Visionaries are necessary to stoke innovation. But visionaries don’t always make good CEOs. That’s one of the major lessons from Magic Leap, and now the lesson has been burnished in tech history with the departure of Rony Abovitz as CEO.

The man who founded the company announced his departure on Thursday evening, just days after the company announced a new round of funding reportedly in the $350 million range, and just a month after massive layoffs decimated about half (possibly more) of the staffers and executives at the company.

In a post on the company’s website, Abovitz said, “As the Board and I planned the changes we made and what Magic Leap needs for this next focused phase, it became clear to us that a change in my role was a natural next step. I discussed this with the Board and we have agreed that now is the time to bring in a new CEO who can help us to commercialize our focused plan for spatial computing in enterprise. We have been actively recruiting candidates for this role and I look forward to sharing more soon.”

According to Abovitz, there’s no CEO already in waiting, so the search is now on for an operations expert who not only knows how to run a company, but also has at least a fundamental grasp of the very young augmented reality space.

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Considering the timing of this announcement, it’s difficult not to speculate that the company’s new funding (which shocked nearly everyone) may have been dependent on Abovitz stepping down and letting a better equipped CEO take the reins.

I’ve been covering Magic Leap since 2015, and one thing that always stood out about Magic Leap and Abovitz was his very obvious attempt to mirror the mystique and visionary approach of Apple during its Steve Jobs era. But one thing that many Apple fans keep forgetting about Jobs is that, beyond his once lofty computing dreams, personal spirituality, and overall hippy tendencies, Jobs was ruthlessly focused on profit. For Jobs, profit meant winning. As much as possible.

Conversely, Abovitz has mostly seemed to be primarily focused on the dream and vision of augmented reality (which he calls spatial computing), and not very focused on profit. That might work for a tiny startup with a few million on the line, but we’re looking at a startup that has snagged over $2 billion in funding, is almost a decade old, and has yet to generate a profit or even a meaningful amount of interest from the mainstream consumers it targeted for much of its life.

Abovitz hasn’t been afraid to get down into the Twitter trenches and respond to some critics, but too often his responses were just more promises about what was to come in ‘the future.’ In the rapidly evolving tech space, that routine gets old after your product has been on the market for two years

None of the gaming and entertainment stuff made sense to me given the device’s high cost ($2,295) and lack of true portability in terms of form factor and battery life. I had always assumed that Magic Leap’s play was to create flashy entertainment pairings (Star Wars, Game of Thrones) and games (Dr. Grordbort’s Invaders) as bait to lure in enterprise customers — which is where the real business is for high-priced augmented reality devices. However, Magic Leap’s very recent (some would say hasty) pivot to focus on enterprise seemed more like a strategic surrender than a real dedication to enterprise.

Over the years, Abovitz has taken a lot of fire from critics of the company and its device as not living up to early, pre-release promises, and merely offering a slicker version of what the HoloLens 1 offered years before. I would, mostly, agree with that take. Nevertheless, Abovitz hasn’t been afraid to get down into the Twitter trenches and respond to some critics, but too often his responses were just more promises about what was to come in the future. In the rapidly evolving tech space, that routine gets old after your product has been on the market for two years and Microsoft just released a much better enterprise option in the HoloLens 2.

But here’s the weird thing: I’m glad Abovitz created Magic Leap. And I’m happy to own a Magic Leap 1. It’s a great idea, and I’ve enjoyed the product. But even in the best of economic times, profit is the final master, and if the CEO’s primary method of generating cash is through new investments, and not actual product sales, then it’s time to make a change. The current health crisis has only accelerated an economic recession that many analysts were predicting back in 2019. Now that the recession is turning into a possible depression, only the strongest companies get to survive.

The fact that a company focused on augmented reality couldn’t, for various reasons, somehow take advantage of the social distancing era wasn’t the strongest vote of confidence in its current leadership.

For longtime watchers of Magic Leap, Abovitz’s departure won’t come as a surprise. In some sense, it seemed inevitable that either the company needed to fold and sell off its assets, or the company needed to find a new, revenue-focused CEO.

Is this the beginning of a new Magic Leap, that will be around for decades, or is this just a head fake in preparation of a sell-off of the company’s remaining assets? Well, last time we checked, much of the company’s patents are still being held as collateral, and the company is still embroiled in a legal conflict with a Chinese startup (Nreal) that Magic Leap claims is using stolen ideas via a former Magic Leap worker who is now the Chinese startup’s CEO. Oh, and then there’s that massive 259,737 square foot office space in Plantation, Florida. The office was custom designed for the company, but now Magic Leap has half the employees…in a time when many of even the largest companies are instituting remote working.

So things don’t look great for Magic Leap, but many success stories have been born in horrible economic times during numerous challenges on various fronts, so don’t count Magic Leap out just yet.

As for Abovitz, who says he’s “in discussions with the Board with regards to how I will continue to provide strategy and vision from a Board level,” he’s now free dream about the future of computing while streaming classic psychedelic rock in his Florida mansion, free from the concerns of attempting to building a profitable company. It turns out that the true “magic” in the company’s “leap” will need to come from someone who knows how to sell products, not just dreams.

Cover image via Sennheiser/YouTube