#97-12 Ideas: Why Metaverse will need to evolve as a digital ecosystem built on community, commerce, credit, and creativity?
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Facebook shares have not been performing great since the company renamed itself “META” indicating its plan to be the pioneer of the opportunity called Metaverse.
Does that imply Metaverse is only a hype based phenomenon that will fizzle out or a dumb opportunity being talked about by tech founders living in ivory towers?
The short answer is NO, and the long answer is that it will take an entire ecosystem level effort for the opportunity to realize its “Trillion dollar” potential
A simple path is to -Replicate the physical and online experiences inside the metaverse, and then make them superior, euphoric and utopian
It is time to see Metaverse as a platform, and the first task is to ensure that customer adoption is high and CAC )customer acquisition cost) is as low as possible.
A lot of marketplace models and ecosystem learnings will need to be brought to the drawing sheet and boardrooms while designing the future of metaverse. It is more complicated than launching a platform or a SaaS business.
So what will it take?
Here are quick 12 no-nonsense bold ideas to make Metaverse work? The first 6 are the part of consumer adoption strategy, 3 are on regulations and digital trust and the last 3 are on business and brand presence.
- Big Tech will have to give up their walled gardens in the virtual world: Build an open metaverse on a universally accepted platform that could be co-owned by them or based on a smart contract-powered ecosystem. Basically imagine a virtual world where you could access- Apple, Facebook, Google, Microsoft, Netflix, Amazon ecosystem (products, services, and experiences) with both freemium and subscription services
- Start with the Freemium model: Just like Google gave people free email, Facebook gave them a free social media profile, what have metaverse companies given to consumers yet? The answer is nothing. So what if Meta offered free virtual land to the first 1 billion users out of the current 3 billion users to design a virtual home/resort or an experience-based property inside the metaverse? People will rush into the metaverse to claim the free goodies and that will build the one-sided network effects too. Can the big tech give the freelancers/gig workers a virtual land or shop space in the metaverse? Give them the invitation link that serves as an address and they will bring in the network to their shops/homes and virtual places inside the metaverse.
- Incentivize the offerings inside the metaverse: Imagine a Cloud-based game subscription, Spotify, or Netflix, Amazon Audible subscription inside the metaverse that costs slightly lower than the actual screen-based subscription. Imagine if the Adidas branded clothes, Nike shoes or any other iconic fashion brand were to release limited edition merchandise inside the metaverse at a discount compared to the physical outlet or e-commerce store?
- Get the headset hardware cost down and improve the experience: Headset innovation is needed to bring the cost down and to further improve the customer experience. The ideal tipping point must be 100 USD and design it for dual-use- one as a sunglass (google glass and Rayban facebook stories, apple glass designers- are you guys listening? )with an option to completely block the external view to enter the metaverse.
- Think how can Alexa and Google assistant voice capabilities be leveraged in metaverse: Voice command and interactive AI assistant technology can help in faster adoption. The headset will always be needed to access the virtual world, but instead of the hand consoles, the user hands should be relaxed. Basically, put the headset on and start interacting and navigating with voice-based commands in the metaverse. Eventually, consumers will be given AI-powered avatars that will roam the metaverse as per the programming done by their real-world owners. Basically, your always-on presence in the metaverse will be ensured by these AI Avatars. The curious and fun part for users will be to see while logging in what their “Avatar did when they logged off”
- Build and think in terms of digital communities: Build digital communities adopting the principle of group/pages on social media. Showcase metaverse versions of -concert shows, music festivals, sports events, art communities, educational classrooms, exclusive product launches, city tours, entertainment shows, startup boot camps, fashion advice, capital markets, dating community, health communities, cause-based communities, and parenting groups. The clubhouse app concept is something that is very well suited for the Metaverse. Give people tools and digital assets to create micro-communities on the platform as well as the right to join the macro communities.
- Data Privacy and digital trust: Metaverse cannot be based on exact principles of web 2.0 or attention economy- where consumer attention became the product and data were conveniently shared with advertisers. This is where blockchain technology, digital assets, and crypto tokenization will play a huge role. The consumer must no longer be treated as a commodity and must be given control over the level of data they choose to share inside the metaverse.
- Community guidelines hate speech and fake news: Users are also looking for a place where fake news cannot be broadcasted. Social media and online community platforms have struggled to remove fake accounts, promoted fake news, and identity-based fraud. Better technology controls and guidelines will ensure it is a happy place to be.
- Mobilize a developer community and tool kits for business: Big businesses like Nike, JP Morgan, PWC already have built presence on the metaverse, but a lot needs to be done to empower small and mid-cap businesses to build a presence. Post helping the small and mid-cap companies try to get small business owners on the platform too. View metaverse like a new platform and sales channel (24 by 7 happening place).
- Start by creating commercial spaces in the metaverse: Imagine a simple way of doing this is to replicate in the metaverse- the most iconic businesses, and shopping malls in the metaverse. The unit economics will have to be worked out but these are places where business owners and shoppers will like to visit for meetings or shopping. Just like every fortune 500 company has a social media/SEO budget they must be incentivized to keep a metaverse budget. It must be advantageous for them to join the Metaverse early, rather than at a late mature stage (maybe higher organic reach, options for events related to business promotion).
- Digital Avatars and Twin technology use case in industrial metaverse- I believe metaverse will also emerge in the industrial space (read more about Nvidia’s omniverse platform). The expertise required to build an industrial metaverse is the expert domain of cloud, 5G, chipset makers, or semiconductor companies. For industrial plants and simulation heavy industries like automobile, space tech, smart city, virtual test environments can be created. Data can be made available for specific queries and testing models.
- Integration with the physical world and NFT auctions- The businesses must be given control to transact within the metaverse and the transaction may result in the movement of goods and services within/or outside the metaverse. Thus a cyber-proof financial infrastructure and regulation-friendly ecosystem need to be built to support- global commerce, trade, and cross-border payments. The other big use case is of NFT auctions for all businesses. Imagine every business owning and trading certain NFT’s within the metaverse with real-time scores.
These are the dozen strategic building blocks related to Metaverse opportunity that the Big Tech orchestrators are most well suited to orchestrate over the next ~5 years. There will be metaverse native and blockchain first startups also that will emerge as winners over the next 5–10 years.
The real value of metaverse will start unlocking once it integrates with the offline world too and can execute “financial transaction” or result in “movement of physical goods and service”
Blockchain as a general-purpose tech (GPT) will transform sectors like- banking, asset & wealth Mgmt, payments, global trade finance, manufacturing-driven consumer, OEM, e-commerce, public sector distribution systems, by cementing ownership records, institutionalizing digital trust, eliminating institutions intermediary or platform fees (gas fee with further go down as new protocols emerge), supply chain.
Metaverse is another AR/MR GPT that brings immersive/ gaming experience to both offline and online (currently 2d) experiences. It will have both centralized and decentralized applications.
Digital assets/NFT’s ownership makes more sense inside the metaverse rather than just existing as individually owned digital assets/file (cat GIF or Beeple art) with no showcasing capabilities or mass reach.
Imagine a museum of NFT’s logically getting built up inside a metaverse. Replica and enhancements of everything worth visiting and experiencing (5–10 year window) So there will be convergence and migration of digital assets towards the metaverse.
The future evolution depends on how much VC money and corporate venture funds (especially big-tech) starts to flow in there, and how consumers adapt to headsets, UI/UX, data privacy ( determine metaverse entry point)
More on metaverse by Sidhartha
Regards,
Sidhartha Sharma
Digital Strategy and Transformation
