Episode Transcript
Speaker 1 00:00:09 Today I want to talk about the metaverse. And at the risk of being a tiny bit controversial, I want to give you some perspectives on what's going on at Facebook and social media and VR and general meta topics. First of all, meta does not mean unlimited. Meta means about metadata is data about data. So this idea of the metaverse essentially means linguistically that you're leaving the real world and you're going to the world about the world, which is a little bit of a strange thing that somebody might want to pitch because most of us would like the real world to just be a little bit nicer. And we're not trying to escape it, we're just trying to improve it. And that's really, in a sense, what Facebook seems to be doing, rather than taking the real problems that they have and addressing them, which are basically important problems making social media safe, making it unbiased, giving people transparency, creating white box ai, giving people control over their part of the social network.
Speaker 1 00:01:08 There's a whole theme going on in blockchain for distributed autonomous organizations, which in a sense is what Facebook needs to do is to support more local control. They've ignored it and they don't want to talk about it. They want to talk about the meta problem, which is the problem about the problem, which is let's escape it. Let's go to another world. And I think most people are seeing right through this. When Philip Morris changed their name to Altria, a lot of us were very aware of what they were trying to do, and it had some positive impact on the company, but the company was still a cigarette company. And I think to some degree that's still true in Facebook. Facebook is a social media company. It makes its money through advertising. A tiny, tiny fraction of their revenue comes from direct sales. So everything they do has to do with collecting data about people and selling that data to advertisers, not serving users.
Speaker 1 00:01:59 So it's not clear to me that the metaverse really changes any of that. Second thing I wanna talk a little bit about is the way social networks work. Now, I'm not an expert on this, but I certainly read a lot. And one of the observations I wanted to make is that if you think about the corporate world where most of us work in companies with hundreds to thousands of people, we don't communicate to everybody at the same time. In one big network, that would never work. I mean, if you had a b open broadcast communication where everybody in the company could talk to everybody else, you know, it would be a mistake. There would be all sorts of complaints and gripes and people anonymously talking about things they don't want to do or that they don't think the company should do and it wouldn't work.
Speaker 1 00:02:41 So what we've learned, by the way, we had a funny situation like that at Sybase, which I'll tell you guys about sometime, where we proved that it didn't work. So instead, what we've done is we break people into teams and we have small groups, and there's endless research on why small teams outperform big teams and why big teams outperform hierarchical teams, and why we should distribute control to the most knowledgeable people, and why personal relationships are more important than hierarchical relationships. This has been proven in business, but somehow in social media, we just ignore all that and we throw everybody into these big open networks and assume good things are gonna happen. And so you think there's a flaw in the fundamental philosophy behind Facebook that we now know is problematic, and for some reason the company doesn't wanna deal with that. I mean, I really think it would be a fascinatingly important strategy for Facebook to take that on and make the system better.
Speaker 1 00:03:36 And I think it's happening to other companies. One example of a company that I sort of know is Nextdoor. Nextdoor is a well-intended social network designed to be used by your community and your neighborhood. And I joined Nextdoor in our neighborhood and it was, it was okay. I mean, it was nice. People were talking about why somebody's trash wasn't picked up, or maybe we should get a new white line painted on the street, or whatever it may be. And then something strange started to happen. The next door community started to connect to each other, and I started to get messages from people a couple blocks away and then a couple miles away, and then all over Oakland and suddenly the stream of information started to be about crime. And somebody who stole my newspaper videos of people stealing each other's Amazon packages, and I just shut it off <laugh>, I just didn't have any interest in it anymore.
Speaker 1 00:04:29 And I wonder if that's the same effect that social networks amongst close allies and friends are great social networks amongst anonymous people where they don't have a real purpose tend to be complaint networks or griping systems. And for any of you who use Twitter, you know what it's like. Sometimes you'll be up in the morning and something will just drive you crazy and you want to tweet about it. And that never turns out to be a good decision. Usually it backfires in some respects. So those tools have a lot of work yet to to come. And it's kind of unfortunate that Facebook just has no interest in fixing this, and next door probably is going down a similar path. And I know the executives there, and I think they're trying to avoid that. So I think that's one part of the meta story. The second part of the meta story is do virtual realities work?
Speaker 1 00:05:19 There's been a lot of money spent on this second life, many, many virtual worlds that have flopped going back to the eighties, and I'm not really sure what Facebook is trying to do. I personally would never wear glasses that sent information about my location back to Facebook. So this whole RayBan thing to me is a huge risk cuz you know that data is being used by Facebook for advertising, and eventually the glasses are gonna flash ads in your eyes, or maybe even subliminal ads. Who knows? So if it's an advertising led strategy, going into a virtual world is a big exposure of your personal needs, information, location, health, relationships, that is going to be, you know, maybe in order of magnitude worse than the information that Facebook has been stealing from people for the last couple of decades. So how are they gonna monetize this?
Speaker 1 00:06:11 Assuming these virtual worlds are great, I suppose they'll sell glasses, they'll sell headsets, they'll sell cameras for virtual classrooms, they'll sell cameras for virtual meetings, and now they're in the business of competing with Microsoft and WebEx and Zoom and, and all of the hardware vendors, including Apple who are really good at this, does that a direction where Facebook's gonna succeed? I don't know. I'm, I mean, I'm not, I don't really follow the company that well, but I tend to doubt it. So on the other hand, there is a huge potential for virtual reality and augmented reality, huge potential. The company that I've spent a lot of time with is a company in Menlo Park called Striver Labs. And Striver is a VR company that was founded by the quarterback of the Stanford football team who used VR to train football players. And when I first started using it and trying it, I was amazed what it feels like to actually be on a football field.
Speaker 1 00:07:09 And they have become a very successful, fast growing company, selling really, really effective VR training to Walmart and Verizon and JetBlue and all sorts of amazing companies. And the fact that the glasses are a hundred dollars a pair and you can have a real world experience in a store without having to get on a plane and go to a simulation center. And the actual VR experience is better than a physical simulation because the virtual simulation can specifically point out very dangerous situations that you may not wanna simulate in the real time. And Strivers doing very well. It took a while for people to believe in it and to experiment with it. And they had to, of course, build an enterprise solution with all of the technology and data and services behind it. But now it's a really successful company and Microsoft's getting into it with AR and HoloLens, Accenture's pitching the fact that they're training a lot of their new consultants using ar.
Speaker 1 00:08:07 I think the business applications of the meta idea are huge. And I think training is going to be one of the bowling pins, as they say, of this market where every company has opportunities for virtual training. Virtual meetings will eventually be huge too. Microsoft and WebEx and other companies will probably dominate that. If Facebook wants to get into that stuff, great. I wish them luck. A problem is, of course, their brand is quite tarnished, and I'm not sure if companies are gonna trust their data to an advertising company. And the other thing that's I question about Facebook is, when you sell products to customers and customers pay for them, by the way, we don't pay for Facebook. So they don't actually don't sell anything to us. You have to support them. So there's a massive infrastructure that Facebook has yet to build, to market, sell, support, and take care of real customers.
Speaker 1 00:09:02 Us not the advertisers. I don't think the company has any infrastructure in that domain whatsoever. And the success that Facebook has had with Workplace, I believe is primarily because the workplace customers are Facebook advertisers. So they have been, they have been doing business with Facebook already, so they feel somehow engaged with the company for this other system. So there's a lot of questions about whether the meta strategy will play out and what it'll turn into. It'll certainly be interesting technology and a lot of people will probably be entranced by it, but believe me, Apple's working on this, Microsoft's working on this. Many, many startups, driver immersion, lots of really cool companies are working on this. So even though Facebook will put 10 billion into a bunch of people working on it, the the business opportunity is not completely clear yet. The third thing I wanna talk about in general is the reason I'm even putting this podcast together is because I've been in the tech industry for so long.
Speaker 1 00:10:00 I entered the tech industry in 1980 before the PC was announced. So I've watched the birth of personal computers, mobile devices, the internet, Google, social media, et cetera. So I've been through maybe six or seven of these big trends. And VR has been around a long time. It's, it's not new. Even the very first IBM PCs in the 1980s had simulated virtual experiences and they were very slow and very expensive and not very interesting to use. So there's no question it's a potential market, but I don't think people are gonna wanna live in meta versus the other part. Of course that's a big potential opportunity for Facebook is the gaming industry. And that's where meta experiences probably will be fantastic. For those of you that play games and I actually have a couple games I love, there's nothing I'd rather do than go into a 3D world of that game. But it's gotta be well done and it's gotta be fast and it's gotta be effective and it's gotta be inexpensive. Most games are $45, so uh, I'm not gonna spend $500 on a game and a bunch of hardware for it. Some people will. But anyway, that's my perspective on meta.
