Consumer-based mobile AR has received mostly positive outlook from investors and analyst firms like us. And that optimism remains, but we’re starting to see signals for where product strategies work and don’t work.

This was the theme of an investor-stocked panel at AWE Europe. Led by Super Ventures partner Tom Emrich, one key question was sector focus for investment dollars. And like we examined recently, a lot of that attention is on underlying tech, including the AR cloud.

“For AR to truly exist in the form we all envision it — persistent, cross platform and geo-spatially anchored — there’s a lot of work to be done,” said Samsung Next’s Jacob Loewenstein. “We’ve been looking at a lot of tech around 3D sensing, algorithmic understanding of environment, the infrastructure of mapping the world, and the infrastructure of storing that data and serving it.”

As for where there are challenges and stumbling blocks at this early stage of mobile AR’s evolution, one factor is mobile itself. When looking at how AR merges with mobile’s existing consumer appeal, what types of apps — or features within apps — will prove additive?

“Now the technology for the most part has been commoditized, is it not just a mobile play? posed Emerich to the panel. “If someone comes up with an ARkit social app, is it not just a social app with an AR feature, or are you treating it differently?

The jury is still out on this question, as lots of mobile AR apps and features have been “hammers searching for nails,” according to Lowenstein. It comes down to a question of if AR  accomplishes something unique or additive, versus functionality already found in mobile apps.

“When I saw Pokemon Go, i thought ‘great,’ my kids played it… but they turned off the augmentation,” said Unternehmertum VC Partners’ Johannes von Borries. “So it was not augmented reality, it was a GPS game. We have to think, ‘where’s the real value?'”

Lowenstein’s advises instead to envision the user value or pain point that needs to be solved, then work backwards from there. Too often it’s the opposite, as technology minded individuals and companies are hard-wired to solve solve engineering problems… not human problems.

“The idea that because this is in AR, it’s suddenly going to be interesting or worthwhile to the consumer is inane frankly,” said Lowenstein. “The real question is what have people always wanted to do where technology has let them down or hasn’t been able to fulfill their ambitions? And how does AR begin to bridge the gap?”

Examples he gives are “of course,” apps that solve pain points, such as furniture apps like IKEA, which save consumers’ time and headache through AR-guided visualization.  Or for the same reason, cosmetics apps. This is another version of the native thinking we’ve examined.

“What are other problems where AR finally helps bridge the gap?” he posed. “Work backwards from there. Because if you’re going technology-first you’re going to end up walking into a door.”

See the entire session below with lots of other topics and good comments from Vito Ventures’ Herbert Mangesius and High-Tech Gründerfonds’ Lucille Bonnet. Also see the recent ARtillry Intelligence Briefing that similarly examines insights from AR & VR investors.

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Disclosure: ARtillry has no financial stake in the companies mentioned in this post, nor received payment for its production. Disclosure and ethics policy can be seen here.