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Minority Report & You: Defining the Interface of the Future

Leap Motion is hoping to make 3D motion control ubiquitous and, with its technical sophistication and serious venture capital backing, it just might make it happen.

John Anderton, a police officer in Washington, D.C, sits at his computer, scanning through pictures of potential suspects for a crime that hasn’t happened yet. As he frantically swipes his right hand from right to left without touching a keyboard or mouse, the pictures on the screen follow his movements directly. He stops at a particularly interesting picture but the suspect’s face is too small; he brings up his left hand and, together with his right, makes a movement like he’s prying open an elevator door, zooming in on the picture – John’s found his suspect.

This is, of course, a scene from Steven Spielberg’s Minority Report, a movie set in 2054. Despite the futuristic settingLeap Motion, a San Francisco-based company, is working to speed up the widespread use of 3D motion control. The company produces a device slightly larger than a typical USB key that can be used to control your desktop using hand motions instead of a keyboard and mouse. The hardware is used with apps available through Leap Motion’s app store, Airspace. Since the company’s first product, the Leap, began shipping on July 19th, 2013 over 1 million app downloads have occurred. This has spurred additional interest in Airspace, whose total app volume increased 97% in the past month from 74 to 146, a strong start for a relatively new space.

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recent review in The New York Times noted that the “[t]he Leap’s hardware may be simple, attractive and coherent — but its software is scattershot, inconsistent and frustrating.” The author notes a valid issue but misses the larger point. New technology rarely gets it right the first time – though the firm’s hardware is already 200 times more accurate than its next closest competitor, Microsoft’s Kinect. On the software side, the main goal with new technology is to lay a base that early adopters can latch on to; these early adopters then work with the company to improve the product over time (aka the Google model). By now most people understand that the ‘ecosystem’ concept of hardware and software is the key to the success of any technology and Leap Motion is pushing to get it right. Importantly, the company is working not only to create apps for PCs but also for new types of devices as well. COO Andy Miller further detailed the company’s strategy when he said “[w]e’re looking to embed our tech into watches and smartphones and glasses and everything”.

Having raised over $14 million from venerable venture capital firms such as Andreessen Horowitz, SOSventures International, Founders Fund, and Highland Capital Partners, Leap Motion has the network and know-how necessary to make a big impact on the way we interact with technology. Leap Motion’s latest round of funding with Highland Capital Partners also resulted in the creation of The Leap Fund, a $25 million fund for entrepreneurs who use the firm’s technology. According to the firm “[t]hey’re looking for ideas that can grow into impactful businesses across various industries – everything from killer apps to embedding Leap Motion’s technology into other hardware/software to unique businesses.” This move fits into Leap Motion’s strategy of actively working to build out the software ecosystem necessary to support the hardware.

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The firm hasn’t revealed how many devices have been sold to date but it had produced 600,000 in anticipation of its July 2013 launch. Leap Motion’s leadership team, including co-founders Michael Buckwald, CEO, and David Holz, CTO, has been putting together the pieces necessary to take advantage of the shift in UI. It will be a while before a massive shift towards motion controlled technology occurs – just look at the way touchscreens are slowly supplanting keyboards in the mobile device space (globally, not just in North America). However, Leap Motion isn’t the only firm looking into the interface of the future. Major players such as Google and Apple are exploring how to use voice to control phones and tablets through Google Now and Siri, respectively. In addition, Waterloo, Ontario’s MYO, a startup founded in 2012, is looking into an armband that can sense muscle movements and translate them into actions on-screen. Similar to Leap Motion, MYO is funded by heavyweights in the technology / venture capital space such as Intel Capital and Saleforce.com CEO Marc Benioff. For reference, Leap Motion’s hardware is priced at $80, lower than MYO’s product, which is currently priced at $139 but not slated to ship until early 2014.

Elon Musk, one of the co-founders of PayPal, claimed on August 23rd, 2013 through Twitter that he “figured out how to design rocket parts just w hand movements through the air (seriously)” using the Leap. He followed up on September 5th, 2013 by posting a video entitled “The Future of Design” that outlined his idea for hand-controlled design, striking an eerie parallel with how Tony Stark designs additions to his armored suit in the Iron Man movies. Although Mr. Musk has a reputation for big thinking, he also has a track record for executing on big ideas. He’s the co-founder of SpaceX, a space exploration company that was founded “with the ultimate goal of enabling people to live on other planets” and a co-founder of Tesla Motors, an electric vehicle manufacturer whose goal is to “lessen global dependence on petroleum-based transportation”. It’s a great sign for Leap Motion, and 3D motion control in general, that a tech luminary such as Mr. Musk is actively taking an interest in using the company’s products. This will surely raise the firm’s profile among potential users and software developers – the two key components to reaching critical mass as outlined above.

Another boon for Leap Motion is its partnership with HP, the world’s # 2 laptop manufacturer by units shipped, to integrate the Leap into HP’s laptops. Announced on April 21st, 2013 the alliance is designed to help HP differentiate its laptops in the market and help Leap Motion create a steady demand for its product. On September 19th, 2013, five months later, HP announced the HP Envy 17 Leap Motion Special Edition, the firm’s first Leap Motion embedded laptop. The key benefit for Leap Motion is that the partnership brings stability to the firm’s operations, which is critical to any start-up.

What Should Leap Motion Do Now?

3D sensor technology is receiving a lot of press right now. Microsoft’s Xbox One, with its media-center capabilities, is forcing entertainment companies to consider the possibilities a gesture-based / voice-based UI enable. In addition, Apple’s low-key purchase of PrimSense, a 3D sensor company that helped Microsoft develop the motion-based controller for the Xbox, aligns well with the numerous motion-based patents the company has filed. Just as importantly, Intel, the world’s largest chip manufacturer, has been developing a new set of chips designed to help devices enable 3D motion control, or what it calls ‘perceptual computing’. The stars are beginning to align for gesture-based computing and with all this buzz the question for Leap Motion is: what now?

It’s likely that 3D motion capture won’t be a major standalone consumer technology. Rather, it will likely be integrated into existing platforms (i.e. phones, tablets, computers, etc.) the same way fingerprint readers and web cameras are. Given this, two implications are clear:

Focus on Scale

For a technology like Leap’s to succeed it needs to be built to adapt to a large number of devices. In order for this to be economically viable there has to be enough interest from consumers across a number of different platforms (i.e. device manufacturers). This is where the firm’s current efforts are focused.

Having irrevocably tied its fate to external developers, Leap Motion must now do everything possible to push them, incentivize them, and make sure they are able to make money. Having recognized this fact two of the firm’s investors, SOS Ventures and Founders Fund, have created an accelerator program, LEAP.AXLR8R, designed to jumpstart the next generation of apps for the Leap. This is a great start, yet more needs to be done to generate interest among end consumers. The relationship between consumer interest and developer interest is symbiotic, but it’s in Leap Motion’s interest to continue the slick, flashy marketing efforts that caused MIT’s Technology Review to call the Leap “[t]he most important new technology since the smart phone…”

If done well, the firm can build the virtuous cycle of new apps generating new consumers who beget new developers who beget new consumers and on and on. Only in this fashion can Leap hope to gain the scale necessary to compete against Apple, who could integrate similar technology into each new iPhone and iPad it sells. To understand Apple’s scale, based on their Q4 2013 results, it sold more units of product in the last 24 hours than Leap has manufactured or sold ever. Given the interest in this space the market is likely to be large enough to support a sizeable number of both large and small players that are split across mass-market vs. niche lines. However, in order to provide itself with the most flexibility, Leap Motion must focus on creating an ecosystem that appeals to a mass market demographic. The firm hasn’t indicated whether it’s looking to sell or stay independent but either way scale will be vital to its success

Build, Buy, or Lie?

As 3D motion capture technology matures device manufacturers will have to ask the above question. For Leap Motion, this is where the fun begins. Once 3D motion technology reaches a critical mass of interest among end-consumers device manufacturers will have to ask: Do we build the technology and integrate it? Do we buy a company’s technology and integrate it? Or do we license a company’s technology and integrate it (i.e. white label it and effectively ‘lie’ to the end consumer)? Under the assumption that the firm desires to stay independent, the last option, lie, makes the most sense economically. In this scenario the firm could look across geographies, platforms, and devices to license to whomever had the greatest reach in terms of consumers. This scenario is also what the firm’s strategy has been, evidenced by Mr. Buckwald’s statement that “we want to be embedded everywhere.”

However, the key thing to explore is what would make a major OEM such as Samsung interested in partnering with Leap Motion instead of just building the technology in-house. As posited above, 3D motion technology will be integrated into existing technologies and eventually become a sine qua non for any ‘smart’ device. As such, analyzing partnerships such as Leap Motion and HP and Leap Motion and ASUS are useful in understanding why a major OEM would lie instead of buy or build.

HP, as outlined above, was looking for a way to differentiate its offerings in a declining market. Only time will tell whether the HP Envy sell better than other, similar computers that don’t have Leap Motion yet the idea is sound. ASUS has yet to release a product with the Leap embedded but the strategy is similar; it’s easier to embed a successful, proven technology such as the Leap rather than develop a piece of native technology. In addition, the effectiveness of the Leap in specific makes it an attractive proposition for OEMs looking for the next edge. Albert Wu, Desktop Division Senior Director at ASUSTek, said in reference to the Leap Motion partnership that “[o]ur commitment to innovation and exceptional quality drive us to provide the best technology to our consumers.”

There can be life in this strategy so long as the Leap Motion continues to improve the software behind its products in between major launches. The worst thing that Leap Motion could do with its ‘embed everywhere’ strategy is to fail to improve in between physical device releases (i.e. through major software updates). It seems like the firm has kept on top of this as it released a major software update four months after its July release that addressed a significant number of pain points. In its most basic form, the firm is taking the Intel strategy of being the basic unit of quality for this type of technology. Maintaining a significant technical lead over similar competitors is what will keep Leap Motion ahead, even in the face of significant competition such as Apple and Microsoft and likely Google.

Leap Motion has the unique opportunity of redefining the way humans and machines interact and there is great hope that the firm will succeed. The firm’s nascent technology is beginning to gain traction with consumers and businesses as evidenced by interest from major venture capitalists. The serious money behind differing technologies will inevitably result in a consumer-facing battle to define the interface of the future. Regardless of the outcome the outworn philosophy of the point-and-click UI is coming to an end with firms such as Leap Motion leading the charge. If successful, Leap Motion’s technology could be powering a future John Anderton’s next frantic search.