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After years of anticipation, today Apple finally announced its entrance into the XR market with the launch of its Vision Pro headset.

This is a big moment for wearable technology, and our investment thesis at Anorak Ventures. We've been focused on XR since Greg's 2013 investment in Oculus. We’ve invested in XR gaming (Rec Room/Virtex), enterprise collaboration (Arthur/Resolve), K-12 education (Prisms of Reality), secondary education (Osso VR/Moth&Flame), healthcare (Innerworld/Karuna), infrastructure (Vntana), and other adjacent areas. We’re big believers that XR, as a medium, can improve the way that people work, learn, relax, and most importantly, connect with each other over distance.

Here’s why we are bullish on the Apple Vision Pro, and the broader XR market, after today’s announcement:

  • Apple is aspirational - Nobody is better than Apple at making technology cool. It stems from a combination of human-centric design, product quality, iconic marketing, and perhaps a bit of lingering charisma from Steve Jobs. Google attempted AR with their Glass product but it backfired as users were labeled Glassholes. Meta has spent billions to widen VRs appeal, but their user base remains a narrow demographic. With $40B of wearable revenue last year (one-fifth of Microsoft’s total revenue!), Apple is one-of-a-kind at bringing products from niche to mainstream.

  • Competition is good - Meta is currently the only viable option for XR at scale. Startups are, and have been, trying to bring new headsets to market, but the capital intensive nature of novel hardware makes it difficult to succeed. Customers benefit when companies are forced to compete. Innovation accelerates and prices are driven down. Regardless, if the Vision Pro succeeds, consumers will benefit from today's announcement.

  • Flagship experience - Like Tesla, whose first product was a $140,000 two-seat convertible, Apple is entering the market with a high-end, no-compromise device that has impressed everyone lucky enough to try it. Meta chose to subsidize the cost of headsets to gain adoption. The $3,500 price point of Apple’s headset shows conviction in its ability to produce amazing products. The Vision Pro will initially be inaccessible to most, but like the iPhone, over time will come to be seen as indispensable while the price will continue to drop. Furthermore, the 525 Apple Stores around the world will be a valuable channel to demo this amazing new technology to millions of people, creating pent-up consumer desire even for people who can’t yet afford it.

  • Marketing to the masses - There was a notable difference between how Apple marketed their headset today versus Meta. Absent from Apple’s presentation was an excess of technical jargon and a deep dive on the technology; instead Apple focused on more familiar and practical use cases that users could easily grasp. Mark Zuckerberg’s fascination with the technology has long been reflected in Meta’s marketing efforts, but likely hindered XRs appeal to the masses. One of Apple’s strongest attributes is their ability to market to the masses by portraying an intimately familiar experience, rather than by emphasizing cutting-edge science-fiction technology.

  • One OS to rule them all - Complete control over both the software and hardware gives Apple a distinct advantage in XR – Apple is uniquely positioned to bridge the most immersive interactions (in XR) with the most frequent interactions (on iPhone). Apple's tight iOS/MacOS/iPadOS integrations and seamless blending of the physical and digital worlds make Vision Pro a very familiar and welcoming environment. Putting on a Meta Quest 2 today is disorienting – Apple is painting an entirely different vision for XR where it can seem fully immersive, or not at all immersive, with a literal control dial for the user to set their immersivity preference.

  • Apple’s play for the enterprise - Most Apple products do not highlight enterprise use cases, but the Vision Pro video prominently showed use cases in remote work and prosumer applications, positioning the headset as a companion device for business travelers and an at-home device for immersive remote work. The design has a waist pack making it more comfortable for long sessions. To us, this signals a commitment to the power user - the user who will spend an extra minute getting the headset ready because they’re planning on using it for 3 hours, not 3 minutes. Improved ergonomics will be important for enterprise usage.

  • Pioneering 2D/3D interaction model - Apple’s core experience is focused on a more familiar 2D interface and retains a direct connection to the user’s physical surroundings. Familiar applications like Photos, FaceTime, and Keynote, can be tiled and arranged in an immersive 3D space. Apple realizes that very few people have tried XR or feel that they have a need for it, and is shipping the Vision Pro with a iPad-esque experience that feels familiar to users and allows the huge installed base of iOS apps to run on Day 1. It’s also less intimidating for users, who aren’t thrown into a completely virtual world which can be disorienting.

Anorak Ventures is tremendously excited for Apple to bring XR to market, and then, over time, to the mass market. The visionary founders of our VR/AR portfolio companies have seen this world coming for years and even decades, and there’s no better company than Apple to now show the world what this technology can do.


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Updated: Feb 14, 2023

Last week we held our Annual Partner Meeting in person for the first time in 3½ years.

It was amazing to have both our founders and LPs from across the US and Europe come together in San Francisco. Several founders in attendance have been part of the Anorak portfolio for years and have never met us IRL, which Amal and I were very happy to change. Both founders and LPs attend these events to give founders a better understanding of the venture model in hopes that it benefits them as fund raisers, while LPs enjoy having direct contact with the founders they’re helping support.

The event was both day and evening, with the day bringing together some amazing speakers in a presentation setting, and the evening focused on networking and cocktails. Although we can’t do anything for those that missed out on the cocktails, below is a summary of the day’s presentations along with slides where applicable.

I’d like to give a massive thanks to our two event sponsors, Inception Partners at UBS Private Wealth, who focus their practice around investment strategies and advanced planning for startup founders, and Perlson LLP, the tax and estate planning solution for tech companies and their founders.


Introductory Talks

Greg Castle, Managing Partner of Anorak Ventures, opened the morning with a discussion on the state of venture capital markets. The 30-80% public market correction that started in 2021, filtered back to late-stage private markets in 2022. Also significant was the absence of IPO activity this past year, which is normally a valuable source of liquidity feeding back into private markets.

While late-stage private companies are 1-2 years from IPO, and thus closely track public markets, at the seed-stage there is a much wider gap. It's more difficult to draw direct comparisons for a variety of reasons which has somewhat insulated seed stage valuations. This, combined with an increased number of larger firms trying to deploy capital earlier, has kept seed-stage valuations relatively founder friendly.

Deals done by larger firms tend to be at higher valuations. These firms have lots of capital to deploy to ensure they reach sizable ownership percentages on exit. Valuation numbers reported and factored into industry averages, like those published by Pitchbook, tend to be artificially inflated by these deals. Great for founders who are able to land a seed investment from larger marque firms, but Greg cautioned founders to have realistic expectations for all others.

Greg highlighted Anorak's renewed focus on investing in capital-efficient businesses with a clear path to profitability. He also highlighted the firm's discipline around reasonable entry valuations when selecting investment opportunities.

Greg’s message to early stage founders building differentiated technology is: don’t let the doom and gloom of the broader capital markets dissuade you. At the very earliest stages, financing is still available, if not quite as abundant, as previously. Great companies with strong teams are getting funded at healthy valuations, and in “hot” sectors, like generative AI, the early-stage markets are as frenzied as anything seen in 2021.

Jonathan “JR” Roosevelt, Managing Director at Industry Ventures, provided in-depth analysis of VC markets. Industry Ventures is one of the most active investors in the venture market. They invest in companies and venture capital partnerships directly and via secondary transactions. With exposure to over 450 venture funds and over 16,000 private tech companies, Industry Ventures has broad insight into VC activity across all sectors and stages.

JR confirmed, with data, the broad strokes of what Anorak has seen in the earliest-stage markets – that activity remains strong in spite of a broad pullback in VC activity in the later-stage markets. JR emphasized that lower multiples in the public markets have led to lower multiples in the mid- and late-stage private markets. He expects the earliest-stage valuations to come down in 2023, creating an opportunity for VCs to get into great companies at attractive prices.

While operating in a recession or capital-constrained environment is certainly challenging, JR also described some of the silver linings for companies that are founded in recessions. Many great companies such as Airbnb, Microsoft, Slack, Square, and Uber were founded in recessions, and find themselves more able to recruit a high density of top talent, while also facing less competition in their markets.

Amal Dorai, Partner at Anorak Ventures, presented Anorak’s investment priorities for 2023.

Anorak focuses on founders leveraging deep expertise to solve important problems with differentiated technology, specifically the set of technologies we refer to as “Computing in the Third Dimension.” Computing in the Third Dimension is the name we give to the convergence of the physical world with the digital world, including:

  • Capturing data from the physical world and processing it digitally, with computer vision or other machine learning techniques. SafelyYou, an Anorak portfolio company that uses cameras to detect when senior citizens have fallen and need assistance.

  • Digital systems acting in the physical world, such as robotics or connected hardware. Irrigreen, an Anorak portfolio company, uses inkjet printing technology to irrigate lawns and fields with no water wastage, reducing water consumption by up to 40%.

  • All aspects of 3D computing, such as business collaboration (Arthur), e-commerce (VNTANA), and entertainment (Virtex)


Fireside Chats

Nirav Patel, CEO of Framework, joined Greg for a fireside chat about building a successful consumer electronics company in an industry dominated by a few giant incumbents. Framework is a mission-oriented company that builds repairable, upgradeable, products, and is ending the unsustainable throwaway culture around our electronics. The Framework Laptop is a fully modular laptop that can be upgraded with a screwdriver, but it has the premium feel and usability of an Apple flagship, unlike clunky modular products that have come before.

One of the most impressive things about Framework is that they’ve managed to ship hardware at software speed, shipping their first laptop only 18 months after founding, and continuing to innovate at a remarkable pace. Nirav discussed how he’s accomplished this, even while building the company completely remote-first during the COVID-19 pandemic. With offices in Taiwan and San Francisco, Nirav has created a tight iteration loop between design and manufacturing that is ushering in a more sustainable future for consumer electronics.

Trae Stephens, co-founder of Anduril and Partner at Founders Fund, joined Amal for a fireside chat about building a modern, AI-centric defense contractor. The traditional defense industry is dominated by old stalwarts like Raytheon and Lockheed Martin, and these incumbents are rarely challenged and have not adapted to the asymmetric warfare of the 21st century. Anduril is leading the charge to change this, with a data-first, AI-first, and software-first approach, where the hardware acts as a vehicle for intelligence gathering and delivery.

Trae very explicitly said that defense contracting is incredibly difficult for the first-time entrepreneur, and that building a defense company requires a much larger capital commitment than a typical startup. Recognizing the constraints of the sector, Trae wants and expects to see successful/exited founders step up to the plate and tackle the tremendously difficult challenges in securing the next generation of American hard power. Starting a company like Anduril is not as simple as getting some whiteboards and pizza and starting to code, but the future of the country depends on Anduril and companies like it.

Nabeel Hyatt, General Partner at Spark Capital, and one of the most insightful gaming investors in the world, painted a compelling picture of the increasingly important role that gaming plays in modern culture. Nabeel made an analogy to music – for kids growing up today, gaming holds the cultural significance that music held for the generations of 60’s, 70’s, and 80’s. Like music, today’s games have deep cultural meaning, not just in their content but in their tribes – the friends and relationships made within the context of the game and its fandom.

As an early investor and board advisor at Discord, Nabeel talked about how Discord has become a platform for users to create small, intimate groups of like-minded friends, and take those groups from game to game rather than having their communities strictly controlled by their games of choice. Discord is now much broader than gaming, and is a true social powerhouse, but the dynamics of community-building in gaming communities are still important in growing communities elsewhere, such as in the fast-rising generative AI Discord servers.

In discussing VR, Nabeel mentioned that the number of active headsets make it a viable gaming platform, but he believes cross-platform distribution is key to scaling.


Founders Showcase

After lunch, six founders of Anorak Ventures portfolio companies gave 15-minute talks about their companies.

Justin Barad, CEO of Osso VR, described how Osso VR’s virtual reality surgical training lets trainee surgeons practice the steps and the hand motions of a surgical procedure as many times as they need to on a virtual patient before taking on a flesh-and-blood case. Osso VR has been clinically proven to improve surgeon performance by 230%, and promises to improve surgical outcomes from the leading academic teaching hospitals to the most remote rural surgery clinics. Osso VR raised $66 million in 2022 and is one of the fastest-growing VR training companies.

Chen-Ping Yu, former CEO of Phiar and current engineering leader in Google’s Android Automotive division, described the opportunities and challenges in building for the automotive sector, as well as his experience through Google’s acquisition of Phiar in 2022. Phiar is an augmented-reality mapping experience that offers drivers turn-by-turn overlay directions, letting them navigate without looking away to their mobile device. Chen-Ping described how the Phiar team built a working solution, and cleared the hurdle of securing an OEM automotive partner, while also offering some realistic guidance on how slow most car companies are, and how tepidly they roll out new technology to their fleet. The automotive and mobility sector is one of the most significant industries in the world, both economically and environmentally. Entrepreneurship in this sector is critically important, and Anorak intends to invest in more companies in this sector.

Noah Robinson, CEO of Innerworld, gave a live demo of Innerworld’s mental health coaching platform, utilizing what Innerworld has coined “Cognitive Behavioral Immersion.” Noah has an incredibly compelling personal story that led him to start Innerworld, a level of “Founder-Market Fit” that we see in many Anorak companies – there’s almost nobody else who could have started Innerworld, and there’s almost no other company that Noah could have founded. One of the most emotional moments of the conference was Noah going into an Innerworld session and talking to some of his users about their experience with the platform. One of the participants literally credited Innerworld with saving her life, with Innerworld’s guides coaching her through a period of extreme depression and anxiety in her life.

Benjamin Conway, CTO of VNTANA, explained how the three-dimensional computing revolution is changing e-commerce. Traditional e-commerce platforms like Amazon use only static two-dimensional photographs of objects, making the online shopping experience much less engaging than the brick-and-mortar experience. People want to see objects in three dimensions, see how household objects feel in their home, see how apparel fits them or looks on them, and see how different objects might look or feel together. None of this is possible with the current 2-dimensional e-commerce assets, which is where VNTANA comes in. VNTANA is an asset management system for three-dimensional products, allowing vendors to scan their products in three dimensions, prepare these scans as 3D models that are efficient enough for users to download, and support advanced retail experiences like virtual try-on and augmented reality in-home previews.

Shane Dyer, CEO of Irrigreen, showed a video demonstration of Irrigreen’s precision irrigation system, which uses inkjet printing technology to “print” an exact pattern of water onto a lawn or field instead of haphazardly spraying water in overlapping circles like traditional lawn sprinklers. Irrigreen systems require 1/8th the number sprinkler heads of a traditional system, making them cost-neutral relative to a traditional system, but use 40% less water, making them an easy choice for customers in water-scarce locales, where over half of municipal water is used on lawns. Due to the precise watering pattern, integration of rain and wind forecasts, and dead-simple user configurability, the Irrigreen system also produces a far superior and more uniform lawn, making it a no-brainer for homeowners, municipalities,

commercial properties alike.

Emmanuel de Maistre, CEO of Scenario, finished the day with a talk and impressive live demo of Scenario’s generative AI toolkit for creating art for gaming assets. Unlike general-purpose AI tools like DALL-E 2, Stable Diffusion, or Midjourney, Scenario is specifically for game artists to enhance their own productivity, rather than for replacing or sidestepping the role of the artist. Scenario can learn an artist’s style from his or her portfolio, build a fine-tuned model in that style, and then generate as much content in the artist’s style as they need. Emmanuel used a training set of fantasy art, and a picture of himself, to create a picture of himself as one of the “rainbow-haired dwarves” in the game that he is building. Scenario recently raised a $6 million seed round and is one of the rising leaders in generative AI.


In total, the day was an incredible opportunity to connect, learn, and simply catch up after three years. We look forward to seeing everyone again soon!

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Highlights from Anorak Ventures' event with newkid at LA Tech Week 2022.

As a seed-stage venture capital firm investing in emerging technology, we meet incredibly smart technical founders who have created astounding technologies and products. However, we regularly see these founders struggle to connect with an audience and get that audience from "spectator" to "customer." We've worked with many of our portfolio companies on marketing and messaging to help these great products become great companies, and we partnered with branding agency newkid to capture some of these lessons at our talk "PERCEPTION IS REALITY" at this year's LA Tech Week. We've summarized that talk below.

1. PEOPLE AREN'T NUMBERS. Startups often define their target customers in terms of broad demographic slices, like "fitness-oriented women" or "services businesses under $10 million in revenue." These are a good start to help narrow your focus, but you can't build a company around this kind of audience without a deeper understanding of who they are.

This is the first, and most important, step towards developing your company's positioning. You need to understand your customers more broadly than how they would interact with your product. You need to meet them, talk to them, and understand them without trying to sell them anything.

If your company becomes very successful, your company, and you personally, will have a leadership role in your industry, the way that Tim Cook at Apple or Satya Nadella at Microsoft are important figures in the global technology industry. Just like you wouldn't run for President of a country without understanding its people, its history, its music, its movies, its stories, its food, its culture, etc... make sure you understand every aspect of your customer, not just those related to your business.

Homework: Spend a day doing customer service. Join a subreddit. Jump into a mosh pit.

2. NO IS THE KEY WORD. As a startup, it's hard to say no, especially to a customer who wants a specific feature and has an open checkbook and is ready to pay for it. A customer might truthfully say, "I'd buy this if it had SAP integration!" And they might pay you enough to cover the costs of building it, and then some. But a startup's biggest advantage is focus, and that SAP integration delays the rest of your vision, creates openings for competition to enter, and makes your product more complex, and thus worse, for the rest of your customers who don't need it.

That's not to say that you shouldn't listen to your customers, but your customer feedback shouldn't go directly into your backlog. Your deep insight into your customer (see point 1) is what gives you the confidence to set the vision for your company yourself, and stay true to it. After all, if you're just building what your customer tells you to, you're building someone else's company for them.

Homework. Delete 5 user requests. Move them from Priority 2 to "Priority Never."

3. CLARITY IS KING. Good startup founders know their markets better than anyone else in the world, and hire other people who are also deep domain experts. But when they communicate to their market, they can fall into the trap of being too abstract or too vague in their messaging.

Vague marketing phrases like "Reimagine your X stack" assume that someone is thinking about X, understands what an "X stack" is, and even wants to "reimagine" it -- it's likely that none of these are true!

A startup needs a message so clear that anyone in your target audience immediately understands what your company does and why they would want your product.

This is an area where startups have a strong advantage over large companies. Large companies sell many different products to many different types of customers, so their marketing is necessarily vague. But when you look at the most successful companies when they were smaller, you can find the focus and clarity it takes to succeed as a startup. For example, Twilio's home page in 2010 describes exactly what it sells: a "web-service API" to "voice-enable your apps" or provide "text messaging for your apps."

12 years later, in 2022, Twilio is a public company with $3 billion in revenue, selling hundreds of different products. Their home page is necessarily vague, referring to "data-driven customer engagement at scale."

Don't look to modern megacorporations for clues about how to market your startup -- look at how they marketed themselves when they were your size. Find a way to describe your company that is so clear that your most clueless investor (hopefully that's not us!😄) could sell your product for you.

Homework: Ask your best friend to describe your startup in one sentence.

4. ATTENTION IS EARNED. People will read a 10,000 word magazine article about Apple or Facebook because people already know those companies and want to learn more about them. But as a startup, you're just one of a million things that people could be paying attention to. Why should they pay attention to you? You need to have a first sentence that earns the user's attention and gets them to read the second sentence.

A great example of this is Apple's original advertising for the Macintosh 38 years ago, when many people found computers perplexing and intimidating:

There's a LOT of information in this advertisement, but the opening tagline gives the target audience a reason to read further.

Homework: Write a 1-2-4 pitch for your company. One sentence to make your audience care. Two more sentences to explain what you do. Four more sentences to support your claims.

5. EDUCATION IS EXPENSIVE. You have 30 seconds to talk to a customer who's been alive and learning things for 30 years -- instead of teaching them everything about your product from scratch, it's far more effective to tap into knowledge that they already have.

The "Uber for X" marketing approach is definitely a bit tired, but it existed for a reason -- instead of having to explain the concept of an on-demand app, the "Uber for X" formulation more concisely tells your customer what they need to know.

Homework: Formulate your company in terms of one or two concepts that your customer already knows.

6. WHAT GETS REPEATED GETS REMEMBERED. A customer won't remember something after seeing it once. The way to go from a brand impression to brand recognition is consistency and repetition:

As a startup founder, you'll be giving your pitch thousands of times, across multiple channels like video, Web, and in-person. Saying the same thing thousands of times can get exhausting, but resist the temptation to "change it up" or "keep it interesting." Definitely don't just have canned responses to all situations, but find your handful of key phrases and visuals, and use them across every situation.

Your target customer is hearing your pitch for the first time, so make sure they're getting your best material.

Homework: Pull up your website, app, social media, emails, pitch deck, etc. Do they all look and sound like they came from the same brand?

7. YOU'RE NOT ALWAYS THE EXPERT. Founders are accustomed to "doing it themselves," but an important part of being an effective founder is knowing when you need a domain expert. You wouldn't try to build your company's iOS app if you've never written a line of code, but we see founders trying to build their startup's pitch deck with built-in PowerPoint themes.

If you had to make a single three-point basketball shot and your life depended on it, would you take the shot yourself, or hire Steph Curry to take it for you? Of course you'd hire Steph Curry, and he doesn't work for free.

As in any market, you don't always get what you pay for just by paying for it. Find a trusted referral to a branding and marketing agency that has done work that you respect. Set clear guidelines on expectations, and if you're unsure about fit, start with small deliverables before moving into bigger projects.

Homework: Ask for referrals to three branding or marketing agencies from founders whose branding and marketing you hold in high regard.

8. PERCEPTION IS REALITY. Your customer often has to invest a huge amount of trust in you, by providing their personal information, medical record, banking passwords, or even access to their home, and they have very little information to go from. Is your server's root password "password"? They can't assess your trustworthiness directly, so they index very strongly on how you present yourself.

What to you is a spelling mistake is a red flag to a customer. Poor attention to detail is the quickest way to lose hard-earned customer trust.

Homework: Check every word, every pixel, every button, every interaction... and do it again next week.


Learn more about Anorak Ventures at or Newkid at

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