10M+ users in the US and Canada used Meta's Muse within six weeks. This is how Meta will make money with it…
by Marcel Hollerbach · World of Commerce
10M+ users in the US and Canada used Meta's Muse within six weeks. This is how Meta will make money with it. Not financial advice. Q3 earnings call update.
Meta shared that Muse has seen ~25% daily usage, and retention is improving with tenure. Meta already calls it product-market fit.
1. Shopping is the biggest use case. Apparently, over 25% of users are using it to buy stuff with an average basket above $200, which led to Stripe having to raise its credit limits.
2. Meta wants to position commerce as a business model, which would be somewhat new to an advertising company (Checkout on Instagram and Facebook Shops weren’t exactly successful). They will monetize by charging businesses transaction fees, subscriptions for power users, and paid products for enterprises.
3. Because of the high cost of inference, Meta has to monetize early on. The old playbook of building reach and monetizing later is hard to pull off.
4. Interestingly, the major constraint right now is compute. One reason why Muse is not yet global is the cost to run it 🤯. Meta plans to improve this by achieving 10x efficiency gains using smaller models.
Overall, a very bullish development for Meta. Instagram has created a lot of new brands that grew around influencers and D2C. I predict that there will be a whole new breed of e-commerce businesses emerging that run entirely on the back of agents, potentially without their own storefronts.
What an exciting time to be in commerce!