Zuckerberg’s bet on the metaverse is a Putinesque delusion that may lead to Meta’s downfall

Disclaimer: Opinions expressed below belong solely to the author.

What does a Silicon Valley billionaire have in common with a Russian despot in charge of a country waging a ruinous war on its neighbour? Quite a lot, actually.

Just yesterday, the latter had to tacitly acknowledge his failures by mobilising reservists to hold as much of the occupied territories as they could to save his face in a tragedy that is entirely of his own making.

Give it a few years and we may see Mark Zuckerberg in a very similar situation, trying to find a way out of trouble his metaverse fantasies are pushing his business into.

Lonely at the top

People of significant influence in any area tend to grow disconnected from the surrounding reality, retreating behind the walls of their fame and wealth.

Ivory tower syndrome / Image Credit: Eva Strauss

Political leaders, particularly those authoritarian types spending decades in power, gradually forget how real life looks like. They can’t go for a simple walk, visit a McDonald’s or go to a cinema. They don’t do grocery shopping, or take friends out for a beer.

Wealthy billionaires enjoy only marginally more freedom, typically hiding in their mansions, hotels, exclusive clubs, bars and restaurants for the elite. It’s small wonder, then, that they often grow oblivious to the obvious.

Just like Putin, Zuckerberg is being led astray by his ego, but can neither hear the warnings from their ivory towers.

He seems to believe himself to be a social media visionary, but the problem is that he has only ever invented one thing — the Facebook timeline displaying the latest news about your friends and content that you may be interested, in at a time when MySpace demanded that you actively visit every page and profile yourself.

That was the only innovation — however successful, of course — that Zuckerberg and, by extension, Facebook, have ever produced.

Since then, he has failed to predict the rise of image-centric social media (Instagram), video-centric social media (Snapchat and TikTok), and direct messaging superseding traditional SMS messages, and even phone calls (WhatsApp).

That is a lot of misses for a “visionary” in any industry.

Zuckerberg certainly feels added pressure of the declining attractiveness of Facebook in the younger, trend-setting demographics, suggesting that he and his company are behind the times, and he is clearly struggling to find a response. There is a real risk that within mere years, the social media giant may be dwarfed by younger startups which were able to understand users better.

Fortune favours the bold — or does it?

Clearly feeling the pain of these lessons, Zuckerberg has decided to leap forward and try to predict what the next social media medium may appear to disrupt the market and/or redefine human interaction online in the future. He lost on images, he lost on video – he won’t lose this time! Cue the “metaverse”.

Mark must have been thinking hard what the next technological step beyond text, images and video may be. How will people consume content in the future? Which nascent technology may one day supersede what we use today? The only answer, in his mind, could be virtual reality (VR).

He decided he would not be beaten to the punch again, so he delved into the technology head first. His bet on the metaverse is so serious, in fact, that he decided to relegate Facebook to a mere subsidiary of Meta — likely in a bid to define his company and himself as the dominant force of this future technology.

He did this, I believe, to avoid his earlier failures when some garage startup claimed the distinction of a pioneer, like Instagram or Snapchat. Meta is supposed to be Zuckerberg’s greatest achievement and the parent of the metaverse.

With that, Zuckerberg would be first somewhere for once (Facebook, after all, was born into an already fairly crowded scene).

However, it seems to me that his ambitions may, again, resemble delusions of Vladimir Putin, rather than the most accomplished of the Silicon Valley visionaries (like Steve Jobs, who — love him or hate him — was genuinely able to shake up several markets in his lifetime).

Modern-day Russian tsar sees himself as the leader of the Slavic, particularly Orthodox, world, whose mission in life was to write himself into the history books by bringing Ukraine — the birthplace of all Ruthenians — under the Russian banner again and revive the empire dismembered in 1991.

Those delusions have now ended in a disaster which the inhabitant of the Kremlin is desperately trying to find a way out of, hoping to save what is left of his reputation, having built it rather successfully for the past 20 years.

The same fate may await Zuckerberg, clearly believing himself to be the godfather of social media, who now went out on a limb claiming he’s building the future and, just like the Russian president, found himself widely ridiculed for having nothing to show for the billions sank into the project (while his core business is hurting).

Just months ago, people were mocked for dropping a few million dollars on an NFT of a monkey, but it seems that Zuckerberg blew them out of the water, with Meta having reportedly spent over US$10 billion on metaverse in 2021 alone and having this to show for the founder’s metaverse avatar:

Let’s remember that Meta’s VR hardware arm — the only rather successful part of the business — wasn’t developed internally, but acquired with the purchase of the leading innovator and manufacturer at the time, Oculus, eight years ago.

Despite spending nearly a decade and 11-figure sums, Meta itself has yet to prove it can turn it into something more (just as it has yet to do with WhatAapp and even Instagram, both of which have shown minuscule innovation since being taken over).

At the same time, the still-young billionaire CEO is clearly distracted by these novelties from running the core business at Facebook, which has recently posted disappointing results.

If you find yourself in a hole, stop digging

After its first-ever decline in revenue on a year-on-year basis for the quarter ending in June, the company’s stock continued its free fall, losing over 60 per cent from last year’s highs, wiping not only pandemic gains, but pushing the stock below 2017 levels — and costing Zuckerberg more than half of his fortune.

His dreams that metaverse may reverse this course were certainly not helped by results of Meta’s Reality Labs division, which posted a loss of US$2.8 billion (yes, just shy of US$1 billion per month).

Can’t metaverse succeed eventually?

You’d be forgiven for thinking that perhaps not all is lost for Meta and Zuckerberg, and that with enough time and investment, they can make metaverse work. Here’s why I think they can’t.

Most innovation gets people excited for one reason or another. As Steve Jobs said, people don’t know what they want until you show it to them. The problem is that Mark Zuckerberg did and everybody laughed.

Paradoxically, he also fails to understand that social media are so popular because they get us all more in touch with real lives of other people. We can discuss things, share photos, videos, and interact with each other through the technology.

What metaverse offers is a replacement of these real life experiences with virtual ones. It’s not connecting people — it’s disconnecting us not only from each other (since instead of seeing each other we’re told we’re touted avatars), but from real life too (by decorating virtual properties, living in virtual locations etc.).

It’s the antithesis of all the benefits of social media.

Just like Putin, driven by ego and blinded by delusions of grandeur, Zuckerberg went all-in on something that he didn’t think through and wasn’t really ready to handle, putting everything else in jeopardy as a result.

And just like the Russian president, Meta’s CEO has cornered himself. He can’t withdraw, concede defeat or, at the very least, admit that his actions may have been premature. He went to bet everything with a very weak hand and his bluff has become apparent very quickly.

It’s hard to imagine Zuckerberg rebranding the company back to Facebook, just like how it’s hard to imagine Russian troops being called back home, regardless of the painful losses. The ego of the powerful — whichever their domain — trumps reason and drives them to continue on their downward path in a desperate hope a turnaround may still be possible.

Of course, Russia is unlikely to relinquish control of every inch of the occupied Ukrainian land, just like Meta is going to be able to squeeze some money out of the market share it commands in VR and AR hardware.

In either case, however, it’s not what they set out to achieve and came at an unbearably high price, keeping them scarred for years and earning their leaders mockery instead of glory they sought, proving yet again the old adage that pride comes before the fall.

Featured Image Credit: Meta / Tonight with Vladimir Putin by BBC