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Joaquim Cardoso MSc.
Servant Leader, Chief Research & Strategy Officer (CRSO),
Editor in Chief and Senior Advisor
January 21, 2024
This is an Executive Summary of the article “After a Sugar High of Free Money, These Billion-Dollar Technologies Need a Nap”, published by the Wall Street Journal (WSH), authored by Christopher Mims
Central Message:
The exuberant investment in the metaverse, blockchain, and autonomous vehicles over the past decade has resulted in underwhelming outcomes, challenging the viability of these technologies as billion-dollar enterprises.
The era of easy money is ending, and the lack of substantial progress in these areas is now evident.
While not signaling their demise, a period of contraction and disinvestment seems inevitable.
Examples and Statistics:
The Metaverse:
- Meta, formerly Facebook, invested heavily in the metaverse, losing billions quarterly for the past two years.
- Despite high expectations, the metaverse concept faced challenges as people returned to physical activities, causing Meta to shift focus to augmented reality.
- Notable successes for Meta included features like Reels in Instagram and a Twitter clone, rather than the immersive virtual world initially envisioned.
Blockchain:
- The blockchain hype, especially associated with Web3 technologies, has diminished, with attention shifting to other technologies like AI.
- Blockchain’s potential to revolutionize ownership and trade has faced setbacks, with significant funding and interest moving away.
- Some argue that blockchain’s fundamental usefulness is obscured by the hype and fraud, emphasizing its transparency in asset ownership.
Autonomous Vehicles (AVs):
- Despite initial promises, widespread adoption of AVs faces barriers such as liability concerns and high development costs.
- The safety requirement for AVs to outperform human drivers adds complexity and cost, reducing the anticipated savings.
- Economic factors, like the lack of urgency in adopting AVs in cities with existing transit systems, showcase challenges to their widespread use.
Conclusions and Recommendations:
The challenges faced by the metaverse, blockchain, and AVs are indicative of a broader issue with “general-purpose” technologies.
Integration with existing laws, infrastructure, and societal expectations poses significant hurdles, extending the timeline for these technologies to realize their potential.
The substantial investments in these ventures might require reevaluation, and stakeholders should consider more sustainable and adaptable approaches.
To Summarize:
The allure of easy money fueled substantial investments in the metaverse, blockchain, and autonomous vehicles, yet their real-world impact falls short of initial expectations.
The shift away from these technologies indicates a need for reassessment and a more realistic understanding of the complex challenges they face.
As the era of abundant funds wanes, a strategic and adaptable approach is essential for these technologies to prove their worth in the evolving landscape.
