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Some ideas
VR walking
VR walking prototype where the user is suspended in straps and their feet are held on pistons. Straps and pistons have high DOF actuators. Maybe suspended in liquid to increase friction. Maybe feet are facing forward. Apply light correcting forces. Generally do things to the user which they don't perceive. Not sure how much space this would require (the less force you can apply, the more the user is able to move around)
Reverse dancing
Collect a dataset of dancing videos; annotate the video with some joint position of the main dancer in each frame (just in 2D is probably fine; probably use something like https://www.youtube.com/watch?v=pW6nZXeWlGM); discard frames with anything other than one person in the frame; discard frames which aren't part of at least a contiguous 1s-10s video; train some kind of model to predict dance from music or even better music from dance
OCR web service
OCR which actually works. Bootstrap off synthetic data. Use modern machine learning. Somehow learn from unsupervised documents.
Actually index the internet
Search engine which indexes the hidden web through a Chrome extension which users voluntarily install; streams all content viewed by user to central server; privacy protected through first sending hash of content, then only sending content if the hash was sent by other users in the past (also can have a blacklist which includes Facebook/GMail/etc). Service would be a cache over the whole internet - users of the Chrome extension (eventually browser) get blazing fast access to all static content anywhere on the web plus they can see how that page changed over time. Bypass paywalls, see content which went down, index forums without registering for them, ... Also if it's a search engine it needs to eventually support regex searches! (update: nerdydata.com is a search engine which supports regex searches)
VR sandbox
Build a VR fire or magic sandbox. If fire maybe use NVidia FlameWorks. If magic try to come up with some small number of simple rules from which magic emerges. Make the player feel cool and powerful
Grunt input device
The natural input device for low effort virtual reality. Grunt repeatedly to move a pointer around a menu (wraps around). Long grunt clicks, hold grunt for longer to make menu go away (visual feedback on grunt length). Or maybe hold grunt to switch menu items, and upon grunt release, grunt again to cancel. Either use a mic or strap some piezo thing to your throat.