Meta's AR Transition

​Entrepreneurs and executives must balance out the short and long term. At times, short and long-term do converge. At other times, they seem to diverge.

A business model is always in transition, as it operates in a dynamic context, which might be more or less stable depending on a set of external factors.

For instance, as we speak, many incumbents (Google, Meta, Apple, Microsoft, Salesforce) are all transitioning their business models to fit the new developing context.

The interesting take is that no one knows yet what that context will look like, yet everyone needs to be carefully betting on it, with a “four-pronged approach” that combines defense-attack on the one end and transform-create on the other end.

One example is Meta, which has just come out with its financials for 2024.

While numbers look impressive, when you drill down into the Reality Labs segment, its losses amounted to over $17 billion in 2024.

I’ve argued that in the previous years, that money was “wasted” on a flawed vision, which in Zuckerberg’s mind was all about VR.

That money is well spent, as the company has announced a complete reorg around AR.

In other words, Meta is just undergoing a massive transition of its core.

And it’s not an easy one.

This is all coming together as part of the Transitional Market Dilemma.