This was originally posted in 2022 when I had Twitter.
My Thesis on Meta and Extended Reality
Mark Zuckerberg announced the rebrand of Facebook to Meta a year ago this week. While scrutiny was expected, in the enterprise, the opposite happened. Big tech companies poured trillions of dollars into research and development. They spent on R&D, human capital expansion, game engine development, partnerships, etc. Companies in unexpected industries, like Pwc accounting, began building digital real estate in the meta verse. Despite the exuberance in enterprise, consumers haven’t been as ecstatic. Most doubt virtual reality as replacing the role phones play in their lives. Others doubt Mark Zuckerberg. Or, throw hate at Meta for attempting to activate a new computing platform. I believe in the future of XR and I think Meta is going to win. In this one-pager, I rebuttal each of the consumer counterarguments mentioned above.
XR replacing the role of phones in our lives
Consumers always find and pay for convenience. In technology, consumers ditched their 5 lb wallet stuffed with cash for Apple Pay. In business communication, the enterprise happily welcomed Slack so employees could terminate their habit of checking Gmail every five minutes. In retail, consumers moved from 60-90 minute weekly shopping to Amazon. The convenience and elegance of tech isn’t something you want to bet against.
In augmented reality, convenience means you can walk down the street with your eyes not glued to the device in your hand. When you have augmented reality glasses, notifications can pop up in your field of vision, and you can use both hands to adjust containers and notification boxes. Your eyes can type out a response to a friend. The use of speech can open new browser windows. In this sense, AR enhances human senses. The moments of temporary whiplash that arise from the seesaw of looking at your phone and the streets in front of you while glimpsing at Apple Maps, are eliminated with AR. Humans can use their in-born functionality to do more at once.
Just as AR increases the true immersiveness (therefore convenience) of a consumer, the enterprise benefits too. The popularity and use of Facebook Workrooms is an early example. Meta’s recent partnership with Microsoft to scale this into the enterprise, means more people working from distributed locations (convenient).
Meta’s activation of a new computing platform
For people who say startups should build XR, not big tech, I disagree. Technical competence and cash are required to build the future of XR. Hardware building is the most important, specifically for the AR future I imagine. Chip-glasses configuration, projector precision, speaker sound are individual technical problems that make an AR glass possible. I don’t believe it makes sense for startups to build this infrastructure. Meta’s spent roughly eight years in R&D, hardware development and testing, and specialized AR-chip building. Meta’s losing money on each headset they sell, the cash and user value is in software building; that’s where startups should focus. Let big tech invest the capex to build the device, startups build on top.
For people who hate on Zuck, I think he’s the critical piece in extended reality’s future. Many companies have built teams and products in the meta verse because of his rebrand and smart acquisition of Reality Labs in 2014. The thesis of building tools to enhance social experience is one Zuck understands well. Facebook has 2.91B MAU’s, WhatsApp 2B, Messenger 1.3B, Instagram 1.2B. Mark owns social consumer and he has the data (4 petabytes per day), scale (7.41B MAU’s, a % are repeat, not mut exclus.), engineers (Facebook is constructed around engineers. They lead designs and product building) to build XR well. If Steve Jobs were alive, I’d bet on Apple as equally as Meta. Steve Jobs cancelled the Newton because of the stylus. “If you’re holding the stylus, you can’t use the other five fingers.” I think Jobs would’ve pushed Apple to create an all-sense enhancing experience (XR).
The people who are fading Meta and Zuck for building XR are non-technical. We shouldn’t listen to them.