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AnalysisCommentaryQuestion of the DayRJ Pittman

Question of the Day: What does it mean that Matterport now has a new CEO?8334

WGAN Forum
DanSmigrod private msg quote post Address this user

RJ Pittman, Matterport's new Chief Executive Officer | Photo Courtesy of Matterport

Hi All,

The WGAN Forum Question of the Day for Tuesday, 4 December 2018 is:

✓ What does it mean that Matterport now has a new CEO?

Here are my thoughts on this question ...

Missing from the announcement yesterday (3 December 2018) of a new Matterport Chief Executive Officer is why the change in leadership?

That said, there are clues in the Matterport press release – in the quotes in the press release attributed to David Gausebeck, Co-Founders and CTO of Matterport; and, RJ Pittman, Matterport's new Chief Executive Officer.

David Gausebeck, Co-Founder and CTO of Matterport

✓ "RJ's operating experience at scale,"
✓ "deep product vision"
✓ "unlocking the full potential of our breakthrough technology and unparalleled 3D media and data"
✓ "reputation for driving transformation"
✓ "creating high-performance teams will invigorate our organization"
✓ "attract world-class industry talent"
✓ "accelerate our next phase of growth"

RJ Pittman, Matterport's new Chief Executive Officer

✓ "unrivaled dataset of precision 3D environments that represents an enormous opportunity to scale the company's data services business exponentially"
✓ This will open up new strategic partnerships and investments"
✓ we realize the full value of this data for a rapidly expanding set of market opportunities around the globe."

I could imagine that the Venture Capital (VC) funds that have invested $70+ million in Matterport since March 2013 are getting restless that they have not been able to "cash out" by at least 10 times their investment by now.

"PitchBook Data estimates that [Matterport] was valued at about $207 million after a 2015 funding but has no more recent valuation since," reports Silicon Valley Business Journal Monday (3 December 2018).

Matterport is shy $493 million in valuation necessary to have the VCs feel good about their investment. And, "cashing out" is taking longer than 4-6 years from the dates of their respective investments.

While Matterport has experience significant growth since its initial seed round investment on 1 January 2012, the growth has not resulted in either:

✓ Matterport being acquired
✓ Matterport going public
✓ Matterport receiving a Series D round resulting in the valuation of the company to keep the initials VCs patient

When I read the carefully worded official statements in the press release, it's obvious that "stay the course" was not working for the investors.

The Board wants a Chief Executive Officer that:

✓ deeply understands the value of the assets and has a vision that will result in Matterport scaling much-much-much faster leading to either additional VC investment at the desired valuation, being acquired or going public.
✓ create a culture to bring the existing team together; and recruit the talent needed for the new direction
✓ a leader that understands the value of the data - perhaps even more than the photography - to enable large-scale deals in ways that we haven't even imagined yet (Matterport Data is THAT important!)
✓ a leader that can scale the business exponentially - rather than in its present linear growth phase

Starting this week (3 December 2018), everything will be about a vision at scale; leadership and creating a new team culture resulting in exponential growth.

For Matterport Service Providers, exponential growth in the demand for our service is welcome news.

For Matterport employees, I could imagine that if your job does not contribute to exponential growth, you are at risk. Any job that is involves in-house intensive labor workflows, watch out.

I could also imagine that previously done in-house work - that inhibits 3rd party innovation and partnership - will be gone soon.

✓ Why build a third-generation camera when you could partner with camera/LiDAR companies to build the next generation cameras and scanners?
✓ Why run an official Matterport user group forum when the WGAN Forum and multiple Facebook groups do that at no cost to Matterport?
✓ Why have a Matterport Service Provider program when you could direct leads to official partners such as Meero and encourage more? (October 2014)
✓ Why compete with Matterport Service Providers (here) (here) (here) when you could encourage booking via a 3rd party such as the WGAN Instant Booking Service powered by KoaWare?
✓ Why have internal camera sales team when there are 10,000+ sales people in the field? Looks for incentives - an affiliate program - for camera owners to sell cameras.
✓ International offices may have been opened too soon. Rather than closing them, watch for a retooling of mission for this remote outposts.
✓ The tech team has likely been pulled in a thousands directions with demands from every department. Shuttering departments will have an added benefit of reducing the burden that they have placed on the tech team. (Unintended consequences)
✓ Look for non-core competencies to be outsourced.
✓ Look for a reduction in workforce of 20 percent within three months
✓ Look for a scaling-up in workforce of 30 percent (mostly in technology and partnership marketing)
✓ Look for C-level executive departures; CEO like to have their executive team around them
✓ Look for a settlement in Matterport, Inc. versus GeoCV, Inc. As I said here, I could imagine that this lawsuit will settle before trial. GeoCV will pay some small - undisclosed - licensing amount. And, Matterport will be able to say it has defended its patents and put others on notice. [The case is a distraction to the new CEO and the leadership team.]

Matterport did not replace a long-time CEO with the expectation of stay-the-course.

Matterport funding as of 25 June 2015 was $66 million. It added about $5 million in strategic money between then and 2 May 2018. That's $70+ million. I could imagine that Matterport needs a Series D round or be acquired to fuel exponential growth beyond its $33+ million annual revenue (2017).

It's hard to imagine a world growing exponentially. At the 2018 Google Street View Summit, Futurist Ray. talked about the world of outdoor and indoor spaces being completely mapped within seven years. That's an example of what exponential growth looks like.

It's that kind of imagination - vision – coupled with execution that Matterport needs - that we need - to create a world of possibilities that we all imagined when we bought our Matterport camera.

What do you think? How do you interpret these statements in the Matterport press release?

What do you think? What does it mean that Matterport now has a new CEO?

Related WGAN Forum Discussions

An Open Letter to Matterport CEO Bill Brown
Why Hexagon will buy Matterport
Exponential Growth Coming Soon to Matterport
What Bill Brown Said. (With responses)
Matterport Cloud to Support Other Cameras?
Preparing Matterport for IPO or Acquisition
How Matterport Can Sell More Pro2 3D Cameras
Dear Matterport ...

Happy holidays,


P.S. Source of Quotes: Matterport Press Release
Post 1 IP   flag post
Miguelea private msg quote post Address this user
I think it's a signal of "new world order" (MP meaning). You don't cut off salmons head if you want him to swim faster. You cut the head when you want it to transform to something with more value added. Like sushi for example. Things are going to happen
Post 2 IP   flag post
WGAN Forum
DanSmigrod private msg quote post Address this user
@Miguelea Sushi happens
Post 3 IP   flag post
Montreal3D private msg quote post Address this user

I've a huge respect for your financial review and understanding of the Matterport situation with investors. I couldn't agree more with the importance of a strong vision when reaching such stage in a Tech company.

I believe that providing all the tools to Matterport Service Providers to create real incomes and great value-added content to their clients is the only key to success.

A lot of potential of the Matterport hardware remains the 3D capture and automated 3D mesh generation and this has yet to be used to it's full potential in the current WebGL solution.

There is hope in third-party software solution to deliver Matterport 3D content, we've often discussed the solution offering we have coming...

Looking forward to the positive impact that will bring RJ to Matterport.
Post 4 IP   flag post
WGAN Forum
DanSmigrod private msg quote post Address this user
Originally Posted by @Montreal3D
A lot of potential of the Matterport hardware remains the 3D capture and automated 3D mesh generation and this has yet to be used to it's full potential in the current WebGL solution.

Thank you for the kind words.

Let's hope that in the future - now with a new CEO - Matterport embraces 3rd party developers rather than compete with them or shut them down (as they have repeatedly done and documented in the WGAN Forum).

You and I agree that the magic of Matterport is the data in potential uses known and yet to be invented by 3rd party developers.

Unlocking the value of the data will unlock the value of Matterport Service Providers to do more scanning and for more money.

Matterport data = exponential growth opportunity.

Post 5 IP   flag post
Metroplex360 private msg quote post Address this user
What an absolutely amazing piece by Dan.

There is so much in there! I agree that the quotes that you will find in the press releases are full of clues that underscore Matterport's operating values and their ambitions.

I agree too that it is very important that the Venture Capitalists are satisfied. Without them, we would not be able to offer the amazing products that we do from the Matterport Ecosystem -- 3D Tours, Cheap Floorplans, Cheap 3D Models, Snapshots -- tons of great benefits from the scans that we produce!

In respect to Bill Brown, I would like to believe that if the above article -is- factually correct, that rather than the board wanting an CEO that does A, B, and C -- it was not that Bill Brown did not do A, B, and C -- it was that the board wanted a CEO that can do A, B and C even better now and in the future -- as well as D.

I think that a change in leadership is always good. Fresh eyes, fresh ideas, etc. CEOs, Product Managers, Marketing Teams, President of the United States -- all of these positions are positions within a company that should never be identified indefinitely with the person who is in the chair.

I would imagine that there are many positive things that Bill Brown did in his tenure that RJ Pittman will be able to run with -- and perhaps without some of the baggage.

RJ has a clean slate and a rather amazing product at a company with endless possibilities to helm.
Post 6 IP   flag post
WGAN Forum
DanSmigrod private msg quote post Address this user

Despite how I may come across, I like Bill Brown personally. I enjoyed having dinner with him a while ago, and thought it was clear then and now that I disagreed with many of the strategies under his rein. While Bill likely has not appreciated any of my commentary in the WGAN Forum, it's important for leaders to hear people that do not agree with them. Better decisions are made as a result of that tension. Just imagine if Blockbuster leadership had paid attention to Netflix.

It's telling that the Matterport Board of Directors webpage has already been updated to include Matterport CEO RJ Pittman. Bill Brown - 5 years and 4 months as Matterport CEO - was not named a Member of the Board.

Nor does Bill Brown show up on the Matterport Executive team.

"Bill Brown, formerly CEO of Matterport, will serve in an advisory capacity to Pittman and the organization," says the only mention of Bill Brown in the Matterport press release.

That's a polite exit: respectful of his tenure as CEO and helping the company raise money. I could imagine that Bill will not be in the Matterport office (awkward) and will be spending full-time looking for his next opportunity.

Happy holidays,

Post 7 IP   flag post
VTLV private msg quote post Address this user
We get a new CEO announced in other news sources and nothing from the company in my email this week. Not feeling very hopeful about this one. What ever remarks he's made about the current tour inventory clearly support what the shareholders want back for returns. Returns they're not getting after 5 years of investing from Camera and hosting fees.
Post 8 IP   flag post
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