- Diana Hu discusses her work in the field of augmented reality (AR) at Niantic after her company, Escher Reality, was acquired.
- AR is a combination of various fields such as computer vision, graphics, engineering, hardware, and optics.
- Hu has a diverse technical background, including experience in cloud television and semiconductors.
- She was drawn to AR because of its potential and the ability to blend digital information with the real world.
- Hu's first exposure to AR was through a project involving a 3D light field display.
- AR is currently in the installation phase, where the necessary infrastructure and abstractions are being developed.
- Niantic is working on building a real-world platform for AR games.
- Hu emphasizes the importance of product-market fit and the need to ensure they are building the right thing in the expanding AR market.
- AR is not a completely new concept and has been explored since the 70s, but recent advancements in technology have made it more accessible.
- The timing for AR is becoming more favorable due to advancements in mobile infrastructure and components.
- The supply chain for AR components is now more affordable, leading to the development of consumer-priced AR headsets.

- The piece discusses three technology trends that are impacting the development of AR headsets.
- The first trend is the reuse of infrastructure built by mobile devices, which allows for cost-effective AR headsets.
- The second trend is the increasing power efficiency of computing devices, which enables more complex computation in small devices.
- The third trend is the improvement of wireless connectivity, which is crucial for data-heavy AR applications.
- The author advises founders in the AR space to focus on core technology and infrastructure companies, as there are still many unknowns in the industry.
- The author also shares their experience in finding investors who believed in the future of AR and were willing to support their vision.

- The speaker discusses the challenges of raising money in newer markets and the importance of finding investors who are independent thinkers.
- They talk about their experience of receiving some no's but continuing to try and eventually finding success.
- The speaker shares their experience of being acquired by Niantic and offers advice to founders who are now at larger companies.
- They emphasize the importance of aligning with the company's vision and finding satisfaction in learning new skills.
- The speaker mentions the growth and exciting projects at Niantic, such as the developer contest.
- They discuss the cultural challenges of transitioning teams and relate it to their experience as an immigrant to the US.
- The speaker shares their personal immigration story from China to Chile and then to the US, highlighting the challenges and opportunities they encountered.

- The speaker immigrated to the US and was determined to succeed despite financial challenges.
- They finished college early by taking AP classes and worked to pay off loans.
- The speaker advises immigrants to the US to take advantage of the entrepreneurial spirit and abundance of opportunities.
- They mention that many big tech companies have been started by immigrants.
- The speaker also discusses the benefits of participating in Y Combinator (YC) and advises participants to make the most of the experience and build relationships with fellow batchmates.

- Diana Hu discusses her work in augmented reality (AR) at Niantic after her company, Escher Reality, was acquired.
- AR combines computer vision, graphics, engineering, hardware, and optics.
- Hu has a diverse technical background and was drawn to AR for its potential to blend digital information with the real world.
- Niantic is building a real-world platform for AR games.
- Recent advancements in technology have made AR more accessible.
- Three technology trends impacting AR headset development are the reuse of mobile device infrastructure, increasing power efficiency of computing devices, and improved wireless connectivity.
- Founders in the AR space should focus on core technology and infrastructure companies.
- The author shares their experience in finding investors who believed in the future of AR.
- They discuss challenges in raising money in newer markets and the importance of finding independent-thinking investors.
- The speaker shares their experience of being acquired by Niantic and advises founders at larger companies to align with the company's vision and find satisfaction in learning new skills.
- They mention the growth and exciting projects at Niantic, such as the developer contest.
- The speaker discusses cultural challenges and relates it to their experience as an immigrant to the US.
- They advise immigrants to take advantage of the entrepreneurial spirit and opportunities in the US.
- They mention that many big tech companies have been started by immigrants.
- The speaker discusses the benefits of participating in Y Combinator (YC) and advises participants to make the most of the experience and build relationships with fellow batchmates.

Diana Hu cofounded Escher Reality, which went through the Summer 2017 batch of YC. They were acquired by Niantic and she is now the head of their AR platform.

https://twitter.com/sdianahu
https://www.ar.dev/

The YC podcast is hosted by Craig Cannon.

https://twitter.com/craigcannon

Y Combinator invests a small amount of money ($150k) in a large number of startups (recently 200), twice a year.

Learn more about YC and apply for funding here: https://www.ycombinator.com/apply/

***

Topics
00:00 - Intro
00:15 - Getting into AR
2:30 - Her first exposure to AR
4:15 - AR's future role in media
7:20 - Deciding where to go with the product
9:30 - Innovations that enabled AR
14:00 - Building a product in a new market
17:00 - Raising money for a new market
21:15 - Advice for founders after an acquisition
26:15 - Immigrating to the US
30:45 - Advice for Immigrant founders
33:24 - Advice for founders in/after YC

All right, Diana Hu, welcome to the podcast.

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?

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.

And personally, I've come from a very diverse technical background.

I've done before, I worked a lot in cloud television before and recommend their systems and doing analysis on television streams with computer vision techniques.

I was in the space of semiconductors at Intel.

So I understood a few things about hardware.

And coming into AR was an interesting point because it's such a, kind of, I really do think it's the next technology evolution.

So we went from desktop, mobile, and next 1 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.

And that will take many, many disciplines to join in to do something interesting.

The reason coming into AR was that part, plus just I think always been interested in some sense of the possibilities of what AR could do.

So a lot of curious, very curious about that.

What it could take us to be able to see information, blend in in the real.

It's this concept of like pixels, photons, where's the line to now between pixels and photons?

Do you recall the kind of like first exposure you had to it, where it clicked?

So 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, it's not just whimsical.

The reason why magic is so magical is that, in AR is that you see a lot of the digital representation believable there.

And the first time I, a couple of projects that I done, there's some in the past I did help some startups build some projects way, way back.

1 of them was building a 3D light field display.

So basically you could see 3D without glasses.

And then you start peeling the onion of what are all the pieces needed from the technology and AR is a fundamental piece to build this new kind of infrastructure to just change the way we do computation for information.

And so obviously like Niantic, you're working on games.

At what point do you think AR becomes this kind of like first class citizen in media, you know, alongside video, photo, I guess audio?

Yeah, I think it will take time because we're at the early stages.

I think the progress of technology has like different cycles.

I mean, if you read some of the work by Carlotta Paris, who's an economist, talking about innovation cycles, there's like big 2 stages.

Stage number 1 is when technology gets installed, quote unquote.

So 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.

And examples of types of installation types of technologies are just like 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, right?

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 kind of build on top of the abstractions always.

So AR is kind of in that phase of really building the installation phase, of solving all the hard problems so that you get to a very expressive world in the future that 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.

And just to give you, 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, like the installation phase for mobile was just getting the hardware devices and the operating system with iOS and Android.

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 YAR, 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 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.

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?

Yeah, it could totally be the wrong direction, right?

I mean, it's just kind of making educators guess sometimes.

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 headsets, might have been even the 60s, don't recall the exact date, but it was by this kind of monster thing called the Sword of Damaclus.

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.

That was like super high end stuff that's only available to the government, right?

And it takes a couple cycles to really get the technology at a price point ready for consumers.

So I think the timing and knowing AR is 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 1 of the things actually about starting companies, you can have a great idea, you can have a great team, and also great investors, 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 to couple trends in technology that really made sense.

So a couple of them, 1, 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 used from the mobile space.

So second technology trend that really hitting for AR to be something real.

This is Moore's Law, everyone is familiar with it, with computing getting faster every 18 months, twice, kind of.

So you could do more complex computation for algorithms in tiny devices.

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 Cumi's Law, it's very similar, every 18 months, with the exact same computation, is gonna 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.

It tells you how powerful mobile devices and computations got and at the exact same, like you think of a MacBook Air is like pretty beefy, chunky computer that can do a lot of things.

And your iPhone 7 beats it at a fraction of the power.

And 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 and AR, it would at some point hit that magical total power costs, which they want to be in the single digit watt range.

So you feel certain constraints on the actual hardware side.

Getting there, so shrinking, so that's another 1.

The third 1, another law, third law, is Edmunds law.

Comes from, 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.

And the other 1, he called it the, he called it nomadic.

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 LT connection is just as good or better than dial-up in the 90s.

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.

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 1 megabit.

With what 5G infrastructure is supposed to get you, it's going to get you to 10 gigabits.

Tens of megabits to 10 gigabit, which is as much as you would get in your wireless at home.

So expanding that out, if you're thinking about starting a company in a relatively, I mean, as you described, AR, VR has kind of been around for 50 years, whatever, but relatively nascent area.

What is your advice for a founder thinking about starting something?

Because You went through the whole thing, right?

Like you did YC, you raised money, you got acquired, all that kind of more traditional startup stuff.

Yeah, how would you tell a founder to strategize around even choosing a product to build?

for the industry, The challenge with spaces with AR and VR is that there's a lot of unknowns, right?

And it's hard to be in the space right now when there's so many things that are moving.

I mean, I know kind of in a sense AR is following on the footstep 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 is like hyped up the whole space.

But after that, it's been difficult for sometimes to raise money for that space for content creators.

I mean, not impossible, but sometimes difficult.

For AR, has some, a bit of that, is just people are still right now testing the waters.

What is like the killer app for AR that's still early to be determined?

I mean, the 1 that we see right now is the Pokemon Go and Antec.

It's 1 of the few, maybe only AR games that is significantly profitable.

So as a founder starting right now, Well, my bet on it would have been talking about this technology trend on economic cycle.

It is personally thinking, betting more on the installation phase kind of style of companies which have to do more with core technology that gets built up.

Because a lot of those, there's tons to do, there's so many problems to solve before going into the application.

Those I think have better chance right now, if you ask me about now.

But those are some of the companies I see in AR a bit better chances right now.

Right, so you can kind of have conversations with investors around tooling, around developers.

Those are the kind of paths you've found more interest.

Yeah, but it's also a bit challenging because as a tooling and infrastructure company, the investor is going to ask you, okay, do your customers who are developers make money?

Right, yeah, are they just like kids goofing around in their basement?

It's hard to, you kind of have to sometimes find the believers in that.

So creating technologies in kind of this emerging tech sometimes is difficult because of this.

Edith Piazza So, in 1 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.

The other 1, 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.

Our lead investor for our seed round was Jeff Clavier from Encore Capital, who really was with us and really believing where all these pieces were coming about and really taking that bet on us.

And besides that was also Founders Fund, also seeing that vision with us, that yes, this makes sense.

So it's kind of finding those kind of people.

were those folks through Demo Day, through intros, how did they find you?

Because I think where invariably people are asking is how do I find the right investor

So part of it is through the YC brand, carries a lot of gravitas in a sense.

Part of it is before demo day we had show 1 of the first AR multiplayer cross platform at that point in time like 2 years ago that worked.

And that created a lot of that buzz that we got contacted.

And that was 1 of the big things, is really driving the technology to have provable points with emerging tech.

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.

Which is a bit different than other founders' trend with sometimes that first thing is really having more actual paying customers early, when the technology is more straightforward.

For us, it was kind of nailing down the market.

For us, it was kind of nailing down the tech early on.

And then once you showed people, they were like, either I don't think so, not right now.

I think when they saw it, the demo we showed was Pong in AR.

We took a classic 1, classic game, and showed it how it would, 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.

So it took some time to figure out that exact.

That was a weird, more technologist to come up with that.

I guess what I'm kind of asking is like, you know, the people who didn't say yes, who maybe gave you a no or like, you know, maybe if this develops further, which is basically a no.

Cause I'm trying to like put myself in the shoes of someone else who's trying to raise money in 1 of these newer markets.

Yeah, the thing about those is that at times, it is kind of scary to bet in this space when it's very unknown.

It is finding kind of really those investors that are independent thinkers.

Because sometimes it's funny when someone invests then all the other people follow.

That's kind of But you keep trying, it's sometimes just connecting those and 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.

But yeah, I mean with everything is, I mean for us it's a bit of an anomaly how it happened, but we did get some no's, but it's okay.

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.

Alicja Kroonen Yeah, that's another unusual thing too.

That was super, I mean, it had to be 1 of the fastest in YC.

Yeah, we were just joking, but I was like, I don't know if that's a good record to set.

Yeah, yeah, for better or worse, for sure.

So there are some founders who have been on the podcast before who are now at larger companies that require them.

What's your advice to a founder who's now at a big company, who's managing people, leading team, working on stuff?

Because you would just put, you know, your 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.

So how do you make it work and get satisfaction out of it?

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 I was thinking about it is kind of taking Escher, which was a seed stage, skipping it and going to Series B.

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.

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, 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 relationships with people, is having a good rapport with the leadership, executing and getting all those things aligned.

And I know sometimes can be difficult because it's different cultures, right?

There's a mutual respect for things that we can learn from each other and work together as eventually there's a path to feel as a single company, to feel like now I feel as a Niantic employee.

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.

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, a lot of the work in my team, it's 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, selected, that's a word, 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 1 of the leaders at Niantic, with Ed, who was 1 of the platform, he leads the platform, the other parts of the platform for Niantic.

So there was a conversation last year and then it became a thing this year.

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 Escher, it would have been at a smaller scale than what we were able to do at Niantic.

We got the luxury of the rest of the Niantic machine to get this out.

Did you find that there were tricky elements culturally in like transitioning the team together?

Those kind of happen and part of it is taking time, patience to work through those things and having faith in the long term.

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.

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Diana Hu on Augmented Reality and Building a Startup in a New Market