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🤖Advertising hits Alexa, 👓Snap stumbles and 🌎 VR rises with a look at corporate venturing on the way.

🤖Advertising hits Alexa, 👓Snap stumbles and 🌎 VR rises with a look at corporate venturing on the way.
By Connected Paths (Riaz Kanani) • Issue #17 • View online

Amazon takes on advertising in Alexa
So advertising platforms are coming to Amazon’s Alexa ecosystem - just limited to flash briefings, streaming radio and streaming music for now. They are going to be 6-15s long and will appear (if the “skill” enables them) at the beginning or end of “conversations”. Clearly Amazon wants to allow its developer ecosystem to make money from their work but I suspect there are going to be more missteps than successes in the short term. How long before Google enters?
Two cautionary tales
Whilst studying investment strategy, one of the warnings about taking money from corporate investment vehicles was the reduction in opportunities to exit. The biggest risk though was balancing the need to talk with giving too much confidential information away during the early relationship phases and the due diligence phases. Usually, if it is an intelligence play it rarely ends in an investment. 
I suspect we do not know all the details yet, but Amazon invested in Nucleus through its Alexa Fund in August last year and has since brought out a remarkably similar competitor, the Echo Show. The timeline means it is likely that Amazon was already working on it before the investment. The founder of Nucleus, Johnathan Frankel, talks about how strong the relationship was with Amazon (and its Alexa team) at least until the Echo Show was announced. Surely people in the Alexa team knew about it, though Frankel believes not
It isn’t the first cautionary tale for startups building on top of someone else’s platform and I suspect it will not be the last.
On an aside, I think the Echo Show is ugly - I much prefer the Nucleus design. For me though the natural approach to this type of communication device would be to connect Alexa to the TV and use that as the screen. The landline device is still dead in my view.
Snap tanks
Despite WPP announcing it would up its spend on the Snap network to $200m (up from $96m last year), Snap’s first earnings report is not good news with shares falling 20%, mostly it seems because it missed revenue targets by about $9m. It was down on the previous quarter, though near 4x the same quarter in the previous year.
The big challenge remains from Instagram which is out competing them as a fast follower. Snap is continuing to push into Augmented (or Mixed) Reality with some cool abilities to edit out real objects from photos - and its not a stretch to see that becoming possible in real time through its glasses but Facebook (which owns Instagram) is already strong in Virtual Reality. Can Snap start out competing the very strong network effects of Instagram? More on the earnings here.
In the Virtual Reality space, one of London’s most intriguing companies has been Improbable and they have now burst out of the tech scene and into the broader mindset with its latest fund raise. 
Raising $502m from Softbank and valuing the business at $1bn, Improbably provides the foundations of building virtual reality applications, allowing other companies to build an experience on top. Rather unsurprisingly, Microsoft and Google - both with deep experience in building operating systems are also building their own competing platforms.
HelloVR is one company building on top of Spatial OS (Improbable’s virtual reality operating system). More on that social VR experience here.
What is interesting to me is the similarity in how Improbable creates its worlds and how Minecraft (now owned by Microsoft) generates its worlds. Could some part of Minecraft end up in Microsoft’s VRos?
Clearly Softbank believes Virtual Reality is going to be a major market and owning the foundations of it is going to be as valuable. Will we end up with a few major players this time around?
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Connected Paths (Riaz Kanani)

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