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Zuckerberg has been speaking about Augmented Reality since the Oculus purchase on March 14th, 2014.

“Mobile is the platform of today, and now we’re also getting ready for the platforms of tomorrow,” said Facebook founder and CEO, Mark Zuckerberg. “Oculus has the chance to create the most social platform ever, and change the way we work, play and communicate.”

Certainly it is a legitimate consideration for investment. I do recall at the time thinking this was a big investment ($3bn approx in 2021 dollars) then I promptly filed away under the category of somewhat limited use-case available to the Facebook platform.

Fast-forward to this week, and Zuckerberg has placed the Metaverse front and centre to lead the platform positioning.

The metaverse is the next evolution of social connection. Our company’s vision is to help bring the metaverse to life, so we are changing our name to reflect our commitment to this future.

There it is. The future of social connection is virtual and/or augmented reality: a world mix somewhere between adding virtual content to real life and full virtual reality viewed through Facebook (Meta) hardware. These words are not from ‘just another startup”. They come from Mark Zuckerberg who, like it or not, is in control of a platform used by 35% +/- of the worlds population.

Lets look at the metaverse in context. One test for Zuckerberg is whether he is legitimately and to what extent, breaking into the next technology frontier. This in contrast with the standard view we are seeing an attempt to paper over the breakdown in trust emanating from alleged user manipulation that has been publicly and articulately brought to the fore by Frances Haughenduring her explosive testimonies to US and British government investigations.

The hardware and physical tools used to interact with ourselves and with each other are inevitably part of the equation. The ‘future is mobile’ remains a strategy that is still under development, and the associated tools are often clunky. However they are firmly embedded in our day day lives, with the concept of “home phone” quickly going the way of the dodo bird.

The world is in our pocket, knows no geographic boundaries, is capable of anything a laptop is, albeit not so handy for some tasks. There are practical limitations including monthly telco fees and roaming fees and limitations, but these fees are mostly provider driven based on market propensity and willingness of consumers to pay. They will normalise over time.

So we interact in our ‘social connection’ referred to in the Meta quote using smart phones and laptops. Zuckerbergs metaverse world is not just viewing on a screen; it is immersive and takes the user into the virtual reality. Today that is achieved from that we have seen by a device worn on the head and over the eyes.

So what is the metaverse. Here is a pragmatic view from Microsoft’s Nadella:

SATYA NADELLA: Yeah, I mean first of all, I think that this entire idea of metaverse is fundamentally this: increasingly, as we embed computing in the real world, you can even embed the real world in computing. That’s kind of how I think about it. Both because in some sense, one of the metaphors that I always use which is helpful is that as both an outside-in and inside-out. For example, you can have a space in which there are lots of cameras and microphones. And you can digitize the space. You don’t need to wear anything on your head.

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The Microsoft view of metaverse is broader and includes headsets but also something on screen that is closer to a chat room where Nadella sees employees drop by to meet other employees. Understandably the Microsoft view is corporate focussed , whereas Zuckerberg shows a view that is broader and user focussed.

The evolving metaverse focus at Meta is still a user environment and subject to the content, methods and context provided. In this view the metaverse represents an evolution from the current hardware metaphors that we live with every day.

The examples and discussion here are subject to two evolving megatrends:

• User manipulation driven by AI and algorithms fed by proprietary data which is exemplified by Facebook, but is pervasive in marketing generally. The sheer pervasiveness of social media magnifies this impact.
• Hybrid work driven by pandemic requiring additional means of employee engagement to maintain and improve corporate culture, loyalty and productivity. This has been driven by the Pandemic but it has surfaced a host of social, family and corporate productivity issues. I will look more at this mega trend in other posts.
  

Lets go back to the central question before this longer discussion than I expected. Is he is legitimately and to what extent, breaking into the next technology frontier.

The obvious parallel is Linden Labs Second Life in the early 2000’s. Briefly this was an on-screen virtual environment of cities, buildings and spaces. People were represented by Avatars that were anonymous but logged in. It was evolving into a commercial endeavour and users could purchase (useless) trinkets and this expanded even to online banking with Wells Fargo hosting a virtual branch. This commercial activity fast evolved into criminal activity including the worst kinds including drugs, paedophilia and others.

It is too simple to look at Zuckerberg’s harmless examples and be drawn in but it is similarly easy to see the risks associated with anonymous interaction particularly where another layer of protection and cover is available to the user base that inevitably choose to take advantage. I will not classify this as a mega trend because it already exists and criminals constantly look for the next best new avenue for their activities because the newness suggests less built in protections.

Relevance to Bankwatch:

This strategy is probably not breakthrough in the grand scheme of things.

It will increase sales of associated hardware and convert existing users of Facebook. Gamers in particular are used to these virtual environments, and they will watch this space for improvements in functionality, performance and user satisfaction.

Support for Hybrid work is a powerful concept but Facebook are nonexistent in a corporate context.

New risks are introduced including inadvertant introduction of risks to unsophisticated users.

Facebook has many use cases but at its core the ‘social graph’ was Zuckerbergs holy grail. Will the metaverse introduction improve the social graph between families and Lon distance relationship. There is probably something there worthy of exploration and we will see where that takes us.

1. Courtesy FT ↩