Credit: Halsey Minor
Halsey Minor was one of the digital media pioneers, having CNET, the first comprehensive consumer-facing technology content publisher, in 1993. The company grew, and, remarkably for the time, grew profitably. He would run the company for eight years, and it would eventually be sold to CBS in 2008 for $1.8 billion.
Halsey would go on to be one of the original investors in Salesforce, and he would be an active advisor to the company in its early days.
He continues to have his hand in a number of companies, including crypto currency company Bitreserve, and Live Planet, an end-to-end virtual reality video system that captures and distributes live and
recorded stereoscopic VR and 360 degree video. We discuss all of the above in this interview.
Peter High: Please provide an overview of Bitreserve, and of why you are so excited about crypto currency.
Halsey Minor: Bitreserve was one of the first companies in the crypto space. I realized that bitcoin created a new monetary system, and the problem Bitreserve is looking to solve is getting money from the old monetary system into this new one.
The company was difficult to start because banks would not open bank accounts for companies with “bit” in the name. It was very prejudicial. We bought part of a New Jersey bank and after about two and a half years, we were in the same situation as Coinbase. Coinbase's success is predicated on their access to US and European banking. Bitreserve is thriving and profitable, but the regulatory aspect was a headache. I thought there were others who were better suited to running the company, so I left and started Live Planet.
High: Could you provide an overview of Live Planet? What are the problems it is trying to solve, and how does this differ than existing solutions?
Minor: What our coin does is it creates a real-time marketplace where computers are bidding for capacity to be used around the world. We mop up any excess that exists in the economy in the world of computation. It is what Uber and Airbnb are doing, but probably on a bigger scale. When that is mopped up and everything is being used 100 percent, you end up with a model like bitcoin, where miners win because they have the lowest cost of power.
I have always focused on the architectures of computing and trying to be at the forefront of those changes. What is happening now is there is a fundamental reconstitution of how computing resources are provided, and they share the same basic concepts with sharing economy giants like Airbnb or Uber. We are heading towards zero unused capacity in computation.
Many ICOs [initial coin offerings] have raised problems that they may or may not build solutions for, but the problem is that the industry is not begging for their solutions. The media industry is begging for a lower cost and a more innovative way to deliver a video because they are getting crushed by over the top cost.
Streaming is exploding and creating new incremental costs, and none of these guys have figured out how to monetize it. My DIRECTV app is free so long as I have a subscription. I do not pay more for it. Then there was an explosion, and 80 percent of the Internet is video-ready. It is growing 25 percent compounded annually and it is at an inflection point. We are going to 4K and 8K and then we are going to [virtual reality]. At that point it is no longer video, it becomes reality.
Compressing and decompressing this video takes a huge amount of computing power. That is where cloud computing comes in. You have an industry that has all this additional cost, and they are paying Amazon and Google. They are paying their competitors. Amazon made it very clear that they use the cash from AWS to crush companies principally in E-commerce and media.
There is a huge mandate for what we are building. Our problem is building it. There is a huge demand for it and these things are not easy to build contrary to what a lot of companies and people think. These are serious engineering efforts. Once it is built, there is nobody in media that does not want to reduce their cost by 60 percent to 80 percent.
What we are doing is effectively creating open source. We allow for more innovation to happen in video at a time when there is not a lot of innovation happening on AWS or Google's video cloud. When you are open source, you allow for new applications to emerge, and those are the things that these media companies need in order to find additional revenue streams.
This is interesting because this is a new architecture of business. You cannot stop what we are creating any more than you can stop bitcoin because these applications are decentralized, and people contribute resources to them like the Internet.
When you contribute resources, you get paid based on demand. There is no central point of control in these. The open source community takes over a lot of the development. There is no recourse and it is interesting because the implications for the economy are that we do not have these hierarchical businesses anymore. We start to have these highly distributed businesses that operate based on the set of rules that were established from the beginning.
High: There has been a lot of both hype and speculation surrounding bitcoin. What are your thoughts on the current state?
Minor: If there is any weakness to this idea, bitcoin has shown it by an inability to agree on how to change the network. That is the downside, but some people do not a consider it downside. Some people think that this is an evolution and people get to pick their direction. It does highlight the fact that a whole new financial system worth $200 billion to $300 billion now has been created with no central authority, no point of contact, and no way to buy it out, which terrifies politicians.
We are seeing this happen across broad swaths of the economy. There is not an entrepreneur sitting at the head of a big company who buys competitors and builds a huge market position. They are systems that are set up to run autonomously with some form of control, and they are more distributed amongst contributors. It is a utility in the best sense of the word.
Regulators cannot go in and regulate it. Normally with utility, regulators would say, "Well, we will let you make 9 percent on the cost of power this month." These crypto-networks are self-regulating because people contribute resources. They are willing to receive whatever they are willing to receive, and they either get compensated or not depending upon whether they are competitive.
For me, there is nothing fundamental that is happening, and it is unfortunate that, similar to the early days of the Internet, there is a lot of crazy stuff going on that is obscuring the potentially huge innovation. A lot of the recent activity is regulated, which is interesting because it is far less than what happened in the Internet bubble. But the problem is that investment bankers and the New York Stock Exchange and NASDAQ are not making the money. That is causing America to crack down, which pushes this offshore.
This whole space is worth $350 billion, and I think at the height of the Internet bubble in 2000 it was at $9 trillion. Already, you are seeing excess, but not at the levels of the Internet bubble. I had an $8 billion company that was on the NASDAQ 100 [CNET]. There were companies that had no revenue that were worth $35 billion. By 2002, the vast majority of the industry was gone. Things which cannot be controlled draw all kinds of responses, but what is interesting is that this lack of control is going to be an ongoing concern as real companies and projects emerge with useful capabilities for blockchain in different industries.
High: You are fond of the James Gleick quote, “Every new medium transforms the nature of human thoughts, and to be curious about how you feel this new medium is going to change the nature of our thought.”
Minor: This comes from my experience with VR and the ability to interject yourself. I had a global top 10 website and I produced five TV shows. I produced four for USA and SYFY and one for CNBC. Ryan Seacrest's first two shows were with me. I lived in the world of banner ads and television and that level of immersion. It was a stark contrast because in 2000 you had crappy graphic banner ads, and then you had television.
The jump from banner ads to television is much like the jump from TV to VR. When people start participating in things as opposed to just seeing them, it is going to have a profound effect on how we understand the world. When I used to talk about the Internet, I could only think of the good things, but there have been so many bad things that have emerged. I feel optimistic again.
When people can experience different places without going anywhere, people's overall awareness of the world and of others is going to be changed profoundly. It may take a couple years for this technology to get broad consumer adoption, but the ability to interject yourself into different kinds of situations instantaneously will be powerful. This is why some call VR an empathy machine.
If people could see the devastation that happened from various events, they would perceive them in a different way. I am optimistic that it would create some global consciousness, particularly in the United States where we tend to be sheltered from the rest of the world. Television was a profound change in the way people experience the world, and print was before that. VR has that same capacity, and AR has benefits too.
High: You have spoken of your vision for having VR running 24 hours per day, live, anywhere. You mentioned the zoo or the theater and using this as an opportunity for anyone to view anything. Can you talk about the bridge between where we are now and making that a reality?
Minor: We are at a nascent place, and I think we are two years away from broad consumer adoption. A big part of the adoption is going to be driven by the quality of the headsets the people have, which need to be high resolution. The feeling of immersion is tied to resolution, and that needs to improve first. Once that happens, people will shift from living on their phones to living in VR.
I built an entire system end-to-end because there is no standard, and as a result, VR video has been stillborn. You cannot plug anything else in to it. That is why our cloud is so important. Our cloud is like Salesforce but for VR video. People will be able to build switchers and workflows. We see our VR cloud as the back plain for people integrating all kinds of functionality. It helps to catch VR up to television in terms of tools and workflow and work process. It is nascent, and on the VR side, we want to lower the cost so we can get a strong ecosystem going.
I see a huge amount of opportunity in enterprise due to the fact that we make everything with an end-to-end security model. I do not believe that in three years, there is going to be a manufacturing facility in the world that does not have our camera or a similar one from a competitor because the ability to drop in and participate in conversations and things just go wrong is enormous. We have giant companies that have thousands of facilities that are interested in starting to test with our cameras. We think enterprise adoption is going to happen faster than media adoption.
The problem with media companies is that television is good. For the NCAA basketball tournament, they have 17 cameras and Intel had their video cameras there too. It is hard to compete against 70 years of experience doing team broadcasts. You do not want to do it unless you can get a large audience, but these guys do not know how to monetize it.
Our app is the only way you can charge a user in all of VR. It is connected to a payment gateway that is similar to pay-per-view. Later, we will add subscriptions. Currently there is not payment infrastructure, but the area will expand as more tools get built. Until then, I see this being driven by enterprise. In two years, there are going to be a set of extraordinary experiences within reach of a lot of people.