[Forbes/UA] Interview with CEO of AR23D Studio. Augmented Reality.

Eugene Sysoev and Andrew Kolodyuk’s Venture fund invested  up to  $1 mln into a company called Augmented Pixels(ex-AR23D Studio).

Vitaliy Goncharuk, CEO, AR23D Studio

Today Venture Fund AVentures Capital announced the acquisition of a share of the Odessa startup, Augmented Pixels formerly known as AR23D Studio. “The fund has paid  up to  $ 1 million for 25% of the company”, said one of the participants of the deal. Augmented Pixels develops augmented reality technology. This market is still in its initial phase of development, but analysts from ARChart research firm predict that in 2014 its volume will exceed $1 billion.

Founder and co-owner of Augmented Pixels, Vitaly Goncharuk told Forbes about his business and future plans:

– What is the history of the company?

– In 2003-2004, I worked as a programmer and project manager in the IT-company, Shape Services AG, in which I invited  a lot of my friends and classmates. Then I left the IT-sector and worked in finance. In 2009, I decided to return to IT and financed several startups. Among them, there was a project on semantic analysis which entered the top 10 of the first Moscow TechCrunch, a project on augmented reality AR23D and several other startups.  AR23D became successful. One of my partners developed a game called AR Basketball; on the basis of this game we started developing a separate company that was engaged in augmented reality. In 2011, we received a number of interesting orders and became profitable. Based in Odessa, our team consists of ten highly-skilled  specialists, plus a few freelancers.

– What Technologies of Augmented Reality do you develop?

– Augmented Reality is a combination of reality and virtual elements. There are two main areas: mobile applications and B2B-solutions for retail. We focus more on the mobile area because these solutions easily find their way into mass production and can be sold worldwide. Nevertheless, we develop specific products for B2B as well.

ar panor

– What specific solutions do you have in your portfolio?

– The first major order we received was in 2011 from the periodicals in Saudi Arabia. They were publishing augmented reality markers in magazines. By pointing a tablet or a smartphone at a marker, you could see a three-dimensional model or a video of the goods advertised. Later we have created an augmented reality browser GlorAR, which allows you to bind virtual 3D-objects to specific GPS-coordinates. We can place this model anywhere on the street near the monument or in the mall. Using mobile gadgets all users will be able to see it there. Third our product is AR Panoramas, this solution allows you to show a panorama of objects or the environment in augmented reality. For example, you can take a photograph of an interior of a car and then using our product show it on the tablet to users who will be able to feel themselves inside the car and allow them to look around. This solution is especially in demand by sales companies and real estate agencies. Our main focus is on games for mobile devices. 

– How do you play the game with augmented reality? What is the physics of the process?

– For example, in one game a dragon is flying around you. If you point the tablet at the wall of the room, the dragon will be flying with a background of this wall, responding to the movement of the screen, growling when you press on it and so on. Using special algorithms, our product analyzes the surroundings and finds key points. When you move the device, the software keeps track of its path and automatically changes the picture. As a result, you have a feeling that an object that is on the screen is in the same room as you and responds to your movements.

Screen Shot 2012-09-22 at 3.21.18 PM

– What markets do you work with? Who are your customers?

– We have no customers in Ukraine and Russia. It is very difficult to explain to someone here what Augmented reality is. Due to this, expenses for attracting customers are very high. Now that we have changed our orientation towards the mass market, we will work through the AppStore and Android Market. We have 5-6 B2B-customers the U.S., Europe and Middle East. Our key customer is the American GPIXA, owned by the founders of the Kerner Group.

– Were you intentionally looking for an investor?

– When a company becomes profitable so quickly investors come themselves. We were looking for interesting contacts and partnerships. AVentures Capital proved to be very adequate, they have necessary competencies. 

– Did you raise money from local and international investors through this fund?

– Yes. Managing directors Andrew Kolodyuk and Eugene Sysoev will enter the board of company directors. In addition, we have been discussing the next round of investments in 2014 with more than ten international venture capital funds.

– What are the prospects for augmented reality market?

– Most analysts predict that in the next few years the market will show growth of up to two to three times per year. High quality applications have finally begun to appear on the market and are available to ordinary users. A second important trend is the development of special devices for augmented reality, in particular, Google Glasses.

-You are saying that you expect to occupy 10% of the global market of augmented reality in your niche. Which niche do you have in mind?

– We aim to get a 10% share from the whole market of mobile augmented reality. Plus we plan to gain a certain position on the market of B2B-solutions in the real estate and retail.

Links and references:

AR23D Studio   – http://ar23d.com

Vitaliy Goncharuk – http://ua.linkedin.com/in/vactivity/

Aventures  Capital  – http://aventurescapital.com

Original interview (Ukrainian language) in Forbes/Ukraine Magazine can be found here

Future belongs to Augmented Reality and 3D interfaces


V
italiy Goncharuk, CEO, AR23D Studio

In 2001 I was working on my first start-up for mobile phones, when the market of smartphones was just emerging, and I heard a lot of pessimistic remarks, such as “Who will be willing to have such big phones?” or “Why do we need smartphones when we have computers?”

After the mass release of Nokia, and even more with iPhone release no one asks such “stupid” questions anymore – everyone makes profit :=)

It happened that in 2010 I became a co-founder of the company in Augmented Reality sphere, where AR Glasses are the main long-term “hardware” trend that can bring a real explosion of profitability and the mass market, which will replace the smartphone market.

While working in this market I got a sense of déjà vu – I think I heard nearly everything about AR glasses, starting from «Just imagine that everyone will have AR glasses on their faces – it’s so stupid» (today a person can go through the whole day in the Bluetooth headset and conventional glasses and no one sees a problem in this) to “I’ll not believe that glasses will be cheaper than $500 by 2020» (Vuzix announced glasses for $ 500 in 2013, Google will probably release its own ones even cheaper).
And moreover, I hear this from people who are not far from technology, but from IT investors and founders of IT-companies that develop software for mobile phones.

In this situation there is nothing else to do but go on developing products and technologies ;=)

After all It will take only 1-2 years till AR Glasses will functionally substitute smartphones and will be sold for $200-300 each.

In connection with this, we expect a boom in Augmented Reality applications (binded to the space, objects, location and user’s movements), including both the creation of new services and games, and a redevelopment of the existing applications to comply with their specifications – 3D interface, as in 3D glasses almost all existing applications with 2D interfaces will look at least absurd and awkward in the environment.

Author:
AR23D Studio – Augmented Reality Solutions
CEO
Vitaliy Goncharuk
E-mail: ceo@ar23d.com

Augmented Reality: forget about markers!


V
italiy Goncharuk, CEO, AR23D Studio

While communicating with investors and  journalists last year, I could not help noticing their interest “… BUT partly mixed with pessimism” regarding the Augmented Reality sphere.

This is primarily due to the “gap” between the beautiful concepts and the lack of commercially successful solutions and companies on the market (gaming, B2B, etc.).

The technological reason for the lack of commercial results is that almost all solutions up to 2012 were based on markers (including markers-“pictures”, i.e. markerless).

But the biggest problem of the marker – the user does not want to waste time on printing it out!

No matter how beautiful and of high quality is the solution you create and how much money you invest in the marketing – everything comes down to the problem of markers – no one wants to print anything 🙁

Because of this issue the Augmented Reality solutions with markers had their “user value” only in very narrow segments, such as additional interactive “layer” of advertising in printed magazines or btl-campaigns.

In all other spheres such solutions received good reviews during test demonstrations, but didn’t show any serious business results.

That is why the reputation of Augmented reality has been damaged in the eyes of investors.

What has changed in 2012?

Beside the Augmented Reality solutions with markers there are two other basic technologies (more complex to implement than the recognition of “markers”), which potentially can be used – it’s SLAM and AR, working on sensors (gyro, accelerometer, compass, gps).

Their advantage is that in order to use applications based on these two technologies, the user does not need to print anything.

Just launch it and nothing more!

And In 2012 AR industry got two technologies for mobile phones that can be used – it’s SLAM, integrated into the SDK from Metaio and the platform GlorAR (AR based on sensors from AR23D Studio).

It was also announced that Dekko was going to develop the SLAM technology and games.
All experts definitely agree that SLAM is the ideal technology for the Augmented reality, but for the moment everything that is on the market doesn’t work or works badly.

My colleagues and I, for example, weren’t able to start any of the games based on SLAM neither at home nor in the office – it could be used only under some specific conditions.

So our forecast – in the next 2-3 years we see AR solutions mainly based on platforms similar to GlorAR – i.e. mix of SLAM and sensor-based AR (we are seriously working on SLAM too, but have not decided to release any market product yet – too many restrictions in the use of the technology to satisfy users expectations for now).

With the significant increase of mobile phones power and the appearance of glasses the new “era of SLAM” will start, but only those will benefit in it, who will be able to create content on the basis of existing technologies and platforms in the next 2-3 years.

Conclusion

No doubt the markers have played their role in the development of Augmented Reality, but they weren’t lucky – they need to be printed. The second reason of their unpopularity – the absence of common AR browser on mobile devices.

That’s why in the next 2-4 years we should expect commercially successful projects in the sphere of Augmented Reality only on the basis of SLAM and AR, based on sensors.

You wonder if markers can come back?

Yes, they can, but only with the creation of common (i.e. pre-installed) AR browser on mobile phones and glasses. But in any case, the use of markers will remain limited.
This is the reason we suggest all journalists and investors to have a closer look on AR technologies and platforms, such as SLAM and AR, based on sensors, and in particular on those that can be easily ported on Google Glass etc.

Author:
AR23D Studio – Augmented Reality Solutions
CEO
Vitaliy Goncharuk
E-mail: ceo@ar23d.com