. And through those lots of lessons, through that it feels almost like a different person.
SPEAKER_01: Yeah.
SPEAKER_00: But yeah, I was very focused on that goal. To really graduate, do something interesting. I ended up doing engineering and computer science because that seemed to be what I was kind of good at.
SPEAKER_01: And so as someone who then worked at a big company and then started a company, what advice would you share for other immigrants to the US around starting a company? And even maybe perhaps bigger than that, just motivating yourself to leave a big company and go out and do your own thing.
SPEAKER_00: Yeah. So with the one about immigrants, I think the thing that's exciting about US versus say, Chile and I imagine other countries as well, is a lot of this positive determinism mentality. That really entrepreneurial where people really want to go at it. And because things are in a state of abundance, in a sense, in the US with stability, mostly. Not for everyone, but yes.
SPEAKER_00: Yes, here at least. Yeah. More so than, let's say, in other countries. It is still very challenging in other parts of the US, poverty lines, but bearing that. The level of abundance when you do get into those environments is something that frees you up psychologically to really explore. And it's exciting coming as an immigrant because you get more like-minded people. I think it's in the US where I found more people that kind of thought like me, more so than when I was in Chile. To really explore and try things out. And there will be challenges, of course, coming from, depending as an immigrant what type of company you start. There are some that need more understanding of the cultural norms or laws that you kind of sometimes need to have more years in the US to do. But there's certain things that they don't have any barrier in those, and those are great
SPEAKER_00: to start. In fact, actually, this is actually very coded a lot. A lot of the big tech companies have been started by immigrants, right? There's something about that.
SPEAKER_00: About having gone through... Now it's a version of the human installation and deployment, right? Yeah, absolutely.
SPEAKER_01: I think the immigrant mentality is wonderful. So right now, it's July. We're in the middle of the YC batch. In spite of being acquired and working at a larger company right now, what would be your advice to people in the batch right now to make the most of it? And to be honest, make the most afterwards, because I think that's something that often stresses people out.
SPEAKER_00: Yeah, there's a lot of angst about what to do with your life and it's like, it's YC, the pinnacle, or things like that. But it's a process in your life to keep always recommitting to what you're doing. But YC is a great time to really get your... The thing that YC is amazing is really taking that really brittle stage of companies and
SPEAKER_00: seed to make them pass that, because that's kind of the incubation stage where a lot of companies have a lot of difficulties. I mean, we did too. And YC gives a lot of focus and direction, because that's part of the things that as a startup, you're limited resources, limited time, and you're competing sometimes with larger companies that may be going after the same space with a lot more resources. But what are the things that you can do different and like the bigger companies?
SPEAKER_00: And it's things with doing activities of high leverage that there was advice from YC that big companies wouldn't do because they don't scale, quote, unquote. And as part of that is sometimes just doing things by hand, right? Like sometimes big companies wouldn't just do like a very brittle hacked up demo. Yeah. Things like that. So really taking advantage of that. And YC is great for fundraising your seed and getting to know also your batch mates. I think you never know. Sometimes a lot of these things are, it might be the current company that you're working with, but this is like in the future, we're in this space. It's not meant to be kind of zero sum or finite.
SPEAKER_00: You will live many lives. It might be this current company. Hopefully it's this one that you're building.
SPEAKER_01: That'd be great.
SPEAKER_00: That'd be great. But sometimes it doesn't. But there's a lot of awesome people that you can get to know as well.
SPEAKER_01: Yeah. It's something I need to do more often, actually. All right. Thank you so much for your time. Thank you for coming in.
SPEAKER_00: Thank you.
SPEAKER_01: All right. Thanks for listening. So as always, you can find the transcript and the video at blog.ycombinator.com. And if you have a second, it would be awesome to give us a rating and review wherever you find your podcast. See you next time.
