Microvision (MVIS) Replaces CEO – A Soothsayer’s Retrospective

Ding-Dong

Microvision’s board finally got around to replacing their CEO today (officially, he is going to be “spending more time with his family“). Mind you, they appeared to have been plenty happy with Alexander Tokman after a decade of routinely losing  over $12 million/year (some years over $40M) for over the last decade. Microvision’s board was still giving him $792,892/year in compensation in 2016, which was a step down for him after receiving $950,561 in 2015 with a total of $3,754,437 in the 5 years from 2012 to 2016, (and then there will be 2017 and whatever golden parachute they give him). That is pretty good pay for someone that drove the stock from about $48/share when he took over July 7th 2005 to about $1.50 today. What’s more, executive compensation roughly doubled from 2012 to 2016 in spite of continuing losses.

As I have written before, Microvision for over 24 years appears to have been a company in the business of selling stock rather than product. I guess it does take a certain kind of talent to keep selling stock while the company continually loses money. Laser Beam Scanning has been the ultimate con-technology for the semi-technical literate. On the surface it may look like a good idea until you really understand it. Do the words attributed to P.T. Barnum come to mind?

Soothsayer

This blog, primarily discussing display technology, started talking about Microvision back in 2011 and Microvision quickly responded with a an SEC 8-K filing by calling me a “False Soothsayer.”   This led to my writing my 7 part Soothsayer Series about Microvision. Microvision painted a very misleading (to be generous) picture of the state of the green laser market. I called them out on it and they had the audacity to call me a “False Soothsayer.” It was then proven I was telling the truth.

The difference in this blog and tech sites that just repeat company marketing spiels, is that I try and analyze technology as an engineer, and were possible, measure things objectively. In the case of Microvision, the more I measured and understood the technology, the worse it looked. Microvision “fibbed” (to put it mildly) about power, resolution, cost, size, eye-safety, and just about everything that could be measured.

I  have explained on this blog how fundamentally flawed laser beam scanning is as a display technology. You can search this bog to find out the details (or hire me to help explain it). I tried to point out that even when the green laser cost came down, Laser Beam Scanning (LBS) was still fundamentally flawed in how it works and it will NEVER be a good display technology for a large market (there may be a few very small niche uses).

Though the years, I tested and publish images and data proving that Microvision was making false claims about resolution and power consumption. But no matter, there is no “marketing police” and Microvision was able to keep selling stock, to people that wanted to believe.

Pivoting More That A Ballerina

In addition to misleading people about the (false) virtues of Laser Beam Scanning, they kept “pivoting” both in terms of market and business model. When Mr. Tokman took over, he pivoted Microvision from Head Mounted Displays (HMDs) to Pico Projectors.

Every time Microvision failed with a product concept, business model, or market, they would announce a new “pivot.” Thus keeping Microvision a 24-year-old “start-up” with a “new” future.

When any rational business person could figure out that building a laser scanning pico projector would lose money, so Microvision funded development and paid companies to make lasers and engines for them. When still nobody would build a projector with a Microvision subsidized engine, Microvision built and sold the final product, the ShowWX and ShowWX+. This resulted in Microvision losing over $45M in 2011 and $27M in 2012.  It was a colossally bad business move, but making money was apparently never the point, Microvision was able to sell more stock based on making a product, and when the losses were found out, the stockholders got an 8 to 1 reverse split.

Microvision pivoted from making ShowWx projectors and selling the engines at a loss to then saying they would be just an I.P. company with Sony making engines. But when the Sony deal was not working out they got back in the engine making business. All the while through all these different “business models” they steadily kept losing about $1M/month and sometimes more. But most importantly with each pivot in business model and market thrust they could sell more stock.

Microvision continues to pivot in in the area of markets. First (pre-Tokman) they were focused on head mounted displays, then pico projectors, then when Google Glass was announced, the were back pushgin head mounted displays. They claimed to be good for gesture recognition when Microsoft Kinects was a hot product. More recently LIDAR for self driving cars (funny, there are a lot of LIDAR companies already around that didn’t need Microvision).  All the while, they keep the pie plates spinning in pico projectors, HUDs, and HMDs. They have a 24 year record of failing in one market and business strategy after another.

So What Is Microvision Up To Now?

If things were going as well as Microvision wanted you to believe, they wouldn’t allow Mr. Tokman to be “spending more time with his family.” The new CEO, Perry Mulligan has a background as a VP of  Operations for telecom companies and no background in displays other than sitting on Microvision’s Board for 10 years.

My best guess is that they are trying to pretty up the company for some type of acquisition or perhaps a new “pivot” with a big money raise. Most likely they will be pushing more into LIDAR as it is newer, less well understood, and a hot topic today.

I could also see them splitting off and selling their patent portfolio to a Non-Practicing Entity (NPE, or more commonly known as a “Patent Troll”).

Crass Commercial Message

Among other things I do these days is perform Technical Due Diligence in evaluating companies. Before your company spends $10M, $50M, $100, or (in the case of Magic Leap)  $500M you might you might want to have my experienced eye evaluate the technology.

I also help companies working on new display technologies. I have a very broad perspective, particularly in the areas of microdisplays,  HMDs, automotive HUD, and novel/new displays technologies.

You can connect with me on LinkedIn.

 

4 comments

  1. frankenberry says:

    Interesting this came the day before the Tokman PR :

    Continental Head-Up Display with DMD Technology Goes into Production for the First Time with Lincoln

    https://www.continental-corporation.com/en/press/press-releases/2017-11-14-dmd-hud-104430

    https://www.cnet.com/roadshow/news/texas-instruments-aims-to-make-car-huds-bigger-and-brighter/

    • KarlG says:

      Thanks,

      Interesting but not surprising. Back when I was at Navdy (2013-2014) TI has an active program supporting automotive HUD. Today the HUD market is dominated by LCD’s with very bright LEDs behind them which is cheaper than using DLP. But as the size of the image increases the inefficiencies of the LCD method cause serious problems and this leave and opening DLP. You will note in the Lincoln product, they talk about the size of the image.

      When I was CTO at Navdy, I looked at using LCDs, LCOS, and DLP. I also evaluated the Pioneer laser beam scanning device (its performance was very poor, in particularly it had a very small brightness range due to a combination of the LBS scanning process and the dynamic range of the lasers; also the image quality was horrible due to a combination of speckle and the “pupil expander”/ screen). I ended setting on DLP due to power efficiency over LCD and field sequential rate over LCOS.

  2. alfred e tokman says:

    What is incredible is how the board tolerated such pathetic performance for so long, and how his rampaging ego – e.g. $200m ShowWX vanity project – was allowed to go unchecked.

    • KarlG says:

      Actually, I don’t believe the ShowWX was so much a “vanity project” as it was a way to sell stock. At the time, any rational business person would realize that it was a money loser and would not do it. The companies making the type of very fast switching green lasers Microvision needed had next to zero market. And so Microvision was in danger of not having even a way to even demo the concept. I think Microvision had to guarantee to buy a certain number of green lasers or there might be none made.

      Microvision used the occasion to act like things were going great and to see more stock with the introduction of the ShowWX. It was only later found out that is was a terrible business deal, that is if you were trying to make money on selling a product rather than selling stock.

      Microvision is much easier to understand if you look at it as a stock selling company rather than a technology business trying to make a profit from operations.

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