A Window on the Future


Walk into the San Juan Island offices of Mark Anderson's Strategic News Service (SNS) and you're confronted with a panoramic view of Haro Strait, with Vancouver Island across the water. The scenic location fits one of the technology industry's favorite prognosticators.

Anderson's predictions and perspectives-which tech titans around the globe pay handsomely for-can be as crystal clear as his view.

Check out, for instance, his forecast for two Puget Sound giants: Boeing and Microsoft. The aircraft manufacturer is "dead-dead," he says. "Deader than they think. "I don't think Boeing understands Boeing's own future," Anderson says. "Boeing's future in Seattle is grimmer than Boeing's future in general. At a time when everyone is giddy over the Dreamliner, I take a bigger look. China, your No. 1 customer, has just turned into your No. 1 competitor. They've canceled orders and the internal edict from the Communist Party is 'Don't buy anymore outside guys' stuff.' That's horrible news. Russia is trying to build a whole new airframe company and in Europe, billions more in subsidies for your chief competitor."

He adds: "Don't rely on Boeing. If you're a Seattle Chamber of Commerce person, don't turn to Boeing; they aren't going to help you out."

Anderson does, however, expect great things from the next Microsoft operating system, due out this fall.

"Windows 7 will be the best-selling Microsoft product of all time," he predicts. "And Q4 will be much bigger than people think. That's a real driver of commerce for all."

Regional growth will come from wireless, biotech and the city's "retail DNA" of Nordstrom, Amazon.com, Blue Nile and others. Oh, and better civic leadership wouldn't hurt. Local leaders tend to be inoffensive and ineffective, he says. Leaders who believe in "less talk, more action," he says, include New York Mayor Michael Bloomberg, Utah Gov. Jon Huntsman, Homeland Security Secretary Janet Napolitano and former Maine Gov. Angus King.

Now consider the source, especially given Anderson's celebrated prescience. Since 1995, industry leaders and investors have forked over $595 to $895 a year for his weekly SNS newsletter with his predictions on the computer and telecommunications industries. A blue-chip roster of tech heavyweights, including Bill Gates, Mark Hurd, Michael Dell and venture capitalist John Doerr, are subscribers.

To extend the impact and influence of his newsletters, Anderson also organizes small conferences in southern California for the technology intelligentsia. Dubbed FiRe, for "Future in Review," the get-togethers attract an exclusive clientele, with attendance capped at 200, of high-level executives from world-class, tech-driven companies.

At these conferences, Anderson peels back the layers of technology's future. He probes nanotechnology, space travel, biology, medical diagnostics and other fields. His on-stage demeanor reflects his island lifestyle: easy-going but scholarly.

But Anderson's reputation stands in contrast to his humble surroundings. The Economist has called FiRe the "best technology conference in the world." Last year, noted BusinessWeek technology writer Steve Hamm named Strategic News Service "one of the most successful high-tech newsletters." The New York Times labeled Anderson "one of the technology world's more highly regarded pundits."

Larry Smarr, a computer science professor at the University of California at San Diego and director of the California Institute for Telecommunications and Information Technology (a joint program of UC San Diego and Irvine), says Anderson is someone who "lives in the future and reports back. He sees things coming, being invented before it gets to be visible to a significant portion of the population.

"We have this insane level of specialization in our culture," Smarr says. "Mark swims against that current. He's also brave. He will tell you exactly what he thinks."


The Big Picture

Anderson's ability to integrate complex subjects and forecast trends so impressed Rick LeFaivre, managing director at Kirkland, Wash.-based OVP Venture Partners, that he recruited Anderson to the VC firm as an adviser.

"Mark is a really, really good big-picture strategist," says LeFaivre. "He can see the big picture in many areas. Lots of guys are really big in their segments, their specialties. Few people step above that and see the big picture." He notes others in that category might include former Microsoft chief technologist Nathan Myhrvold, Sun Microsystems co-founder and chief scientist Bill Joy, and Stanford University futurist Paul Saffo.

In October, Anderson will bring FiRe to Seattle, including a special "sub-conference" of FiRe dubbed the CTO Design Challenge, in which technology executives will pool their problem-solving skills.

During the challenge part of the meeting, business technology chiefs first look at purely technological aspects of a problem-for example, in one recent meeting, the problem was firefighting strategies in wildfire-ravaged San Diego County. Then the participants take the discussion in a new direction and expand its reach.

"These guys are the smartest guys in the world," Anderson says. Referring to the wildfire exercise, he adds, "They came up with a stunning achievement that integrated NASA, university systems, technology and the existing firefighting structures and systems."

The specific topic of the Seattle conference, dubbed FiRe Global Challenge: West Coast, will involve computers and netbooks, telecommunications, alternative energy and smart grids, biotech and biomedicine, ocean health and eduction. Gov. Chris Gregroire and Dell CEO Michael Dell have committed to attend, as have Nobel laureate Lee Hartwell, former director of the Fred Hutchinson Cancer Research Center, and Roger Payne, founder of Ocean Alliance. Steering committee members for the event include executives from Microsoft, the state Department of Commerce, the University of Washington, Northwest venture capital firms and other regional leaders.

"Seattle is at a crossroads," Anderson says. "Seattle needs some leadership. That's part of what we want to do with this conference. There are lots of ways to create jobs in the Northwest and Seattle, but they require action and decision. Seattle can still have a great future."

Ebullient, intellectual and respected, Anderson has repeatedly staked his career on big ideas.

He keeps his fingers on the pulse of technology as president of Technology Alliance Partners, which provides trend and marketing assistance to telecommunications and technology companies. He also founded the WSA's Investment Forum (now the Fast Pitch Forum).

He claims to be among the first to predict the global liquidity collapse, on "CNN World News," back in February 2007. He says his accuracy rate of his predictions over 10 years-which his readers hold him to account for-is greater than  90 percent. He is best known for forecasts of major shifts, redesigns and events in the computing and telecom markets, such as Steve Jobs' return to Apple.

Last year, he predicted 2009 would see a boom in software for big screens and smart phones, wall computing and lightweight laptops. He's also said 2009 would see big advances in voice recognition and the integration of biology and chips.


Pattern Recognition

Where did all this envisioning come from? He was always good at science from an early age, he says. At age 8, he wrote a letter to the head of the United States space program suggesting a better way to deploy rocket fuel. That official ignored the letter and returned it, but the ideas behind it later became standard procedure. Anderson framed the hand-written letter. It hangs in his island office.

Anderson, 58, hails from Elmhurst, Ill., near Chicago. He excelled, both academically and in extra-curricular activities, at a large high school. Around age 20, he realized he was good at predicting things.

Anderson was intrigued by the scientific method, which starts with a theory, then tests that theory, using the results to refine the initial premise. "But where did the premise come from?" he asks. "The question is the hard part."

He consciously began to practice "pattern matching," a skill he honed while earning bachelor's and master's degrees in marine biology and marine biochemistry at Stanford University. Over the years, he says, he has trained his mind to ask the right "first question."

"The job that I'm doing in the newsletter is integration, a combination of pattern matching and integration," he says. "[I'm] looking for patterns that are being honored or violated and integrating the results of that across many places."

He has lived in the San Juans since discovering its "unmatched" combination of beauty and community while doing doctoral research at the University of British Columbia in Vancouver and teaching at the University of Washington's Friday Harbor Laboratories. 

Before starting his newsletter, Anderson was a technology consultant from 1989 to 1995, with clients including McCaw Cellular Communications and Aldus Corp. (now part of Adobe Systems). He has experimented with keeping an office in Seattle but now runs a mostly virtual company, whose staff includes his two sisters as his editor and program manager.

His workplace has ample space for conversation and thinking. At its center are two sofas, a globe and tripod-mounted binoculars for whale watching. A large flat-screen TV rests on top of a cast-iron wood stove, which is fronted by an array of consumer electronics gadgets-phones, remotes and other mobile devices.

From this setting, Anderson thinks big. In addition to newsletters and conferences, he chairs SNS Project Inkwell, a computers-in-education initiative. It aims to be a standards body for computing platforms in K-12 classrooms and advocates for every child to have a computer. Microsoft, AMD, Gateway, SanDisk, Intel and others have backed the project.

San Juan Islanders know him best for creating the Whale Museum in Friday Harbor and for founding the Orca Relief Citizen's Alliance, a group that urges tighter restrictions on popular whale watching boats.

"The boats cause the whales to lose sonar ability and they starve," he says. "The boats increase their [the whales'] requirements for food at a time when there are fewer fish, and their starvation accelerates."

Near his sea-view office, Anderson makes his home on a lush, inner-island farm where he raises sheep and blueberries. He zips around the island in a silver BMW M Roadster convertible.

Anderson talks exuberantly about theoretical physics, marine biology, chip sales in Japan and European heads of state. When pressed, he touches on more personal topics such as music and local artists. But he speaks most emphatically about the whale watching industry. "We are going to do something about it," he says. That's his prediction.


[Virtual] Reality Check

[Virtual] Reality Check

Seattle companies will cash in on the coming VR explosion. How it plays out beyond gaming is the next big question.
After years of hype about virtual reality, it stands ready to move from The Matrix and Avatar into real life, with applications ranging from gaming to e-sales, from collaborative product design to remote surgery. What’s more, many companies in the Seattle region will reap the benefits.
“It is a paradigm shift,” says Bob Berry, CEO of Envelop VR, a virtual reality startup in Bellevue. “It’s a new form of computing that is just as transformative as mobile was. We are entering the age of immersive computing.”  
Those heralding the arrival of market-ready VR aren’t merely the ones developing the technologies. Investors have become true believers, too. Matt McIlwain, managing director of the tech-oriented Madrona Venture Group, says he was a VR skeptic until recently. “Eighteen months ago, I started meeting with a group of companies that had very early developer kits,” says McIlwain, who noticed two things had changed from earlier efforts. First, the VR experience was “pretty darn good.” Second, he adds, “I didn’t feel woozy coming out of the experience.”
Forest Key, CEO of Pixvana, a Seattle startup developing cloud-based tools for VR, couldn’t agree more. “VR in the 1990s made me vomit,” Key relates. But thanks to rapid advances in the underlying technologies, such as faster processing, better graphics and new methods for tracking movements, says Key, virtual reality systems that will hit the consumer market this year are more immersive and much less likely to induce “simulator sickness.”
“For hundreds of dollars, or certainly in the low thousands, you can build a rig that is superb in its capabilities and fully capable of tricking your brain into the effect that virtual reality strives for,” Key says. “Once done correctly, it’s like time travel, teleportation and science fiction all in one. It magically transports you to different places and profoundly allows you to have a psycho-perceptual experience that is different than watching a rectangle on a web browser.”
The launch this spring of three much-anticipated VR headsets — Facebook’s Oculus Rift, the HTC Vive and Microsoft’s HoloLens — spurs the optimistic frenzy. The Oculus Rift costs $600 and the HTC Vive goes for $799; both are aimed at the consumer market. Microsoft is selling 
HoloLens as part of a developer’s kit for $3,000. It’s aimed at game makers as well as those developing practical applications. 
Of the three companies that have introduced new headsets, only Microsoft calls the Seattle region home. But HTC, which developed its Vive headset in partnership with Bellevue’s game colossus, Valve Corporation, headquarters its United States operations in Bellevue, and its VR offices are in Pioneer Square, about a mile from the SoDo site where Oculus VR recently opened an R&D office.  
Los angeles, Silicon Valley and Seattle constitute the three major hubs for VR development, but Seattle may be ideally positioned to benefit most favorably from the coming VR explosion. While Los Angeles has a large pool of entertainment talent to draw from and Silicon Valley has an edge in hardware development, Key says Seattle has two major advantages: companies with long experience in game development and a vast knowledge of cloud services. While single-person VR experiences can run on isolated computers, Key notes, running interactive VR applications requires a cloud-based infrastructure.
“In three years,” he predicts, “no one will be debating whether the hardware is ready. It’s going to entirely become a question about software, about content.” In fact, Tom Furness, a professor of industrial engineering at the University of Washington and considered by many to be the godfather of VR, says, “The hardware is here. Now it’s about the content and tools to help us develop content easier and better. We don’t have those tools right now.”
Furness recently joined Berry’s Envelop VR as its senior scientific adviser. He says he chose to work with Envelop because it is developing what he considers “the most essential component” for the VR industry. “It is the superglue that brings together and integrates all of the hardware, software and experience design components that make VR an empowering tool for mankind,” Furness says.
Madrona Venture Group has been a lead investor in many of the burgeoning VR companies in the region, including Envelop and Pixvana. McIlwain believes the concentration of game and cloud application developers makes the Seattle region the natural location for developing VR content and the tools required to create and deliver the content.
“The gaming ecosystem in Seattle is really good,” notes McIlwain. “But, then, this is also the cloud capital of the world. I can go down the street and talk to my buddies at Microsoft and Amazon and ask, ‘What kind of use cases are people using you for? What are the next things you’re building? Why do you need to support this kind of video encoding?’”
Key says gaming will be the primary driver of consumer VR sales, but investors and developers alike see VR as a much broader game changer — from education to health care to manufacturing. “[For example,] meetings and conferences,” Key observes. “Meeting with your doctor or your trainer. Any kind of one-to-many or one-to-one communication will be very powerful in VR.  It might be education, or therapy.” 
Furness matches Key’s excitement at VR’s potential for bridging distances. “It’s basically a transportation system for the senses, where you can meet with other people even though you’re not physically co-located,” Furness notes. “You can bring people together and get bandwidth not only to the brain but between brains.”
It’s not quite the Vulcan mind meld Mr. Spock used to great advantage in Star Trek, but it’s close. “[VR] will let us look through somebody else’s eyes, let us communicate our perspectives and [give us a space] where we work on things together,” Furness told KUOW last year.
In the training sphere alone, whether it’s showing surgeons how to remove a gallbladder or giving aircraft technicians a how-to on painting a helicopter — without wasting any paint — VR promises to revolutionize how teachers teach. 
Even Seattle companies you wouldn’t immediately associate with VR are getting into the act. Boeing, which has long used augmented reality for flight training, used VR in the aforementioned example on painting helicopters. Amazon and Vulcan are hiring software engineers with VR expertise, Amazon apparently with an eye on its growing position in film and television production and Vulcan expressing a vague interest in “developing cutting edge solutions in augmented and virtual reality technologies.” 
“There are a lot of exciting applications that are in the commercial realm in addition to the consumer realm,” adds McIlwain. He envisions a group of architects “walking around” inside a building in VR, discussing design changes. “Or I can Skype into an interactive session to help a doctor figure out a diagnosis, or help someone repair something in a manufacturing facility. I don’t have to be physically present.”
Microsoft designed HoloLens primarily for such nongaming markets. At its Redmond campus last fall, the company demonstrated HoloLens by giving users a full-size 3-D view of a new Volvo sedan, with the ability to look under the hood and remove elements to explore the chassis and power train. Volvo is exploring having its engineers use HoloLens in the design process. One Microsoft video shows a designer looking at a motorcycle and simply touching and pulling on the gas tank, for example, to change its shape.    
E-commerce constitutes one of the most immediate and massive nongaming markets for VR. Imagine, Berry says, shopping on Amazon.com for a tent that sleeps six. How big is that tent, really? Big enough for six large people?
“I have no way to reason about the actual size of that tent other than looking at 2-D images, or maybe a little 3-D model I can spin around,” Berry says. But imagine clicking on a button next to the tent to summon up a VR view. “Suddenly,” he explains, “you’re inside the tent at scale and you can actually get a sense of how big the thing is. VR allows you to sense scale in a way that your brain can actually understand.”
As game makers move into the VR space, new startups in Seattle zero in on developing the tools that will simplify developing those games, as well as any other type of VR application.
Envelop VR, which launched in July 2014, developed a VR shell that goes around the Windows computer, allowing users wearing an Oculus Rift headset to work in Microsoft Windows in a 3-D environment. A camera on the Rift headset offers the user a view of the keyboard or mouse so he or she can control the immersive experience of Windows.  
The company is also building tools that let developers convert 2-D objects created in, say, AutoCAD, into 3-D objects in a virtual app in the environment. Besides allowing users to explore tents in 3-D while shopping online, the technology can be used in other sectors, such as manufacturing. “An engineer on an auto manufacturing line could put a headset on, export a 2-D design into a VR environment and walk around the object, lean their head into it and evaluate in a much more intuitive way,” Berry says.  
Pixvana focuses on delivering a cloud-based video-processing and delivery platform for virtual reality applications. After working on the Silverlight team at Microsoft, and before that as a visual effects specialist at Industrial Light & Magic, Key was aware that VR hardware, to be effective, will require new technologies for processing video at required speeds, especially when interactive applications require cloud services.
The new VR applications, says Key, “will require new kinds of tools, new kinds of production process, new kinds of experiential viewing processes. That’s what Pixvana’s mission is.”
As engineers put the finishing touches on the soon-to-be-released VR headsets and technologists of various specialties prepare the infrastructure the headsets will run on, industry insiders are not entirely specific on how VR will affect the economy and society. But they are convinced the impact will be huge.
In the near term, McIlwain predicts VR products will be adopted quickly. “Smart headsets will become pretty ubiquitous in two to four years,” he says. “Based on what I’ve seen, this stuff is pretty high quality and the chances are good that we are going to get some pretty good headsets out there in the second quarter. And then we’re going to have a big uptake cycle for the holiday season.”
As for the longer term, Key believes VR will be as disruptive to earlier technologies as cinema was to vaudeville. “The idea of sitting and watching a static rectangle on a screen will be very passé in 10 years,” he predicts, “because virtual reality is so fundamentally compelling. It’s magical.”  
Thanks to that magic, VR pioneer Trond Nilsen told a meeting of the Washington Technology Industries Association last November that we’re all going to live at least part of our lives in virtual reality at some point. “[And] the world,” Nilsen promised, “is going to get strange.”