Zuck is Pulling Off One of the Greatest Business Pivots of All Time
Meta just announced the linchpin that will help them bring VR mainstream
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I believe Zuck is leading Meta through one of the greatest business pivots of all time and no one seems to see it. Which either means I'm very wrong or very right.
Time will tell.
Almost exactly one year ago, Zuck announced that Facebook (the company, not the product) was rebranding to Meta, claiming that the Metaverse was "the next evolution in a long line of social technologies."
And while the reactions were scattered, I think people saw the current state of Oculus, which they had purchased waaaay back in 2014, and just couldn't take the new direction seriously. Virtual reality had had a rocky road and still hadn't caught on with consumers despite a number of claims over the years that it was the next big thing.
But then earlier this year, Zuck went on The Joe Rogan Experience…
…and The Lex Fridman Podcast…
…and in both interviews, he waxed poetic about his love for the Metaverse and how it will usher in a new era for human connection. Perfectly on brand. Nice job, Meta PR department. But still... it felt more like the pipe dream of a billionaire who was looking for something new and interesting to work on. Not something that was realistic.
But last week, as I watched the Connect keynote, I started to see Meta's strategy to bring the Metaverse to life unfolding in real time.
Let's dive in.
Meta's $15,000,000,000 moonshot
To start, it's important to understand the sheer enormity of Meta's undertaking. Zuck has made a pinky-swear with the world to bring the Metaverse to life no matter what it costs. And it will cost a lot. To date, he's poured $15B+ into Metaverse R&D and that's just the tip of the iceberg. We are definitively still in the early days.
Just for the Metaverse to exist and be useful, you need:
Infrastructure: In order for developers to build an interoperable ecosystem where the cool skin that you won playing a game that morning can be worn to the VR concert that night, the Metaverse must be built upon a set of universal standards.
Objects: Speaking of cool skins... someone has to build those! There needs to be "things" in the Metaverse that you can own and interact with. With the incredible progress made in NFTs over the last several years, I believe we'll be able to own scarce digital property in the Metaverse.
Worlds: Sure, stand-alone games in VR are cool. But they're just glorified 3D games which misses the forest for the trees. Entire universes can be built within Virtual Reality, allowing us to be transported into new realms from the comfort of our home. And someone needs to build those worlds.
Experiences: Just as the worlds need to exist in VR, the experiences within those worlds need to exist. The obvious ones are games, of course. But more broadly, kids from all around the world should be able to attend school and be taught by the world's best teachers. Movie nights with friends in other states should be able to be shared in our own virtual homes. We should be able to attend conferences, design buildings, do our taxes and explore other cities in VR.
Hardware: And of course, in order to access this meta dimension and interact with it in a way that feels truly immersive, you'll need gear. Some sort of visor, haptic clothing like gloves, boots and suits, and eventually, entire rigs that help you run or jump in the Metaverse without face-planting into your living room wall.
Oh, and on top of inventing some of the most advanced technology in the world, they also have to shift the public's perception of:
... Meta (to be trust-worthy).
... virtual experiences (to be useful).
... VR headsets (to be cool).
Are you starting to get a feel for just how big this business maneuver is?
Yeah. It’s titanic.
But it doesn't look like the future (yet)
But while the progress is beyond impressive, you and I both know that progress alone does not equal success. And this seems to be the position the skeptics are taking.
It's only natural. When Zuck dropped this gem last year, it was cringy to say the least. The Sim's called and wanted their avatar back.
But even after Meta Connect ‘22, TechCrunch spoke for all the haters when they said…
"It looked better, yes, but it sure didn’t look like the future."
—Darrell Etherington, TechCrunch
And to be honest... I'd have to agree with Darrell. It didn't look like the future.
But I believe the road to the future is paved with small iterations on the present. Which brings me to the main point of this article: what iterations will finally make the Metaverse real and useful to people like you and me?
The Playbook for Bringing the Metaverse Mainstream
Last year, Ben Thompson of Stratechery argued an enterprise use-case is best suited for VR. Since the shift to remote-first work was accelerated by COVID-19, a lot of work has an inherent lack of physicality. All you really need is an internet connection.
Gaming as the first real use-case is compelling, but the quality of the Metaverse isn't up to par yet and, again, it’s just a glorified 3D game.
Personal use like 3D painting is also interesting… but there's not enough social use cases to make it compelling for personal use.
But every day, most of us are already locked in to our screens for 8+ hours. Virtual reality simply promises a better experience.
So let’s say Ben’s right and enterprise is the “tip of the spear” to lead the Metaverse into the mainstream. What’s Meta’s play? Meta has had Horizon Workrooms and Workplace, but they only account for a small fraction of the enterprise market. When it comes to enterprise tools, Microsoft is the market leader and it's not even close.
"If the initial experience of the Metaverse is as an individual self-contained metaverse with its own data and applications, then Teams is already there. In other words, not only is enterprise the most obvious channel for virtual reality from a hardware perspective, but Teams is the most obvious manifestation of virtual reality’s potential from a software perspective."
—Ben Thompson, Stratechery
So Meta could either compete… or collaborate. And they chose to collaborate.
Their new partnership with Microsoft brings:
...the "immersive media experience" of Microsoft Teams to the Quest as well as the option to launch Team meetings from Meta Workrooms.
...the Microsoft Office 365 suite including Word, Excel and Powerpoint into quest.
...the option to stream your computer into VR through a Microsoft Windows 365 integration.
...the ability for enterprise teams to procure and manage the workplace experience on Quest devices for their employees through Azure Active Directory and Microsoft Intune.
The most ubiquitous workplace tools are now available in VR.
I would consider Meta's new partnership with Microsoft to be the linchpin to their first real, honest push into VR for work.
And though I wouldn't have guessed that this partnership would have ever happened, it makes total sense in hindsight. Meta has been heads down moving the Metaverse forward from a hardware perspective while Microsoft has dominated workplace software.
Meta and Microsoft sittin’ in a tree…
This partnership is a big win for both sides.
Meta gets a leg up on hardware competitors…
…by being the first to bring mainstream workplace tools that people already use every day to their Quest devices. This is the utility that they needed to make those devices actually useful, which is one of the major hurdles for consumer adoption.
Microsoft gets to ride the hardware rocketship of the Quest…
…just as they rode the hardware rocketship of the IBM PC back in the 80's. Assuming they didn't do any sort of exclusivity deal, they'll be able to craft similar partnerships with other hardware manufacturers and continue their reign as the workplace OS.
The Advantages of the Metaverse
Okay, so the power of Microsoft's productivity suite is now at your disposal in VR... so what? We already have access to those same tools through our laptops.
Great question! And you're right.
The Metaverse has to offer some sort of advantage over the 2D screen we currently spend 8+ hours a day in.
I would argue it's 2-fold.
1. Connected Collaboration
Despite the current version of Metaverse avatars being cartoonish, there's something “real” about them after you’ve been interacting with them for 5 minutes. I've been amazed at how quickly I can lose all sense of reality and become entirely immersed in the virtual world. Especially now, with the latest versions they introduced at Connect.
While previous versions had simulated facial expressions and floating torsos and hands, avatars will soon have more realistic facial expressions and full bodies with legs and arms. And if I could get sucked into feeling a sense of presence with floating torsos, how much more so can that happen as we slowly begin to ramp up the avatars' fidelity?
Within the next couple of years, the advancements in avatars are going to be shocking. The demo of Codec Avatars that Zuck showed off was honestly so good that the first time I saw it, I thought it was the real Zuck doing it as some sort of prank.
As we move toward THIS version of the future, the fidelity will be so good that it will genuinely feel as though co-workers, friends, family, or lovers can be transported through space to appear right before us. As someone who lives in a different state from his family and co-workers, I can't wait for this to become a reality.
To me, this is the biggest advantage that the Metaverse offers over the 2D screen of our monitors. Sure, it might take a little more time to full be realized, but I firmly believe it’ll be worth the wait.
The second big advantage is the new suite of tools at our disposal. As with anything, the tools start off simple. For example, expanding your workstation from a single laptop monitor to a 180-degree wall of monitors.
That by itself is pretty incredible, but these workplace tools will only get more powerful with time, introducing tools that we haven't even begun to think about yet.
The Wrap Up
Just as Apple expanded their vision of personal computing to AirPods that grew into a $240B business on its own, I believe Meta is expanding their vision of human connection to the Metaverse. But if they do it right, I believe it will be a multi-trillion dollar business when it’s all said and done.
My wife disagrees with me, but I strongly believe that in less than 20 years there's a world in which people will spend more time in the Metaverse than they currently spend sitting at their computers today. This is not a judgement call on the ethics or health of that reality... merely a prediction of what could be true.
Consider the amount of time that folks already spend in immersive worlds like World of Warcraft except now they ARE their character, battling wizards and dragons for loot and glory.
Consider the amount of time that folks already spend watching Netflix except now they're IN the film watching the story unfold around them.
Consider the amount of time folks already spend collaborating with colleagues in another state through Slack or Zoom except now they're in the same collaborative workroom with floor to ceiling windows overlooking panoramic views of breathtaking mountains.
Consider the amount of time folks already spend scrolling their Instagram or Twitter feeds, except now they're creating and consuming entirely new forms of social content in three dimensions.
Consider the amount of time folks already spend crafting the perfect vibe in their own home, except now they can construct virtual homes with endless possibilities limited only by their creativity.
And in these world, Meta stands to make a fortune, selling tickets to virtual events, offering subscriptions to virtual worlds, taking a percentage of virtual transactions and selling ad space on virtual billboards. The opportunities are limitless, and I only hope that they steward that power well.
Will this partnership with Microsoft be enough to launch the Metaverse mainstream?
Am I dreaming too big? Too small?
What are you most excited or scared about in this version of the future?
Hit me with your thoughts in the comments below!
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