I find it interesting that predictions about the near-term future tend to be very conservative – most people envision the future looking like a mildly-enhanced version of the present. It is easy to imagine that most of the major societal transformations have either already taken place or will occur in the distant future, but this is far from the truth. The world is changing faster today than ever before, and a number of technologies emerging over the next few years – namely, autonomous cars and the subject of this post, virtual reality – will render the world nearly unrecognizable from its current form.
There are three fundamental axioms to grasp when attempting to accurately predict the near-term future:
- The popular technology in 10 years will likely not be a new invention – it will be a smaller, faster, lighter, more convenient, more compact, and cheaper version of what we have today.
- The best technology of today is used to build the technology of tomorrow, causing technologies to improve at an exponential rate.
- As technologies improve exponentially, so does the rate of adoption.
It is important to also note that network effects amplify this trajectory for many emerging technologies. A network effect means that the value of the technology depends on the number of people using it: the first telephone was not intrinsically valuable for its owner – it only became valuable once there was someone to call, and it became exponentially more valuable as the technology was widely adopted.
Why most predictions about the future are wrong
There is one fundamental reason that many forecasts are wildly underestimated: industry experts and analysts attempt to use linear models to predict adoption rates that are likely to be exponential. This happens largely because they evaluate a technology’s potential based on its current form and function, when the reality is that such a technology will improve dramatically in the years that follow invention.
Let’s take a look at how this type of thinking plays out. In 1980, AT&T hired consulting giant McKinsey to forecast the size of the cell phone market. Based on the slow historical adoption rate and shortcomings of the technology – heavy devices, terrible battery life, poor coverage, and an absurd cost – McKinsey famously predicted that the total market would be roughly 900,000 subscribers by the year 2000. The actual number proved to be 109 million.
While McKinsey’s analysis may seem comically wrong from our vantage point, the truth is that few people foresaw the explosive growth that the coming years would bring. In fact, it is easy to see how they arrived at their numbers: at the time, cell phones were terrible and the growth appeared to be linear – only when we ‘zoom out’ on the graph does it become apparent that the adoption rate was exponential.
Virtual reality is ready for widespread adoption
Many people see virtual reality in terms of black and white: that it will merely be a novelty until the day that it is as good as The Matrix. But virtual reality isn’t competing against some idealistically perfect, real-world simulation – it is competing against traditional media sources: TV, radio, smartphones, tablets, and computers. Adults aged 18+ are already spending 8.4 hours per day on these channels combined.1 And good, consumer VR technology is not just a speculative pipe dream – it already exists today. The Oculus Rift is already many times better than these traditional alternatives, and consumer versions are due to be released sometime in 2015 at a cost of just $200-400 per unit.
The consumption behavior behind my hypothesis is already established, and the technology will soon be cheap and widely available. It is inconceivable to think that VR will be anything less than the dominant medium within 5 years – moreover, I believe that consumption will substantially increase as the content and user experience become exponentially better than their predecessors.
Said another way: I believe that most people will choose to spend the vast majority of their free time immersed in virtual reality versions of shows like Game of Thrones or The Bachelor, video games like Call of Duty, or even less savory diversions such as VR porn.
The network effect of virtual reality will be mind-numbing. As more people use VR, more media will become available for the platform, the platform gets more engaging, bringing more users and continuing the cycle.
The VR-centric world
We can’t possibly imagine how VR will evolve as a medium – perhaps the most exciting concept for me is the idea of peer-to-peer sharing of VR experiences. Imagine a YouTube-like interface where you can be immersed in a real, 3D environment that someone created for you out of actual footage. I think it is possible that we will see user generated content and massive, crowdsourced/collaborative projects begin to replace traditional ‘top-down’ production from media giants and film studios – though there are certainly some exciting opportunities for organizations like the NFL to integrate first-person viewing experiences into their channels.
This only scratches the surface. Entire marketplaces will exist solely within VR, perhaps finally giving Bitcoin and other cryptocurrencies a market in which to thrive. Enterprise applications are often overlooked – it may be feasible for large portions of the workforce to transition to VR environments, though I think this will occur closer to the 10-15 year timeframe.
There will be major winners and losers in the ancillary real world as well. Consumers will have far less time to prepare food, and I see food replacements/alternatives like Soylent exploding as will any sort of service that facilitates food delivery or preparation (Blue Apron, Plated). Movie theaters are an obvious choice for extinction, but I see potential for tech giants to get clobbered as well. Who will successfully parlay their 2D web presence into an immersive VR experience? Facebook, YouTube, Netflix, Google and others must make the leap or be left behind in the dying 2D space.
While there will certainly be a booming market for VR-related devices and accessories – even our household furniture will experience a design revolution – I have to imagine that a VR-centered life will kill off entire categories of real-world products. This may be an elegant solution to our unsustainable consumption of natural resources, but this does not bode well for the likes of Amazon.
Perhaps the largest ‘offline’ opportunity lies in health and wellness. We already know that sitting is deadly – insufficient physical activity is a top 10 leading risk factor for death worldwide – and a predominantly VR lifestyle will certainly exacerbate the issues caused by obesity and inactivity. There will be innovations in passive approaches such as pharmaceuticals to preserve muscle mass and bone density as well as active solutions like virtual reality treadmills. Plenty of brainpower is already being dedicated to solving these problems: successful trips to Mars require sustaining health with a sedentary lifestyle, and Elon Musk plans to accomplish such a mission by 2026.
It has been lamented that every corner of the earth has already been discovered, that only a chosen few from our generation will continue that exploration into space. But we are living on the verge of our greatest journey, peering into a vast frontier that expands infinitely inwards: the unexplored domain of our minds, a place where we can create limitless, evolving worlds – the first universe built by us, for us. Perhaps the last, the only.