Understanding Facebook's Move Into the Metaverse
Facebook's "next chapter" is turning science fiction into reality
Hey all, I hope that you all enjoyed my previous Substack issue on Zero Knowledge. It’s now time that I discuss one of the boldest corporate moves on an idea that I’ve ever seen.
This idea is known as the Metaverse, and Facebook is declaring that in the future it the will be a “metaverse company”. What exactly does that mean? In Facebook’s words the metaverse is a “virtual environment where you can be present with people in digital spaces”. Its characteristics are in how it is open, broadly distributed, and in a 3D dimension. I personally define it as “parallel digital universes that offer experiences to users. These digital universes are accessible via virtual reality headsets, computers, smartphones, and even consoles for videogames”. I foresaw this move when I observed Zuckerberg wrote a few Facebook posts about how excited he was, and this. This blog post speaks numbers about the future of Facebook and the metaverse since it shows that they’re still an ad company.
On Facebook’s most recent earnings call, Zuckerberg believes that the metaverse is the next evolution in the internet and it will enable “new experiences and economic opportunities.” I echoed Zuckerberg’s sentiment in my 2nd thread where I wrote extensively on the metaverse and why I believe that it’ll be one of the biggest wealth creating opportunities of the 21st century. Zuckerberg also believes that the metaverse will be where we spend most of our lives on playing, working, and connecting with others. Zuckerberg has become so bullish on the topic that he has dedicated an entire product unit to the metaverse.
But how did Facebook get to this point? It’s not like the decision to become a metaverse just appeared out of nowhere, but—perhaps—there was a key acquisition?
Oculus and a dream that became a reality
To fully understand Facebook’s metaverse dream we need to understand the history of Oculus. Founded in 2012, Oculus enables experience via virtual reality (an artificial environment where experiences are enabled by stimuli). Together, two key co-founders—Palmer Luckey and Brendan Iribe—came together around a shared dream and started Oculus to bring VR to everyone. Oculus’s flagships products are the Quest and Rift which have enabled Virtual Reality to be in the hands of some people at $500+—which is still expensive, and the price will fall overtime. However, far it is more affordable than something that was created during the early 1990s and 2000s. At a time in the past, a very young Robin went on a field trip to a museum with his class. There he had the opportunity to test one of these headsets and was absolutely amazed. After that experience I’ve since followed the VR/AR industry like a hawk—trying to understand its intricacies and niches. It’s safe to say that Oculus’s dream of enabling and inspiring people with the potential of virtual reality as of 2021 has succeeded and they’re just getting started.
The true alpha in acquiring Oculus was not in the existing product suite, established market dominance, or even a cheap acquisition deal. It was in acquiring the human capital and some of the brightest and imaginative minds in the VR space. These minds are now both working at Oculus and now they’ve managed to attract future talent due to their connections. This is critical when you’re doing groundbreaking research with a specific niche. You require great talent, and you also need future talent to accomplish a crazy mission like bringing a new technology to everyday people.
Xerox Parc and Facebook Reality Labs
Thanks to the talent and precedence that was established by Oculus’s acquisition, Facebook started Facebook Reality Labs which does technological innovation research into Virtual Reality, Augmented Reality, and Haptic Feedback or Haptics (creating computer feedback via touch).
I personally akin Facebook’s Reality Labs to Xerox Parc during the early 80s.
The advances being made with Facebook Reality Labs are truly incredible. I’d highly recommend everyone read this article on wrist based interaction, and how it relates to the future of VR/AR. It’s absolutely remarkable—it reminds me so much of my reading on Xerox Parc and how they pioneered the graphical user interface along with the mouse.
Now, Facebook Reality Labs is showing the world a new kind of mouse that uses wrist-based input combined with usable, but limited contextualized AI, which dynamically adapts to you and your environment. In English, that means that I can go from shooting virtual targets to using my hands to type, and the device will know that I’m doing so via AI. It’s going to change the world.
A History of Missed Boats
Facebook also views the metaverse as a chance to pick up on a lost opportunity in mobile phone business. During his Verge interview with Casey Newton, Zuckerberg remarked, “One of the reasons why we’re investing so much in augmented and virtual reality is mobile phones kind of came around at the same time as Facebook, so we didn’t really get to play a big role in shaping the development of those platforms”. Facebook views their reality investments as a chance to catch the next boat before it takes off, and play a key role in its formation. However, Zuckerberg didn’t mention how Facebook also missed the wearable revolution, and is now trying to catch up and compete with companies like Apple with their own health watch.
A New Dream and a New Boat to Build
Now, Facebook believes the ultimate endgame of the metaverse is an “embodied internet, where instead of just viewing content—you are in it. And you feel present with other people as if you were in other places, having different experiences that you couldn’t necessarily do on a 2D app or webpage—like dancing, for example—or different types of fitness.” This is something of science fiction that is about to become a non-fiction. As described in my podcast episode with the Degen Jungle, this will increasingly become a reality as we all sit in lobbies and have the opportunity to watch e-sports in virtual stadiums. Now, this new boat will be built by Facebook and many other companies.
Why Centralization Will Always Lose and Why Facebook Will Be One of Many Companies Building this Boat
Let’s travel back in time and dial back to the very early 90s. The internet was a completely new and novel idea that no one had heard of outside of tech geeks. During this current time, the academic world had embraced the internet in full. In stark contrast there were “walled garden” networks operated by private companies such as Apple (yes, that’s right Apple), Compuserve, and Prodigy. These networks fundamentally lost in the long term because of their centralization, and most are completely gone outside of Apple—who invested deeply in hardware and threw some cash at the internet.
The reason these companies lost is because they were centralized. They failed to remain open to new users who wanted to contribute, and instead operated on a paid subscription model for users who wanted to use the platform. It sucked for centralized users because during the early 90s, these new builders of the web were united behind a vision of a decentralized internet where anyone could learn anything and didn’t need to pay money to join the internet. This is also why I believe centralization is doomed to fail on the metaverse. The most open network will win in the end due to the talent that it can attract.
For a more recent example, you can compare Microsoft Encarta to Wikipedia.
Wikipedia has hundreds of thousands of people freely contributing to it while Microsoft Encarta hired expensive writers. The network with the most freedom will always win in the end, and that’s why I believe the decentralization of everything will be one of the most transformative shifts in the world. Facebook will be just one of the many companies building on this—along with Epic Games (Substack on them is coming soon)—among decentralized metaverses like Decentraland (Token: MANA) and DecentralGames (Token: DG). Is Decentraland just another Netscape? Probably, but we’ll see.
In view of the future, it’s clear that Facebook’s next chapter as a business is turning science fiction into a reality, and that they’ll be one of the many companies facilitating this shift. I am confident that my writing explains Facebook’s motivations for building the metaverse, and why this has been a long time coming.
Thank you for reading—do good in the world.
Thanks
Great read!