Facebook's new rose-tinted glasses
Meta aka Facebook has released its latest device for the Metaverse. The Quest Pro headset can, among other things, mix the real and virtual world together.
For only $1,499 you can pre-order this engineering marvel for yourself. It is a part of the ongoing plan of Mr. Zuckerberg to transform the company from a social media wasteland to a virtual reality paradise.
According to a promotional video, featuring Mr. Zuckerberg as a real person and as an avatar, virtual reality is no longer an obscure hobby. It is enjoyed by millions of people around the world. But to make it mainstream, we have to convince the 200 million people who buy a new PC for work every year to buy not only the PC but also the virtual headset.
The problem? Where would I start?
First, people with money aka investors don't believe that this is going to work. From its peak share price at $380 in September, 2021, it has slid below $130 a year later. That's almost 2/3 of its value. Since Mr. Zuckeberg owns 50%+ of the voting shares, he can't be voted off the island. As CEO, he can do as he pleases. Despite the billions invested into the Metaverse and virtual reality headsets, Facebook is a money-printing machine with close to 3 billion users. Mr. Zuckerberg thinks he has money to burn.
Unlike other big Internet companies, Facebook is a one trick pony. Its ability to deliver on its ad targeting business has been severely limited by its competition from Apple and Google, as well as efforts by governments around the world. To have a future, Facebook has to come up with something new to help keep its current users and diversify its business. With the Metaverse, it is trying to recreate the magic and become a cash cow again.
Its next challenge is to turn a consumer, web-based company into a hardware company selling into the enterprise space. Just ask Google about its effort to build, market and sell its Google Search Appliance. In that case, the value proposition was well defined, the problem was understood and yet, in the end it didn't work. Google encountered issues with support, systems integration, selling cycle, 3rd party software updates, just to name a few. What on paper looks easy, requires deep knowledge and ability to execute. Can this be built or acquired? Absolutely, but it takes time. The idea that starting next year, IT managers will start buying extra hardware with every PC, is a delusion. It’s lunacy.
Even if companies start buying these headsets in droves, the problem is a complete lack of software which would take advantage of the hardware. True, Facebook developed Horizon Workrooms, the '...flagship collaboration experience that lets people come together to work in the same virtual room, regardless of physical distance ....'. Facebook also announced a partnership with Microsoft, where the Microsoft Office will have a virtual version.
Their theory is that after 2 years of Covid Zoom calls, people can't wait to put on their head a device and collaborate on the latest version of Excel spreadsheet. This will unleash our creativity and we’ll be able to use this space for truly collaboration activities… Or does that sound too mundane and boring?
This might be a newsflash to Mr Zuckeberg, but most people in the office are not designing skateboards or the latest fashions. For instance, would it help in designing the new advanced airplane? I am sure it might. But first, you have to build the software. You have to convince your customers to buy it and use it. Suddenly the number of tasks which would benefit from this technology is measured not in billions or millions but in the thousands.
These are some of the reasons why this project is going to fail. In order for this to succeed, there would have to be numerous things which Would Have To Be True.
It is not clear if this product is for consumer or business. There is no army of developers building applications, like Microsoft has. There is nothing but the wishful thinking that if you build it, they will come.
Having a lot of money can help you to accelerate your product development, time to market, and customer acquisition. However, having too much money will help you to lose focus. And that's the recurrent pattern.