What Are Your Thoughts on the Metaverse?

00:00:00.000 | (upbeat music)

00:00:02.580 | - Okay, sounds good.

00:00:06.360 | This question is from Cameron.

00:00:08.320 | He's in college.

00:00:09.280 | He has a question about your thoughts

00:00:10.800 | on the metaverse from Meta.

00:00:12.840 | - Hi Cal, college student here.

00:00:16.300 | What are your thoughts on the metaverse

00:00:17.640 | that Meta is currently trying to build?

00:00:20.200 | How do you think that it's going to affect society?

00:00:23.020 | Thank you.

00:00:23.860 | - Well, there's a few things going on here.

00:00:27.680 | One, why is Facebook doing this?

00:00:30.960 | And in part it's because,

00:00:33.280 | as I've been predicting for a few years now,

00:00:35.440 | the age of social media monopoly platforms

00:00:38.800 | has begun its descent.

00:00:41.480 | We just didn't realize it.

00:00:42.480 | Now we're actually starting to see it.

00:00:44.660 | Facebook posted one of their first reductions

00:00:49.760 | in active user minutes,

00:00:51.440 | and their stock lost something like $150 billion.

00:00:54.800 | The biggest in absolute value,

00:00:57.400 | single one day drop of a company's valuation ever.

00:01:00.640 | So people are leaving Facebook,

00:01:03.280 | people are leaving Instagram.

00:01:05.600 | This era in which there's six platforms you have to use,

00:01:10.600 | but you can't communicate

00:01:11.520 | and you're completely out of it.

00:01:13.160 | That's all dissolving into a world

00:01:14.880 | of much more niche social media.

00:01:16.320 | And I've talked about before why this has happened.

00:01:18.140 | I talked about this on Lex Fridman's podcast, for example.

00:01:20.920 | I went into detail on this.

00:01:22.320 | The issue is the network effect,

00:01:25.120 | the main network effect that these platforms had

00:01:27.300 | that made them monopolies,

00:01:29.620 | was everyone you know is using them.

00:01:31.800 | And so when their main promise was,

00:01:34.540 | you're gonna update people on what you're up to

00:01:36.880 | and see what people you know are up to,

00:01:38.160 | that network effect dominates.

00:01:40.640 | If I need a place to go to see what people I know are up to,

00:01:43.140 | and they're all on this one platform,

00:01:44.560 | no competitor will succeed.

00:01:46.040 | I have to go to Facebook.

00:01:47.400 | That was the foundation

00:01:48.240 | on which they built their massive user base.

00:01:51.080 | They then got spooked

00:01:52.440 | because they saw Twitter come out of nowhere

00:01:54.380 | and have a lot of success

00:01:56.420 | with this algorithmic curated timeline feature.

00:01:59.000 | And so the main social media companies,

00:02:01.680 | namely Facebook and Instagram,

00:02:03.240 | and then Facebook eventually bought Instagram,

00:02:04.880 | said, well, what we're gonna do instead is,

00:02:07.000 | say these platforms are not about connecting

00:02:09.160 | with people you know,

00:02:10.000 | it's about distraction and entertainment.

00:02:12.260 | We will select articles and posts and things

00:02:14.460 | that are generating a lot of engagement

00:02:15.840 | and we'll put them in an infinite scroll newsfeed.

00:02:17.900 | And you could just click on that F on your phone

00:02:19.900 | when you're bored

00:02:20.740 | and there's gonna be something there

00:02:21.580 | that's gonna press your buttons

00:02:22.400 | and it's a good distraction.

00:02:23.920 | That was the beginning of the end for these platforms.

00:02:26.740 | Yes, when you already had 1.3 billion people

00:02:29.240 | on these platforms,

00:02:30.160 | they were gonna use it more in the short term

00:02:34.200 | 'cause that's more interesting

00:02:35.200 | than seeing what your cousin's up to.

00:02:37.580 | But in the longterm,

00:02:38.520 | now there's no reason to be on Facebook

00:02:40.200 | if I wanna be entertained.

00:02:41.320 | Yeah, that's entertaining,

00:02:43.460 | but so are podcasts.

00:02:45.940 | So are shows on the streaming services.

00:02:48.080 | So are books.

00:02:49.720 | You know, so are any other number of other services

00:02:53.700 | where it could care less if my cousin uses it.

00:02:57.340 | And that's exactly what happened to Facebook.

00:02:59.020 | It's like, yes, that was more entertaining

00:03:00.600 | for their existing users,

00:03:01.660 | but over time their users were saying,

00:03:03.620 | I don't really wanna see Facebook newsfeeds.

00:03:06.340 | I wanna watch, you know, Yellowstone over on Paramount

00:03:10.400 | and listen to a podcast on some niche topic

00:03:13.740 | I'm really interested in.

00:03:15.060 | This is entertaining,

00:03:16.100 | but other things are even more entertaining.

00:03:17.580 | So they're starting to lose users.

00:03:20.720 | And so what we get instead

00:03:21.760 | is the rise of much more fractured social media

00:03:25.040 | where the experience is,

00:03:26.400 | okay, if we're gonna do distraction,

00:03:27.880 | let's just do distraction.

00:03:29.320 | And that was TikTok's play.

00:03:32.160 | TikTok said, okay,

00:03:33.520 | if this is just about scrolling things and being distracted,

00:03:37.040 | let's just plug that matrix cable

00:03:38.800 | straight into the back of your spine.

00:03:40.400 | Let's get rid of the whole,

00:03:41.400 | like my cousin's on here and I have a wall

00:03:43.200 | and I'm connecting to people.

00:03:44.020 | Just get rid of all of that.

00:03:45.520 | And let's just like hone in like a laser beam

00:03:48.220 | on just the absolute most in the moment,

00:03:51.820 | dopamine hijacking, attention generating style of content.

00:03:55.540 | And don't even worry about where it comes from.

00:03:57.580 | We'll just show you things one after another.

00:03:59.740 | If that's our game here,

00:04:01.740 | then let's just purify that.

00:04:03.980 | And that's what TikTok is doing.

00:04:05.060 | And that's why it's sort of eating the lunch

00:04:06.800 | of the other social media platforms

00:04:08.240 | because it's saying, forget this,

00:04:09.340 | like I wanna connect to people I know stuff.

00:04:12.060 | However, that is a world in which the obligation

00:04:16.280 | to be on these platforms completely dissolves.

00:04:18.580 | And I don't mean to rant too much about this,

00:04:21.120 | but Cameron, I think about this a lot.

00:04:23.140 | Five years ago, when I would say in public,

00:04:25.920 | I don't use social media, I don't use Facebook.

00:04:28.760 | People were aghast.

00:04:31.440 | Like this is crazy.

00:04:33.460 | How can you survive in our society without it?

00:04:36.640 | That's where everyone is.

00:04:37.520 | That's how you know what's going on.

00:04:38.440 | That's where all the cultural trends are.

00:04:39.720 | That's where all the news is.

00:04:40.800 | That's how you get business.

00:04:42.000 | In an age of TikTok, no one cares anymore

00:04:44.020 | if you're not using it.

00:04:45.540 | 'Cause it's just purified dopamine distraction.

00:04:48.600 | So if you say, hey, I don't have a TikTok account.

00:04:52.340 | No one's like, how do you survive?

00:04:54.460 | Like, yeah, I know it's weird.

00:04:56.340 | You know, it's fun, but there's no expectation

00:04:59.820 | that you would use it.

00:05:01.140 | And that's actually way more healthy relationship

00:05:03.260 | with these tools.

00:05:04.100 | And so what we're gonna get is TikTok 2.0 and 3.0,

00:05:06.900 | all sorts of different services

00:05:09.060 | that directly press buttons in very specific types

00:05:11.660 | of ways.

00:05:12.500 | A clubhouse was like this.

00:05:14.780 | It was doing something else very specific,

00:05:16.220 | was very interesting.

00:05:17.200 | None of which have any network effect requirements.

00:05:19.220 | I don't need my cousin and my friends from high school

00:05:22.460 | and my grandfather to be on TikTok for it to be useful.

00:05:26.020 | And it's promised to me.

00:05:26.860 | It's promised to me is like,

00:05:27.680 | we're gonna show you these videos

00:05:29.080 | and there's gonna be a cat on it

00:05:30.860 | and it's gonna be entertaining.

00:05:32.940 | And so once you got rid of the network effects,

00:05:35.380 | this whole thing is just gonna fragment

00:05:36.840 | into lots of different sources of entertainment.

00:05:38.960 | Some different than others, some much more base,

00:05:41.540 | some much more high end.

00:05:42.700 | It doesn't matter.

00:05:43.820 | And no one will be expected to use any one of these things.

00:05:46.560 | And it's not a weirdness

00:05:47.520 | if you don't use any one of these things.

00:05:48.820 | And that's actually a much better, healthier world.

00:05:51.120 | This more long tail niche social media type world.

00:05:53.660 | It's less about connection and more about distraction

00:05:56.500 | is fine.

00:05:57.340 | And that's where we're going.

00:05:58.260 | And you can't be a $700 billion a year

00:06:00.860 | social media company anymore,

00:06:02.540 | once we get to that world.

00:06:03.740 | And that's what Facebook sees.

00:06:05.380 | And that's why they're trying to shift away from it.

00:06:07.380 | All right, so that's the whole background

00:06:09.380 | for what's going on.

00:06:11.100 | I think the particular meta vision that we see now,

00:06:14.140 | which tends to be focused on social life

00:06:15.900 | occurring in virtual reality, that's a smoke screen.

00:06:18.500 | That's not the big headline.

00:06:21.720 | The big headline with these technologies

00:06:23.500 | is going to be the dissipation

00:06:25.500 | of the personal electronics industry.

00:06:28.580 | I was talking to some people in the industry about this

00:06:31.420 | when I was doing a New Yorker piece last fall

00:06:33.940 | about people who work in virtual reality.

00:06:35.860 | This Cameron is the trend that is much more powerful.

00:06:39.060 | And the trend works as follows.

00:06:41.500 | Once augmented reality glasses

00:06:43.540 | get to a certain level of quality,

00:06:47.700 | and once we have sufficient high speed internet

00:06:50.980 | wherever we need to be, and we're very close to that,

00:06:54.100 | there'll be no need to own any other consumer electronics

00:06:56.660 | beyond those glasses.

00:06:57.700 | If I want to use a computer,

00:07:01.120 | I don't buy a computer from Apple.

00:07:03.300 | There is a instance in some Amazon virtualization cloud

00:07:07.260 | somewhere of my computer running in a giant server farm,

00:07:10.260 | and my AR glasses will create a screen

00:07:12.660 | wherever I want in the environment in front of me.

00:07:14.660 | And there is a screen of whatever size I want,

00:07:16.740 | and there I work on my computer.

00:07:17.900 | If I need to use my phone,

00:07:18.980 | I do not need to own an iPhone or an Android phone.

00:07:21.420 | I have my glasses on.

00:07:22.700 | I can just pull my hands down

00:07:24.420 | and there is the list of my contacts

00:07:26.020 | and I can see who's texting me.

00:07:27.860 | I don't need a separate phone.

00:07:28.740 | If I want to watch TV, I do not need a 65 inch TV.

00:07:31.900 | I can make a 65 inch TV show up wherever I want in my house,

00:07:35.560 | and it can be in a position

00:07:37.180 | where I see it through my AR goggles,

00:07:38.700 | but everyone else in my house

00:07:39.860 | sees it in the exact same position.

00:07:41.300 | We can't tell the difference between that screen

00:07:42.940 | being there in real life or not.

00:07:45.940 | There's no need to actually buy or own TVs.

00:07:48.140 | That is the huge game changer that is coming.

00:07:51.540 | The virtualization of computation into the cloud

00:07:54.900 | and the replacement of interfaces

00:07:57.180 | with augmented reality goggles.

00:07:59.040 | Many companies disappear once that happens.

00:08:04.260 | What's the Foxconn plant,

00:08:05.600 | Apple's Foxconn plant gonna do

00:08:07.820 | when there's no iPhones to produce,

00:08:09.160 | there's no iMacs to produce?

00:08:11.440 | What are they gonna do?

00:08:12.360 | You know, that's gonna go out of business.

00:08:13.520 | What's Samsung gonna do

00:08:14.760 | when high-end Android phones

00:08:18.360 | and large screen TVs don't need to exist?

00:08:20.620 | It's gonna disappear.

00:08:23.680 | It's gonna be a huge change

00:08:25.480 | to the digital electronics industry.

00:08:27.520 | And guess what?

00:08:28.840 | All of the major players are investing huge amounts of money

00:08:31.320 | to make sure that they are not going to lose

00:08:33.600 | in that game of musical chairs.

00:08:34.740 | Yes, Facebook talks about META.

00:08:36.500 | Facebook is also caring a lot about this future

00:08:39.940 | of virtualized consumer electronics.

00:08:42.040 | They are spending a lot of money on, guess what?

00:08:44.860 | Their own pair of these augmented reality glasses.

00:08:47.980 | Apple is putting a ton of money into this as well

00:08:50.500 | because it is existential for Apple.

00:08:53.300 | Apple is a trillion dollar company

00:08:54.740 | that will disappear and no longer exist

00:08:56.860 | if they don't win the fight to be the people

00:08:59.380 | who produce the best glasses that virtualize all this

00:09:01.820 | because you don't produce iPhones

00:09:03.440 | in a world of augmented reality.

00:09:05.440 | Amazon and Google are betting big on both.

00:09:07.560 | Google is betting big on the glasses front.

00:09:09.880 | They're doing that with Magic Leap,

00:09:11.520 | which they put well over a billion dollars into.

00:09:14.640 | Amazon is trying to be the back-end computation.

00:09:17.240 | So if we don't actually have a phone,

00:09:18.760 | if we don't actually have a computer,

00:09:20.180 | where does that computation happen?

00:09:21.600 | Amazon is saying, "We'll do it.

00:09:23.600 | "We're not just virtualizing computation,

00:09:25.200 | "we're virtualizing hardware.

00:09:26.660 | "We can make anything you want happen in our servers

00:09:28.800 | "and we'll just beam the screen to wherever you are."

00:09:31.060 | So Cameron, that is the big trend.

00:09:32.920 | That is gonna be the trend

00:09:33.840 | that's gonna completely upend our industry,

00:09:36.240 | not, as Mark Zuckerberg videos would seem to imply,

00:09:39.600 | us playing cards in virtual reality in a space station

00:09:43.000 | with some of our friends.

00:09:44.680 | That's not that interesting to me.

00:09:46.960 | The thing that's gonna upend our world

00:09:48.520 | is all interfaces are virtual.

00:09:51.060 | All computation happens on Amazon servers.

00:09:53.760 | And 80% of the major digital electronics company

00:09:56.320 | that exists today no longer exist in any way

00:09:58.440 | that we, anywhere like how we see them today.

00:10:01.040 | That's what I would keep my eyes on,

00:10:03.640 | not being in one of these weird virtual reality

00:10:06.900 | space stations and doing Facebook with avatars

00:10:11.140 | or something like this.

00:10:12.320 | Interesting stuff could happen there,

00:10:13.580 | but that's not where my eye is right now.

What Are Your Thoughts on the Metaverse?

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