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"I Consider Myself Crucial to the Success of that Company": Jack McCauley Recalls the Early Days of Oculus and Looks to the Future

Jack McCauley isn't with Oculus VR anymore, but he's still working tirelessly to make VR better.

The former Vice President of Engineering at Oculus, McCauley was instrumental in the creation the first two Oculus Rift development kits. The Rift is out now, but McCauley is moving forward. He's currently working on a new VR tracking system, which he hopes will solve many of the platform's issues surrounding motion sickness.

I recently had a chance to talk with McCauley about his time with Oculus, the cirumstances around his departure, VR's gaming potential, and what VR will look like in the future. Here's what he had to say.

USG: You said that your experience with VR is really profound. You stated your belief that it's going to change things. I'm kind of wondering, what was your first experience with VR?

JM: Well, I'm a late adopter on stuff. I don't buy the latest phone. I buy it six months later.

USG: That's surprising, because you're a tinkerer. You seem like a technology guy.

JM: Right, but I lack the ability to distinguish between buzz and hype and reality, and so I've been burned so many times, now I just wait, until I can get it in my hands. I wasn't a VR guy, I was a videogame guy, and virtual reality and stereopsis tried to do that for years, and it just wasn't there because the cell phone screens that we can use now were not high enough pixel density. It was not a good experience.

So, I was sitting at my little lab here, working away, and I got a call from [Activision's Greg Deutch], who says, "There's a guy named Brendan Iribe who's got a VR thing, he wants to talk to you. I turned him on to you because you worked at Activision with me, and we worked on Guitar Hero."

Brendan's a very enthusiastic, positive person - it's his personality, and it's infectious. When he came to meet me and asked me for help, I said to him, "Brendan, you're a pitch man, I can tell, and you're very very good at it. You've hooked me into this thing and I haven't even seen it yet, but I can tell by your enthusiasm that you think you're onto something."

So Brendan came here with the prototype hooked to something I can't really talk about right now because of some legal issues, but hooked to an application. I looked at it, and all I came up with were criticisms in my mind. "This doesn't work right, this doesn't work right, this doesn't work right." And then I put it down and went, "What can be done to make it work right? Well, this thing can be done. I don't know how to that particular thing, but other people are working on that part, but I can do my part to work on things."

I thought that it was profound enough, and the technology that was being used, which came from mobile phones. These little sensors that are in mobile phones - the gyroscopes, the 9-DOF, MEMS components were finally in mass production and being shown in applications in similar devices, which made sort of rudimentary rotations and head position possible - just very fundamental stuff. It didn't eliminate the motion sickness stuff, which many people experienced with DK1, it was terrible. But I could see where it was going, I could see the cell phone screens. The 4K stuff was being talked about. I said, "It's just a matter of time before there's a cell phone screen with 1080p, and a little bit beyond that, there's going to be a cell phone screen with 4K resolution. So now we have a really good display, and we have these sensors." And I said, "Those are the parts that are naturally going to fall into place, and will be there." I knew from looking at DK1 and the foamcore prototype from [Oculus founder Palmer Luckey] that it was just a matter of time before we were able to crest that wave and get that newer stuff in there.

USG: So, Brendan came in and he demoed you the VR set. Can you tell me about your first meeting with Palmer?

JM: Palmer, I met... so, here's the story with that. Brendan goes, "There's this guy named Palmer Luckey. He's a VR enthusiast. He's hooked up with [John Carmack]." I met [John Carmack] at Oculus, but I knew who he was. He works in a different area than I do. I'm a console guy, I work with the consoles, game consoles. I'm not a PC gamer guy. I was, years ago, but I migrated into consoles because that's where I could find work. So, anyways, to make a long story short, Brendan told me [Carmack] was working with Palmer. Palmer had given him a prototype. Carmack had modified it and added a few small things to it, but basically, took Palmer's formcore prototype and wrote a test application around it.

And, so Brendan says, “Carmack was at CES, he wants to show it." OK, it's got to be pretty good, let's try it. So I put it on, and then Brendan basically hired me to help him produce the thing. This is more or less before I met Palmer. Palmer, [vice president of product Nate Mitchell], [chief scientist Mike Abrash], and myself met at a restaurant in Newport Beach. I brought some stuff I had been working on with me, and it was the first time that I met Palmer. He was just 19 years old. I had my own kids, my kids were his age, and just to me he looked like a kid, but he's a very well-spoken guy. He's not a technical guy. He doesn't need to be, either. When people ask me about Palmer, I say, "He's not technical, really, but he's an enthusiast." That's what he calls himself, and that's exactly what he is. So, I met Palmer, Nate, and Mike at a restaurant, I brought the stuff with me that I had been working on. Then we set up to film the Kickstarter video. We filmed it here at my facility. As far as I'm concerned, we started the company here.

They didn't have a building or anything, and we were meeting people down here in Livermore, basically. I think they were using Brendan's apartment a little, but we filmed the Kickstarter video here. We redecorated the place for the Kickstarter video, we rented furniture, we set the place up to basically look like it was a functional place. And it was, for all intents and purposes. I had already engaged the factory about potentially making DK1s. We launched the Kickstarter video, we sold 10,000 pieces. And I thought at the time, if it's 10,000 pieces, and we sell that many, that's not enough, but it would be OK. So I took the thing to China and I produced it in China. All of the things that you see there, the design work, everything on DK1, I did completely in China. We only had ten or fifteen people at the company.

I brought prototypes back to Irvine. People tried them out, they hated them. Too heavy, uncomfortable. So we'd change a few things, and I ironed out some things. But to be honest, it's a pretty simple thing. It's got an [inertial measurement unit] in it, which is the motion sensing system, and a screen and a commercial display controller that we programmed in Taiwan. We tuned it to Nvidia, tuned the panels and the motion – when you make a display, it has to be tuned. It takes specialized equipment. You don't realize when you see your phone, but the display is tuned on a piece of equipment, and you set some registers and parameters, so the display is nice and crisp and the pixels open up quickly and close quickly. We tuned it to Nvidia and launched it, was successful, had very few returns, and people loved it.

Pretty soon we were selling and selling, and we sold 70,000 of them before we stopped making them. So, we made 70,000 of those, and in the meantime we started on a DK2. And DK2 we were trying to solve positional tracking - the vestibular issues, I think, and tried to have a walk-around experience. Brendan was also working with Valve. I wasn't involved with Valve and what he was doing up there, but Valve had their own VR initiative, and how that started and who started first kind of opened a debate. My view is Oculus started first, in any measurable or meaningful way. But, Brendan had some prototype from Valve that Valve had been working on which was pretty good. It could show us the direction we were going to go in. It used two Samsung panels side by side. If you look on my Twitter page you can see it there, my kid's wearing it there in my profile shot.

So we sort of took that, some of those concepts and ran with them, but most of the engineering work for that, a lot of it was done at Irvine, a lot of it was done at China, at the factory, and a lot of the test software and production equipment. I did all the production design on it. The layout of the production lines, all the test equipment, everything.

USG: So you were there when Oculus was making their Kickstarter video and everything...

JM: Let's talk about one thing that sort of irritates me. The definition of a founder, what is that?

USG: A person who's there at the very beginning, I suppose, helps establish the company?

JM: Yeah, so, my story, and my position on this thing, and this changes... I call Brendan and I said, "You're not referring to me as a founder anymore." And the story is, "There's only one founder, and it's Palmer." Well, that's not true. Palmer being very young at the beginning of that company and a VR enthusiast, enthusiastic nice guy, he's a really nice person. Palmer doesn't have any job skills, he's 19. What do you know when you're 19? You can kind of do some stuff. He hired big guns to produce the thing, and that big gun was me. And I know how to make stuff, that's what I do. I consider myself crucial to the success of that company. If they didn't have me there and my connections in China... no one wanted that thing. [Ed. Note: We reached out to Oculus for comment on this.] Even after we had all the hype on DK1, we interviewed with Foxconn, Flex, no one wanted to touch Oculus, because it's too risky, and they didn't need us. They're making iPhones. They're perfectly happy turning out iPhones 24/7. We went to my friend's factory to produce it, it's a personal friend of mine, I said, “Can you help me?” I said, "I'll throw this project in and this project in, we'll put it all into one project for you, we'll make some money on it." And she said, "No, I don't want to get involved in it. And who are those guys, how well do you know them? Do you know anything about their character?” I said, “Trust me, I've got good intuition on this." I always say that to her.

And so, we had to pay them a lot of money up front, we had to pay them three quarters of a million dollars cash to get started. So it was challenging to find a production partner. Now, 70,000 DK1s say we made money on them, we made pretty good margin in them, and the company was actually in the black, from the startup hardware company, which is amazing. That never happens. But we didn't have enough capital to grow. We could pay our bills and stay afloat for a while if we kept selling DK1s, but we'd be like GoPro. We had to come out with another product, so we did DK2. To try to answer your question, I consider myself a founder. I think the founders are Nate, Mike, myself, Palmer, and Brendan. Those are the five key early employees. So, I get irritated by Brendan now referring to me as early employee, which wasn't true. Brendan's version of reality often changes. He's a sales guy, that's what they do, right? He's a good sales guy, he's the best.

This is the third or fourth thing I've done that's been a smash hit, and I'm pretty happy with the outcome of it. I want them to succeed, and I want Oculus to beat those guys, our competitors. Can they do it? No one knows. If I were them I would be extremely worried about Sony. Sony does not do things without really thinking their way through it. They're very smart, the company's very well run. Facebook's well run, but Sony's very well run. They don't take big risks. They take risks, but not giant ones, and VR's very risky. For them to do this means that Sony sees something in it. There are people at Sony who are hardcore executive gamers, have been doing it for 25 years, know this product and know this business so well, and they're on board. If I were Oculus or Oculus and Vive, I would be worried about them. I told Brendan very early on, "Brendan, Sony's going to get on this thing, they're going to do this, and they're going to kick your ass, they're going to kick our asses." I said, "You've got to be worried about them. Every time they've gotten into something like this they've done really well, with the exception of some other things."

USG: I was going to ask, what was the culture like early on in Oculus. You had Brendan, who you described as the pitch man, and then you had Palmer, who was very young. What was it like?

JM: Well, I'm going to tell you what I think of the people, and I'm going to only say good things, because I mean it. If there's a person that I want to say a bad thing about, I won't say anything bad. I won't even talk about them. Let's talk about Brendan. I've already given you my spin on Brendan. He's brilliant. Not a technical person. Neither was Steve Jobs. But he's not Steve Jobs, different people. He's not a technical person. He relies on input from other people, and he trusts a core group of people and surrounds himself with those people. Now, you've got to be careful who you're going to surround yourself with. You may pick the wrong person who has a personal interest in the outcome, rather than the interest of the company. If you're working for a business, you have to leave your personal self out. I've found that to be the key to success, is to remove yourself, your selfishness, from the equation, so you're making decisions which are best for the company. They may not be in your interest.

Well, when you pick someone to be your advisor and you surround yourself with them, you don't pick the person who has selfish interest. So, he has to be careful there, I'll just say that, because if you're not careful, you may be listening to the wrong person. Nate has the energy of ten people. I don't know where it comes from. He also has an innate, pardon the expression, he has a natural gift for marketing. He is a software engineer, but, he just has this thing. He's good at it. He's young. He knows what's hip. I'm not hip. I'm an old guy, you know. Palmer knows what's hip, and, Nate does. Mike is a pure technical guy. He's a very dry Russian guy. He was my favorite person there, he really was. I like Mike so much, and I stay in touch with most of those guys, but Mike in particular was a guy I really liked a lot. I worked with Mike on the quaternion mathematics and things like that.

So, to make a long story short, the culture was this: it was a startup company, and everyone was working 15, 16 hours a day. I just absolutely love that, I live for that, where everyone's on a team and we're all enthusiastic. When the politics start and the company grows and people are struggling for position in the company and walking on their fellows to get ahead, that's when I exit. I decide that's time for me to leave, because I'm just not good at those things. I don't understand it. I don't get involved with those politics at all. As soon as that starts, I leave. So, when I came on board, I said to Brendan, "Brendan, as soon as we're bought out or sold, you have to let me vest and exit," and that was sort of the deal I had with them, is that I get to leave, and I'm not going to go work for Facebook. I will not work for them. I won't work for... I do work for major corporations, but as an executive at a position at a real high profile startup I won't do it, because it's too difficult for me.

Besides, I have this facility here, this is where I like to be, in my lab, working on stuff. I'm a technical guy. So, I like doing this. I don't like sitting in meetings - no one does, really - but I don't like sitting in meetings and listening to people talk about themselves, not in the interest of the business. In a start-up company, it's like being in a rowboat that's filling up with water, and everybody has to bail the water out, or else we're all going to drown. So, everybody's bailing and working together. Well, when the rowboat turns into the ship, you're going to have the bailers and you're going to have the people standing on the deck, the people in the cabins, so, it's no longer the same situation. So, the people who were former bailers are now standing on the deck, and we've got new bailers coming in. It's just not my thing, although I did work at Activision for a long time, and EA, because I worked in a studio where it's run like a startup. A game studio is a really cool place to work, it's a lot of fun, and the reason is it's all about the art. It's all about making the content, and, all that other stuff, struggling for position, falls by the wayside. It's the guy that has the best idea that wins, usually.

At a corporation or publisher, I'm not going to name any, or a large company with a blue F, it's not really about that. It is about that, but it's not really about that. It's about gaining your own position in the company, and naturally people want to get recognized for what they're doing. So, to answer your question, I'll go to a studio and sit at Burnaby, at EA Burnaby for two or three years, no problem, or I'll go to a studio, Red Octane or Neversoft, I have no problem, I'll sit there for days and days and days and love it. But going to work for a corporation, it's just not my thing, it's just not for me. So, to answer your question, when everything's going well and we're all bailing – for instance, Nate, Palmer and myself all went to China to work on DK1. Palmer and Nate and I were at the factory working on it together. Neither of these guys knew how to work on anything, but we're all trying to get it done, and I just loved it. It's fun. The enthusiasm and the energy and the commitment by the people. Like I said, we were working, I was working, I'd go to work at 4 or 5 in the morning, I'd get off at 9 or 10 at night every night. Then at the factory I stayed awake for three days working, didn't sleep once. But it was all voluntary. No one forced me to it, I just dug it.

USG: Do you have any really good stories that you remember from that period?

JM: So, this is the story I tell, and it's kind of a Palmer story. I think it's a cute story, because it shows more about me than it does Palmer. Palmer was at my facility here, and I had my mom's estate furniture here. What I liked was the enthusiasm that we had, and Brendan in particular I liked. And, the funny stories, there's many of them, but one of them is me yelling at Palmer like I'm his dad about putting feet on my furniture, and it just came out, because I've got kids that age. And later on I thought about it, it's like, we probably shouldn't have talked to him like that, we probably embarrassed him. And then Palmer would show up here with his girlfriend, and I think he still has the same girlfriend, like he's going to a party. I kind of bossed Palmer around like I was his dad, probably. That's my view of things, and probably I should have been a little more gentle. You know, he doesn't wear shoes to work, he walks in bare feet, he's kind of sloppy. He's just a big nerd.

USG: Very much the picture of the Silicon Valley tech guy who's starting at a very early age.

JM: Well, you know, when you're young like that you're pretty fearless. You don't know, you haven't been burned enough. Yeah, he's fearless, for sure. All those guys are. You've got to be fearless. This is not an activity of normal people, to take risks like this, and most people like their jobs and security. They don't like insecurity. He just didn't think about it. There are some other things about Palmer that he told me later that surprised me, but now looking back on it it doesn't surprise me as much, because he doesn't have that much fear. He also, the thing that I like about him is, he doesn't get his ego too much into it. A little bit of that now, but back then, he didn't have a big ego. He really didn't. He's just a guy that likes gadgets. Most of the guys there are like that.

USG: What was it like when Oculus caught fire and started to catch on?

JM: Well, I'll tell you, I'd been through this before with Guitar Hero, and I didn't realize the extent of it when I was at Guitar Hero. My job there was to make stuff, and make sure things happened. An executive executing, or whatever. So, I'm not involved with the marketing stuff either, and I don't like to get my face out there and show up. I do a little bit now with speeches and things, mostly related to my career, but, I don't stick my head out there, I don't do well in front of the camera. None of that stuff works for me. So, I don't have good visibility. It's only when I look at the actual sales numbers do I realize how big something is, and with Guitar Hero's 63 million units, we sold more hardware than Apple. Activision did, in two years. Over a period of two years we sold more hardware than Apple Computer, which was like the world's biggest company back then. So, it's only when I look back I see the impact. At the time I can't see it.

To answer your question, Oculus was coming up, I saw the magazines, people were asking me about it. I didn't really occur to me what it was. I am going to reserve my opinion on where VR is going to go until it actually happens. It could absolutely go upside down. These things do sometimes. No one knows why. Tesla could absolutely go tits up, pardon the expression. It could. I've seen that before. Apple did go belly up, almost. Apple Computer was almost out of business. People were hedging with what was going to happen to them. When they came out with the Macintosh, Steve Jobs predicted 10 million units, they sold 30,000. Because it was a $12,000 machine. So, pricing is very important. So, you never know what's going to happen. Apple, the stodgy old people that run companies, very conservative companies like Palmolive and Coca-Cola would have continued to sell the Apple IIe, because it was selling well, instead of thinking, "We better stop selling this thing and come up with something new really fast." Well, if it was a company run by a bunch of old people, they would say, "No, don't do that. We've got security, we've got revenue, we can pay our bills". Back then, Oculus was... they were risk takers. I'm a risk taker. I do risky stuff, like putting revenue into GoPro, and other things like that. I do, and I lose. I've had so many companies fail. I've done like ten of these things, or twelve, and the number of hits I've had is pretty low.

USG: Four or five hits is kind of a big deal. That's really good.

JM: Well, like I said, I don't see it at the time, because I'm just doing my job. I have a job to do, I have a staff, and I focus on my job, and I don't get involved with political stuff. That's how I've survived. Once I start poking around in politics and personalities, I start spending all my time on that stuff instead of doing my job. So, it's all results-based. Can he get it done? We know he can, he'll get it done, and I give people as little grief as possible. Does that always make me the easiest person to work with? No, it doesn't. I'm very demanding. If someone's not pulling their weight, they very quickly find themselves out of a job, real fast, and I'll get the next guy in there. It doesn't make me easy necessarily to get along with, and I know that, but I concentrate on what I'm supposed to do and I leave my own interest out of it. Sort of. I've tried my best to be agnostic in what I'm doing.

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