Oculus VR’s Brendan Iribe on raising $75M and building the next-generation consumer virtual reality (interview)

Oculus VR, the maker of the Oculus Rift virtual reality goggles, has had a whirlwind startup life that has taken it from an underdog of the gaming business to a viable alternative platform.

The Irvine, Calif.-based company started as an indie project by virtual reality fan Palmer Luckey. He convinced gaming guru John Carmack, of id Software, to tout it at a big game trade show in June 2012. Serial entrepreneur Brendan Iribe joined as chief executive and helped orchestrate a phenomenal Kickstarter campaign that raised $2.4 million.

Its demo won numerous awards at trade shows and the company proceeded to sell more than 40,000 development systems to game developers at $300 each. It raised $16 million in the summer of 2013, but also tragically lost a co-founder in an accident.

Many people doubted whether Oculus could bring its technology to the consumer mass market, given the competition from the next-generation consoles from Microsoft and Sony.

But Oculus gained some big credibility this week: As VentureBeat first reported, the company raised $75 million in a funding round led by Andreessen Horowitz, one of the most powerful venture capital firms in Silicon Valley. Now Iribe has the clout and money to build a real ecosystem around Oculus Rift and get game developers to make unique virtual reality games.

Most startups don’t live such an accelerated life. But Iribe, who spoke at our GamesBeat 2013 conference earlier this year, paused to speak with us this week about the latest funding and the company’s vision for a new, sleeker version of its headset. Here’s an edited transcript of our interview.

GamesBeat: So does this mean you’re closer to shipping a commercial unit that’s not going to make you seasick?

Brendan Iribe: Weird way to ask the question. [laughs] We’re always improving the experience. The technology recently has taken a pretty big leap. We call it a bit of a breakthrough in comfort. I spoke about that your conference, when we did our fireside chat. There’s been a big jump in the overall technology and the headset itself.

When you put it on — the latest internal prototype, which is what Marc Andreessen and his team saw – it’s a completely different experience from the previous versions. The latest one finally ties it all together. There’s this switch in your head. Your brain, instead of feeling like you’re looking through a VR headset, suddenly feels like you’re just looking through a pair of glasses into another reality. It’s much more comfortable.

We’ve had about 300 people try the latest prototype, including Marc and [Andreessen Horowitz investor] Chris Dixon themselves. [Game designer and executive] Brian Fargo just tried it and tweeted a little about it. Everyone who’s tried it has walked out saying, “Oh my God, that’s it.” Some people may have said, about the previous versions, that they had some issues or that they didn’t feel so great. But this one, they’re saying, “I feel great. If you guys deliver that quality of experience to the consumer market, this thing is going to be a lot bigger than anyone expected.”

We feel that way too. Marc and his team all had the same reaction. This could be much bigger than we all expected. We’re now trying to scale up. Of course, we had dreams of how big it could be, but we try to be realistic. We try to have realistic expectations. The developer kits and previous incarnations still had challenges, whether it was resolution or latency or motion blur or tracking. The latest prototype solves most of those well enough to have a comfortable experience.

GamesBeat: Are you proceeding down a path that’s following Moore’s Law? Or are you redesigning it still, coming up with different kinds of technology or materials?

Iribe: It’s going to be a similar form factor to what we’ve been thinking about since the beginning. You still strap it on. That form factor is similar to many of the VR headsets that have been out there in the past. We’ve just taken a unique approach to use a single screen internally and really hit the optics right.

The biggest thing that we’ve solved is the latency challenge, and the tracking. It wasn’t until recently that you could solve these problems with modern hardware. We were looking at latency in previous devices around 100 to 200 milliseconds. That’s tough for anybody to stand. We got our developer kits — the prototype that you saw way back when, at the last CES — running at about 60 to 70 milliseconds. Our most recent internal prototype is now between 10 and 20 milliseconds. Less than 20 [milliseconds] flips the switch and you cross that threshold where the brain feels comfortable with it. You’re not reminded you’re looking at a computer device.

GamesBeat: The amount of money here, can you talk about that? How is it going to help you get the goggles out? When you think about launching a console, that sounds like a small amount of money, but launching something different, it does seem like a lot of money.

Iribe: We’d of course like to see two million units in a few days. [laughs] But again, we try to set expectations realistically. We’re a startup. This is a new device. It’s a full platform that we’re looking at launching, but it’s a platform that requires a computer and the headset. We’re looking at the right way to sell that to consumers. We want to make sure everyone has a great experience. When they buy the product and take home and plug it in, we want to make sure that first experience is comfortable and everything is there.

We’re looking at how many units that might be at launch, and how much money we would need to cover that. If we were going to see millions of units at launch, we’d undoubtedly need even more money. But with the expectation we have for the pre-order launch units for consumer V1, we should now have enough money to build that inventory and ship that alongside a healthy amount of pre-orders. We’ve seen that already with the developer kits.

We feel like we have a good grip on it. We’ve pitched the road map to Andreessen and the other partners. Everyone feels comfortable with it. It could always change, of course. We set out a road map of how many developer kits we’d like to sell and when we’d get things done. So far we’re tracking closely to that. Hats off to the team and the community for showing up and helping us. We’re getting there with V1. It should be a good launch.

Virtual reality — and Oculus, now, because there’s nothing else like it — is what the next generation is going to be all about. When we look back on 2013, 2014, the next two to three years, I’m confident that people will remember that the big change was Oculus. There may be a few more that launch and compete, which should be exciting. Hopefully they do as well or better as we do.

We’re finally going to be free of the 2D monitor. It’s been a window into virtual reality that we’ve all looked into for 30 or 40 years. We’ll have goggles at the beginning. Down the road, a decade or so from now, you’ll get a nice pair of sunglasses and look out into virtual reality. There’s a lot of opportunity beyond gaming as far as where this will go.

GamesBeat: On the mobile side of things, are you setting an expectation of that as well? When might something that works with a smartphone or tablet come along?

Iribe: We continue to say that hardware is finally ready. But I’d say it’s just at the edge of being ready. We’ll see a lot of great advances in virtual reality over the next five to 10 years because of better hardware, on the mobile side and on the PC side, the graphics side.

I’m bullish that VR is going to reignite the PC race and the GPU/CPU race, which has largely plateaued. People aren’t talking about gigahertz or cores anymore. They aren’t talking about one GPU compared to the next, how many triangles they can do. It’s calmed down. With VR, though, when you put on the headset and it all comes together and works well, you want more. You want higher-resolution environments, even if you’re already running on a high-end computer. We expect to see a huge jump over the next decade in computing performance.

What does that mean for mobile, when suddenly we’re at the edge of making this all work in a PC that’s five or 10 times faster than a smartphone or tablet? There’s a big challenge there. That’s the kind of thing that a guy like John Carmack loves to sink his teeth into and pull something off there, something where people look at it and say, “How is that possible?”

Tim Sweeney was quoted recently at the Doom anniversary, talking about when he saw Doom in 2.5D. He didn’t know how that was possible at the time on such a low-end computer. That was a bit of what Carmack was known for. He and his group are very focused on the mobile side. We are throughout the company, but he’s spearheading a lot of that mobile work. We can’t give any details on it, but so far, from the glimpses we’ve seen, we’re going to see another “How did he make that work?”

GamesBeat: How are you organizing yourselves? If Carmack has come in as CTO, is he overseeing almost every technology that’s being developed, or is he focused on mobile? Does Palmer do something different than what he used to?

Iribe: At this point there’s more than 50 of us in the company, and the majority of us are engineers. We have a team of real senior, rock star engineers. Of course, Carmack is at the top. He’s been spearheading a lot of the mobile effort, working with a group of talented engineers on that. He largely works out of the Dallas office. Most of the engineers, though, are in Irvine here, working remotely with John. There’s a handful of other developers in Dallas that John is working with.

It’s spread out. We can do a lot of this stuff remotely. So far, so good. John is known for being head-down. We’re trying to respect his wishes, where he wants to get in and code and solve these problems on such a small platform. To do that well, he needs to focus and have his isolation. That’s what he’s doing.

GamesBeat: Some different technologies are rising up as people talk more about wearables and virtual reality. Those areas are changing rapidly. Are you focused on any one of these technologies?

Iribe: We’re looking at a lot of different tech. Internally, we’re focused on building our own technology, leveraging all the momentum that’s out there around wearable computing and mobile computing and PC computing. But at the end of the day, all the code we’ve written and all the invention we’ve created has been focused on our own tech and our own products.

We love the ecosystem. A great number of other companies are doing cool stuff. We keep a watchful eye and see what others are doing. It’s very exciting. But we’re heads down on our own product and tech and software.

GamesBeat: Do you still see yourselves as having to do a lot of work on the ecosystem, finding the right partners in the PC makers or the peripheral makers that will go along with this? And on top of that, the game makers as well.

Iribe: When you get V1, we’d love it to be something that doesn’t require you to go out and purchase other products. You should be able to buy this thing and take it home and plug it in and it just works with whatever you have at home. We’re looking at investing in content in the ecosystem and offering as close to an all-in-one package and platform as we can. A complete set of services built around it, so you’ll be able to leverage and get to content easily. When you plug it in, you’ll have a lot of stuff to do.

There’s so much excitement around VR and Oculus in the game development community that it’s pretty easy to go out there and find developers who want to make Oculus content. The harder challenge is funding them. With this latest round of funding, we’re certainly going to be using part of it to seed the community and get more great content at launch, and in the months that follow. You need a road map of content. We’ll be making some announcements, even over the next few weeks and months, that show how committed we are to the ecosystem and content and putting our effort behind it.

GamesBeat: So far you’ve had a lot of indie support. You probably also need a lot of support from established game makers and publishers.

Iribe: We love indies. You can look at something like the iPhone and it’s hard to argue that indies didn’t build the entire ecosystem there. It took a long time for the bigger publishers to show up on mobile. Most of the original success in the smartphone and tablet world, especially on the app side, came from indie third parties.

We’re looking at a mix of indies and triple-A. Triple-A builds high-fidelity content. You can look at mobile and say, “Well, that’s a lot of 2D games. 2D games are easier for smaller teams to build.” To some degree that’s true, but there’s a lot that indies can do. At the same time, we see a huge opportunity to get a few key, higher-production-value, higher-budget titles that deliver this high-fidelity experience.

We’re out there talking to triple-A developers now. It’s nice to have this series B round behind us, because we can go out there and not just have to try and inspire them to make content. We can actually invest in content.

GamesBeat: Is the content in high-end 3D games portable now to Oculus? Or do you believe that they have to work on games for Oculus from the ground up?

Iribe: The best content is going to be made for Oculus. That’s always been the case. You don’t port PC games to an iPhone. You don’t typically port iPhone games to a console. VR is very much a new platform. It’s going to need made-for-VR games.

At the same time, we do benefit from being able to port some PC games. You can add VR modes and look around and have head tracking. It does enhance the experience. It’s fun, and it’s something that I think a lot of people are going to have a lot of fun jumping into — whether it’s Half-Life or even iRacing or Project CARS — these really cool games that were originally made for a 2D monitor and keyboard/mouse or game pad. It’s neat jumping in there in VR. But these games will probably still be best played on the platforms they were designed before.

When you make it for Oculus, it’s going to be best played on Oculus. We’re out there looking at funding and helping out developers create content that’s made for Oculus.

GamesBeat: Marc Andreessen has built a few billion-dollar companies. He seems like a pretty good investor. He’s also got an interest in gaming. That might make him a good fit for you guys?

Iribe: He’s been awesome to talk to and work with so far. He got started in computer science, largely in VR, working on building the CAVE stuff back at the University of Illinois, 20 or 25 years ago. He has a love for the tech and the concept. He went on to build a browser that changed the world.

Looking all the way to where Oculus is and this combination of all this great tech finally being realized, there’s a lot of love from a technologist like Marc for building out Oculus. It’s a platform — there are all these pieces he knows very well – but it’s also ground-breaking. It will disrupt many industries and change the world, assuming we deliver on the promise, which we feel like we’re very close to doing.

I’m looking forward to getting a lot of Marc’s advice, and Chris Dixon’s as well. Chris is also an operator. He’s run companies and done startups before. I’m excited to get their input along the way and make sure we don’t make too many mistakes.

GamesBeat: Did they communicate some other things about why they invested. Clearly they liked your demo, 

Iribe: They liked the vision and the team. That’s a big part of it. The technology has crossed a lot of hurdles. It works now. We’re not going to hit some kind of fundamental barrier of entry. The experience is good enough for mass-market consumers to enjoy. Now it’s very much about the team and the vision of where we want to go. We’re in alignment there.

There’s a lot more that people are going to do with Oculus than just games. It’ll extend beyond into film and education and design of all kinds. In the long term, it’s very much about communication. It’s about multi-user communication. That’s what has the largest audience. The world wants to communicate.

You started with a personal computer on your desk, and we’re going to start with personal VR on your desk. Hopefully over the next decade or two, as we continue to build this out and work toward the vision, we’ll continue to shrink the form factor and improve the experience. There will be this shift, much like the smartphone. The personal computer on your desk turned into a laptop, and then it finally turned into a personal computer in your pocket. You’ll see a similar evolution with VR. One day, a decade or two from now, we hope to realize the vision of having VR in everyone’s pocket. You and I could have a face to face meeting and it will feel just like you’re really there, yet we’ll be in different places.

That will have such a huge impact on the world, when you can be free of this 2D screen and have communication and video conferencing that’s not video conferencing, but VR conferencing. We’ll be able to break down the barrier of the monitor we’ve had to stare through for 40 years.

GamesBeat: How do you feel about waking the sleeping giants at Microsoft and Sony and Nintendo?

Iribe: There will be a handful of big companies, we hope, that get into this. We hope their technology pushes the ball forward. Competition makes for better products for the consumer, usually. As long as nobody does anything too crazy and everyone just tries to deliver the best product possible, it’s going to be a lot of fun to see what other companies come up with.

We have a few partners we’ve been working closely with. We have our strategy focused on the PC and mobile. In our vision, that’s where VR needs to be. It’s going to be an exciting time. All we hope is that, much like Valve—What we all hope is that the VR of the future is really good. What we don’t want to see is bad experiences. We want comfortable breakthrough experiences.

That’s why we’re taking our time. We hope that the other major players out there do take the time to get it right and don’t just throw something over the fence that delivers a bad experience. We’ve heard some rumors that they could do that. We’re a little concerned. We hope they take the time to get it right.

GamesBeat: Are you planning much for the 2014 International CES in January? Will you show off any new things?

Iribe: We’ll see when we get there. I think we’ll have something that gets people excited, but we can’t say what it is yet. It’s still coming together.

GamesBeat: Is there anything else?

Iribe: Thank you for your support along the way. Like when we lost Andrew.

GamesBeat: I think Andrew would be proud of what you’ve done at Oculus.