Nicola Mendelsohn, Vice President, Global Business Group, Meta 
Interviewer: Michal Lev-Ram, FORTUNE


Brainstorm Tech 2022: Meta And The Metaverse

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Brainstorm Tech 2022: Meta And The Metaverse


Nicola, I interviewed you on stage at a fortune event way back in 2016 and a lot has changed since then in the world obviously and that the company formerly known as as Facebook and your role has changed as well. So let's just start without you are running a media at the time. Um tell us about how your role has evolved in the move that you recently made. So Michael, you're absolutely right, I mean what a lot of changes, right? None of us could have predicted all of that, But yes, my role has changed. I'm at the company now nine years and in november I took on the global business group, I moved to new york, I'm having the most fantastic midlife adventure, which I'm loving and so I'm responsible for you know, the global business and it's been very exciting because as you said, the company has changed its name and we've put a whole new direction in terms of looking out towards the metaverse, the vision for the next 3 to 5 to 10 years and what that's going to mean and you know, just heard the announcement of some of the size of the investments that we're making here because we really do think that this is going to be The next computing platform that we see about every 10 to 15 years, so all in on the matter, so and you have said that um For a fully realized metaverse it'll take 5-10 years, what does that mean, exactly what does it look like in your view of the future and uh and does that also mean that does a fully realized metaverse for meta mean that it's also a fully realized revenue stream. So we are a company. So it means yes obviously we we want to be making sure that we're making money but at the moment we're not the only people that are thinking about building the metaphors, it's going to be something that's built by many different companies. Many of the people in this room are are invested in looking at that and understanding what that could look like. But for us it's you know it's still early days we're investing in the hardware but also in the software as well looking at Horizon World and it's really really early days. So we're just starting to see business is starting to build our own worlds in there with us which is exciting. We saw recently that mini created a mini verse which if you haven't tried it is a wonderful experience that you can go in. You can customize your own driving suit, you can customize your car and you can do a virtual track with loop the loop things that you can't do in the real world. So there's a lot of potential, there's a lot of fun and so many different use cases, my own leadership team. We we every week go into work rooms and we meet we put on the quest uh and we have you know a virtual coming together as avatars where we can brainstorm was just talking earlier with someone about how much better it is to I. D. Eight together and actually create when you're in there? Yeah, I've actually ever heard you saying that one of the advantages is that you can talk over people which is a funny advantage but but but it's hard to do on zoom or you know, other video conferencing apps, right? Yeah. Very much so. And so you don't have that whole pause wait for someone to a mute then come back on and you really have that feeling of presence in the way that you and I when you're talking, I'm looking at you and I'm talking you know, you move you really feel that sense of presence And it's so much more immersive than than what we have today. And for us as a social technology company, we're always looking for ways that people can communicate with one another. It started 17 years ago just by sending messages in many ways on Facebook then we had pictures, then we had videos, short videos and now we're moving into the world of a AR and VR and so the ways that people can communicate and the ways that businesses are going to be able to communicate with people. Well it's only really going to be limited by our imaginations um by the way, what what kind of setting are you in when you do your team meetings in the metaverse. Are you in like an office environment? Are you all like on a tropical beach? Well a bit of both actually. So I played around with my backdrop, so there is one which goes and looks out onto the beach which is quite fun when you're in a meeting and you suddenly have a little look out at a view of the beach. But I've also got one that actually looks a bit like aspen because I like a bit of the mountains and some lakes as well. So again We can choose what we want to do, we need to start thinking in different ways about what really being in a 360 immersive environment can mean for us how you have a lot of conversations with with obviously many, many different brands large and small. Um a lot of cmos um how much of these conversations today tend to focus on the metaverse and sort of the future and how much of it is about your current core business is? Yeah, I mean those are the two hours that I'm talking to when I'm talking to Ceos when I'm talking to cmos, they want to know about the metaverse, they want to understand what they should be doing when they're building, you know their own long term strategies, successful businesses are looking today medium term but also the long term as well, whole host of companies now have created chief metaverse officers or the like so that their full on on that but they're also talking to me about you know how can you help us get growth? You talked at the beginning about some of the challenges that are out there, all businesses are focused on growth, keeping the you know the customers that they have but also looking at who the who the new customers are going to be as well and you know they're coming to us, they want to understand our new products, they want to understand real, Our short form video which is you know growing incredibly fast, 20% of the time spent on Instagram now is unreal. They want to know about business messaging and how they can communicate with customers in much simpler ways and already we see billion messages a week going between people and businesses. So those are the things that they're asking us about all at the same time as to how we can help them, you know bring bring in the growth. So talk a little bit more about challenges to the current business because we're seeing uh not unique to meta necessarily of course, but we're seeing a host of challenges and and what is unique to you is really for for the first time, a bit of a slowdown. Um and so I'm curious to just hear more what are the primary concerns that you're hearing from advertisers in light from brands in light of the slowdown on the ad side. Yeah, so I mean businesses are talking about at the moment, a whole raft of different headlines that are coming out and you mentioned some of them at the beginning, they are talking in general about, you know, the ongoing effects of the, of the war in Ukraine, the supply chain issues, the fact that we are still living in a pandemic and what that means on, you know, staff shortages, etcetera. But as I said, they're actually when they're coming to us, they're hungry to know what they should do in terms of how they can reach their customers. They want to know about what they can do to get growth. And so they're looking at innovation, they're looking at the sorts of things that they're in that they can control. And that's actually a bit of a mantra that I'm talking about as well, which is control what you can control. And so, you know, utilizing things like rials, utilizing things like messaging and our basic ad platforms that we have across so many of the different formats. Have we got the creative right? Have we got the targeting right? What else can you help us to do? We're seeing a lot of excitement as well around a our ads as well. So, you know, the fact that you can now, if you're a company like charlotte tilbury or like Sephora, you can actually look feel like you're trying on the makeup, then click through and to buy. Well, those are the sorts of innovations that businesses are really excited about the likes of walmart being able to, you know, do you have a desk that you can look and see what it looks like in your house and of course you don't get the, you know, the returns back because you can actually see what it looks like and you you you just said something about, you know, control what you can control as as part of your your advice. Uh two brands. Um one thing that that meta can't control uh is Apple, Apple's IOS google's android and some of the privacy controls that they've put in place, which has had an impact on your business and broadly, of course on other small businesses as well. Um can you talk a little bit more about what you're doing or what you could be doing to re engineer the ad platform to make sure that you are still delivering value to advertisers? Okay, so we've been very vocal as a company about the changes that Apple was going to make from about 18 months ago and the impact, as you said that it would have, particularly on small businesses and it really has hurt those small businesses From our side, we've been very clear that we're building privacy enhanced technologies that we can do more with less data going forward. And we've also been working on one of the issues that really that happened with Apple was that it's not like the people went away, there's still 3.6 billion people that are using our platforms, what advertisers couldn't see quite as clearly was the ability to see the conversions That were happening. One of the things that we've managed to reduce in the last few months is from going down from over 18% down to 8% now, so we've really narrowed that gap and we're going to continue to make sure that on a continuous basis we continue to make improvements here. By the way. Speaking of small businesses, um I was in Israel recently and I was so amazed by how small businesses are using WhatsApp and I know that it's not an Israel specific phenomenon that this is the case and much of the world, not the US what it's not a new phenomenon, right? But but why? And have you as a company attempted to make more inroads in the US and in small businesses specifically with WhatsApp? So we what we see, you know, we have both WhatsApp and messenger that you know, businesses around the world and different countries go with one or the other is typically what we've seen and it is a surprise I think still for many in the US to understand the strength and the scale of WhatsApp, but as I said, we're really seeing that, you know, conversational commerce, the people want to have a relationship with a customer that doesn't mean that your darling one to speak to someone, wait for two on your phone. 34 you want to have an answer straight away. And so we have a number of different products already with which called click to x. So click to whether it's messenger and you can actually start to open a thread from an ad into that, into that relationship with that person that you can then continue on an ongoing basis. Consumers love it because they have all the information in one place and it's also good for the advertisers as well. So this is an area of focus for us and you continue to see us do more here crab. Um I will go to you all for questions in just a minute, coming to you down um real quick tapping into your global perspective again for a minute here. So on the regulatory side obviously lots of headwinds for the company there as well. And I don't even know where to begin because I could ask you about so many different things here. But um I'm really curious to hear your take on um this recent development Ireland's privacy regulator wanting to block facebook and Tiktok apparently from transferring data to the U. S. Tiktok to china. Obviously, how big of it. Like is this like a near catastrophe? I was reading, you know, we've been covering it too, of course everyone's covering it. Um is this a big deal or are you confident that something will be worked out in time? Yes. I think it's important to take a step back here. That the pace of change of technology over the last 20 years has been extraordinary. And I think it has been a challenge for governments regulators around the world to keep up as a company. We've really wanted to engage because we don't think that it's these are the decisions that an individual company should make on the specifics that you're talking about there. That was something that wouldn't it's currently still in draft. But that wasn't something that would impact just matter. That was something that would impact actually all businesses, literally every business of all sides that transfers data across the US and the EU. Now at the same time what I what I think has been very good and I think the right direction of travel is when when all sides come together and have deep and thoughtful conversation about what regulations should look like. And so that's why we'd obviously welcome the fact that the both the EU and the US at the same time, I've worked on an agreement about The new transatlantic agreement around that passage of data between the two. So that's good and that's what we're encouraged by because what it means is that people and businesses can still continue to do the things that they want to do and to be in communication with with their friends and families matters to me because of course you know I'm living in new york now my family is in the U. K. I want to be able to send them the pictures. That's what it means. Okay Dominic let's go to can you stand up and introduce yourself? I'm dom I have been with SAS platforms streaming and now private company trading platforms forge. So it's very interesting the panel before you was talking about mental health and so I'm just very curious how does the metaverse play into that and what are the safeguards that are there? You've had my former boss Benny off say you know um Mhm. Social media is the carcinogens of of our modern world. I'm just curious how do we look at those safeguards around mental health and self reflection? Yeah so I think it's a really important topic that that you raised. Um and I'm you know we were talking before I'm a mom of four so you know this is something that matters to me as I think it does to everybody in the room from a metaverse perspective we're still really early on but we're not waiting we'll take some of the lessons and learning from you know web to to wait for it to be fully realized before we start to grapple with these sorts of issues. And so one of the things of the company that matter has done is actually to create a $50 million dollar fund that we're going to spend over the next two years working with academics working with governments working with informed, different areas of society to really understand what the guardrails are that we need to be putting in place and to be building those early doors. It's something also that we think about a lot with our existing platforms that they're there and we've created a number of different products that sometimes I don't know if people are so aware of That that are important in this area. And particularly on things like Instagram where there's actually an option where you can take a break and it can give you a nudge and nudge. I'm a great believer in nudge technology, you know, nudge theory and you know, it's actually good and it's a healthy thing to actually say, yeah, I'm gonna do my 15, 20 minutes. And then, you know, it's nudged me to remind me so we're constantly investing and looking at different ways that we, we can understand this better and more that we can do. And certainly as we build, not just us, but many other companies will build towards that, I think it's important that we have an agreed set of guardrails. And one of the things that you've put in your putting in place specifically like literal guardrails is you have like a four, is it a four ft diameter around you in the metaverse people get into, which I would really like in the real world, by the way. Yeah. So it's actually something a physical, um, it's like a perimeter and it feels like if somebody comes too close to you in horizon world on our areas, then actually they're not allowed in there, not allowed in. So then of course you get the thing that people say, well what if I want them in? And then you go, well that's another whole conversation. But I think it's being thoughtful about the creation of those sorts of things early doors that matters and I think is important. Well, social media has been complicated in, in, in its present form. I'm sure we'll see all sorts of challenges and opportunities in the future form in the universe. But thank you so much for being here with us today. Nicola, thank you.