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Eric Johnson

Oculus VR's Palmer Luckey, left, and Nate Mitchell, right. At center, AllThingsD's Lauren Goode tries out the Oculus Rift at CES 2013.

Oculus VR’s Palmer Luckey, left, and Nate Mitchell, right. At center, AllThingsD’s Lauren Goode tries out the Oculus Rift at CES 2013.

There were plenty of great onstage interviews at D11 last week, but — as attendees doubtless know — the conversations that happen offstage are often just as engaging. Such was the case on the last day of the conference, when Oculus VR co-founders Palmer Luckey and Nate Mitchell drove up from their office in Irvine, Calif., for lunch and an hour-long chat.

Oculus is a 30-person startup focused on just one thing: Virtual-reality videogames, by way of a wearable headset that plugs into gamers’ PCs. Its much-anticipated VR headset, the Oculus Rift, was funded on Kickstarter last year to the tune of $2.4 million, and an early version is now in the hands of thousands of game developers. A consumer version is on the way — though the company has yet to announce a release date.

At conferences like this year’s GDC, Luckey has publicly acknowledged that the first versions of the headset won’t be perfect, because developers are still learning what game mechanics work (or don’t) in VR. In this wide-ranging Q&A, Luckey and Mitchell told AllThingsD about that learning process, the Rift’s limitations, its ballpark price point, what they want from developers, messing with coworkers wearing the Rift, and how it stacks up to other next-gen technology like the Xbox Kinect and Google Glass.

For easier reading, we’ve split the chat into two parts. Part One is below. And here’s Part Two.

(Before we begin, a sad note: This interview took place last Thursday, one day before Oculus VR’s lead engineer and fellow co-founder Andrew Reisse was struck and killed as a bystander during a high-speed car chase. The company memorialized Reisse as a “brilliant computer graphics engineer” on its blog on Saturday).

AT1T7403-X2Asa Mathat / D: All Things Digital

AllThingsD: How do you control people’s high expectations for the Rift? At GDC, Palmer called virtual reality the “holy grail of gaming,” but was quick to clarify that the first version you release won’t completely fulfill that promise.

Palmer Luckey: The developer kit, especially, but yeah, even the first consumer Rift has a long way to go. People who research it tend to have good expectations, but there’s two other sets: You have people who think that VR tech is already super-advanced, that it’s like “The Matrix” already, and that we just happen to be cheaper. And then you have people who think that it’s completely broken and hopeless. The best way is to get them to look inside of a Rift, and usually they’re like, “Oh, I get it. It’s not the Matrix, but it’s also not terribly broken.”

Who’s the audience for the Rift? Who’s going to really appreciate it?

EQ7G8237-X2Luckey: I don’t think it’s just hardcore gamers. At GDC, Valve talked about how players who were very skilled at Team Fortress 2 felt like the Rift lowered their skill level. I play a ton of TF2: You’re jumping off things and spinning around and then instantly snapping back, constantly whipping back and forth as you walk along. But what they found with people who didn’t play games as much, who weren’t TF2 players — they reported that it increased their perceived skills. I think the Rift can open up the possibility, for a lot of games that have been “hardcore games,” for normal people to play them. They have the right muscle memory built up. Every day, they look around and they move their head to look around. It’s not a huge leap to do that inside of a video game when you have the proper tools.

Nate Mitchell: It also totally depends upon the content. We’ve already seen some people do Minecraft mods (unofficial modifications to the original game to support the Oculus Rift). We have the families in the office, they bring in their kids, and you’ve got 10 kids playing Minecraft in our conference room on the Rift, on the same server. That shows you that there is this huge audience of all sorts of people.

Luckey: In fact, we’ve done that some in the office, too. [laughs] It’s not just for the kids.

Mitchell: Right now, the audience is game developers, and the content is super-key to the whole user experience. Having content that appeals to those types of people, that’s what we want.

Do you need a killer app?

Mitchell: Definitely. We could use a couple killer apps. Ideally, we’d have a game for the niche market. You’d have Call of Duty 9 over here, and something like Minecraft over here, and a wide swath of games in between.

But what about a killer app that’s exclusively for the Rift? A lot of Wii owners only played Wii Sports. Do you need something like that to distinguish the game play?

Mitchell: I won’t say that we need it, but I will say that we want it. That’s something we are trying to figure out. Is it something someone else is going to develop? We’ve discussed — does it make sense to do something ourselves internally? We’re not sure yet. Right now, the focus has been, “Let’s build the tools, and help the developers get there.”

Luckey: It doesn’t make sense for our first focus to be to hire a bunch of game developers to sit and try and figure out what works best in VR, when there’s literally thousands of other people that are willing to figure it out for themselves. They want the privilege of being the first to work in this space.

OculusRift

How does the Rift fit in with other new gaming hardware coming out, like the Xbox One and PlayStation 4?

Luckey: Right now, it’s just for PC games, because that’s the open platform. Mobile support’s also possible, but that’s just more of a technical problem — phones are not powerful enough to provide a good VR experience right now. There’s no technical reason that the Rift can’t work on consoles. It has standard input/outputs, it wouldn’t be a lot of work. It’s just a matter of console manufacturers deciding to license it as a peripheral. They’re the gatekeepers.

Have you talked to them about that?

Luckey: We can’t say.

Mitchell: I think when you look at this upcoming console generation, we are this black sheep, doing something completely different, but we like that. We’re aiming for what we consider to be next-generation gaming. Xbox and PlayStation, they’re doing awesome stuff. And we’re big fans. That said, the Rift is going to be something entirely different.

Luckey: And we’re focusing specifically on gaming. We’re not trying to make a multi-platform home media hub for the family.

How much is the consumer version of the Rift going to cost?

Luckey: The current developer kits are $300. We don’t know what the consumer version’s going to cost — it could be more, could be less. But we’re looking to stay in that same ballpark. We’re not going to be charging $800 or something. We have to be affordable. If you’re not affordable, you may as well not exist for a huge segment of the market.

I guess you would know, since you have the world’s largest private collection of VR headsets.

Mitchell: [laughs]

Luckey: I’m one of the few people where it’s different. I would spend whatever it was. Gamers are not known to be the most affluent population of people. If something’s even $600, it doesn’t matter how good it is, how great of an experience it is — if they just can’t afford it, then it really might as well not exist. We’re going for the mainstream, but time will tell what the market is.

Mitchell: A big part of it’s going to be the content. If it’s only Call of Duty 9, it’s only going to be the niche hardcore gamers. If we can get other stuff on there, which I think we’re already making exciting progress on, I think it’s going to be a lot broader. The three tenets for us are immersion, wearability and affordability. If we can nail those three things, that’s the killer combination that makes it a consumer VR device.

Luckey: The other thing is, it’s possible to make better hardware if you sell it at that lower price point. When you can sell thousands of something, or tens or hundreds or millions of something, you can afford to put better components into it than if you were only making a hundred of these things for $10,000 each. There are people who’ve said, “You should sell a version with better specs for $1,000,” but it’d be better to sell it for $200 and sell more of them.

What are the limitations of the Rift right now, beyond needing to be wired into a PC?

Mitchell: We don’t have positional tracking right now.

Luckey: [That means] you can’t track movement through space, you can only track rotation.

Mitchell: That’s a big one, something we’d love to solve for the consumer version. The only other “limitation,” I’d say right now — well, there’s things we want to improve, like weight. The more comfortable it is, the more immersive it is. So, there’s that. There’s resolution. We want to bring the resolution up for the consumer version.

IMG_4587And, for the foreseeable future, will players still need to use a handheld console-like controller?

Luckey: We don’t know yet.

Mitchell: Human-computer interaction and user input, especially for VR, is something that we’re constantly researching and evaluating.

Luckey: The reason we’re using gamepads (now) is that everyone knows how to use it, so we don’t need to teach a new [control] device while we’re demoing. But we do know that a keyboard, mouse or gamepad isn’t the best possible VR gaming interface.

Mitchell: It’s another abstraction. We’d love to — well, we’re exploring the possibilities.

Luckey: [waving hand] Use your imagination. [he and Mitchell both laugh]

Mitchell: Microsoft, with the new Kinect, is doing some really interesting stuff. Leap Motion is doing incredible stuff. This tech is out there. It’s a matter of packaging it just right for virtual reality, so that we’re putting players totally inside the game. We always joke, you want to look down in the game and go, ‘Yes, I’m Batman!’ And then you pull out your lightsaber or whatever it is — I know, I’m destroying canon here –

Luckey: — I, I’ll just leave that.

Mitchell: [laughs]

Luckey: One of the things I talked about at GDC is that other game consoles, it’s very abstract. You’re controlling something on a screen, using a controller that’s nothing like how you interact in real life. If you hand a person who doesn’t game a 360 controller, it’s like, “Here’s a 16-button, dual analog controller. Use it!” It’s very difficult for someone to pick it up.

And that was the brilliance of the Wiimote, right? If you want to bowl, here’s the controller, just move it like you’re bowling.

Luckey: Even then, it was an abstraction. But it’s clear you want a control interface so that people feel they’re inside the game. It’s clear that you want to take it to the level where they’re not just looking around in the game, but they’re interacting in the same way that they would interact with real life. On Kinect, no matter how great the tracking is, you’re still controlling something on a screen. You don’t feel like you’re inside of the game if you’re looking at a screen in your living room. It’s never going to feel good until you can feel like you’re actually that person.

In Part Two of this Q&A, Luckey and Mitchell discuss Google Glass, motion sickness, messing with coworkers, and their long-term plans for the company.

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mark zuckerberg dustin moskovitz

SAN FRANCISCO -- All eyes are on Facebook Inc., which is on the verge of a $100-billion initial public stock offering.

But the people to watch are an elite group of former company insiders. Already loaded, or soon to be, thanks to the looming Wall Street payday, these Facebook pals are furiously building the next generation of Silicon Valley companies.

And they're doing it together.

Facebook co-founder Dustin Moskovitz, the world's youngest billionaire at 27, has teamed with Facebook alumnus Justin Rosenstein on Asana, which makes online software that helps people work together more effectively.

Adam D'Angelo, Facebook's first chief technology officer, is working with Facebook pal Charlie Cheever on Quora, a website whose aim is to connect people to information.

Former Facebook executive Matt Cohler is now a venture capitalist bankrolling his old co-workers, including Dave Morin, who runs a mobile social network called Path.

"Very few people get to change the world with their friends. Now we are setting out to do it again," said Kevin Colleran, 31, Facebook's first ad sales guy, who's now an investor handing out money and advice.

Whether these Facebook friends, most still in their 20s, can deliver on these youthful ambitions remains to be seen. Silicon Valley is littered with the wreckage of onetime meteors that burned through all their hype and cash.

What's clear is that it pays to have friends like these in Silicon Valley, where it's all about whom you know and whom you work with.

Innovation, researchers have found, is an inherently social act, owing as much to these tightknit networks as the garage tinkering of individual entrepreneurs.

"The basic unit of innovation in Silicon Valley is the team," Silicon Valley futurist Paul Saffo said. "Innovation is an irrational act, and the only way to get through that irrationality is to surround yourself with other people as crazy and obsessed with changing the world as you are."

For decades, these networks have seeded Silicon Valley with breakthrough ideas and ventures. It all began with Frederick Terman, who, as a young Stanford faculty member in the 1930s, encouraged his engineering students William Hewlett and David Packard to start a company. Terman brought together young entrepreneurs and local industry, giving rise to a powerful and wealthy high-tech community to rival the East Coast.

Interlocking social networks were forged in cubicles across Silicon Valley. In the 1960s the "traitorous eight" defected from Shockley Semiconductor Laboratory to start a competing company. Fairchild Semiconductor quickly surpassed Shockley and became a training ground for engineers. When it began to stumble, the original eight founders moved on to new ventures. Eugene Kleiner became one of the region's most important venture capitalists. Gordon Moore and Robert Noyce co-foundedIntel Corp.

The most famous social network is the "PayPal mafia," a high-profile band of executives who sold the payments company to EBay Inc. They then built and backed some of the hottest companies in Silicon Valley, including Yelp, YouTube and Facebook. Facebook's first Silicon Valley investor was Peter Thiel of Founders Fund, who was PayPal's chief executive and co-founder.

Now it's the Facebook pals' turn. With social networking wired into their brains, who better to out-friend the PayPal mafia?

"We have all been through the experience of building something that had a massive, massive impact on the world. Going out a second time and starting a new company, nothing short of that is very interesting," Moskovitz said in an interview in Asana's San Francisco headquarters. "Everyone is mission-oriented. They want to do something that will touch everyone on Earth."

He and Rosenstein are building software that breaks down communication barriers so that people can collaborate more effectively. It's a labor of love that dates back to their days at Facebook. As the company grew, it became harder for Moskovitz to keep tabs on what various teams were doing.

So he built a tool to help Facebook employees organize and discuss tasks. He and Rosenstein bonded over their shared desire to create ways to work more efficiently. In 2008, they left Facebook to concentrate on building a tool to help any group of people be more productive and stay on track.

"We are focused on building a company that will last. We expect to be a $100-billion company," said Rosenstein, 28. "We run the company with the intent and the expectation to be the next in that lineage."

D'Angelo, 27, and Cheever, 30, have similarly lofty goals. Over Chinese food in Facebook's offices in the fall of 2008, they began discussing Q&A sites that enabled users to answer one another's questions. The services were wildly popular. But the answers were often wrong or useless.

D'Angelo and Cheever decided they could do better, so they started work on Quora in 2009. They rented cramped offices over an art supply store in an old building in Palo Alto, hired programming and design prodigies, and got experts to weigh in with thoughtful, authoritative answers to hundreds of thousands of questions.

Traffic grew quickly as Quora won over fans with answers that were not only smart but entertaining:

"What's the best way to escape the police in a high-speed car chase?" A former Missouri police officer responded that it's easy if you pick a jurisdiction where authorities are bound by strict pursuit guidelines to avoid liability.

"If you injure a bug, should you kill it or let it live?" An entomologist responded that insects don't feel pain the way that vertebrates do, so there's no need to put them out of their misery.

Quora landed $11 million in funding and an $86-million valuation via Benchmark Capital's Cohler and now has 33 employees.

Like others in the Facebook network, D'Angelo and Cheever seem to read each other's thoughts and finish each other's sentences. The depth of these friendships is unusual even in Silicon Valley. These Facebook pals don't just call on one another for money and advice, start companies together and sit on each other's boards. They also hook up to celebrate life's big moments.

Ruchi Sanghvi was Facebook's first female engineer and one of the first 10 hired at the company. She and her husband, Aditya Agarwal, were Carnegie Mellon graduates who came to Facebook as a couple in 2004. In 2010 when they wed on a beach in Goa, India, dozens of their Facebook friends joined them for a weeklong family celebration. Among them was Facebook CEO Mark Zuckerberg in a long silk sherwani jacket.

"With this network, you are never lonely," said Sanghvi, who with Agarwal last month sold their start-up Cove to San Francisco's Dropbox. "It's not just a work fabric. It's our life fabric."

Each winter a couple of dozen of them pile into a house at a Colorado ski resort that belongs to the family of Facebook executive Sam Lessin. This snowy retreat hundreds of miles from Silicon Valley is the gathering place for the "Lothlorien Life Conference," or LLC for short. Named after the forest realm in "The Lord of the Rings," LLC is the event no one misses, a time for friends to slice down the mountain and swap advice.

That's where Morin, 31, decided to turn down a $125-million offer fromGoogle Inc.for Path. It was 2010, and he had just launched Path and didn't want to sell it, nor did he want to help Google take on Facebook. But he was under pressure from investors and employees.

Morin huddled in a quiet corner of the living room with Moskovitz and Founders Fund's Brian Singerman, both investors in Path. They talked late into the night and all the next day. Moskovitz reminded Morin about how Zuckerberg wrestled with the $1-billion buyout offer fromYahoo Inc.in the early days of Facebook.

"I told Dave he simply didn't need to do it and, even if he subsequently failed, that would be OK," Moskovitz said. "After that it was clear that a huge weight had been lifted."

Morin said he couldn't get by without that kind of help from his friends. Path has raised a new round of funding that values the company at $250 million, and it has more than 2 million users, including Britney Spears.

"We built Facebook, and it's ingrained in how we think. I think in networks now," Morin said. "It would be hard for me to think any other way."

No one in the Facebook network has any intention of cashing in his or her chips any time soon, Colleran said. Facebook's employee No. 7 left the company in July. He just signed on to a new gig as a venture partner with General Catalyst Partners in Boston.

"I believe after Asana, after Path, after Quora, there will be another company, and then another one, and another one," Colleran said.

"If we are all going to be hanging out anyway, why not be productive and change the world? It's a whole lot better than sitting around and saying, 'Remember that time at Facebook?' We're all way too young for that."

jessica.guynn@latimes.com

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