Kaleido Insights’ Impact Analysis on Virtual/Augmented/Mixed Reality


By Jaimy Szymanski, Jeremiah Owyang, Jessica Groopman, and Rebecca Lieb of Kaleido Insights.

Virtual Reality Headsets. Image From Heavy.com

As VR/AR/MR make their way into the corporate ecosystem, positive impacts and operational efficiencies abound. From sales and service; to HR, safety, and training; to engineering and product development, teams feel their wake and harness the power of informational overlay.

Kaleido Insights’ methodology for analyzing emerging technology assesses the impacts on humans, on businesses, and on the ecosystem. As part of our ongoing coverage, we’ll be covering a series of topics using our methodology to help business leaders first understand, and then see beyond the bright and shiny and cut right to what matters.

In each post, all Kaleido Insights analysts conduct a joint analysis session around one topic (e.g. technology, event, announcement, etc.). In this post, we analyze the business and organizational impacts of virtual, augmented, and mixed reality.

Topic: VR/AR/MR

Oculus Rift; HTC Vive, Playstation VR, Google Cardboard, Microsoft Hololens, Samsung Gear VR, other plug-and-play smartphone options

Impact Analysis: Organizations & Business

Business Opportunities and Use Cases
As VR/AR/MR have permeated business environments, leaders are recognizing that opportunities reach beyond video gaming and novelty. VR/AR/MR have a place in every industry, with multiple use cases. Many of these use cases require interoperability with other technologies to reach full potential, including artificial intelligence (AI), computer vision, wearables, drones, 3D-printing, facial recognition, and more.

  • Immersive training and education. Organizations have the opportunity to use VR to train employees — either onsite or remotely — in virtual, simulated worksite environments. Consider options in scaling complex equipment, repair, or other training programs to multiple employees at various locations. EON Reality is experimenting with Chick-fil-A on a training program that immerses potential employees in a restaurant kitchen to train in a virtual environment. VR training is also effective in immersing trainees in high-pressure or otherwise dangerous scenarios. There are AR/MR education opportunities to train employees on-the-job using visual informational overlay via augmented reality glasses or similar technologies. This effectively brings a catalog of contextual product and merchandising data to the forefront of employee access. There are numerous examples of surgeons and doctors using VR and AR for complex surgical training.
  • Skills, Operating, and Repair Guidance. Augmented and mixed reality shine in their facilitation of efficient employee guidance while performing difficult or heavily information-dependent skills, operating machinery, or repairing equipment. Viewed as a visual overlay to the real world via AR glasses or specialty headsets, mobile phones, or tablets, AR expands information about physical equipment that is useful to employees. This may include procedural directions, machine models, serial numbers, repair parts, operating manuals, and more. For example, Caterpillartechnicians are outfitted with Hololens and AR-equipped tablets (see image below) to provide informational overlays to increase repair efficiency and accuracy.

Image Sources: Caterpillar Inc.’s YouTube Video, “Augmented Reality Brings Data to Life at Caterpillar” and the Internet of Things (IoT) Institute

  • Engineering Planning and Product Development. VR gives organizations the opportunity to understand products, parts, and machinery before they hit production. By creating 3D models that can be explored via virtual reality software and hardware, engineers are able to better predict potential design issues, collisions among other parts or equipment, plan for ergonomics of employee operations, and steer clear of potential safety concerns. Using VR, manufacturing design and engineering transforms from reactive to proactive, allowing for entire teams to easily weigh in on the process before any real-world applications are implemented.
  • Sales and Marketing Engagement. Virtual reality can also be used as both a technical sales and consumer sales tool. In industrial capacities, VR offers the ability to view intricacies of machinery, parts, or tooling before a purchase order is signed. This builds bridges between those designing the technologies and equipment with less technical buyers. By creating proofs-of-concept in VR, sales prospects are immersed and influenced in a deeper way during design reviews. Looking toward consumer focused AR, retailers like Uniqlo (see image below) are experimenting with virtual dressing rooms, allowing customers to “try on” clothing without ever disrobing, and Ikea is well-known for its AR app that places furniture into the homes of its customers. Imagine the opportunity for a service like StitchFix to create a virtual stylist environment for customers to access their monthly shipments and try them on (with potential for upselling) before the physical clothing is even sent.

Above image: Uniqlo’s “Magic Mirror” augmented reality experience

  • Immersive Storytelling. From the New York Times, to Charity Water, to Save the Children International, VR has been used to tell more gripping and emotional stories in immersive environments. VR/AR/MR are growing in organizational content marketing strategies as another channel to voice brand promise, promote new products and services, and raise awareness for causes. These technologies are also being used to augment tourist experiences in new ways, as Disney World is readying a Star Wars VR experience to launch next year.

Business Models
We’ll see VR/AR/MR enhancing existing business models via enabling new revenue streams in new channels. There are also significant opportunities to achieve cost savings in maintenance, repair, and design. There may also be business model potential in creating goods in virtual or augmented environments and either a. ordering them for real-world shipment or b. 3D-printing them at home. New communications models are already emerging to meet friends in virtual reality spaces, as is possible in “Rec Room” on the Steam network for HTC Vive. Look for new opportunities to emerge in the travel space as well, when VR users can virtually visit exotic locations for a price.

Organizational Structure and Leadership
VR/AR/MR pushes the internal departmental boundaries at organizations that are not equipped to rapidly innovate and harness the power of disruptive technologies. The lines will continue to blur between digital, marketing, IT, and innovation groups as a greater focus on CX and EX (employee experience) rises from new VR/AR/MR implementations. The rise of the “Innovation Center of Excellence” gives way to quicker VR/AR/MR initiative development when multiple business units are working in synchronicity. The first department to deploy VR/AR/MR will depend on its use case (e.g. if it’s consumer-focused, it will likely be marketing, whereas if it’s training focus it may sprout from a partnership between IT and HR).

Change Management
As with any disruptive technology, expect push-back from older generations or late adopters who have not yet found a valuable use case for VR/AR/MR in their lifestyle or career. These technologies begin to (or, fully, in some cases) replace human-to-human, real-world interactions, as well as require new user skillsets, which can be difficult for employees to embrace. In corporate environments, utilizing training and education programs around on-the-job VR/AR/MR use cases that make work easier, more efficient, or save money can be an effective foray into catalyzing change management and helping ease employees into their use.

Another popular challenge related to change management is that VR/AR/MR technology is initially viewed as a novelty. Companies may receive mixed reception from customers and prospects as to the viability of VR/AR as an engineering/design/sales tool. They’re intrigued by the possibility, but not convinced of its value or capabilities. Only through assigning measurable objectives, regular experimentation, learning, and failing fast, can organizations quickly prove its value.

Data Lifecycle
In the world of relatively nascent VR, the provider with the most content ultimately wins. This reward typically falls to one in the headset monopoly of Oculus Rift, HTC Vive and Playstation VR (of which, Vive sees greatest developer popularity). Consumers choose the headset that offers the content they desire, and companies follow suit in the “what can you do for my use case?” mindset. AR/MR are broader and more accessible across devices, as the associated hardware is most often a mobile phone. Apple’s AR Kit has also democratized development with its accessibility and ease of use.

Process, Governance, Compliance
Internal process and governance around VR/AR/MR initiatives will depend on the use cases established. In terms of compliance, we foresee the biggest hurdle being consent in regard to AR/MR, especially on a global scale where protecting individual privacy and identity can be paramount to a country’s culture. When anyone can use AR/MR facial recognition features, or overlay data on their environment, compliance is difficult to enforce at every level of consumer, employee, and ecosystem interaction.

Specific metrics attached to VR/AR/MR are dependent on the business use case established for the technology within an organization. Sample metrics may include:

  • Decrease in accidents on trained scenarios
  • More efficient repairs and installations
  • Reduced maintenance costs and shop-floor collisions
  • Reduced rework on jobs over time
  • Increased profitability on programming tools and fixtures
  • More efficient use of time on redesigns (less total redesigns)
  • More efficient troubleshooting
  • More complete design back-ups
  • Increased sales and more satisfied customers due to involvement in VR process

Challenges & Risk Mitigation
Companies misunderstand technology needs and costs associated with virtual reality. Even if starting small and understanding minimum technology requirements, bringing VR/AR/MR into a facility requires costs in hardware (both computers that can handle the necessary operating load and the actual hardware headsets, glasses, immersive cubes, screen panels, etc.), as well as software. Finally, virtual reality presents new challenges to content marketers who are not accustomed to non-linear storytelling that requires multiple scenarios vs. a start-to-finish script. Machine and deep learning will prove to be continually useful in helping generate infinite scenarios in immersive storytelling.

This is just one of the myriad technologies creating new uses cases for business and consumer adoption and value. And, these are just a few of the many impacts on organizations today. Kaleido Insights’ analysts are tracking these and other technologies closely to help you find clarity amidst the chaos. Interested in discussing the impacts of VR/AR/MR­­ — to your customers, business, or ecosystem? Our industry analyst Jaimy Szymanski is looking for interview participants for an upcoming report on VR/AR/MR enabling the “super employee” experience. Contact her here, or reach out via Twitter.

Kaleido Insights Impact Analysis on Smart Speakers


By Jeremiah Owyang, Jaimy Szymanski, Jessica Groopman, and Rebecca Lieb of Kaleido Insights.

We put them in our homes. We speak to them, listen to them, buy things from them. Much ado about smart speakers, but what are the implications for consumers and end users?

Kaleido Insights’ methodology for analyzing emerging technology assesses the impacts on humans, on businesses, and on the ecosystem. As part of our ongoing coverage, we’ll be covering a series of topics using our methodology to help business leaders first understand, and then see beyond the bright and shiny and cut right to what matters.

In each post, all Kaleido Insights analysts conduct a joint analysis session around one topic (i.e. technology, event, announcement, etc.) We begin with analyzing the human impacts of smart speakers.

Topic: Smart Speakers

Examples: Amazon Echo, Google Home, Sonos One, Apple Homepod, among many others

Impact Analysis: Humans (consumers and end users)

User Behavior & Adoption: While smart home adoption, measured by numerous devices, hovered around 10% market adoption for years, smart speakers have injected new life into this space. Adoption of smart speakers grew from 5% in Q4 2015 to 12% in Q4 2016 in US markets alone — a 130% CAGR. With the dominant Amazon having sold some 15.3 million Echos, Dots, and Taps in the last 12 months, according to Parks & Associates. The success of these devices has also made its way into cars, healthcare, and even industrial environments, and voice-enabled virtual assistants are now being integrated in a range of IoT platform solutions.

With adjacent advancements in natural language understanding, the technology leaders powering these devices are also expanding to Germany, France, Spain, and beyond. Interestingly, the smart speaker market in the West mirrors the parallel growth market in the East — social robots — also powered by voice-enabled virtual assistants but more anthropomorphic.

Today’s voice-enabled virtual agents for smart home adoption take different form factors in North America and Western Europe compared to popular devices in Asian markets

User Interface: Voice-enablement and hands-free user interface reduce barriers to entry for all. Simply put, it’s easier and it’s human. We are innately wired to learn and produce language with relatively little effort. Still, while voice is a significant improvement in interface in certain settings — kitchen, driving, holding children — it is not appropriate in all settings or when there is overwhelming background noise.

Impact on Experience: Ultimately reducing the friction of clicking, typing, and tapping with simply speaking introduces new convenience and efficiency. While smart speakers immediately reduce the friction of using technology in the home, they also offer brands new opportunities to improve broader customer experiences. For example, Domino’s Pizza allows enables customers to order a pizza from “anyware” — any hardware, that is — from an Apple Watch to a smart TV to the Google Home.

Both Amazon and Google recently announced, new ‘multi-step’ actions, wherein devices execute multiple tasks with a single prompt, are just the latest updates designed to reduce friction. Simply saying “good morning” to instigate a news briefing, automatically brew coffee, and adjust the lighting for instance, is just another incremental advancement in leveraging voice interface to improve the smart home experience. Brands, manufacturers, and service providers are all flocking towards these devices

User Psychology: The emergence of smart speakers hasn’t just brought voice-interaction into the mainstream, it’s offered a glimpse into the power of anthropomorphizing devices. Never mind that smart speakers look like speakers, consumers expect them to seamlessly interact, and increasingly for agents to “remember” relevant information such as past search queries, feature preferences, and other context, just as a human would.

Pioneered by the likes of Siri, Google Assistant, and Alexa, consumers expectations for voice-enabled virtual agents are quickly spanning others devices too. Smart speaker owners often report how they expect other devices to have the same functionality — “why can’t I just tell my fan to turn off?”

Meanwhile, unlike in human interactions, virtual assistants are deaf to manners and non-responsive to social faux pas. When assistants fail, users are annoyed, often admitting to yelling or scolding them. Parents lament the fact that their kids can be as mean as they want, and virtual agents will remain subservient and friendly. Implications of these technologies on developmental and adult psychology remain woefully unclear.

Use Cases: Another driver of adoption of smart speakers is that they are inherently ‘horizontal’ in that they support a wide range of use cases. From listening to music, to turning on the lights, to ordering an Uber or virtually any other product, the use cases for these devices look more like a smartphone than any other consumer IoT or smart home device. Similar to a smartphone, wherein making phone calls is a tiny fraction of its capability, a smart speaker is something of a category misnomer; playing music is also just the tip of the iceberg. Instead, these devices are better understood as voice-enabled vehicles for cloud services and mobile apps.

Perhaps one of the most critical impacts of smart speakers in consumer markets is they set a precedent for product appreciating over time, compared to past models in which products only depreciated after purchase. Both Amazon and Google offer open up development to the broader ecosystem meaning manufacturers, brands, and even individual developers can create new apps, new features, and integrations all the time. This open and expanding ecosystem doesn’t just create a better out-of-the-box experience, it also extends the range of potential use cases, users, and value over time.

Access & Mobility: Some technologies help enable or mobilize new segments of people. While this is great for adoption and brand marketers, in certain cases it can also enhance people’s lives. Consider, for instance, how smart speakers are enabling elderly folks to listen to audiobooks, connect with family members, and use home care apps; and disabled folks to enjoy internet services, play games, live more independently, or even offers kids story time enhancement.

Risks & Challenges: Despite the growing success of smart speakers in the home, the technology carries a host of risks and challenges for brands and consumers alike. Zeroing in on impacts to humans, Kaleido analysts identify risks associated with user privacy, data protection associated with cloud-based processing of highly sensitive data, as well as user experience.

A recent murder case cast a spotlight on Amazon as questions of privacy, consent, evidence, caused the company to hand over sensitive Echo data to Arkansas officials. In addition, smart speakers in the US have tangled with the Child Online Privacy Protection act (COPPA) — and soon with the EU’s Global Data Protection Regulation (GDPR) — , prompting Amazon to recently unveil parental consent and control features as well as child-specific skills. And Google’s latest product must have a feature disabled due to a privacy mishap. Even without the sensitive content, most smart speakers today are not designed for multi-user personalization, even if they are used by multiple users.

Technology Proliferation: Although smart speakers have improved the user experience in the smart home, challenges remain on the technology side. For one, no one wants to have 17 different apps for 17 different devices; we don’t want to be system administrators for our homes. And while smart speakers have shifted the form factor of a ‘home automation’ hub (from an app or gateway to a speaker) the administration of these devices, their apps, and data remains a cumbersome user experience even for the technologically proficient.

Then there are additional challenges around interoperability. Consumers don’t want to be boxed in to using single brands or manufacturers, and especially in the home. Although both Amazon and Google offer an impressive (and growing) array of service and product integrations through their Skills and Actions SDKs respectively, they draw a line when it comes to each other. Fiercely competitive Google won’t integrate with Amazon or Apple, and vice versa.

Smart speakers mark an exciting technological shift, most notably in accelerating voice as a mainstream human-machine interface. Over time though, Kaleido analysts expect form factor will be de-emphasized and eventually disappear, as the machine and deep learning behind these virtual agents will:

  • Learn: They become hyper-personalized to individual users, as we train these systems to become our friends, mates, and more.
  • Predict: What customers want based on multi-modal historical and real-time data sets Transcend any single form factor, instead “follow” users wherever they go (home, office, car, retail, medical, etc.)
  • Infuse: almost any physical space with speaking, thinking, predictive services… and sentience? The digital interface is not needed where sound travels.

This is just one of the myriad technologies shifting how businesses interact with consumers and their ecosystems. And these are just a few of the many impacts on consumers today. Kaleido analysts are tracking these and other technologies closely to help you find clarity amidst the chaos. Interested in discussing the impacts of smart speakers? Don’t hesitate to reach out.

Introducing Kaleido Insights


A new firm and new original research to help corporate leaders act on technology trends shaping the future, Kaleido Insights. By Jeremiah Owyang, with my partners Jaimy Szymanski, Jessica Groopman, and Rebecca Lieb

What happens when the pace and scope of technological change becomes exponentially greater than an organization’s ability to adapt?

This isn’t a prophecy, it’s today’s state of the business world. The scope and velocity of change brought about by technologies are only increasing. We’re surrounded by a proliferation of devices and interfaces; an untold velocity of data generation and networked services; and an ever-shifting tessellation of new capabilities and bright shiny objects. Innovation is no longer a choice, it’s an imperative.

To support organizations in this ongoing journey, today we launch Kaleido Insights.

Our mission is to help companies foresee, decipher, and act on technological disruption with agility.

Kaleido Insights is a research-based advisory firm founded by four proven industry analysts: Jaimy Szymanski, Jessica Groopman, Jeremiah Owyang, and Rebecca Lieb. Not only have we shared a deep history of collaboration, in both research and client project capacities, we’re a trusted team of friends. As research analysts, our collective expertise offers a wide range of coverage; when leveraged as a whole, we are greater than the sum of the parts.

When interwoven, we help organizations find sanity and strategy in the chaos, transforming this ‘kaleidoscope’ of technological disruption into a clear vision for innovation.

To substantiate our unique methodology for analyzing the impacts of emerging technologies, we are publishing an introductory research report. This research identifies and analyzes three macrotrends driven by emerging technologies which impact us all.

First, technology enables people to evolve into Super Humans. Born in the age of social media and accelerated through mobile, consumers’ ever-expanding toolkit of capabilities renders individuals more powerful than ever before. When devices communicate and learn from others products and services around them, pulling historical and real-time data to enhance context, Super Humans’ powers to act and make decisions dramatically increases. Super Humans demand a new type of corporation that not only meets their needs but predicts their future state and delivers before need arises.

Second, nimble and Fluid Organizations are the survivors. Early efforts in digital transformation reveal why shifting competitive forces requires agility and fluidity across systems, internal culture, and within innovation programs themselves. Kaleido analysts look at Fluid Organizations like Amazon, Tesla, Google, GE, and others to identify common traits. These traits encompass the whole of an organization, and infuse cultural and structural areas like leadership and governance, strategic areas such as product and business model innovation, as well as functions and lines of business themselves.

Third, Enlightened Ecosystems are the result of digital convergence with the physical world — as distributed systems, machines, and supply chains become more integrated, interconnectivity across ecosystems is forging intelligence more powerful than any single human or business. Ecosystem enablement has already become a tenant in digital strategies, but emerging technologies will shift and accelerate what it means for companies to open up.

Within each of these trends, Kaleido analysts surface key implications, examples, and offer clear direction on how to apply insights to help organizations participate. To access the full research report at no cost, visit our website. While you’re there, check out our research agenda for upcoming reports we’ll be publishing in the coming months.

In the meantime, feel free to be in touch: we welcome your feedback, comments, questions, or briefing requests. We are thrilled to offer Fortune 500 businesses, technology leaders and start-ups, and non-profit organizations rigorous, best-in-class research and strategic advisory services to innovation leaders across industries and functions. Together, we look forward to working with you to create and execute strategies to adapt to the consumer, business model, and ecosystem impacts of disruptive technologies.

Please let me know if there’s anything we can do for you: info@kaleidoinsights.com

TED: When Cars Become Alive (my 3 min speech)


In the above short video (or access directly), I make the case that your future car will be like a living creature, able to predict what we want, and even start to reproduce.

I had a mere three minutes to present and deliver a single concept on the largest physical TED stage in Frankfurt Germany in conjunction with BMW at the world’s largest auto show. Over 180 people submitted ideas, and 6 folks were invited by the TED team to bring that idea to the stage. Of course, I was delighted to be selected. We had many planning calls, and a seasoned TED speaker was assigned to mentor me. I rehearsed about 50 times, and we did multiple dress rehearsals to get it right. Weeks of preparing for just a few minutes on stage –I gave it my all.

My topic? What happens when powerful AI connects to self driving cars, what kind of world would it be?

First, these self driving cars will connect to our online Calenders, giving them ability to automatically escort us around. Then they’ll connect to our smart fridges, getting the milk and eggs before they run out. Then they’ll connect to our social networks, analyzing what type of mood we’re in, setting the experience of the ride. Then they’ll connect to our search engines, and can take us to places we didn’t even know we’d love. It thinks, anticipates, and acts before we know we need something.

At that magical point, these cars become alive, but it won’t stop there. These cars will act like humans. They’ll generate revenues just as human workers do, by offering rides to individuals and ferrying parcels around town. Then, they’ll self-charge, just as we eat our meals and drink our energy drinks. After that, they’ll use their savings to upgrade their tires, upholstery, and even have installed a new VR entertainment system. At this next magical point, it knows to purchase another car, to increase its fleet, it reproduces just as humans do.

In this radical future, these distributed managed vehicles will become like a living species, able to self-sustain, grow, and reproduce. Of course this sounds far-fetched but we’re seeing similar behaviors with Blockchain: decentralized, unknown creator, and it’s growing at a scalable rate.

So what type of future does this mean for society? I address this in the speech, but I am optimistic that we can create a meaningful society for us all, but we need to start planning now –the impacts to society are not an afterthought we can clean up later, these technologies are going to grow at exponential rates.

Graphic: Corporate Innovation Programs Come in Ten Flavors


Above: Click to see high-res version, of the 10 Corporate Innovation Programs

Recently, at Crowd Companies, we published a research report on the Corporate Innovation Imperative (short version available on Slideshare), and found that companies are struggling internally with cultural pushback, but they’ve launched over ten innovation programs to help large companies become nimble. This handy graphic, is organized in the following way:

  • It lists all ten innovation programs that companies are launching. Keep in mind, many companies are deploying several, but few are doing them all well. In our full report for customers, we have adoption and budget details.
  • They’re organized with the center programs being internal programs, and the outside circle are programs that are partnering with the external ecosystem, often with startups.
  • Descriptions are provided on the top and bottom of the graphic, to help bring to life the various programs. Often people are most intrigued by the Intrepreneur Program or Open Innovation programs.

Thank you Jaimy Szymanski and Vlad Mirkovic for their assistance on this project. Also, we’re conducting a few followup reports on Corporate Innovation Metrics, processes, and internal organizational models. Contact me at jeremiah at CrowdCompanies.com if you know of a large company we should interview, or a vendor that’s helping with these goals.

Call for Insights: Innovation Success Measures Report


Do you have proven success measures for your corporate innovation programs? If so, we’d like to interview you for an upcoming Crowd Companies report that I’m working on with Jaimy Szymanski

The report will showcase how companies are measuring success for each of the 10 corporate innovation programs established in previous Crowd Companies research. Looking internally and externally, we’ll examine how companies are determining the right objectives and key performance indicators (KPIs) to align innovation program efforts with over-arching corporate and departmental goals.

This research will also delve into the challenges faced in measuring success, software and other tactics used for data analysis, and provide recommendations for aligning current digital, customer service, and product development metrics to fit with innovation programs. Readers will finish the report with a better understanding of how their innovation program(s) can contribute to greater, measurable organizational growth.

Interviews last approximately 30 minutes, and nothing will be shared without your approval. The report will be available in full to Crowd Companies members, and partially to the public.

Ideal interview candidates fulfill one or more of the following criteria:

  • Be in an innovation position (senior leadership preferred) at a large corporation, or otherwise contribute to company business model changes,
  • Ideate new products or features, or improvements to existing products and services,
  • Build new customer experiences brought forth by disruptive technologies,
  • Responsible for strategy and execution of one or more corporate innovation programs, internal or external,

Do you fit the bill? Please email me at Jeremiah@CrowdCompanies.com for more information. Thank you in advance for contributing to our research that will benefit all corporate innovators.

Photo via Pexels