When Facebook announced last month that it was rebranding as Meta, CEO Mark Zuckerberg enthusiastically described the metaverse his company would soon build, promising it would be a world “as detailed and convincing as this one” where “you’re going to be able to do almost anything you can imagine.” Facebook released concept videos that offered a tour of what that might look like (holograms playing chess, holograms attending concerts, holograms popping into work meetings). The company also announced plans to hire 10,000 people to work on the project and spend $10 billion on Reality Labs, the division charged with its creation.
There is no single definition of the metaverse. Neal Stephenson coined the term in the 1992 novel Snow Crash. (Stephenson has made it clear he has nothing to do with Facebook.) But the idea of an interconnected virtual universe has long been a kind of internet endgame for developers and sci-fi dreamers alike. So what will Zuckerberg’s version really look like? And is he really the right person for the job? Intelligencer asked Pivot co-host Scott Galloway to sketch out what he thinks Meta is up to, and where it could go very wrong.
What do you imagine Facebook’s metaverse might look like?
The idea is to have a place where you could have relationships, leisure, economies, and maybe even your professional life online, right? There’d be some critical success factors. One, you’d have to have something that was open-source — no company is big enough to create everything you’d want in a metaverse. Two, it’d have to be interoperable — you’d have to be able to take things from one metaverse to another.
I think there probably has to be an economic incentive. Just as NFTs and crypto have become tradable assets, I think a successful metaverse needs to have ways to make money. If you buy a Chanel bag, you also get to have it as an NFT in your metaverse. If I were Ferrari, I would be thinking about how to ensure IP protection such that someone has to buy a Ferrari offline to show a Ferrari in my metaverse or my Tinder profile. You essentially would be signaling power and wealth online, which would create a lot of mating opportunities or signaling capability in these metaverses.
In actuality, Facebook is basically spending $10 billion on a prayer that, in the short run, it might change the conversation. It gives them an opportunity to talk about the metaverse instead of insurrection and teen depression. It gives Mark Zuckerberg a chance to talk about the metaverse instead of saying, “Hi, I’m the CEO of Facebook, I’m ruining the world.” But Facebook’s metaverse won’t work.
Why won’t it work?
People have been talking about this future for decades and it never really comes close to what anyone has envisioned. The question is, why is there a renewed focus? It comes down to this: If we had a metaverse that dictated our relationships, a place where we kept assets and interacted with politics, then whoever controls that metaverse is the closest thing we have to a scientific god. The reason this is getting so much attention is because everyone is freaked out by the idea of a scientific god named Mark Zuckerberg.
There are some very uncomfortable things about all of this. We live in a capitalist society — money equals options. The people with the most options in the world, specifically Jeff Bezos, Elon Musk, and Mark Zuckerberg, either want to be off the planet or they want to create a different universe on this planet. It feels like the mother of all abdications. “We don’t want to improve the world, we want to go to a different world.” It seems somewhat nihilistic and strange.
Mark Zuckerberg won’t be our scientific god?
No. That’s the saving grace of this. Facebook’s metaverse is dead on arrival. The fundamental mistake people make around these AR or VR experiences is to immediately think of sight as the entry point into a metaverse. When Mark Zuckerberg says, “Imagine your friend is at a great concert around the world and you can join her.” Let’s play that out. I get a text message from my friend and I’m at the mall, or a movie, or at school. Am I going to pull out my handy Oculus and throw it on my head and start jamming to the Weeknd? It doesn’t make any sense. The Oculus is not a wearable. In fact, it’s prophylactic. No one’s going to get near you. It’s basically the fastest way to say, “I don’t date.” You’re never going to get mass adoption with an item that is clunky, makes you nauseous, and has a negative self-expressive benefit.
A portal needs to be like an appendage, and right now, there’s actually more opportunity around sound than sight. Oculus sells like 2 or 3 million units a year? Apple sold 110 million AirPods last year. People wear them when they’re not even using them. Someone can already say, “Hey, I’m at the Weeknd’s concert in Prague right now, listen to this,” and you can listen wherever you are. Looking forward, Apple could install some sort of smart camera on AirPods and you might be able to see whatever someone else is seeing on their AirPods. That’s why Apple owns the on-ramp to AR, and the App Store is kind of the closest thing we have to a metaverse right now. While it’s a little clunky, your apps all work on one system, so it’s somewhat interoperable, and the interface is your phone.
Lastly, if you’re going to try and position a new universe and have rulers and gods, you’re going to want it to be through a company that has some sort of democratic control. Unlike Facebook, Apple does not have two classes of stock, so there’s somewhat a democracy, and people don’t think Apple is run by a sociopath.
Facebook does have nearly 3 billion users. That has to count for something, no?
Facebook is vulnerable because it doesn’t control the end distribution. No matter how much money Mark Zuckerberg spends on lobbying or how charming Sheryl Sandberg is, every Facebook user running iOS gets an opportunity to opt out of being tracked by Facebook. The reason LVMH and Apple have added more shareholder value than almost any company in Europe, or any company in the world, is that they both decided they wanted control of their end distribution and they each opened about 700 stores. They decided they weren’t going to hand over their brands to Macy’s or CompUSA. The same thing is playing out here, and Zuckerberg realizes it. He’s been trying to figure out distribution for a long time. There was the Facebook phone, there was Portal, and now they’re spending a shit-ton of money on Oculus. Tim Cook can’t show up on an Oculus and say, “Do you not want Mark Zuckerberg to track you? Do you want to opt out?”
Mark Zuckerberg and Facebook are not innovators. The only thing they’ve innovated around is their core product, Facebook, which a lot of people would argue was stolen in the first place. They’re outstanding acquirers. Just as I have reveled in the train wrecks that were Portal and Libra, this is the next $10 billion insect hitting the windshield of reality for Facebook.
As abrupt and calculated as this feels, Zuckerberg has been talking about transitioning Facebook into a metaverse company for a while. Facebook acquired Oculus in 2014. How else could their business evolve?
You’re right, the metaverse has been envisioned for a while. But it’s just no accident that they announced this a few weeks after Frances Haugen and the most effective attack on Facebook’s bad behavior. You have to think the timing was likely hurried. But I think there’s a lot of ways they could have taken the business. Cleaning up the toxicity on Facebook and Instagram would open up all sorts of new opportunities for them. Changing the conversation is a good decision, but a metaverse is unoriginal.
When the internet came about, the initial vision for retail was that you would have these avatars that would go to a shelf for a sweater and then walk over to the cash register and buy it. It was just stupid and didn’t make any sense. We have these similar things now. We’re going to be legless avatars in a meeting? This is the cynical part of me, but I just love the fact that 10,000 Facebook employees are driving to work every day to accomplish absolutely nothing. I guess they’ll get some IP out of it. I don’t know what the biggest product failures are in terms of capital spent; at $10 billion, this will be right up there. But if it changes the conversation for several months, maybe it will be worth it?
