Mark Zuckerberg could see the writing on the wall:
That may seem a strange thing to say, since Facebook made $29 billion in profit in 2020, surpassing Wall Street’s expectations. But in the world of tech, one year’s unicorn is the next year’s failure.
Which is why Zuckerberg and company have looked to the future, turned the page on a new chapter, and changed Facebook to Meta–an attempt to usher in the metaverse, a new world built in virtual reality.
“The metaverse is the next frontier in connecting people, just like social networking was when we got started,” Zuckerberg shared in his most recent founder’s letter. “Over time, I hope we are seen as a metaverse company, and I want to anchor our work and our identity on what we’re building towards.”
After recently rewatching Zuckerberg’s keynote, two seemingly conflicting facts became blatantly obvious:
Changing Facebook’s focus to the metaverse, right here and right now, is a brilliant business move.
Considering Facebook’s track record, it’s also very bad news for the future.
Let’s break down why I think both these statements are true, and what both business owners and consumers can learn from them.
Why did Facebook change its name?
First, it’s important to acknowledge that Facebook didn’t simply change its name or rebrand.
It fundamentally changed the direction of the company.
People have been dreaming of something like the metaverse for years. Just think of all the science fiction films and TV over the years, where holograms and virtual reality were used to provide people with escape. (Ready Player One, anyone? Or anyone remember this thing?)
This type of technology has the potential to be the biggest business of all time–because it will provide people with the ability to immediately transport themselves to another place or even time. It’s transformative.
Add to this the fact that the Covid-19 pandemic has exponentially increased the need for this technology. New variants create a threat of new lockdowns and travel restrictions. Companies are rethinking their plans to bring employees back to the office.
All of this makes the potential of the metaverse even more valuable.
After all, why travel to the office when you can enter a room in your own home and immediately be together with your colleagues?
Too dangerous to be physically together with high-risk family members? No problem. The metaverse will make you feel as if you are physically together.
No longer possible to pick up and travel to see beautiful, faraway places? It’s all good. Bring those beautiful, faraway places to you.
Granted, Mark Zuckerberg turning himself into an avatar so he can meet with his lieutenants is a far cry from all of this.
But it’s a huge first step.
Of course Facebook, I mean Meta, isn’t the only company to commit resources to the metaverse. Google, I mean Alphabet, has gradually announced its own ventures into the metaverse.
But here’s the difference: Facebook has committed its entire brand to the metaverse–and with it potentially billions of dollars of resources.
For illustrative purposes, we could compare Facebook to Tesla. Today, we see more and more car companies following Tesla’s lead in producing electric vehicles. Yet Tesla’s value has exploded in recent years.
Its market cap exceeds the next nine companies combined, legacy automakers like Toyota, Volkswagen, GM, Ford, and BMW.
Tesla’s success has nothing to do with the number of cars it’s produced, and everything to do with the 10-year head start it got on technology.
And this is what Facebook is attempting to do with the metaverse.
There are huge lessons for business owners here.
Just because your product or service is successful, that doesn’t mean it will always be.
This is the famous innovator’s dilemma, that even the most successful products are marching inevitably toward irrelevance. The key is to address this, not once your product starts to lose value, but when it is at its peak.
And this is what Zuckerberg and his team have done: They’ve identified the next innovation and gone all in–while their product is still at the top.
So, why is Facebook’s brilliant move such bad news?
Because what’s great news for companies doesn’t always translate to great news for consumers.
Why Facebook’s move to the metaverse is bad news
“Move fast and break things” was Facebook’s official motto for years. Its purpose was to provide direction to designers and managers, but it became an essential part of the company’s DNA.
Facebook did move fast. And it broke lots of stuff in the process.
Trevor Ward, a self-described “Unicorn for hire,” summed it up well in a viral LinkedIn comment:
Wait, so the same company that has been:
Robbing us of our privacy,
Destroying our mental health,
Spreading misinformation like wildfire,
Proliferating a new type of addiction,
Stealing intellectual property, and
Inciting violence and hate speech
Is building a digital world where we’ll work, play, create, socialize, shop, and, essentially, live?
Yes, Facebook’s track record should worry everyone about the future of the metaverse.
Which also begs the questions:
Is Meta the same as Facebook? Or have Zuckerberg and co. learned from their mistakes?
But one thing is for sure:
As a consumer, you have to be very careful as to whether Facebook’s version of the metaverse is one you want to be a part of.
Because just because a house looks great on the outside, that doesn’t mean you want to move in.