Silicon Valley’s thinking about platform bets has been permanently altered by what just happened at Meta. Horizon Worlds is being shut down on VR — off the Quest store in March, fully terminated on June 15 — after close to $80 billion in losses. Mark Zuckerberg’s metaverse failure has introduced a reference point into every conversation about emerging platform investments that was not there before. The conversation will never be quite the same.
Before the metaverse failure, Silicon Valley’s conventional wisdom on platform bets emphasized patience and conviction. The examples most frequently cited were Amazon’s patient investment through years of losses, Netflix’s sustained commitment through years of skepticism, and Apple’s willingness to cannibalize existing products to build new platforms. The metaverse appeared to be a case of applying that conventional wisdom to virtual reality.
After the metaverse failure, the conventional wisdom requires qualification. Amazon and Netflix were losing money while growing users at rates that validated their long-term theses. The metaverse was losing close to $80 billion while growing users at rates that contradicted its thesis. The patience of Bezos and Hastings was validated by leading indicators of eventual success; Zuckerberg’s patience was maintained despite leading indicators of eventual failure. The conventional wisdom now includes a distinction between patient capital supporting validated growth and patient capital supporting hoped-for growth.
Reality Labs’ losses of close to $80 billion and the subsequent layoffs of more than 1,000 employees have made that distinction tangible and specific. Future platform bets in Silicon Valley will be evaluated against the metaverse framework: What are the leading indicators of eventual success? How do current results compare to those indicators? When do disappointing results trigger reconsideration rather than continued investment?
Silicon Valley’s culture of bold bets and long-term thinking has produced many of the world’s most valuable technology companies. It also produced the metaverse. The challenge for the culture is to preserve the boldness while incorporating the discipline that $80 billion in losses has demonstrated is essential. Whether that cultural evolution occurs — and how quickly — will shape which platform bets of the current decade succeed and which become the next cautionary tale.