Adaptive Reality Architects

Gene Feldman: All right. Well, welcome today's episode of Neon Protocol. We're really excited to have a couple people from Dauntless XR with us. So with our Neon Protocol team that's here today, we have Dan, Mark, Lucky, and myself, Gene. And then again, we're joined with Laura Lee and Sophia from Dauntless XR. We're really excited to get a chance to talk with them. This this has kind of been a month in the working to get a chance to sit down with these two. So If you want Laura Lee, I'll start with you. If you wanna go ahead and introduce yourself and then we can go to Sophia and really get get a chance to learn what you guys are doing over there.
Lori-Lee Elliott @ Dauntless: Yeah, thanks for having us. And I didn't realize it was a full panel, but that makes it so much more interesting. I'm sure lots of very dynamic conversations. But
Gene Feldman: Mm-hmm.
Lori-Lee Elliott @ Dauntless: we'll we'll get into that. So yeah, as as I said, I'm Lorely Elliott. I'm the co-founder of Dauntless XR, and I'm joined today by Sophia Lazaro. Sophia is my co-founder. We have quite the co-founder origin story going back to 2016, 17. Yeah. but
Gene Feldman: made it sound like an evil villain origin story.
Lori-Lee Elliott @ Dauntless: I think it depends on your perspective, really. I mean
Gene Feldman: No, yeah, I would love to learn more about it in all honesty.
Lori-Lee Elliott @ Dauntless: Yeah, it was definitely at the kind of height of the height of the XR hype cycle. We were putting this company together and I met Sophia when I was in we were both in Houston. I'd just come back from working a job in Australia and had this idea for a company and we met at a well, actually no, we met through I I worked with her husband in Australia, so we were finally We're all coming back to the States and like meeting all of these significant others and confirming that they were actually real people, and not just like a a text bot or something. Sophia was a real person and I was like, You're way cooler than Mike. I wanna hang out with you instead.
Sofia Lazaro @ Dauntless XR: Yeah, I was new to Houston, was trying to make friends and was invited to a ladies' night of women who had just moved to Houston, showed up. Lorelee waited until everyone was about two glasses of wine in and then pulls out a printed pitch deck and is like, so I have a bunch of ideas of how I think we could use augmented reality in construction and engineering. And most of the women here are engineers. So what do you guys think? And just starts going through this pitch deck. And I'm like, I I like her. This is this is great.
Gene Feldman: that's awesome.
Sofia Lazaro @ Dauntless XR: think we agreed to meet up for coffee the next day or that weekend if I remember. and then I think like four or five hours later our husbands were like, where are you? Because we were still at the coffee shop from like 9 a.m to like 5 p.m later. We just like ordered food and stayed there all day because we could not stop talking about the tech which I had been exposed to in college and all the cool things we thought it could do and all the new You know, at that point there wasn't a lot of hardware to speak of. I think
Gene Feldman: Mm-hmm.
Sofia Lazaro @ Dauntless XR: it was just Oculus and Lorely was about to get her hands on a set of RDGs, if you guys remember those. yeah.
Lori-Lee Elliott @ Dauntless: ODGs, yeah.
Mark G.: O DGs, yeah.
Gene Feldman: absolutely.
Sofia Lazaro @ Dauntless XR: Yeah. And then it just spiraled from there. Many many, many we originally tried to get someone to hire us to build our ideas. Like we started shipping ourselves as like a team to different studios and There wasn't a lot of interest in enterprise applications of AR at
Gene Feldman: Mm-hmm.
Sofia Lazaro @ Dauntless XR: the time. and so like finally we were like, I guess we have to make a company. Like we didn't want to.
Lori-Lee Elliott @ Dauntless: Do it ourselves. Yeah.
Sofia Lazaro @ Dauntless XR: We tried for a good long while to figure out how to just like get someone to hire us to build it. And then yeah, nope. And now a good 10 years later, we're still still building things. Not just XR things, but still still building things that we think can't figure out why someone else hasn't already built it.
Gene Feldman: No, and I think that's and but part of that origin story I think is great because I think one is it's great to see people excited about tech a certain piece of technology that they can have the that we can have these extended conversations. the the podcasts relatively start the same way, all of us just talking in various committees and all of a sudden let's share this. But I think what's great about is you guys really addressed filling a need. You know, One of the things I noticed, especially with early XR, it was all these sizzle reel games. You know, it was all these things just to get people interested, but there wasn't a lot of meat on the back end of it at the early stages. And I think you guys focusing on very specific needs, I think was absolutely fantastic. So tell us a little bit more about what you guys do at Dauntless, because I know like with Dauntless, it seems, and even you kind of alluded to it, that you guys are kinda almost well, I think I think you guys originally started off kinda as more of a middleman, but you're kind of like allowing companies to come to you as the experts to design everything and then turn it over to them. Is that kinda the the feel of it? Or am I totally
Lori-Lee Elliott @ Dauntless: That's definitely
Gene Feldman: misgoing?
Lori-Lee Elliott @ Dauntless: no, no, no. the because we're we're bootstrapped, like we never took any venture capital, we we find the revenue streams where we can, right? So
Gene Feldman: Okay.
Lori-Lee Elliott @ Dauntless: part of what we do now is having people come to us who are subject matter experts in their field and then we use our tech background to build products with them and ship them. but we also have our own applications that we build and and launch as well. And It took us a while to kind of get over the idea that, you know, you you're one company with one big product and that's all you focus on. And we're like, you know, we don't have any investors. We can kind of go do whatever we want, build whatever we want. so yeah, that it in in the beginning, it started out with just one app. We were trying to find product market fit for the app that would become Katana. So that was you know, as Sophia mentioned earlier, I w used to work in engineering and construction. And that's where the initial I like concept for this whole company came
Gene Feldman: Mm-hmm.
Lori-Lee Elliott @ Dauntless: about was I wanted a augmented or it mixed reality wasn't really a thing back then, but like what would become mixed reality application for people that are out in the field, engineering and constructing, commissioning these really big infrastructure projects. I wanted them to be able, that was me, to be able to see all of the the data, the checklists, the drawings. hands-free while you're out there doing this really important work that's also at times kind of hazardous. You really want that hands-free capability. So that was the the just initial idea for K Katana was I want I want one piece of software where I can load all of these assets in there digital native to the digital format. Can barely get that one out. And then be able to like fill out all of these forms and checklists, QAs, sign-offs without having to like literally literally get out a paper form and a binder or clipboard and sign the thing, hand it off to someone who's going to then transpose it into a piece of software somewhere else. Like that was just ridiculous to me. So we I just wanted to solve this one very expensive pain point. and when we started when we started pitching this thing, the Biggest pushback we got was like people don't use paper forms in construction or engineering. They don't use paper. They're like, what are you talking about? And I'm like, I I've been there. They most certainly do print things out and write on them and then hand it to someone else for them to type it up and put it into whatever database they're using. Like that is happening. It was happening in 2016 and it is happening today. And I just thought that
Dan Meeks: Well Lor Lorely, if I c if I can interrupt with
Lori-Lee Elliott @ Dauntless: Yeah.
Dan Meeks: a compliment. I I still use your quote all the time. Make a painkiller, not a vitamin. I love that. So yes,
Lori-Lee Elliott @ Dauntless: Yeah, exactly.
Dan Meeks: yes, you you clearly stated the painkiller that you're trying
Lori-Lee Elliott @ Dauntless: Yeah.
Dan Meeks: to solve there. Yeah. Thanks. Just
Gene Feldman: Absolutely.
Dan Meeks: just wanna interject there.
Gene Feldman: No, and I think I think but you bring up a great point because I worked in manufacturing for years. People forget that when you're on the floor, you don't have access to a computer. You don't have access to a digital screen. And as long as OSHA is locking down the headsets, you don't even have access to those. I mean, paper copies are everywhere. And so no, I I so now how do you 'Cause I mean, a lot has changed since twenty sixteen, but I think there's still some carryover. There's still a lot of that. So I guess how do you overcome some of that? So if somebody was new coming into this, how would you and they say we only want digital, you know, or they're they're locked into something, but how do you guide them to where you need them to be? Does that make sense?
Lori-Lee Elliott @ Dauntless: Yeah, I think so. I'll try to answer and you can tell me if I answered the question the way you intended. But yeah.
Gene Feldman: No, please this is just a conversation, so yeah, we'll go freeform.
Lori-Lee Elliott @ Dauntless: So that was like that was a big thing, right? Like a lot of these and at the time digital transformation was like the LinkedIn buzzword, right? Like all the consultants did technology, woo, digitally transformed. and we were coming in right around that time. And the way, the best way we found to deal with that was to meet the customer where they are. Which is something that is actually in the world of Silicon Valley tech startups, which is what we were trying to position ourselves as, that is not a thing, right? Like you don't come in and do non-scalable things in the beginning, and the people that do don't talk about it. So, like, for example, when Airbnb started, the founders of Airbnb went around to all of the listings and took professional photos because they realized. If you left it up to the the host to take photos, they were usually kind of crappy and had bad lighting and weren't appealing. So they were like, okay, we're gonna go around and fix that. And now an investor, because they were venture-backed, would probably not be too happy with that use of VC money, but it was necessary to get the platform going, right? They don't do that anymore. People hire photographers now to photograph their Airbnb to make it pretty. They do the AI photos and heard from a real estate agent to look for fireplaces because then you can tell if it's AI generated because for whatever reason AI likes to put fireplaces in where there are none. yeah.
Gene Feldman: I've never caught that. That's good. I know if you see the word intersection or hyphens, you know copilot wrote it, but that's a good one.
Lori-Lee Elliott @ Dauntless: fireplaces if whatever A AI image gen. but so you have to do these like non-scalable things in the beginning. So we did a lot of we ended up building like a whole other piece of software to help companies ingest and transform things that are either in PDFs, in WordDocs, in Larry down the hall's head. That was a really common thing. I experienced where it's like, what's the procedure for starting up this thing? And they'd be like, yeah, it's a it's a specialty vendor item. We don't know, but Carl figured it out. Go get Carl. And I'm like, no, I I need him to like write it down somewhere that everyone where I can store it. So when Carl goes on vacation or retires, we can still start up the furnace. Like real like things like that. So we needed a way of capturing all of that data coming in at different different levels of digitization. I guess, you know, electrical signals in your brain is akin to ones and zeros. But you know, so we
Gene Feldman: Mm.
Lori-Lee Elliott @ Dauntless: we built that and that's what became Katana Pro, which is our editor, our or and content creation platform for XR content. And that wasn't in our original pitch, right? Like that wasn't there. We just, you know, we were gonna be the the the CMS and the display for all of these procedures, workflows, checklists. So we ended up building like a whole other piece of software that is not not XR just to deal with that and meet the customer where they are and do it in a way that is a little bit more scalable than going around to each Airbnb and taking photos. And that still exists today. You can go to katanaxr.com and sign up for a free account and start publishing off content to the metaverse on Quest.
Gene Feldman: No. And but I think that's great because I think that's one of the things that I think gets lost in a lot of the messaging that we we hear over the years. And
Lori-Lee Elliott @ Dauntless: Mm-hmm.
Gene Feldman: what I mean is that, you know, first off that you're you don't take any venture capital funds. You know, we do have typically a venture capitalist that's on our that's a part of our committee. So he would he so you're being spared from all the questions. But
Mark G.: Yeah. Ron's gonna save
Lori-Lee Elliott @ Dauntless: Yeah.
Mark G.: you from the validation questions. Ron's not here.
Gene Feldman: Yes. but the but the thing is is that when you don't have investors, you're able to hold to your roadmap a little bit better. You know, because when investors come in, you know, we've seen what has happened with, you know, like Meta, Spatial, a lot of these really the big names early on, the it seems like the investors got involved and said, No, we're going with NFTs, we're going with AI. They followed all the fads and kept changing their roadmaps and disrupted things. But so you're able to keep your roadmap, but I what I thought was really cool is that you identified another need and you didn't have to deter your roadmap. You were able to actually give it an advantage. Does that make sense? Because one of the things I've always been arguing at some point we're we're gonna need normal people, I shouldn't say normal, we're gonna need the average technology person
Lori-Lee Elliott @ Dauntless: Mm-hmm.
Gene Feldman: that's not involved in XR. So like an instructional designer, at some point they're gonna have to design in this. And so I think it's great. So how do you work with that by keeping your roadmap the same and being able to work in these these additional things that you you find along the way? Does that make sense? Without changing your roadmap.
Sofia Lazaro @ Dauntless XR: Yeah, I don't know that I would say that our roadmap doesn't change.
Gene Feldman: Okay, please.
Sofia Lazaro @ Dauntless XR: I would say I would say our roadmap actually changes quite a bit. I would say what doesn't change is that there's a couple through lines for the types of problems that we like to solve. And that kind of is what we end up holding things up against when we have opportunities to go after things, whether they're government or whether they're enterprise, to say, like, does this kind of tie to our through lines and of the types of problems that we want to solve? And Does XR fit as a medium based on what the problem is? And then if it does, we do it. This is the other advantage of being not venture-backed, is we can do things that maybe might look to someone outside the business like, that's a weird random project. But like frankly, if we want to build it, it's our company. Like we're just gonna go build it. Like if we want to. And to be clear, we tried to raise venture capital. I'm glad that we were unsuccessful. Because it's given us a lot more flexibility. And frankly, I think it's why we're still around. Because we've seen other founders who were successful in our space getting venture capital and then having to make good on the promise to their investors. And sometimes that looked like exits that they weren't ready for or that weren't on their terms. And we didn't have to do that. But to be clear, we did try strain for venture capital. We didn't get good deals. We got one so bad that Lorely just blocked the investor, which is still one of my favorite. it's just like Why did you waste my time with this deal? so then we just stop and we've been bootstrapped since and it was you know, maybe a blessing in disguise. But it the the the through line for for me from like a product perspective, and we're really curious what you're thinking about this, is there's there's there's two main things that all of our problems tend to focus around. And one is there are certain work activities where it's just It's best to work hands-free. And a phone and a tablet is a hindrance, not a helper. And we just really like XR as a modality in those scenarios. So, like the construction is is one of them, but there's lots of other ones that we've talked about, right? Like pulling cables and data centers. Like there's all these really interesting applications of just where someone needs information at their fingertips, but where a phone or a tablet or a computer is a is a hindrance. Like watching an aircraft mechanic stand under a plane doing an inspection with a like a a cart with a computer and like flipping. It was just like it was so hard to watch when we were doing some some user some user discovery for one of our Air Force contracts. So I'd say that that's a that's like a through line is like, is there kind of a desli des workforce, whatever you want to call it But someone where their job really has to be done physically and they do need access to information while they're doing it. And whether it's a HoloLens visor, you can flip up and down, whether it's a boom on some of those that you can flip up and down, like can we get them something better than a laptop that they're carrying around, right? That's like one through line that I think we gravitate towards things that are like that. And those things aren't always XR, to be clear. Sometimes it is an iPad app because that's a step in the right direction. The other
Dan Meeks: Yeah.
Sofia Lazaro @ Dauntless XR: One that we keep coming back around to is data that is just
Dan Meeks: Okay.
Sofia Lazaro @ Dauntless XR: really should be looked at in 3D. That every time you're flattening the data to look at it on a piece of paper, you're losing something. You're losing a layer of understanding, you're losing the option to manipulate the data in the way that it should be manipulated. And those are kind of the two modalities where I feel like we just keep coming back to we like solving those types of problems. And yes, sometimes that means that we go after things that people are like, that doesn't look connected. Like that's a web app you're deploying. I'm like, yeah, but it is allowing the user to manipulate the data in a in a way that's deeper than what they used to. So I would say I don't, I our roadmap changes all the time, but the types of problems that hit our roadmap tend to fit into one of those two categories. There's big messy data, you need a better way to manipulate, or it's really it's a it's a physical job and we need to give them a better way to access the data to do their job at a lower error rate.
Dan Meeks: Okay. Sorry.
Gene Feldman: No, I go ahead, Dan.
Dan Meeks: The the question I have, so yes, owning a business and building whatever you want is awesome. I I'm I'm doing that myself. the problem, the thing I want to pick your brain on is selling it and actually making money off of it. Which
Sofia Lazaro @ Dauntless XR: yeah.
Dan Meeks: which which is something while I'm watching from afar what what y'all are doing is amazing. And I'm like, how are they doing this? You know, like like just doing the paperwork on a silver for crying out loud. Like, do you have like a a whole oven full of of AIs just doing the paperwork for you? Like like
Gene Feldman: Ha ha.
Sofia Lazaro @ Dauntless XR: Okay.
Lori-Lee Elliott @ Dauntless: Funny story.
Dan Meeks: it's it's it's it's amazing. So so I'm just kind of wondering like like all right you ideate on a on solving a problem that painkiller and then when you do it do you do you already have clients lined up or or they're a part of your ideation when you come up with a solution or do you make the idea and then go all right let's let's find people that have owies and solve their their problem That's that's my my curiosity.
Sofia Lazaro @ Dauntless XR: I would say we've done a mix of all of those with varying degrees of success. Laura
Lori-Lee Elliott @ Dauntless: Yeah.
Sofia Lazaro @ Dauntless XR: Lorely. What would be your interpretation of which one of those methods is working for us the best right now?
Lori-Lee Elliott @ Dauntless: Well
Gene Feldman: I was say, well what what is your definition of success? I mean, how are I I I would be curious. And I'm not saying it's not right or wrong, you know, I'm like, okay, so what are you guys using as that benchmark to know, okay, this is successful, let's move on with this. This one we need to cut our ties on.
Lori-Lee Elliott @ Dauntless: We actually revisit the like when is it time to just let something die conversation, like fairly frequently. But depending on the nature of the product, so like something like a more consumer or like prosumer product is that it is selling without me having to like pick up the phone and like make a sale, do a sales call, or you know, like there's there's some organic confirmed traction, right? Like it's making sales on its own. We're getting good feedback, like that would be considered a success. And then from there you can go and scale it, right? Like you put then you go and put more organic marketing or paid marketing behind it to be like, okay, this is good. We've got, we've got that traction. I think Sophia, that that's how we would define product market fit. It's been achieved. another success metric is that it gets acquired, get you exit either, you know, you hear a lot about companies exiting, but you can also just sell the IP for a single product. and for from our perspective, does I don't necessarily get a say in what the new owner does with it. If it sits on a shelf or if they use it, that's out of my hands. But an acquisition would be considered a success metric as well.
Gene Feldman: Nice.
Lori-Lee Elliott @ Dauntless: what else? Enterprise is a little harder because like B2B stuff, you can't, you know, go run an Instagram campaign and be like, yeah, we're gonna sell a bunch of enterprise software. Like you have to have some market expertise. You have to or you know, you are literally picking up the phone or sending emails trying to get the things sold. and that is also very product dependent. So like success for like a product we're trying to sell, which I know is an enterprise, but like sell to the Air Force, like B2G. having like one successful contract could up be all you need for it to be like that one was a success, big check mark there, right? Like depending on what it is. But I don't know, I would say like some indicator of product market fit. What about you, Sophia? Yeah.
Sofia Lazaro @ Dauntless XR: Yeah. Were we able to build it profitably and
Gene Feldman: Nice.
Sofia Lazaro @ Dauntless XR: d is someone using it? and even if they bought it to use it and they aren't using it, if we were able to build it profitably and then they wanted it enough to buy it, I'm still calling that a success, right? From my end. and maybe that's again different than if we had our our investor on the line, what they would consider successful. But that this is the nice thing about it's it's that's our definition of success. But
Gene Feldman: No, but but I think it's important because I think sometimes people get convoluted with the data numbers when it comes to XR. Because I mean, there's times where like I had a factory tour. At first I had twenty people a month u using it. Well, to me that was a huge success. And they're like, Well, we've got two thousand employees. Well, I don't have two thousand headsets. You know, I can't we can't get it done in in a time, but I think some people assume it's It they should be getting the same numbers they're getting on like let's say a e-learning course. You know, everybody has access to it. So, you know, how do you have that conversation with the enterprises? Especially, you know, I mean, I came from the enterprise. I know Mark's part of an enterprise. You know, th their timelines are very unique in that if you're not able to get it by their specific time, it's considered a dead project. We're moving on, we're cutting ties. You know, and or if they say, go ahead, Mark.
Mark G.: I I kinda I kinda wanna jump I kinda wanna jump in here, right? 'Cause me being
Gene Feldman: No, please.
Mark G.: the enterprise guy, you know, you got you guys you sort of uniquely sort of played both sides of the markets, right? So one of the question I have for you guys, I'm kinda interested to hear, right, 'cause it's related to this, is can you guys like kinda talk about like the pace? Like when I mean you know, like maybe the salesy jargon is like from, you know, sort of identifying the opportunity to closing the deal. What would you say is the pace like over the years comparing say a consumer versus an enterprise? What's been the pace like? Because I think a lot of people have a perception for both markets. And I'm interested to hear sort of your guys' viewpoints on, you know, what's the time it took typically when you're dealing with say an enterprise customer for solving their their boo-boos, right, versus a consumer sort of thing where you're selling. A X widget or licensing.
Sofia Lazaro @ Dauntless XR: It's months to a year before a meaningful engagement for an enterprise customer. And that could even mean like a pilot, right? It could take a month to a year of collaborating on things, of testing things, of asking them to feedback things for us, of building a relationship before we're, you know, there's some contract in place where they're either paying us to build something custom for them or paying us to license and try something that we already have in-house. And then for a consumer, you know, like we have a a student pilot app out on MetaQuest. The the funnel's pretty short. It's it's days to weeks maybe from when a student pilot finds the app, maybe learns a little bit about the app, reads some reviews, watches a few videos, and then decides to buy it or doesn't. So it's it's dri it's it's dramatic. we play both sides because it allows us to like it gives us more stability from a revenue perspective, right? because you do have to handle those very long sales cycles. And then I would say the government is in the same, for us at least in the same pocket as enterprise, right? that was not our experience when we started doing siblers. the sales cycle for sippers was a lot shorter. At least my memory of it was shorter, Lorely, you can argue me. But it was normal for us to, you know, find a topic we wanted to bid on and then if we want to be under contract and executing within six months. And now that that's not the case in our experience, Experience for most agencies. That is it that that process that was six months is pretty much now a year. So I'd put that in the
Lori-Lee Elliott @ Dauntless: Yeah.
Sofia Lazaro @ Dauntless XR: same bucket. But those are higher doll, higher dollar, higher value contracts
Mark G.: Mm-hmm.
Sofia Lazaro @ Dauntless XR: than you know, one license of a consumer app. So we have to do both. But I think it is normal and for other people working in this space, If you are still in like positive conversation with a potential enterprise customer and you're only six months in, I don't think it's fair to call that a dead lead. I think, you know, go go host a panel together at a conference, write a white paper together and co-market it, try to find ways to like keep the conversation going because the sales cycle is just truly that.
Gene Feldman: Now, on top of that though, because you mentioned piloting, what would you say ca because that's the sales cycle. And I'm with Mark. I it I remember it took me four years to get spatial approved. You know, and it's and for a lot of new companies, it could be very I'm gonna say it could be very daunting. So we're asking Dauntless. Sorry, I couldn't resist.
Sofia Lazaro @ Dauntless XR: I love that.
Gene Feldman: but no, it could be very daunting for these companies, but once you get past the sales cycle, now you have the proof of concept. the pilot security protocols, all the red tape that go into it. So after the year, what are you look then what what could somebody expect for, let's say, the storyboarding proof of concept and then even security protocols to get the software in the company. Does that make sense? Because I think people assume that once you're through the sales cycle, you're ready to go. But there's a whole nother cycle after that. I'm curious how you guys look at it.
Mark G.: Or how or how did you manage it? Like what was sort
Gene Feldman: Yeah.
Mark G.: of the experience, right? I'm interested more in sort of the authentic aspect of it, right? I mean,
Gene Feldman: Absolutely.
Mark G.: you know, if you guys could like maybe share what was the what was what was the learning process or the learning experience behind that, right? Because we all know big corporates are glaciers, right? They move forward very slowly. Maybe if you could share sort of maybe what was the experience like or any sort of Notable items or things you could mention.
Lori-Lee Elliott @ Dauntless: I guess the this actually goes back to what Dan was saying with the painkiller versus the vitamin. If the pain point is hurting them enough, like they will pay for you to come in and do the custom integration to get behind whatever get behind whatever security clearance they need or, you know, get behind their firewall, do all of those things, get access to their databases. If it's hurting them enough, and ideally your pilot shows, Hey, look, we saved you. X amount of hours, Y amount of rework, this amounted to however many millions of dollars. And you can get that in front of the right people, they will be like, okay, we will pay to fix it, fix this because it is stupid not to, right? s some of the other ways we've dealt with that is and Sophia can speak more intelligently on this than I can, is to just not touch the systems that they don't want us interfacing with or provide them with an API that they can connect to, be able to run this as an island and on its own just for sake of speed, right? Like this is its own thing. It lives over here, you know, run that for 30 days and then we will reevaluate. and that we we learned that through working with Air Force because
Sofia Lazaro @ Dauntless XR: Yes.
Lori-Lee Elliott @ Dauntless: If you're doing like even a phase two sibl, you don't have enough time to like get get on AFNET and like do all of that hoop jumping. Even if you have everything ready to go, you just don't have the time to do it in that period of performance. So you just have to run it independently. And that was one of the things we did. We invested in a lot of 5G Wi-Fi pucks for time to make it happen.
Sofia Lazaro @ Dauntless XR: Yeah, I think the other
Gene Feldman: Nice.
Sofia Lazaro @ Dauntless XR: like authentic side of the answer I would say is that we are still learning. Like we have a what I would call like a a zombie lead, like a a c a a potential customer that we think is a great fit. that every time someone new comes into like one or two teams in that business, we get a call being like, hey, I like, we have all your stuff on file. This is so interesting. Tell me about it. And we're like, cool. And we keep coming back to what Lorelise says is the we'll, you know, we'll we'll have the conversations with them. And then up to this point, the pain has not been high enough. For the problems that we want to solve. So we get excitement when someone new onboards and they don't have the context yet of like where all the pain points are and how much money there is to deploy against them. They find us, they get really excited because pretty much everyone on those like three teams in that company has talked to one or both of us at one point in time in the past five years, I would say. but we keep taking the call because someday maybe the the calculus will change on the hardware side, on the cost side for them, on the pain side. But The I don't want to say that we've always been successful because we haven't been. and like this was a client I think when Lino Lorely and I were sitting in a coffee shop and we were like, who would buy this? was on the original list more than 10 years ago. And but it's it's a it's a big enterprise and we haven't made
Mark G.: Mm-hmm.
Sofia Lazaro @ Dauntless XR: it through. We've had a lot of a better time with with smaller companies. So it that's like the the fact of the matter is they can move faster. It's easier for them to stand up like more of an island style pilot. But we're not done trying to be clear. So I think the really authentic answer is we haven't always been successful and we're still trying.
Mark G.: Would you feel that that sort of relates to at big organizations, right? I call it the cycle of stakeholders, right? So like you
Sofia Lazaro @ Dauntless XR: Yeah.
Mark G.: get to that point where you sort of educate the one staker, you're like, You've got and then all of a sudden they're like, Yeah, no, I'm getting I'm moving to this other group and you know. So so you're experiencing that as well based on your yeah.
Sofia Lazaro @ Dauntless XR: yeah. No.
Lori-Lee Elliott @ Dauntless: Yeah, for sure.
Sofia Lazaro @ Dauntless XR: yeah. It's this, it's just this, it's every time there's someone new on like one of three teams in this company, they're like, hey, I found your stuff. We're like, we're like, yeah, we're sure we're all over your files in terms of like market research to help you solve these problems. But the the main thing for
Dan Meeks: Yeah I
Sofia Lazaro @ Dauntless XR: me is I know that they haven't gone with a competitor. So I know it's not us. I know it's that the vitamin painkiller calculus or the cost benefit calculus isn't right yet. For them. So that's my sign to keep trying when they reach back out. But yeah, to be
Gene Feldman: Now
Sofia Lazaro @ Dauntless XR: honest, we're still figuring it out.
Gene Feldman: now besides the pain point of them feeling the pain, I also noticed that there's also a hesitant hesitancy point. You know, I mean meta's really created a lot of hesitancy with the comp with companies. You know,
Sofia Lazaro @ Dauntless XR: Mm-hmm.
Gene Feldman: I don't want to invest if now I don't have certain applications plus the amount they were charging companies. But not getting into a meta bashing contest. but really it's getting into the landscape. I mean, like right now, you know, with with Over the past week, the last announcements, and kind of switching it to a future conversation now. But with over the past couple of weeks, there's been all the announcements of, you know, that the big AI leaders are now saying, no, no, no, no, we need to pull back, you know, and then you got another side saying, no, we need to keep going because other people are working on it. So now there's this schism of AI. But so how would a company that's trying to do what you're doing, you know, be able, you know, not only the pain points, but these these organic points within the technology, how do you guys overcome that? Or how are you looking at that?
Lori-Lee Elliott @ Dauntless: Well
Gene Feldman: 'Cause Lord Lee, especially I saw you giggling when I started bringing it up. So I'm really curious.
Lori-Lee Elliott @ Dauntless: Sophia's already been subjected to a slack, like full-on novel rant about how I think all of this AI is gonna kill us in the next three years is just garbage. Like, I have so many things to say about that. This might not be the forum for it, and Sophia's already heard it once, so I you know I can.
Mark G.: Are you saying you have a certain level of operational insight that might call something about AI? Is that what you're implying? There's a certain operational insight that you contain that you're just like, Yeah, no bro. The people I know ain't happening.
Lori-Lee Elliott @ Dauntless: Yeah, as the the the top secret insider info is someone who has actually used the products in question. Yeah.
Gene Feldman: yeah, and I think what makes it hard too is you start hearing all these horror stories, you know. I mean, like what was it, the AI that cr that was writing code to itself, its future self, you know, on how to break out, and you start hearing all these. But for me, I always go back to R2D2 and C three PO. That's the perfect example of what we should have. But I mean, how does a company that without that's I guess getting I I guess where I'm kind of going to is A c let's say a company's just now getting started and they're they're going to go all in on AI, but I'm worried it's gonna be like a dot-com boom at some point.
Lori-Lee Elliott @ Dauntless: It it will be. Like it it might not be as dramatic as the dot com bubble pop. It might be like a they call a slow leak instead of a dramatic pop, but it will happen when you just look at the unit economics of how these AI companies are operating. Like they're way over leveraged with debt when they talk about, we raised all of this money. Raising money is just another way of saying we took on debt, we took out a loan from
Gene Feldman: Okay.
Lori-Lee Elliott @ Dauntless: a you know, it that's all it is, right? So they're running on crazy amounts of debt. They're not profitable. They're not making any money. And the products that they're putting out there, while they're fantastic and really cool and you can do great things with them, they're not delivering the economic value proportional to how much money went into this thing, right? Like, I don't have the exact numbers in front of me, but like, you know, we're we're throwing in $10 billion into open AI. Is there any company out there that's made ten billion dollars from using open AI's products right now? I haven't heard, they're not speaking up if I so like there will be a a reckoning, right? Like that can't go on forever. And whether that's a big dramatic pop, like we saw.com bubble, or if it's something that just like over time things start falling out. We already saw OpenAI is not gonna IPO in the next 12 to 18 months. They took that off the table, you know, like all of this. But so I think it will happen, right? There will be a pop. And how can you hedge against that? actually goes back to part of our business DNA in that as an XR company from the get-go, we realized if we are going to survive, we have to build software that's hardware agnostic. So we talked about like we were we were looking at the ODGs in the early days and then OGD ODG disappeared, which like those glasses, I still have them. They were ahead of their time, man. Like they were, yeah. They were I I went to their headquarters in San Francisco and like where they were assembling them right down by the water, like they were great a great product. and like that was in 2017. Like anyway, but we saw that kind of like, you know, it did that did its cycle. And we were like, well, if we had been locked into their platform, our whole company would be dead right now because they're gone. So we realized early on we got to be hardware agnostic. We have to be able to go from Headsets that might be on the VR side of the scale, all the way to the heads-up display side of things, be able to port to smartphones and tablets. Like we realized that really early on. So that was baked into all of the products that we built. And any product that we build for someone else, like that is always an option. We have applied the same philosophy to AI. So we use while we're building products that Now not all of our products are AI enabled. Dan, don't come for me. Not all of them have
Gene Feldman: No, no, no.
Lori-Lee Elliott @ Dauntless: AI. But the ones that do, they're model agnostic or they're running off of open source. And Sophia can speak to this side of things more again, more intelligently than I can. But it's we're not locked into any one provider or any one model. If like if anthropic or open AI or whoever disappears tomorrow, we will go plug and play a new model in there, train it up, and away we go. Right? So I think that's really the only thing you can do is to build real IP, not that isn't locked into one particular platform. And that's how you survive. And that you have to make concessions. You you know, there's it there's a downside to it.
Gene Feldman: Absolutely. Now I know a lot of new people will say they're starting new companies. Well, okay, I can't build for every headset right off the bat. You know, I there's no way I can prep for it. So and especially when you get to between meta and pico, the differences. So how so if somebody was starting, how would you guide them to say, all right, here's the headsets maybe you want to start with, or do you do it ad hoc? So let's say, since meta, I'm just throwing out there, so let's say One headset's the number one seller. And then a company says, well, we'll use this. All right. Now we're going to write to it. So you write to those headsets as needed rather than or every app is going to be on every headset from day one.
Lori-Lee Elliott @ Dauntless: No, no you that go on, Sophia.
Sofia Lazaro @ Dauntless XR: No, no. I mean, go ahead, Larley. Well, and this kind of
Gene Feldman: Mm-hmm.
Sofia Lazaro @ Dauntless XR: circles back to Dan's earlier question about how we sell. a lot of it is we get that we will get them to pay us to do it. And but we've just done as much engineering as we can on our side to make that lift as small as possible. But no, we don't. we don't not all of our apps are available on every headset. Do we have the ability to go to every headset? with like Not too much pain, absolutely. but we're not gonna do it all at our own cost.
Mark G.: Do you s do you see the okay?
Gene Feldman: Nice.
Dan Meeks: Well well Jean, hold on, let me let me push back a little bit. So it depends on the on on the level of fit and I think some of your products, using WebXR, any any headset that has a browser in it should be able to run. and I'm a little surprised, maybe because WebXR could be a little janky at times. I mean now there's Web GPU and there's all sorts of amazing stuff that you can do inside the browser itself. I'm a little surprised because Now you can build for every browser. I mean, you saw me zooming around Mount Rainier. That's WebXR. That's in a browser. That's what I'm testing today. So
Mark G.: There's some challenges with password right now and WebXR.
Dan Meeks: Really? Okay. Yeah, I didn't want to drill it into a technical conversation, but it's yeah, I'm j I'm just a little surprised that WebXR just doesn't really get the love that that maybe it deserves. but anyway, yeah, that's just my observation on it.
Mark G.: So that relates to your observation the question I have now. So do you guys see or do you guys feel that in sort of our space that there's been a lot of selling of hardware products without a solution? And that you guys are really sort of fitting that gap or that spot where you're more f you you're you're looking at the product of hardware but really assisting these enterprises and small businesses to a proper solution what generally would you say in regards to that since you know Dan's very Dan's very much as you can tell into WebGL right how would you how would you manage or what would be the advice Talking to a customer like Dan, where they're like, hey, I'm in the engineering field. I want to do something with WebGL, but here's my problem. What would be sort of your approach to managing that?
Lori-Lee Elliott @ Dauntless: Sophia, do you wanna take this one? Like the I think the reason we haven't touched web as much is just a timing thing, right? Like some of the the earlier products we were working on were augmented and on the augmented and mixed reality side of the spectrum, right? Like we didn't get into the simulation side of things for quite a ways into the company's history. And then when we were doing things that were maybe more practical for web, WebXR like went away. and it was just maybe inconvenient timing, right? Now we're looking at something like one of our other applications, Aura, which is we developed for Air Force for mission debrief, would be a great candidate for web. And we just, you know, we need the demand signal to go move it over there, but we absolutely would. but yeah I think if anything the the web not getting love from us was just a timing thing and I don't know maybe like there there's no reason why it was omitted. Just it hasn't come up yet. Yeah. Yeah.
Dan Meeks: I I get that. Yeah. Web GPU is a very recent development, so that
Gene Feldman: Yeah.
Dan Meeks: makes sense. I yeah, I can see that.
Lori-Lee Elliott @ Dauntless: Yeah, we were when we were talking to Greg from Portal and talking about using his products, there were a lot of times where we were like, we wish we'd had this like three years ago when we were demoing XYZ, because this would have been so much easier. If you're doing any, I think, headset demo at a conference, having Portal would be prime because then you don't have to put on the headset, you still get the experience, you still get all of the the interactions. But Mark, kind of going back to what you were saying, there were kind of like two parts to it that like jumped out at me. So we got our first money in to the company, like outside money, because Magic Leap had built a headset that didn't have any apps for it. So one of our first customer was Magic Leap, and they paid us to we kept all of our IP, but to develop our application from what was it? It was Android, to get it on Lumen OS, which our IP, that was a terrible thing to have to build for, but like we did it. and and and that's still a very common problem today where people companies go and build these headsets and expect that there's like a gonna be a lineup out the door at Best Buy to go buy a headset, like someone's gonna buy a PlayStation or an Xbox. And I'm like, no, no, no, you have not created that market demand yet. You can't just build a headset and they will come. You have to build a headset for a reason, right? and I saw it really clearly with the meta rayband displays. So there is so much potential in that form factor. Not gonna necessarily I don't know that Meta's gonna be the one to carry it over the line, but like in that form factor of like a pretty normal pair of of glasses or sunglasses where you can see stuff, right? Like being able to use it for maps and navigation, checking your email about having to look at your phone, all of that. It has like some it has the potential for some basic utility, but for whatever reason, they have not plugged that in. but it I like and they haven't opened up a marketplace for those devices. And I'm like you need to it the regardless of the platform, it needs some kind of killer app that people are
Gene Feldman: Yeah.
Lori-Lee Elliott @ Dauntless: going to buy the hardware just to have that capability. And I don't think that for glasses, VR devices different, different category, but for anything see-through or pass through, it is going to be some kind of unsexy everyday utility. And I don't know why, but all these companies are like, no, but we want it to be a game. Like don't you want
Gene Feldman: Yeah.
Lori-Lee Elliott @ Dauntless: to play snake on your glasses? I'm like, no, bro, I want to check my text messages. Like
Gene Feldman: Well well it's it to me it always goes back to I think the i switch the iPhone transition was the great was a great use case in change management. Because
Lori-Lee Elliott @ Dauntless: Mm-hmm.
Gene Feldman: when the iPhone first came out, unless you were a star diehard Star Wars or Star Trek fanatic, you didn't get the iPhone because you won't either want the lightsaber or the the tricorder, you know? And then all because people had Blackberries. Then all of a sudden they added Outlook to the And Microsoft teamed up with them. And then all of a sudden you had all the out all the Windows apps available. And
Lori-Lee Elliott @ Dauntless: Mm-hmm.
Gene Feldman: now all of a sudden it gave that use case of this is why we need to use it. And it now it's where people have separation anxiety. And I agree with you. It the games are great. I mean, but I go back to I'm a Tron fanatic. The perfect game for VR would have been Tron or Ready Player One. And nobody thought about because it's it's so simple. We're not doing that. We want something that's gonna blow the socks off. But change management starts with just a simple change of behavior that I think we miss out on, you know, by shooting sometimes for these just huge projects.
Lori-Lee Elliott @ Dauntless: Yeah. Yeah, I mean so
Gene Feldman: Yeah, I mean yeah. Sorry, I'm getting ready to go into my NFT conversation. I'm not gonna do
Lori-Lee Elliott @ Dauntless: Yeah.
Gene Feldman: that. now so we're we've had talked for about an hour and thank you gu ladies so much for joining. I know we've really kind of picked your brain. but the one thing that we usually try to usually try to end with is If you were had the chance to share some advice with somebody that's getting started based on your 10 years, you know, like I know you talked about the glasses. You know, we kind of had a missed opportunity with that. I still think there's an opportunity. I think having having only eight stores in the entire country to sell it really kind of hurt them, as well as you had to try them on before you could buy them. You know, which I get it, they're trying to avoid the Apple situation, you know, of what I think a 50% return rate of the Vision Pro. Last I heard. So you have these companies that okay, they take risks, they don't take risks. So from your 10 year experience, if you had the chance to talk to a new company or somebody was picking your brain, what type of advice could we share with our listeners that that you could offer?
Sofia Lazaro @ Dauntless XR: I have I have two, and I would say these apply to like non-XR and AI companies too. But one would be Really get specific with yourself and with your co-founder about the scale and nature of the product and the business that you're trying to build, and then decide how to fund it. don't just follow this default path of you're supposed to have an idea, pitch deck, go range venture capital. Like, really think about like what is the market for this business? What is revenue look like? What type of, what do I want my lifestyle to look like as a founder? And does that align with my co-founders? What do I want an exit to look like for this business? And does that align with my co-founders? And then decides whether or not to raise. Because I do think we invested precious time in trying to be a traditional Silicon Valley startup when it wasn't the right thing for the business. And that effort could have been placed other places, right? If if we had, I think, had a had a stricter evaluation earlier, which we had to learn what we needed to learn. That's fine. But I think we had a lot of people pushing us towards a pitch and raise VC path. And we like w we wasted our time. It could have been selling to customers instead of to investors. And then that leads me into my second piece of advice, which is sell it before you build it. so one, that is a thing. if you have an idea and you have the right client and they're like, I think I could be a customer of this, be like, cool, be my design partner and like strike a deal. You invest in me to build it and then you get a like really sweet licensing deal, where you're not like paying what I'm gonna charge other people and you get to help give feedback while it's being built. That is a real thing. whether you're doing that on the B2B side or the consumer side, is is try and sell it before you before you build it. I think that is something that I wish I had learned earlier and that we have embedded into more of our sales cycles moving forward and I think will be a best case practice for us. But Those would those would be the two is really think about the sh the the shape and the nature of the business that you're trying to build and whether or not VC is the right fit for that. And consider the founder lifestyle as well. And try and sell it before you build it. I think there's this sense that you have to build it in stealth and don't tell anyone and then release it to the world. And I think that is the exact opposite way to build in my experience so far. It has been much better. we've gotten much stronger market signals and better market fit when we've done it the opposite way.
Gene Feldman: No, I think then too you can kind of respond your ideas of what the final product's gonna be based on input you may receive through that selling process. You know, like to me it reminds me of the Tucker car. You know, that you know I know they only sold 50 of them, but they sold all the ideas long before the car was ever even put together. They're still carried over. Sorry, I'm digressing into auto history. I I I digress.
Dan Meeks: No, I I well, I was kinda kinda turning my head listening to that advice because wow, man, I've got so many stories
Gene Feldman: Yeah.
Dan Meeks: on the military side of the prime contractors just completely screwing over some young engineer that's got a great idea that's building alongside with them. where they just outright steal it, you know, and they say, Well, it it said in the paperwork in this long contract that you signed to design with us that we get to steal it from you. Yeah, got about three examples in my head. I don't wanna libel anybody, but so when you gave that advice I'm like, Yeah, I'd love to, but they have this way of kinda just taking you for the ringer, so I don't know how you did it, but yeah.
Mark G.: Just
Sofia Lazaro @ Dauntless XR: That's that's fair and
Lori-Lee Elliott @ Dauntless: I mean military.
Sofia Lazaro @ Dauntless XR: that's that's fair. You do have to know what you're doing from an IP agreement standpoint. and so maybe the third piece of advice is have a good budget for lawyers. I really like our lawyers.
Dan Meeks: Yeah. Yeah.
Mark G.: I I I I would just I would just want to
Gene Feldman: I love it.
Mark G.: add that me being the guy usually on the other end, right? You know, for a large organization gap, they try to go draconian, right? So the other piece or another piece of advice there is also find your inside cheat code for that organization, right? Because they're gonna be your champion for the product developer.
Lori-Lee Elliott @ Dauntless: Yeah, that actually gels really well what I was what I was thinking of contributing to this to this part of the
Gene Feldman: No, please.
Lori-Lee Elliott @ Dauntless: conversation because I was trying to think back about like I I do mentoring every week through ADP lists. So I was like, what is something that I'm continually telling all of these mentees, right? And It the thing that keeps coming up is like I built this thing and now I don't know how to sell it. I don't know how to market it. I don't know what my go-to-market is. So it relates to that of like when you're when you found the product concept that is a pain point and not a vitamin, and you've decided where it's gonna fit on the is this venture scale, is this more like of a lifestyle business product, like you figure that out. For the idea to actually be viable and for it to be successful, you have to have go-to-market. And what if you're dealing if you're a B2B and you're dealing with big enterprise and you don't have a giant like enterprise sales budget to have ten people on the phones all day, like you gotta have that insider connection, right? Like that's why so many people that start B2B came from enterprise themselves, right? Like you have that I can go phone a friend, I know this guy. You bring that with you, right? Coming from government, I think it's similar if you have if you know like okay I know how to s if I even if I don't know the exact like procurement person or acquisition specialist that I'm gonna be dealing with, I at least you know a little bit about the process for how to sell to government, which can go a long way. Dealing with government prime contractors, and I won't name any of them, but they're sneaky bastards. So you gotta be careful when you're if if you're dealing with them at all. Like, you know, I'm not I'm not too concerned about the Air Force stealing my IP, but like there are other people where I wouldn't won't even talk to them when they come to my booth at a conference. You know, like so you have to, you know, have have that level of of due diligence about what you're doing. But the thing that I keep having to explain like to the peop to the people that come to me that are starting out is you do have to be able able to sell the thing. And that can mean if it's on the more consumer side, like doing a build in public and Creating a lot of marketing yourself and bringing people along for the ride and creating that demand. I find a lot of people are very uncomfortable with that concept. They're like, I don't want to become an influencer. And I'm like, trust me, you won't. It is really hard to become an influencer. and if you start posting on social media and brands start offering to send you free stuff, like you can say no and you will be not an influencer. for B2B like you or if you know people who are less comfortable with that or think that that's not right for their brand, you can build slightly off-camera where you're still sharing about what you're doing without giving away all of your secret sauce. But you have to have one of those things, right? Like you have to have the insider track, you have to have the insider knowledge of how do you sell to this organization, what marketplaces do I need to be on, like where do I need to be registered, or you have to be willing to go out there and put your face in front of it and do all of that marketing, write the email newsletters, like get the get the signups flowing, build your own sales funnel, or it it will not sell itself. Like that is not a thing. and if you don't have all of those pieces, like either you have to go learn them or go find a co-founder or an early hire that does know how to do them. There isn't really a workaround to to filling those requirements, right? And I just say that because I also spend a lot of time explaining to these mentees, like, there's no like magic button to press to just be like, yeah, get customers here. Like work goes
Sofia Lazaro @ Dauntless XR: Sales of sales.
Lori-Lee Elliott @ Dauntless: sales is sales, right?
Sofia Lazaro @ Dauntless XR: You have to do the work.
Gene Feldman: Uhhuh.
Lori-Lee Elliott @ Dauntless: and the the other thing like, that's cringe or this is cringe or whatever. Like, I hear that a lot too. And I'm like, look, if you really believe in the thing that you built and that you're selling, it is absolutely not cringe to go on LinkedIn or go on whatever platform and talk about why this is important, why you should know about it, how it's gonna change your life. You know, like it we get a little removed with a lot of the products we're building are kind of abstract and you can't put your hands on them. But like if you had built a water filtration system that filters water, is really cheap and runs on it's solar powered. So you don't even need to plug it in and it's amazing. It's gonna save millions of lives because now people will have clean drinking water. It would not be cringe for you to go online and be like, hey, I need to tell you about this. Like this is amazing. It does all these things. It's gonna be have all of these benefits. Like no one would be like, look at that person talking about how we're saving people with clean water. Like
Gene Feldman: Look at what the average person shares on social media to begin with.
Lori-Lee Elliott @ Dauntless: Yeah.
Gene Feldman: You know, I would rather know that you can say that you can save people with water than what your cooking recipe was for tonight, you know?
Lori-Lee Elliott @ Dauntless: I mean depends what it is. If you've got something
Gene Feldman: Ha ha ha.
Lori-Lee Elliott @ Dauntless: that's like high protein and like maybe keto, like might might save that one.
Gene Feldman: See, I'm I'm in the Midwest. Anything with a Dutch oven.
Lori-Lee Elliott @ Dauntless: Ha ha
Sofia Lazaro @ Dauntless XR: Love my death driven.
Gene Feldman: So no, absolutely great. And I think I love the counterpoints too because you know, because one thing is that with this whole technology is there is there isn't one size fits all yet. You know, there's you know, like for me, I've always learned that you, you know, like you find your a trusted group of ecosystem of people that you know that you can share the early ideas with. That you know aren't going to take them and run with them and that will offer you key advice. And then you can start kind of flush flushing it out from there. So, but ladies, it w we're at the hour mark. I know it's midday. I don't want to eat up all your time from your sales. so first off, thank you again. This was absolutely a fantastic conversation. for those listening, please feel free to check out some of our other episodes or if you want to go to LinkedIn, feel free to follow us, offer up suggestions for any future guests or future topics. there we are gonna our next episode is hopefully gonna be a live system update where we're gonna invite some past guest members in and we're gonna talk about some of the current headlines right now. I know we've been relatively quiet on them, but we're preparing our conversation now. so please feel free to like, follow, share. It will help our channel grow. we are definitely open to sponsorship. Other than that, again, ladies, thank you. Everybody, thank you for listening, and we'll catch you next time on the Neon Protocol.