“Mark Has Surrounded Himself With Sycophants”: Zuckerberg’s Big Bet on the Metaverse Is Backfiring

In early October, Yan Xiaonan and Mackenzie Dern, two prized UFC fighters, entered the 25-foot octagon ring at the Las Vegas Apex arena to pummel each other for the women’s strawweight match. But unlike the countless previous fights that have taken place in the arena, which is often filled with hundreds of raucous fans, this time, the 130,000-square-foot space was eerily quiet. As cameras panned around the arena, almost all of the seats sat empty, with the exception of a select few: Right at the edge of the octagon were Mark Zuckerberg and his wife, Priscilla Chan. It seems that at some point during the pandemic, Zuckerberg had been drawn into UFC fighting, and the multibillionaire founder of Facebook wanted to experience one of these fights in person. But rather than just buy two tickets to see a fight, like most normal people would—even normal ultrarich people—Zuckerberg, apparently afraid of other human beings, rented out the entire arena, according to Dern, a claim UFC chief Dana White denied.

Being exorbitantly rich, powerful, and famous affects people differently. In Hollywood, celebrities get implants and abdominoplasty surgeries and ribs removed so they can stay beautiful forever. In the fashion world, the more money and accolades a famed designer receives, the more their own sense of style resembles a clown at the circus. (Just look at Rick Owens, who now dresses like a bat.) But the folks in Technoland do something entirely different. The more money and fame they get, the more they retreat into an insular world where they don’t interact with us commoners. They fly on their private jets away from the Normals. They live in homes worth hundreds of millions of dollars, and in Zuckerberg’s case, reportedly buy nearby homes so they don’t have to interact with neighbors. And—perhaps strangest of all—they surround themselves with sycophants in their own work environment and even live in their own form of digital feudalism online, rarely interacting with people outside their immediate bubble.

For Zuckerberg, the decision to keep himself insulated from the rest of the world has cost him dearly. His troubles really started a year ago when he decided it was time to rebrand Facebook, which was approaching 18 years old, and he announced that he was now renaming the company Meta. Along with the name change, Zuckerberg said the company’s direction was going to morph too. “From now on, we will be metaverse first. Not Facebook first,” Zuckerberg said during a nearly 75-minute presentation at the time as he wandered through his offices. “Facebook is one of the most used products in the world. But increasingly, it doesn’t encompass everything that we do.” The metaverse, he believed, was the future.

The problem is—as everyone surmised at the time and still does today—no one wants to live in the metaverse. They don’t want to go to meetings in a virtual coffee shop on the moon; they don’t want to go on dates dressed as a digital porcupine on a virtual beach with a pink ocean, and they don’t want to exercise in a virtual outdoor space with their friends who live down the block. If the pandemic taught us anything, it was that technology enables us to connect when we have no other way to reach people, but in reality, in-person connections are way more impactful and important than a digital genus. People want to experience real things now more than ever and—most importantly—they want to experience real people. Zuckerberg, as his trip to the Apex arena in Las Vegas illustrates so perfectly, doesn’t seem to want to be around real people. In fact, it appears that he’s kind of afraid of them. I’m sure if Meta would have released the metaverse in the height of the pandemic, it would have been a more important advancement than Zoom. But as the packed restaurants and full-to-the-brim hotels and overbooked flights illustrate, we are no longer in the height of a pandemic.

Since that announcement, it’s honestly staggering to see the impact this decision had on the company. In September of 2021, a few weeks before Zuckerberg announced the name and direction change of Facebook, the company was worth just over $1 trillion dollars. A little over a year later, the company’s value had fallen to a vertiginous low of $236 billion. That’s a fall of more than $840 billion in value in a single year. To put that into perspective, the company’s worth fell by about the equivalent of today’s combined value of IBM, CVS, Goldman Sachs, Charles Schwab, Netflix, Twitter, and AT&T—all in a single year. In October, The Wall Street Journal, citing internal documents, noted that Meta’s metaverse, called Horizon Worlds, has seen paltry adoption by users. “Meta initially set a goal of reaching 500,000 monthly active users for Horizon Worlds by the end of this year,” TheJournal wrote. “But in recent weeks revised that figure to 280,000. The current tally is less than 200,000.” Most visitors, it turns out, go into Horizon Worlds and then don’t return to the app after the first month, according to TheJournal.

Zuckerberg’s own fortune has fallen by more than $100 billion in that time too. (Don’t worry, he’s still got about $38 billion left. He’ll be fine.) Last week, this all came to a head when Zuckerberg announced that he was laying off more than 11,000 employees, or about 13% of the company’s workforce. “I got this wrong,” Zuckerberg said to employees. “I’m especially sorry to those impacted.” And while he clearly felt remorse for having to fire so many people, he did not back away from his vision of the metaverse. “In this new environment, we need to become more capital efficient,” Zuckerberg said in his layoff announcement. “We’ve shifted more of our resources onto a smaller number of high-priority growth areas—like our AI discovery engine, our ads and business platforms, and our long-term vision for the metaverse.”

People who were once close with Zuckerberg and worked for the company have been shocked to see abrupt transformation. One former executive told me that Zuckerberg used to surround himself with executives who had different points of view to him, and that while he didn’t always follow their advice, he did listen. “The problem now is that Mark has surrounded himself with sycophants, and for some reason he’s fallen for their vision of the future, which no one else is interested in,” the former Facebook executive told me. “In a previous era, someone would have been able to reason with Mark about the company’s direction, but that is no longer the case.” Another former Facebook executive echoed this, noting that while it is important to focus on the future, and to build new products, it is irresponsible to shareholders and employees for the company to change direction so drastically in such a short period of time. “I’ve known Mark for almost two decades and I’ve never seen him act so abruptly,” the former executive said.

A tech investor told me that the recent events are illustrative of why many investors no longer want to risk putting their capital into Meta’s stock. “This is what happens when you get a demagogue gaming the entire company’s voting apparatus in order to have full control,” the investor told me, referring to the fact that Meta has a dual class of stock and that Zuckerberg has 55% of the company’s voting shares, giving him power over all the decisions the company makes. “Visionary legacy trumps profit motive and shareholder value. It’s more than biting off a nose to spite a face, it’s creating a new nose and a new face in the universe that doesn’t exist yet, and no one, other than Zuckerberg, wants anything to do with it.”

Not everyone is against Zuckerberg and his vision of the future, and they like the pushback he and his company is getting to the response other new technologies have received in the past. A startup cofounder who works in the industry argued that consumers don’t know what they want and that Zuckerberg’s vision of the next era of his company is not incorrect, but rather, he’s simply picked the wrong moment in time to make that transition. “If he was to ask consumers what they want, they’d say faster social media, not too dissimilar to the famous line about the invention of the car, that ‘if I had asked people what they wanted, they would have said a faster horses,’” the startup cofounder said. “There is no question that AR and VR are the future, it’s just a matter of when.” Another Silicon Valley insider told me that, “The more hate Zuck gets from press and pundits and investors, the more people in the industry are rooting for him to succeed.”

For the people in the Meta orbit, who either still work for Meta or have recently been laid off, they have less sympathy for Zuckerberg and the company’s recent change in direction. “The metaverse will be our slow death,” a senior software developer at Meta posted last week on the anonymous employee platform, Blind. “Mark Zuckerberg will single-handedly kill a company with the meta-verse.” Another employee wrote that “Zuck is leading this company in the wrong direction.” And yet another wrote, “I thought it was a data-driven company but actually it is one man’s gut feeling and emotions-driven. Nobody can overwrite his decision.” It appears that one group of people can still have an impact on Zuckerberg, and that is Wall Street investors. But given the way the current stock structure works at Meta, it’s going to require Zuckerberg realizing what is best for consumers—which, right now, at least in its current instantiation, is not to live in the metaverse. Maybe the best way to figure that out is to try to interact with the people who actually use Facebook.

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