4 ms·

As I was watching their 'keynote' I couldn't help but wonder about the many companies that took a similar approach and then died. Spending a ton of money on som

by krm01 5y ago

As I was watching their 'keynote' I couldn't help but wonder about the many companies that took a similar approach and then died. Spending a ton of money on something doesn't make it automatically successful. [1] In fact, history has shown the opposite to be true. Take Facebook itself for example, it succeeded, not because it poured Billions into building its social network. Mark built something small, for a small market. Reached a monopoly quickly, then expanded to the next market. One after the other. Google, Apple, Airbnb, Stripe, none became the giants they are because they spent billions on a grand vision. Even if you look at established companies like Apple, and how they launched their first iPhone. I've worked with tons of startups, helping them with UI/UX design. So usually in their early stages and get to see how they go from prototype to success or failure. [2] Can 100% confirm that YC's advice of building something small for a small audience and then slowly grow that is the best advice to increase your chances of success. Facebook should know this. So I understand it's my observation vs Billions of dollars and a lot of very smart people who're working on it. But History says this won't work. [1] https://techcrunch.com/2020/04/22/magic-leap-announces-layoffs-amid-covid-19-slowdown/ https://techcrunch.com/2020/04/22/magic-leap-announces-layof... [2] https://fairpixels.pro https://fairpixels.pro

salmonfamine 5y ago
Is this not, essentially, the innovator's dilemma? Facebook has to increase profits at a large scale now, and doubtlessly suffers from middle-management power jockeying, and so is unable to repeat the small market growth process that made them what they are today.
- JohnJamesRambo 5y ago
  They could cut costs and just try to be good at being a better Facebook. I know that is heresy in the stock world.
  - salmonfamine 5y ago
    I think they effectively cannot. There would be a shareholder's revolt.
    - meltedcapacitor 5y ago
      How do they revolt? Facebook shareholders cannot remove the Zuck and he doesn't need their money. They have zero power.
    - johannes1234321 5y ago
      Which doesn't matter as Zuckerberg controls too many voting shares. Investors spent money while not receiving voting power ...
tantalor 5y ago
How about Tesla?
- parthdesai 5y ago
  Tesla followed the same model, no? Roadster -> Model S/Y/X -> Model 3
- krm01 5y ago
  Same: https://www.tesla.com/nl_NL/blog/secret-tesla-motors-master-plan-just-between-you-and-me https://www.tesla.com/nl_NL/blog/secret-tesla-motors-master-...
sslayer 5y ago
And those of us with Privacy concerns don't see this as a bad thing. However, it could be of concern if it is successful, and probably for more than just privacy. If anyone reminisces about the internet of 10-15 years ago, imagine if you will one absolutely dominated by Meta's virtual garden.
CursedUrn 5y ago
Facebook's current market position is almost entirely based on being there at the start. Mark knows this and is terrified of missing out on the start of another big thing.
2th3m00n 5y ago
I agree with you for the most part, but what the companies you gave examples of lacked is a Zuck. None of them had someone who could execute as effectively as he could. https://stratechery.com/2021/meta/ https://stratechery.com/2021/meta/
SavantIdiot 5y ago
> Google, Apple, Airbnb, Stripe, none became the giants they are because they spent billions on a grand vision. Google set out to catalog the entire internet on day one. If that's not a grand vision that they spent billions on, what is? AirBNB set out to disrupt the entire vacation rental market. Stripe set out to disrupt the entire POS payment market. Apple is the only one who fits your narrative: they set out to make a hobby PC then Jobs wanted to ... oh right, disrupt the entire PC market with Mac, but that came 7 years later so OK.
- dstick 5y ago
  He also said “build something small for a small audience” and that applies to the start of all the companies you mentioned. Even Google. Back then, the internet was small, and enthousiasts a small group (relative to the global population).
- krm01 5y ago
  Might be good to take a closer look at history. #GOOGLE Google started as a research project called BackRub. It only turned into Google and a mission after it started taking too much bandwidth on Stanford's servers Source: https://inshorts.com/en/news/google-began-as-a-research-project-backrub-1471791451197 https://inshorts.com/en/news/google-began-as-a-research-proj... #AIRBNB Airbnb began just so that the founders could make some extra money to pay rent. Not to disrupt an industry. Source: https://www.businessinsider.com/how-airbnb-was-founded-a-visual-history-2016-2?international=true&r=US&IR=T https://www.businessinsider.com/how-airbnb-was-founded-a-vis... #STRIPE Stripe was just a small project so the founders could simplify getting paid for their other side projects. Source: https://www.startupgrind.com/blog/the-collison-brothers-and-story-behind-the-founding-of-stripe/ https://www.startupgrind.com/blog/the-collison-brothers-and-...
  - SavantIdiot 5y ago
    # GOOGLE "calling it a "web crawler" designed to roam the web. " I'm right. # STRIPE "At the time Patrick was working on several side projects and they debated why it was so difficult to accept payments on the web. They sought to solve the problem and see if it was possible to make it simple - really simple. " I'm right. # AIRBNB I'm wrong. The first two set out to do something huge.
mempko 5y ago
That's because you are comparing Facebook to startups when you should be comparing Facebook to AT&T. AT&T spent billions on Bell Labs and gave us the transistor among other things like modern day switching networks. AT&T was a government sanctioned monopoly, and for that privileged they spent billions on research. Keep in mind that billions were already spent on the technology behind the metaverse in research institutions and government labs. Think internet, computers, AI tech, VR tech, all had billions of investment from the public sector already. What you are seeing with the metaverse is a privatization of the technology that already had substantial public investment. And even your startups are just piggy backing off billions spent in research. Google itself was started by a government grant for example. In other words when you look at spend at starups, you are just looking at the tip of an iceberg. Where under the water there was billions spent already by the public.
adolph 5y ago
If you haven't seen it yet, you might appreciate this slide deck about how organizations are like slime mold. Slide 57 main image "0.60=0.95^10", text "And thanks to that non-linearity, even a small decline in individual likelihood [of success] leads to a much lower overall decline in the likelihood of success." https://komoroske.com/slime-mold/ https://komoroske.com/slime-mold/
- rastapasta42 5y ago
  I disagree that slime-ball force is inescapable. I think our industry has a huge "boulder" - we often work on useless software that is far too removed from real world applications, which causes us to lose our passion. When you have 50 engineers maintaining a boring piece of crap software which can be maintained by 5 engineers, you will start noticing the productivity going down. Engineers who used to be very productive will slow down to meet the low expectations. Brainstorming a way to avoid this problem: - working on things we're passionate about with real-world impact - having a bunch of small organizations with small number of employees (maybe Mark should break down facebook into 50 smaller companies) - stop creating redundant jobs; if things are not going well, adding 100 people to a project isn't going to fix the delayed project
  - adolph 5y ago
    > 50 engineers maintaining a boring piece of crap software which can be maintained by 5 engineers https://www.youtube.com/watch?v=aXQ2lO3ieBA https://www.youtube.com/watch?v=aXQ2lO3ieBA "If thats the Bradley, then what's this? [...] How did they get to that from this?" General: "This all well and good Col. Smith. But with this gorilla in production I don't supposed there's going to be anything left in the budget for my scouts. . . . This is a speedy vehicle, why can't it be both? . . . We'll just stick a turret on top with lots of opticals. . . . We aught to get the biggest bang we can up there [in the turret]." Other general: "Add on some firepower!"
  - adolph 5y ago
    > I disagree that slime-ball force is inescapable. Please do go through the deck. At about 152 the author talks about a way through organizational headwinds. Also, the thesis is that an organization's ability to mutate and respond in a balance between collective and cellular methods is similar to a slime mold in a positive way (slide 149).
2OEH8eoCRo0 5y ago
There's a ton of money and there's a ton of money. Facebook has a ton of money to spend. Whether they succeed or fail is anybody's guess but this kind of investment can't help but move the needle on AR/VR tech.
- dilyevsky 5y ago
  Not necessarily so if it’s all closed sourced proprietary tech. For example I don’t think Newton had accelerated pda tech probably the opposite
  - nradov 5y ago
    Even closed source proprietary tech moves the industry forward. Engineers switch companies. Patents are filed. Competitors reverse engineer products. The knowledge diffusion is slower than with open source but it does happen eventually.
martindbp 5y ago
Well, it depends. Let's say this was 1990 and IBM instead of Facebook deciding that the internet is clearly the future and invest billions into it. Could have been the right move. They're betting on AR and VR as a medium, and I wouldn't bet against that long term. The question is if they can actually make something useful. Even if you know something will be successful it's still hard to find a way to capitalize on that. Your timing could also be years off. It was hard to foresee a search engine being the most valuable internet company.
kryptiskt 5y ago
There are counterexamples, sometimes the road to success is to bite the bullet and spend heavily. IBM spent five billion dollars to develop the IBM System/360 line, back when a billion was serious money. Neither Airbus nor Boeing would be where they are today without investing big sums up front. Making AAA games these days basically requires it, Google Stadia is floundering because Google shied away from putting enough money into their game studio to be competitive.
dkarp 5y ago
Is that not pretty much the story of Oculus so far? There are 2 million oculus quest 2 devices out there now and they're getting to the point where they have a monopoly in VR
- PeterisP 5y ago
  Didn't Oculus "succeed" already before FB bought it and invested huge amounts of extra money?
  - dkarp 5y ago
    They have only sold millions of devices since being part of FB. They were still really niche in 2014.

by krm01 5y ago

salmonfamine 5y ago

Is this not, essentially, the innovator's dilemma? Facebook has to increase profits at a large scale now, and doubtlessly suffers from middle-management power jockeying, and so is unable to repeat the small market growth process that made them what they are today.

JohnJamesRambo 5y ago
They could cut costs and just try to be good at being a better Facebook. I know that is heresy in the stock world.
- salmonfamine 5y ago
  I think they effectively cannot. There would be a shareholder's revolt.
  - meltedcapacitor 5y ago
    How do they revolt? Facebook shareholders cannot remove the Zuck and he doesn't need their money. They have zero power.
  - johannes1234321 5y ago
    Which doesn't matter as Zuckerberg controls too many voting shares. Investors spent money while not receiving voting power ...

tantalor 5y ago

How about Tesla?

parthdesai 5y ago
Tesla followed the same model, no? Roadster -> Model S/Y/X -> Model 3
krm01 5y ago
Same: https://www.tesla.com/nl_NL/blog/secret-tesla-motors-master-plan-just-between-you-and-me https://www.tesla.com/nl_NL/blog/secret-tesla-motors-master-...

sslayer 5y ago

And those of us with Privacy concerns don't see this as a bad thing. However, it could be of concern if it is successful, and probably for more than just privacy. If anyone reminisces about the internet of 10-15 years ago, imagine if you will one absolutely dominated by Meta's virtual garden.

CursedUrn 5y ago

Facebook's current market position is almost entirely based on being there at the start. Mark knows this and is terrified of missing out on the start of another big thing.

2th3m00n 5y ago

I agree with you for the most part, but what the companies you gave examples of lacked is a Zuck. None of them had someone who could execute as effectively as he could. https://stratechery.com/2021/meta/ https://stratechery.com/2021/meta/

SavantIdiot 5y ago

> Google, Apple, Airbnb, Stripe, none became the giants they are because they spent billions on a grand vision. Google set out to catalog the entire internet on day one. If that's not a grand vision that they spent billions on, what is? AirBNB set out to disrupt the entire vacation rental market. Stripe set out to disrupt the entire POS payment market. Apple is the only one who fits your narrative: they set out to make a hobby PC then Jobs wanted to ... oh right, disrupt the entire PC market with Mac, but that came 7 years later so OK.

dstick 5y ago
He also said “build something small for a small audience” and that applies to the start of all the companies you mentioned. Even Google. Back then, the internet was small, and enthousiasts a small group (relative to the global population).
krm01 5y ago
Might be good to take a closer look at history. #GOOGLE Google started as a research project called BackRub. It only turned into Google and a mission after it started taking too much bandwidth on Stanford's servers Source: https://inshorts.com/en/news/google-began-as-a-research-project-backrub-1471791451197 https://inshorts.com/en/news/google-began-as-a-research-proj... #AIRBNB Airbnb began just so that the founders could make some extra money to pay rent. Not to disrupt an industry. Source: https://www.businessinsider.com/how-airbnb-was-founded-a-visual-history-2016-2?international=true&r=US&IR=T https://www.businessinsider.com/how-airbnb-was-founded-a-vis... #STRIPE Stripe was just a small project so the founders could simplify getting paid for their other side projects. Source: https://www.startupgrind.com/blog/the-collison-brothers-and-story-behind-the-founding-of-stripe/ https://www.startupgrind.com/blog/the-collison-brothers-and-...
- SavantIdiot 5y ago
  # GOOGLE "calling it a "web crawler" designed to roam the web. " I'm right. # STRIPE "At the time Patrick was working on several side projects and they debated why it was so difficult to accept payments on the web. They sought to solve the problem and see if it was possible to make it simple - really simple. " I'm right. # AIRBNB I'm wrong. The first two set out to do something huge.

mempko 5y ago

That's because you are comparing Facebook to startups when you should be comparing Facebook to AT&T. AT&T spent billions on Bell Labs and gave us the transistor among other things like modern day switching networks. AT&T was a government sanctioned monopoly, and for that privileged they spent billions on research. Keep in mind that billions were already spent on the technology behind the metaverse in research institutions and government labs. Think internet, computers, AI tech, VR tech, all had billions of investment from the public sector already. What you are seeing with the metaverse is a privatization of the technology that already had substantial public investment. And even your startups are just piggy backing off billions spent in research. Google itself was started by a government grant for example. In other words when you look at spend at starups, you are just looking at the tip of an iceberg. Where under the water there was billions spent already by the public.

adolph 5y ago

If you haven't seen it yet, you might appreciate this slide deck about how organizations are like slime mold. Slide 57 main image "0.60=0.95^10", text "And thanks to that non-linearity, even a small decline in individual likelihood [of success] leads to a much lower overall decline in the likelihood of success." https://komoroske.com/slime-mold/ https://komoroske.com/slime-mold/

rastapasta42 5y ago
I disagree that slime-ball force is inescapable. I think our industry has a huge "boulder" - we often work on useless software that is far too removed from real world applications, which causes us to lose our passion. When you have 50 engineers maintaining a boring piece of crap software which can be maintained by 5 engineers, you will start noticing the productivity going down. Engineers who used to be very productive will slow down to meet the low expectations. Brainstorming a way to avoid this problem: - working on things we're passionate about with real-world impact - having a bunch of small organizations with small number of employees (maybe Mark should break down facebook into 50 smaller companies) - stop creating redundant jobs; if things are not going well, adding 100 people to a project isn't going to fix the delayed project
- adolph 5y ago
  > 50 engineers maintaining a boring piece of crap software which can be maintained by 5 engineers https://www.youtube.com/watch?v=aXQ2lO3ieBA https://www.youtube.com/watch?v=aXQ2lO3ieBA "If thats the Bradley, then what's this? [...] How did they get to that from this?" General: "This all well and good Col. Smith. But with this gorilla in production I don't supposed there's going to be anything left in the budget for my scouts. . . . This is a speedy vehicle, why can't it be both? . . . We'll just stick a turret on top with lots of opticals. . . . We aught to get the biggest bang we can up there [in the turret]." Other general: "Add on some firepower!"
- adolph 5y ago
  > I disagree that slime-ball force is inescapable. Please do go through the deck. At about 152 the author talks about a way through organizational headwinds. Also, the thesis is that an organization's ability to mutate and respond in a balance between collective and cellular methods is similar to a slime mold in a positive way (slide 149).

2OEH8eoCRo0 5y ago

There's a ton of money and there's a ton of money. Facebook has a ton of money to spend. Whether they succeed or fail is anybody's guess but this kind of investment can't help but move the needle on AR/VR tech.

dilyevsky 5y ago
Not necessarily so if it’s all closed sourced proprietary tech. For example I don’t think Newton had accelerated pda tech probably the opposite
- nradov 5y ago
  Even closed source proprietary tech moves the industry forward. Engineers switch companies. Patents are filed. Competitors reverse engineer products. The knowledge diffusion is slower than with open source but it does happen eventually.

martindbp 5y ago

Well, it depends. Let's say this was 1990 and IBM instead of Facebook deciding that the internet is clearly the future and invest billions into it. Could have been the right move. They're betting on AR and VR as a medium, and I wouldn't bet against that long term. The question is if they can actually make something useful. Even if you know something will be successful it's still hard to find a way to capitalize on that. Your timing could also be years off. It was hard to foresee a search engine being the most valuable internet company.

kryptiskt 5y ago

There are counterexamples, sometimes the road to success is to bite the bullet and spend heavily. IBM spent five billion dollars to develop the IBM System/360 line, back when a billion was serious money. Neither Airbus nor Boeing would be where they are today without investing big sums up front. Making AAA games these days basically requires it, Google Stadia is floundering because Google shied away from putting enough money into their game studio to be competitive.

dkarp 5y ago

Is that not pretty much the story of Oculus so far? There are 2 million oculus quest 2 devices out there now and they're getting to the point where they have a monopoly in VR

PeterisP 5y ago
Didn't Oculus "succeed" already before FB bought it and invested huge amounts of extra money?
- dkarp 5y ago
  They have only sold millions of devices since being part of FB. They were still really niche in 2014.