The Opportunity to Fail is Priceless
Virtual Reality Meets Economic Reality
In most respects, The Moneyball Method and venture capital (VC) investment are significantly different. Venture capitalists buy equity stakes in small, young individual companies. They devote time and effort to the due diligence process before the deployment of capital. The VC will expect to lose part or all their investment in most of the companies they own. And they will cut bait when they lose trust in the business model and its products to dominate its niche. That is the VC performance benchmark.
Objective, middle-class and affluent investors own large companies with a track record of performance. We respect the price mechanism and know markets will do our due diligence for us. We expect our broad market equity stakes to be profitable over the long run. We combine cash flow strategy with statistical analysis to adjust our equity exposure to fully funded status. That is our performance benchmark.
Venture capitalists, angel investors, merchant bankers, private equity originators, etc. are the driving force behind innovation, wealth creation, and mass prosperity. And on the 250th anniversary of the publication of Adam Smith’s The Wealth of Nations, it bears repeating: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”
This is where VC and Moneyball investing merge – the entrepreneurial mindset, which means to create your vision, take calculated risks, learn from experience, and measure success. To illustrate how this works I’m going to use a high profile case of venture capital failure, describe it in a macroeconomic context, and bring it back to microeconomic reality. And in this case, it is about virtual reality. On October 28, 2021, Bloomberg reported on Facebook restructuring under its new parent company name, Meta:
In Meta’s vision, people will congregate and communicate by entering virtual environments, whether they’re talking with colleagues in a boardroom or hanging out with friends in far-flung corners of the world.
I’m using Facebook/Meta as the venture capital example to make a point, but most VC firms are not well known and their successes and failures are rarely public knowledge. And on March 26, 2026, VR.org reported:
The platform never delivered on those expectations. It never drew more than a few hundred thousand monthly active users, a fraction of what would be needed to justify the investment. Reality Labs posted operating losses of billions of dollars every quarter. In the fourth quarter of 2025 alone, the unit reported a loss of $6.02 billion.
These two news stories tell us almost nothing about Meta’s virtual reality products, the target markets for them, the manufacturing and distribution challenges, or the financial projections used to justify the capital. And just as important, they tell us nothing about the remainder of the portfolio of businesses and alternative ventures that were considered.
But they do tell us something about the entrepreneurial mindset. CEO Mark Zuckerberg’s leadership team was willing to try something radically different from the accepted norms and be ridiculed by those with no skin in the game. And typical of the criticisms on social media platforms that Zuckerberg and Meta helped make possible is this excerpt from Substack:
He spent billions of shareholder dollars he was entrusted to control . . . Failure is good. Wasting $80 billion is catastrophic . . . He wasted the entire working lives of thousands of people. When your social function is to allocate capital, that’s extremely bad.
To put these complaints in perspective, the billions of dollars of risk capital under the control of Meta’s senior leadership team is money that was voluntarily entrusted to them. It is a very small fraction compared to the hundreds of billions that were coerced by government to fund wind and solar project disasters. And to equate that with “working lives of thousands of people” is decades old Marxist ideology.
Furthermore, it is emphatically not Meta’s or any VC’s “social function” to allocate capital. They have no “social function.” None of us is born owing a duty to anyone. Zuckerberg chose a duty to his investors for long term return on investment (ROI), Meta’s employees and vendors for contractual obligations, and to their customers for reliable products and services.
And it is emphatically not our duty to practice “socially responsible” investing. However, because of our nature as rational, living beings with free will, we are born with a duty to ourselves – if we choose to accept it. Because reason is our absolute tool of survival, and purpose is to be a charted course to earn pride and happiness, we must also create our own vision for the future.
In financial terms, that vision should be defined in terms of time and money. That is the hard part and most people resist doing it. Calculated risks is the statistical analysis part and may require the services of a skilled advisor using reliable capital market assumptions. This is also difficult. Long-term historical assumptions are radically different from the accepted norms. Learning from experience means flexibility for cash flow and investment strategy with changing circumstances. And measuring success for VC and Moneyball is always in money terms.
Virtual reality is a fascinating idea and the product of ingenious minds. Economic reality the fascinating subject of free market capital formation. Objective reality The Moneyball Method.