Building an AR startup in an emerging technology market

Executive overview

AR is not yet a mature platform — it is in the installation phase, where foundational tooling must be built before applications can flourish. The window for founders is in core infrastructure, not consumer apps. Three converging trends — mobile supply chains, power efficiency (Koomey's law), and bandwidth (Edholm's law) — are making the hardware viable.

The right time to build in AR is during the installation phase, on infrastructure — not applications.

The technology cycles behind AR's timing

• AR is riding the mobile supply chain: cheap sensors, cameras, and processors originally built for phones
• Koomey's law: compute power efficiency doubles every 18 months — iPhone 7 outperforms a MacBook Air at a fraction of the power draw
• Edholm's law: wireless bandwidth (3G → LTE → 5G) tracks exponentially; 5G targets 10 Gbps — comparable to home Wi-Fi
• AR headsets need to hit single-digit watt power consumption; current trends point there
• Carlota Perez's innovation cycle: installation phase (tooling, infrastructure) precedes the deployment phase (app explosion)
• Mobile's deployment phase — the proliferation of apps — only happened after iOS/Android infrastructure was solid

Where founders should focus in nascent markets

• Bet on installation-phase companies: core technology and developer tooling, not end-user applications
• Killer apps for AR are still undetermined; trying to predict them is a losing game
• Provable technical demos matter more than early customer traction when the tech is unproven
• Nail the technology first — show it's doable — then use that to attract aligned investors
• Finding investors who are independent thinkers and genuinely believe the vision is worth more than chasing followers
• ARKit's launch created market enthusiasm; timing external catalysts can multiply fundraising impact

Fundraising in an unknown market

• YC brand provides credibility and access that is hard to replicate independently
• A compelling live demo (cross-platform AR multiplayer Pong) generated inbound investor interest
• Seed investors who back long-horizon bets need to be true believers, not trend-followers
• Founders Fund and SoftTech (Jeff Clavier) backed Escher Reality based on vision alignment
• Expect more no's than yes's; keep going and seek people who will weather uncertainty with you

Life after acquisition: operating inside a large company

• Escher's acquisition by Niantic worked because the original mission — building an AR platform — continued
• Reframe the acquisition as skipping from seed stage to Series B: same ambition, more resources
• Cultural integration takes patience; treat it like immigration — mutual respect, gradual alignment
• Niantic's 5x headcount growth in one year offered skills and scope impossible at a startup
• Success inside a large company depends on relationships, rapport with leadership, and execution
• Projects that would have taken years at Escher shipped faster with Niantic's scale behind them

YC and the immigrant founder mindset

• YC's value is protecting companies through the most brittle early stage — focus, direction, seed funding
• Do things that don't scale: hacked demos, manual processes, high-leverage activities big companies won't touch
• Batch relationships outlast the current company; the network is non-zero-sum across careers
• The immigrant experience — rebuilding from scratch, adapting fast — maps directly onto founding a startup
• The US environment of abundance and positive-sum thinking enables the psychological freedom to explore
• Many major tech companies were founded by immigrants; the pattern is structural, not coincidental