The (very short) Meta backstory
Over the past eighteen months, it has been common to hear people make fun of fka Facebook for their insane investments in the Metaverse and AR/VR… and of course their company name and stock ticker change to “Meta” (META). Along with most big tech companies, Meta got swept up in spending the free money that was dispensed liberally throughout 2020 and 2021. As the stock market soured in late 2021 and 2022, Altimeter Capital’s Brad Gerstner wrote an open letter to Zuck challenging them to get “fit” and naming some actions that could be taken such as reducing headcount by 20%, reducing CapX by $5B, and limiting investment in Reality Labs spending to $5B a year.
Reality Labs is the Meta entity that is focused on VR, AR and immersive 3D which is generally called “the metaverse”.
As a quick aside, there is unlikely to ever be a single metaverse, but rather a marketplace of immersive experiences provided by different companies for different purposes… much like the app ecosystem we experience in the mobile world today.
Back to Meta. I was a “discount-buying” META shareholder until All In #102 got me a little nervous. At that time. Meta was spending ~$25B a year on Reality Labs and hinting they would increase that investment materially. This had them on pace to outspend… the Apollo Space program. 🤯 Meta’s Metaverse SuperBowl commercial had me shaking my head and I ultimately decided this was a giant money pit that was going to end in disaster. Who wants to interact with a bunch of extremely cheesy cartoon avatars?
I became a META seller.
In hindsight, we can see that Zuck appeared to take the open letter requests to heart and got leaner, and META has been soaring ever since. I got META wrong as a company. Did I also get the Metaverse wrong?
A Revitalization of the Metaverse
It seemed the Metaverse was an idea born of ZIRP and destined to die with its end. When money is free it is easy to chase all kinds of wild ideas. When money gets expensive, companies have to hunker down and focus their spending on things that are going to generate returns.
Two weeks ago, Lex Fridman interviewed Zuck on his podcast in the metaverse. What does this mean? Well, give this video a watch and see. I recommend watching 3-5 minutes to get a feel for the experience. If you are really interested, keep going.
Where might the “Metaverse” be useful in the future?
Where might this technology go if it becomes more accessible (including things like haptics)?
Work meetings, interviews and Podcasts
Connecting with family and friends across the world (or may just kids at college) in more personal ways that we can with voice or FaceTime
Attending (or presenting at) conferences and associated networking sessions without having to travel while maintaining more presence than Zoom/Teams
Joining communities / meetups that currently take place in particular cities. Perhaps these move online, or participants become more first-class even if they are not in person? Don’t live in a big city with a strong tech community? Maybe that won’t matter anymore. 🤷♂️
Learning how to do new tasks, jobs without building expensive and immersive simulators. Today we watch YouTube to learn how to do everything we need in 2D. What if that translates into 3D in a controlled environment?
Coaching on activities that require observations of movement (weightlifting, gymnastics, golf / baseball swings, etc.)
Remote pair programming that is less frustrating than the current online experience
Human-driven remote control of devices / robotics
Immersive entertainment experiences
For this to stick and reach mass market, we’ll need to make it a lot further along the adoption curve and some of the capabilities to enable photorealistic avatars and immersive physical experiences (haptics) will have to progress dramatically and decrease in cost.
Overall, I am a little skeptical. The experience of traveling to a new place and seeing it first hand or sitting across the table from someone in person has been, traditionally, innate to the human experience. Will this always be the case? The human expectation of “normal” is constantly evolving. When I was in college, I remember saying “why would you ever type a message to someone on your phone when you can just call them?". Anecdotally, kids today are rarely seen playing outside and often “immersed” in video games or on their phones face-timing friends.
Meta has yet to prove there is a real market for this technology outside of gaming and is far from break-even on these R&D investments, but maybe they were smart to keep investing through an uncertain time. That is often what great companies do.
Others are getting in the game. I was (and still am) very interested to get hands on with Apple’s AR solution when it comes to market. Is it a novelty, or is it the future?
I had written off the Metaverse, but I am back to 51/49 on it become a useful reality at some point in the future.
This is wild! Makes my mind buzz on future use cases & watching tech this improve/expand. Just WOW!! Great write-up & thx for sharing Brian :)