How a former Microsoft executive brought Magic Leap back from the brink

During the height of the pandemic in 2020, augmented reality (AR) startup Magic Leap, fresh off massive layoffs, seemed in danger of being shuttered or sold off for parts. Then the company pivoted by hiring Peggy Johnson, a veteran of Microsoft and Qualcomm, to lead its new mission to focus on enterprise customers instead of the consumer market. 

In the following year, layoffs slowed, new hires picked up, and the company secured a new $542 million round of funding, valuing the company at roughly $2 billion. Now, Magic Leap has a new hardware offering better suited to compete with Microsoft’s HoloLens 2. Still, after years of hype, and the departure of its founder, doubts remain about Magic Leap’s quest to help lead the transition to immersive computing interfaces and a new metaverse dynamic. Quartz spoke with Johnson in early March.

Why join a beleaguered company with minimal mainstream adoption, in the middle of a pandemic? 

When I saw that the CEO job was open, I very intentionally raised my hand, because I thought, “They’ve got a great product, they just made the switch to enterprise, and all the bright pieces are there. They can actually have an impact in that market.” That’s why I’m here.

We’ve been rebuilding over the last 18 months. We’ve stabilized the team, our finances, our image in the industry, and we have new branding…. I’m [also] guided by the IDC analysis [of the AR/VR industry]. They predict a $39 billion TAM [total addressable market by 2025].  

Will Magic Leap ever return to its consumer-focused roots to join the race to replace smart phones with smart glasses?  

We intend over time to come back to the consumer market. But the reason I’m focused [on enterprise] now is I need to show value now. That will inform us as we move over the longer term back toward a consumer market. I think those companies [Facebook, Snap, Apple] have all said the same thing, that the consumer is going to want a glasses format. And I think they’re right.

How is AR meaningfully impactful right now? 

I think, augmented reality will forever change surgery going forward. Now, rather than a screen fixed on the wall, they can lay down a digital marker as to where the incision has to go, a very precise digital marker. I think we may look back and say, “You remember when surgeons didn’t have augmented reality in the operating room?” 

Can we avoid a dystopian, data-flooded AR future? 

I think you have to be careful of cognitive overload and make sure that the user is in control of what they see. And so we think about, in these early days of AR, privacy concerns, ethics concerns. These things are brimming with sensors and cameras.

We have to think about that from day one, not five years into the plan. You can’t just create technology and unleash it on the world without thinking about the constraints, and the pitfalls of it.