Using XR to Change Everything (Without Changing Anything) with Lance-AR’s Lance Anderson

Today’s guest, Lance Anderson of Lance-AR, got tired of seeing so many XR providers only help clients achieve their stated ROI goals, then leaving them to their own devices to scale. Lance helps those companies today, by understanding the need to marry emerging tech with legacy systems, so disruptive tech doesn’t seem so disruptive.

Alan: Coming up on the XR for Business Podcast, today we’re speaking with Lance Anderson, founder and CEO of Lance-AR, a consulting and services company for enterprise AR space, focused on helping organizations scale deployment. We’ll be learning about the challenges and learnings from his experience. All that and more on the XR for Business Podcast. Lance, welcome to the show.

Lance: Hey, great, thanks for having me on.

Alan: My absolute pleasure. It’s very exciting to meet somebody as passionate as you are about bringing augmented reality to the enterprise. But before we start, explain how you got here and what is it you do for customers?

Lance: Sure. So I’m coming from — let’s just round it down, let’s call it 15 years — in the enterprise space selling software and services and automation, things like that. Ended up at Vuzix in 2015 and had a great run with those guys. Late 2018 I left Vuzix and started Lance-AR, because I was just frustrated. Frustrated with the lack of companies deploying augmented reality at scale. Everybody talks about the dizzying ROIs that are out there to get, and all the wonderful things and advantages that this technology brings. Yet no one was deploying at scale and I had this unique position at Vuzix — because there are so few hardware providers — that we were able to see thousands of pilots and POCs, in all different regions and different use cases. And we just saw so many of those either fail, sputter, or just kind of evaporate. So I wanted to take all that knowledge and bring it to the enterprise space and see if we could turn some things around. That’s why Lance-AR came about. And really what we do now is we connect enterprise users, AR hardware manufacturers and AR software providers, the problem solvers. We connect them all in an agnostic way, and try to make sure that these folks are set up in the right way for success, that they have a strategy for achieving success and then for taking success and moving it into what I would call scale deployment. So success could be a five unit pilot, but I don’t consider it success until it’s 500 units or a 1,000 units rolling to the company. So that’s in essence, what we do.

Alan: That’s amazing. My first thought when you were talking about the challenges and pitfalls of getting caught in what they call “pilot purgatory” would be if you had to kind of focus on the five main things or six main things, what are those main challenges that make it so difficult to go from pilot to scale?

Lance: Everybody’s at fault, frankly. So I’ve done a lot of sales and marketing in my day. The marketers in our industry are at fault. Promising future worlds today that just aren’t quite possible. There’s fault in the hardware manufacturers.

Alan: We’ve got to call out Microsoft on making videos that people will go, “We want that!”

Lance: It was Microsoft, SAP did one in 2014.

Alan: Everybody’s been making these beautifully Hollywood produced videos on “Look at what you can do with AR!” And then they put the glasses on and are like, “Well, why is the view cut off?” They’re like, “Oh, yeah. Well, about that…”

Lance: Not really. Not really. Well, almost. Use your imagination.

Alan: “Why is it getting hot on my head?” You’re like, “Ah, well, you know…”

Lance: Yeah, yeah. And I look at it like it’s like back in the day. You’ve even got shysters selling tonics, “solve every problem” tonics out of the back of their car. And yet there are real solutions out there, that are solving problems and driving value.

Alan: And I think we’re starting to see that where companies that have been at this a long time, like Vuzix and the newer companies as well, like the providers that are creating the software layers. Hololens 2, it’s been hyped and hyped and hyped. And we’re really excited, because it really is driving value in enterprise. Maybe not at scale yet, which is– that’s what we’re here to talk about. But what are some of the sticking points?

Lance: Let’s break it down to this: enterprise. We’re talking about enterprise deployments here. This isn’t SAS. These clients are not buying SAS. A lot of people are selling the SAS. This isn’t set it and forget it. Sell me one pilot, sell me one license, a pair of glasses, and then I’ll take it from here and deploy a thousand units. There is a dichotomy of what’s being sold. Most people are talking to the C-suite and they’re selling digital transformation. Transformational AR, the new way of working. But they’re also getting budget and getting paid solving problem-specific ROI for operation. Those two are dichotomous. So they sell five units, five licenses. “Here’s my platform license. Here’s the hardware. We solved your problem. We delivered ROI for these five users.” And it’s like hands in the air, “Good luck, god bless.” And they’re expecting these organizations — these large enterprise organizations — to take those five units and proliferate it throughout their business and turn that into 5,000. And that’s really where Lance-AR comes in. And that’s where we saw a massive gap. It’s really in the services side. So one of the things we brought out — we actually brought it out at AWE this year and really leaned into it at the EWTS show this fall — was what we call our process engineering services, aftermarket sales, right? So what we found was the service providers and the harder providers were selling– they weren’t selling success. They were selling the start. Which is these pilots and all that. We come in after the fact, and we bring in the knowledge/expertise, the engineering knowledge/expertise for manufacturing, or logistics, or whatever it might be. That also has the AR experience. And we work with these clients to say, “OK, you got your first process onto this new platform. So what about your other 999 processes? How do we prioritize them? How do we take care of the back end that will make these a reality?” Some of these processes are easy to move into a head-worn AR space. Some of them require all kinds of data connectivity to siloed data in your organization, and they will require other projects to be done just before we can do this. So we try to look at all that, help them through this and start them on this longer term — not long term, but longer term — iterative transitional process. I hate the word disruption and frankly, most people in business hate the word disruption. No one wants their operation disrupted. They want to transform.

Alan: What did you call that, because I think this is– we need to emphasize this. “The iterative–“

Lance: It’s the iterative transformation or the iterative deployment of augmented reality/virtual reality within your business organization.

Alan: I think the keyword there being “iterative.” People think you’re going to just buy this SAS software, install it, and it works perfectly forever. They’re missing the part about where you have to make the content for it. And you’ll have to make the content for one job role, it’s going to be different than another one. Now, there’s going to be overlaps, but it’s knowing where those overlaps are where you can take pieces from the other one and bring them in. I think what you’re doing is very smart, because we’re also seeing the same thing where we’re focused kind of on the training side of things. But if you make one training module, it does not translate to every role in the company. Maybe there’s overlap, maybe can you re-use the graphics or the interactions, but every role within a company has its own distinct training algorithms, and same with when you’re going through digital transformation of things using AR. Pick-n-pack is not the same as driving a forklift.

Lance: Exactly right. And training is a good example. I’d like to get back to that in a minute. But before, just to finish this first thought out, another area that I think our software providers are really missing, is the fact that you can’t sell something that is just completely new into an enterprise organization effectively. That enterprise is running today. That factory is open. It has to run. It has to churn out tires, cars, parts, whatever it is. Disrupting that, stopping that, removing all of their — or a huge chunk of their — existing processes and putting this one in, it’s just not going to happen. That’s not the way business works, it’s too much of a risk. There’s too much of a fiduciary risk and operations risk and all that stuff. And I’d say one of our clients — LogistiVIEW, they’re in the logistic space — and originally they were going after new greenfield systems. The ROI was there their technology could save millions of dollars, yet it wasn’t getting traction. What they learned was we have to exist within this existing ecosystem of these warehouses, and we changed their tagline to “change everything without changing anything.” And what that means is, they developed their brand new AR AI computer vision software to work with antiquated AS400 green screen systems that are the reality of how these manufacturing and logistic plants are operate, and created that interface in that at filter — I guess is probably a better way to put it — and merger so that these companies don’t have to change their core backend systems to use this new technology. And now that they’re starting to use this new technology, it’s these organizations themselves that are raising their hands and saying, “Hey, wait a minute, could we use it over here? Could we add it over here, now that we’re connected? Wow. Look at all the great stuff we can do.” And logistics business has exploded recently due to this change. And I think they’re a fantastic example of what’s been going wrong in this industry, which was here’s our great new technology. It’s so awesome, Mr. Enterprise User, that you should change all your backend systems, and come over and do things our way. That’s just not the way of the world. And we’re in that transition right now.

Alan: I think you nailed it with “change everything without changing anything.” That is just a brilliant tagline. And if you think about it from an enterprise standpoint, that changing anything in a line, unless it’s going to create massive value in the 10, 20, 30 percent improvement range, it’s risky. I think augmented reality and virtual reality and these technologies now, they do drive that kind of warranted rollout. But then how do you do that in a way that doesn’t disrupt? And I think you nailed it with kind of synchronizing with legacy systems, even though very difficult to do. You’re taking cutting edge things that are run on cloud and edge with antiquated systems that are buried in servers on-prem, and trying to marry that together. It’s interesting. And I love your point about selling this stuff is not SAS. And so many startups that I see — pretty much everyone — it’s a SAS play that they’re working with, and it’s very difficult when the content doesn’t exist for the roles that you’re looking to work on.

Lance: Content is key. So let’s go back to your training example, because I think it’s a brilliant one. So most training, you were seeing the majority of that is in the VR space. Makes perfect sense. Great opportunity for it. I love training, because training departments have budgets — A. They — B — they are generally looking for new technology and new ways to train their workforce. And C, they look for mobile training, getting it out of the classroom, making it more realistic, situational training, and all that. As you know, there’s a significant content creation play there. But what what I also see is–

Alan: I know, right?

Lance: Well, think about that, yeah. You know, you know all too well.

Alan: There’s a reason we started our own accelerator to bring the whole community together. We see this– look, there’s a lot of content providers in the world making amazing things. But fast forward three years, there won’t be nearly enough content creators to satisfy the needs of any of these companies at scale.

Lance: Well, it’s the same problem, Alan. So think about it. So there’s two things that need to be done. So creating net new content in this new way is simple. There’s actually better ways to do it now. But companies have most of everything they have is not net new content. It’s old content that has to be changed, and moved, and morphed. And who owns the process? Who owns the updating of the process? Is it the training group? Is it the operations group? Is it– do we even know? It’s half the problem. So–

Alan: We’re working with a client now and we said, “OK, so we’re gonna train your employees in this role. And do you have a manual?” And they gave us the manual, but it was the instruction manual of the computer that they work on. It was like written in DOS 2.0.

Lance: Love it.

Alan: I was like, “OK, so this is nice. So where’s the manual you give to the staff?” and they’re like, “That’s it.” It’s like, oh my God, you can’t read this thing. It’s impossible.

Lance: Right. Sprinkle in a little tribal knowledge on top of that, that isn’t written down anywhere. All this kind of stuff.

Alan: Exactly.

Lance: But so think about this. So whatever content you do create in the VR space for training, alright? Very few people have thought about the investment that you make there. What percentage of that could the worker take with them on a pair of AR glasses? Oh, now wait a minute. So there’s training that you have in their classrooms. Let’s– I’m going to give you a simple number. So one third of it is, you have that training one time, you get it, you got it. Good. It’s in your head, you move forward with it. Another 30 percent, gosh, maybe you don’t use it everyday. You don’t use it every week. And it would be great if while I was on the job after training, where I could just click on something and see a quick video or get a quick little reminder. Refresher training, let’s call it little telementor on your shoulder. And then there’s 30 percent of training that you’re just never going to get right. And you really need — in the field — to be taken through step one, step two, step three, step four. But the content that you guys create on the VR side, that investment — and we’re talking to the C level and the B level here — the investment you make there can trickle down. And move into your AR and your worker on the floor experience, if you’re going to give them some type of mobile way to consume them, then let’s let those workers feed back into the system. If there’s a part they’re working on that there is no video for, there is no training for. Well, maybe they could film point of view themselves and walk people through the training of it. And have this system that starts to work within itself. And the whole thing is connected. It’s a much bigger investment. It’s much bigger than just the hardware you purchase with the SAS that you purchase. It’s a mindset of how we’re going to capture data, create content, always update that content and keep this thing moving forward. It’s just not as a static thing that everybody thinks it is.

Alan: Absolutely. It’s multifaceted, but I think there’s also the ability in the last, I would say 24 months, 360 content, for example, you had to stitch every scene together and it was thousands of dollars a minute. I can buy a camera now for 500 bucks. It shoots better than we were shooting three years ago and it stitches on my phone. And I can literally make a quick training thing on my phone and publish it to a VR headset in an hour. So you’ve got that kind of low-end side of things, where companies can start to create their own content. Then you’ve got higher-end things where maybe you want to have full hands on training of something. You need to bring in a machine or in location, and that sort of thing. But as this range of content starts to be made, there’s gonna start to be similarities. And we’re not seeing it yet, because not enough people are working on it. But there’s gonna be similarities, where if I do a fire safety warehouse training, turns out that will work for pretty much any warehouse, I can transfer it. And so being able to transfer the knowledge from one company to another is also something that nobody is looking at yet.

Lance: I agree. And so a lot of folks are selling to the actual end user, but why not sell to the provider? So if I’m a provider of, let’s say, conveyor technology for a warehouse, I should be providing and updating all that training material that can be consumed either through VR or AR. But that’s my responsibility, not the employer’s responsibility to keep up with your changes and your manuals and all that kind of stuff. And if we can create a little environment where individuals could tap into that knowledge base, that would be great.

Alan: Well, the problem with that is you need to make sure that everybody’s synchronized, because if my company bought Oculus Go headsets for training and then my supplier comes along, goes, “Hey, we just made this training in VR, but it only works on the HTC Vive.” you’re like “Oh, OK.” There’s no standardization and all VR is not made equally, as we know. Or AR, for that matter. And there’s going to be a huge range of quality types and compatibility issues and all this, so–

Lance: Alan, standardization is not on the table for the next three to five years. We will get there, because if this technology is going to mature and become ubiquitous — like most of us think it will — we will get to standardization. We will get to commonalities that make all this simple because the clients and the users will demand it. They will demand that simplicity. They will demand that interoperability. But this war isn’t done yet. And so what we tell clients is — actually I’m glad you brought this up, it’s a great segue — one of the next biggest hurdles is companies trying to decide on one physical platform that they’re going to go forward with. And that means a brand. Is it VR, is it AR, is it a brand? And even for the software, we’re going to choose this one software provider. That’s not going to get us there.

Alan: Obviously. I mean, come on.

Lance: It’s not going to get us there. Yeah, I know. Right.

Alan: 1990’s calling, they want their business model back.

Lance: [laughs] Exactly. So what we try to impart through Lance-AR is we talked about the iterative process improvements and process engineering that we do. We also have an iterative model that helps companies go from “Let’s vet this idea, breed innovation department” into “This comes out, let’s go get budget and funding and KPI agreements.” Everybody forgets to do that. Let’s make sure the C level and the IT and HR and operations and everybody is very clear on what they would agree is success or not. And then we agree on what we’ll do if we are successful before we start. And if you don’t do that, don’t start. Go spend your money on– I don’t know, take everybody out to a ballgame. You’re better off getting value out of that. But you do that and then iterate. And it’s a circular process. And while your company is taking the one good idea they decided on and moving that into operations, your IT department should be looking at the next round of physical hardware that’s coming in. So you’re not waiting for that. You just kind of keep these circles going and–

Alan: Wouldn’t it be great if there was a consultant or somebody you could just hire, that would just keep you abreast of all this and work with your IT teams to just keep you on top of this? Wouldn’t that be amazing?

Lance: That would be amazing. I don’t know, I’m scratching my head. I think I know some guy that might be able to help with that.

Alan: I’m going to Google it here. I think it’s Lance, lance-ar.com.

Lance: That’s a great place to start. That’s a great place to start. You know, but this stuff isn’t easy, Alan, and that’s what it is.

Alan: It’s not easy! You and I’ve been studying this shit for years and it’s complicated, because every day a new headset comes out and every day a new platform comes out.

Lance: Yep.

Alan: The way I liken this — and I’ve said it before in the podcast — is how do you disrupt an industry constantly and consistently disrupting itself?

Lance: Yeah, it’s– well, you have to plan for this technology to continue and consistently iterate. So what you deploy– and remember, in enterprise, they’d like to let me buy this piece of conveyor, run it for the next 20 years. Sorry, that’s not where this is going. And so companies need to change. They need to change their mantra and understand. That’s why actually one of the things we’re coming out with — and I guess I can show this — is we’re coming out with Lance-AR will be providing leasing terms, for leasing for hardware, leasing for software, leasing for applications. We also provide a deployment services, provisioning, warranty service, and things like that, because that’s how companies want to buy, especially when they want to protect themselves from missing the next great tech that’s coming next. But that’s a side note. We can do that on a subsequent– we’ll do that next year, when that’s actually in the market for us. And there’s other things we’re doing too, Alan. I don’t want to share everything right now, but we are going to provide the world with an agnostic hardware validation, applicability, and use case affirmation site. We want to have one area where everybody can come and start to understand what these technologies can do. I hate, hate, hate when people ask me, “Lance, what’s the best AR headset on the market?” It’s impossible.

Alan: I can tell you that. I know the answer to that.

Lance: Yeah? What’s that?

Alan: You ready? It’s the one that matches your needs and budget.

Lance: Amen.

Alan: Is that the right answer?

Lance: Do you know how much they hate that answer? Do you know how much they hate that answer?

Alan: They *hate* that answer! “Why can’t I just buy one headset and do it all?”

Lance: It’s like, what a copout. What a copout answer, right? So we’re gonna provide something that allows people to kind of self-segment themselves. “My name is Joe. I work in Europe. I’m doing manufacturing, I’m trying to do this, that, and the other thing,” and we’re gonna get you down to a smaller selection and also let you know what’s coming next. So we’re looking at that kind of stuff. And then we talked about content creation. That’s a big issue, people.

Alan: We spent an enormous amount of time– well, I spent an enormous amount of time on LinkedIn, building a community, becoming friends with all sorts of content providers all over the world, amazing people doing incredible things. And we’ve kept a database of all of them. And so I think we have a pretty good advantage in the fact that we have access to content providers all around the world at all different levels of quality in different fields. VR, AR, MR, volumetric capture, spatial audio, you name it. And I think this is really going to be– you mentioned right at the beginning. Content is one of those things where it’s constant, it’s never ending. And so how do you harness the power of the entire XR community to service the needs of these customers? As this becomes — like you said — everybody is going to want this. As soon as they realize that that training that used to take us two weeks, and we had to fly everybody in, now we can send them a headset and they’re trained before they even step foot on the floor. Hello? This is going to be a thing.

Lance: It’s amazing. And you also just struck on something there where the XR community is starting to build all this stuff for the users. Let’s define the word user. So there’s users. There’s the CEO of Fortune 500 Company X, that we’re considering a user because he or she is writing the check. Users are the people who wear these devices and actually do real work everyday, and don’t just push emails back and forth. Those folks. And this is another pet peeve of mine. And it’s more than a pet peeve. It’s a–

Alan: Those guys. Who needs buy-in from the people actually use them? Psh!

Lance: “Whatever. Here, use this.” This is– well, at least not in the US and Europe. That’s not how we operate. And that’s not how our workers operate. That actually is a little bit different in China and some of the Asian countries. And they’re actually getting pull-through. There’s a discussion there, and we don’t have time to get into it today. But my point is this for the user is and I want to talk about efficacy and stickiness of this technology. We all know see-what-I-see. Everybody’s heard about it. Telepresence, telementoring, tele remote support, whatever you want to call it. And we all talk about this being the number one use case for AR headsets today. It’s not sticky. That’s the problem. In most use cases, it is a once a day, once a week use case. That’s just not enough. And the problem is, when people then go ahead and try to turn it on that one day a week, connectivity. Gosh, exactly how did I enter my password? And what button do I press and how do I do it? So the UX is a big problem, user interface. I was talking with Audi, who were doing– they were using VR. And they want to use it in their dealerships. And here’s the deal. When someone walks into a dealership, they’re there to buy a car, not use VR. And if you want them to have this really cool VR experience and all that kind of stuff, you’ve got about two minutes, maybe three minutes of their attention span. You can’t spend five minutes training them how to enjoy that two minute experience. It’s gotta be intuitive. It has to be natural. And what is natural today? Well, that’s changing. And for us in the VR/AR headset space, let’s look at what else is going on. Voice is everywhere. Let’s use voice. Hand gesture control, hand using hand gestures. What is it. Google Pixel came out. So, yeah, we’re gonna enable some gestures and it’s super limited and all that stuff. But whatever, they see it, they see its coming. I was in my friend’s BMW the other day, and he was just swinging his hand around, changing the radio station, using gesture control.

Alan: Yeah, I actually got to try the the Ultrahaptics thing on the weekend and you basically goes in VR. And I reached out– I was playing tic-tac-toe with an avatar, and I reached out and it felt like I could feel it in midair or I could feel like I was touching something. But it was it was almost like a minor electric shock. Like, you know, when you lick a battery, that kind of feeling. It was really just– it was a weird sensation. I don’t know. It wasn’t comfortable for me, but they’re trying to make it so that when midair, you just reach out, you feel something and you turn it like in a car, you just kind of reach out. But it’s like, okay, well, that’s called a knob and it’s right there below my hand. What do I need it in 3D space for?

Lance: Alan, it’s the same thing as we’re talking up before. Like the “change everything without changing anything” concept of our new technology needs to be able to work with old data systems. Well, our new technology, the way the human being who wears it interfaces with it needs to jive with their current experiences. Swiping, we’re all using swipe on our phones and our iPads.

Alan: Only on Tinder.

Lance: [laughs] But if you can use that with a pair of smart glasses when you expect to use it, when I want to move a menu or something like that. Wow. Then it just becomes natural. We’re all talking to our Echos and our Amazon and all this kind of stuff, for good or bad. I want to talk to my device. I should be able to do it. We have to look back. Our UX needs to look back before it looks forward. I guess it’s really me.

Alan: But I agree with you 100 percent. And two things that came up this week were the original Hololens interactions, where we had the kind of clicky thing and point click, and it was amazing. We’ve done hundreds, maybe thousands of demos on the Hololens. And one thing that I always watched was that anybody over 30 had trouble with that, learning that little mechanism of pointing your finger up and then flipping it down. — What do they call it? I can’t remember, anyway. — But it was natural. They just reach out and like they would reach out in real life and touch things. And the new Hololens 2 interactions are all kind of around that real gesture base. They learned anybody– any of their actual customers are trying to poke at it in midair. They’re like, wait a second, this is not working. But the interactions with your hands are going to be very close to being naturally part of reaching out, reaching and grabbing a hologram. And it’s gonna be very exciting. And we’re almost there.

Lance: We’re gonna get there. We’re gonna get there, Alan. We are.

Alan: The Quest hand tracking is coming in January and the Hololens 2. Even though there was an article today saying that’s shipping. That article was misleading, it said we are taking your orders now.

Lance: I put it this way. There is so much incredibly valuable, useful stuff that can be done today with the technology we have today, physical, with the software that exists today, with the UI that exists today. Being able to use an RGB camera to give myself a thumbs up as a confirmation. I don’t care what language you speak. I don’t care where you’re from. That’s simple. It’s simple and it’s effective and it works. And the more we use the technology that is available today. The more the money is going to flow in, and support businesses that are– they’re on the brink. A lot of these software folks are on the brink, or they’re using investor dollars. And if we don’t help them and pay for what they’re doing today, they won’t innovate for tomorrow. And our innovation will actually take a hit. We won’t innovate as fast enough if we’re just trying to stay alive. And on the software side that’s very, very true. On the hardware side that’s very true. Hardware companies need to be very honest with what they’re doing. I thought RealWear did a great job of that. They unabashedly said we are designed to be worn with a hardhat for the field worker. If you want to use our technology anywhere else, good luck, god bless. Enjoy it. We’ll try to help you a little bit, but that’s what it was designed for. And that’s why those guys sold more headsets in North America and Europe than anyone else. They had focus.

Alan: They had focus, and it turns out they went the most simple route. And sometimes we’re overcomplicating this stuff. But I’m going to end on this quote that you just quoted, and I think it’s a great way to to wrap this up. “Let’s use the technology of today to pay for the innovation of tomorrow.”

Lance: You got it. AR for today. We call it the now term, right? Not for the distant future. There’s a lot of AR solutions that impact your current business cycles that can be iteratively expanded throughout your organization if you plan correctly. If you really take this industry for what it is right now and understand it, there’s a lot of success that can be had. And we at Lance-AR would love to be your partner in helping you. And I really thank you for your time, Alan.

Alan: It’s been my pleasure. Thank you so much, everybody. This has been the XR for Business Podcast with your host, Alan Smithson, and my guest, Lance Anderson of Lance-AR. You can visit them at lance-ar.com.