Magic Leap

Zoom

Magic Leap

Hardware and software platform for augmented reality. Originally consumer-focused (the dream was AR glasses for everyone), now pivoted to enterprise.

Magic Leap sells the Magic Leap 2 headset to businesses for use in healthcare, manufacturing, defense, and training. Revenue comes from hardware sales ($3,299 per unit for the ML2), software licensing, and enterprise service contracts.

The company also licenses its spatial computing technology to other companies. The pivot from consumer to enterprise dramatically shrank the addressable market but targeted buyers who have real budgets, real use cases, and real willingness to pay — unlike consumers who were not going to spend $2,300 on AR goggles.

Zoom

Zoom uses a freemium model. Free accounts get unlimited one-on-one meetings and 40-minute group meetings.

Paid plans start at $13.33/month per user for Pro (meetings up to 30 hours), $18.33/month for Business, and custom pricing for Enterprise. Zoom also charges for add-ons — Zoom Phone (cloud phone system), Zoom Rooms (conference room hardware), and Zoom Contact Center.

The free tier is the hook. The 40-minute limit on group calls creates just enough friction to push power users to pay.

And once one person in a company pays, the whole team follows because nobody wants to be the one whose meetings keep getting cut off.

Magic Leap

Rony Abovitz was a biomedical engineer who had previously founded and sold a surgical robotics company called MAKO Surgical for $1.65 billion. In 2010, he started Magic Leap with a vision that bordered on science fiction: lightweight augmented reality glasses that could overlay photorealistic digital objects onto the real world.

Not a screen strapped to your face — actual holograms that looked like they existed in your living room. The early demos were jaw-dropping.

A whale jumping out of a gymnasium floor. A tiny elephant dancing on your palm.

Google led the first major funding round. Then Alibaba invested.

Then AT&T. Then Saudi Arabia's sovereign wealth fund.

Between 2014 and 2019, Magic Leap raised $3.5 billion without shipping a single product. The hype was unprecedented.

The secrecy was legendary. Journalists weren't allowed inside the headquarters.

Employees signed NDAs that would make the CIA blush.

Zoom

Eric Yuan grew up in Tai'an, a mining city in Shandong province, China. In the mid-1990s he was in his twenties and inspired by the internet boom happening in America.

He applied for a US visa. He was rejected.

He applied again. Rejected again.

Eight times in total over about two years before he was finally approved in 1997. He moved to Silicon Valley with barely any English and joined WebEx as one of its first engineers.

Yuan spent 14 years at WebEx, eventually becoming VP of Engineering. Cisco acquired WebEx in 2007 for $3.2 billion.

Yuan watched Cisco slowly bloat the product with enterprise features while the core video quality deteriorated. He kept telling Cisco leadership they needed to rebuild the product from scratch.

They kept saying no.

In 2011, Yuan quit and took 40 WebEx engineers with him. He founded Zoom Video Communications with a simple thesis: video meetings should just work.

No downloads. No lag.

No "can you hear me?" No IT department required. He built the product that Cisco refused to build.

Magic Leap

The pivot to enterprise under CEO Peggy Johnson (former Microsoft executive) refocused the company on markets where AR has immediate, measurable value. Healthcare became the lead vertical — surgeons can see patient scans overlaid on the actual patient during procedures.

Defense contracts provided large, predictable revenue from government budgets. Partnerships with companies like SyncThink (concussion assessment) and Brainlab (surgical navigation) gave Magic Leap embedded distribution in existing enterprise workflows.

The Magic Leap 2 was purpose-built for enterprise — lighter, more comfortable for extended wear, and with dimming technology that works in well-lit operating rooms and factories. Getting FDA clearance opened the medical market in a way competitors haven't matched.

Zoom

Zoom grew on one thing: it worked. In a world where every video call started with five minutes of technical issues, Zoom calls just connected.

That reliability was the entire marketing strategy for the first five years.

The freemium model did the rest. Teachers, coaches, therapists, book clubs, and small teams all started on the free tier.

When they hit the 40-minute limit, enough of them converted to paid. And every free meeting was essentially a demo — everyone in the meeting saw how good Zoom was.

Yuan obsessed over simplicity. While competitors like WebEx and GoToMeeting required downloads, plugins, and IT involvement, Zoom worked in the browser with one click.

The learning curve was essentially zero. Your grandmother could figure it out.

That turned out to be extremely important when a pandemic suddenly required your grandmother to figure it out.

Then COVID happened. In March 2020, the world shut down.

Every meeting — work, school, family, doctor, church, happy hour — moved to video. Zoom was already the easiest option.

Daily participants exploded from 10 million to 300 million in four months. The stock went from $70 to $588.

Magic Leap

The $3.5 billion already spent is a sunk cost that no realistic enterprise revenue can quickly recoup. Competition from Microsoft HoloLens 2 (which had a multi-year head start in enterprise AR), Meta's Quest Pro, and Apple Vision Pro means Magic Leap is fighting well-funded incumbents.

The consumer AR dream is effectively dead — Apple's $3,499 Vision Pro proved that even Apple can't make consumer AR work yet at accessible prices. Employee trust was damaged by years of overpromising and under-delivering under the previous CEO.

The AR market itself is still nascent — total enterprise AR headset sales across all vendors number in the low hundreds of thousands, not millions. And the fundamental physics problem: making AR glasses that are lightweight, high-resolution, wide-field-of-view, and affordable remains an unsolved engineering challenge.

Zoom

The post-pandemic hangover has been severe. Zoom's stock peaked at $588 in October 2020 and crashed to under $70 by 2022 — an 88% drop.

The company went from the most exciting tech stock on the planet to a cautionary tale about pandemic valuations. Revenue growth slowed from 300%+ to single digits as people returned to offices and competitors caught up.

Security and "Zoombombing" were early crises. In early 2020, as millions of new users flooded in, trolls discovered they could join open Zoom meetings and share offensive content.

Schools, churches, and AA meetings were disrupted. It turned out Zoom's encryption wasn't truly end-to-end as advertised.

Yuan had to halt all feature development for 90 days and focus exclusively on security fixes. It was a near-death reputational crisis.

Competition from Microsoft Teams and Google Meet intensified. Both companies bundled video calling for free into products that hundreds of millions of people already used.

Microsoft Teams integrated directly into Office 365. Google Meet was built into Gmail.

Zoom had to compete against free products from two of the richest companies on Earth.

Magic Leap

Magic Leap 2 — enterprise AR headset with the largest field of view in the industry (70 degrees), dimming technology for use in bright environments, and FDA 510(k) clearance for medical use. Spatial computing platform for building enterprise AR applications.

Healthcare applications — surgeons using AR overlays during procedures, medical training simulations. Manufacturing applications — remote assistance, 3D work instructions, quality inspection with AR overlays.

Defense applications — contracted with the US military for AR-assisted battlefield visualization. Developer tools and SDK for building custom AR applications on the Magic Leap platform.

Zoom

Zoom Meetings is the core — video calls that actually work. Zoom Webinars handles large-scale events with up to 50,000 attendees.

Zoom Phone is a full cloud-based phone system replacing traditional office phones. Zoom Rooms turns physical conference rooms into one-click video meeting spaces.

Zoom Contact Center competes with established call center software. Zoom Team Chat is their Slack/Teams competitor.

Zoom Whiteboard is a collaborative digital canvas. Zoom Revenue Accelerator uses AI to analyze sales calls.

And Zoom AI Companion summarizes meetings and drafts messages.

Magic Leap

Investors include Google, Alibaba Group, AT&T, Saudi Arabia's Public Investment Fund, Temasek Holdings, and Andreessen Horowitz. Total funding exceeded $3.5 billion across multiple rounds, making Magic Leap one of the most heavily funded private tech companies ever.

Zoom

Sequoia Capital, Emergence Capital, Horizons Ventures (Li Ka-shing), Qualcomm Ventures