The Metaverse: To Boldly Go Where No Company Has (Successfully) Gone Before
First published in the Australian Financial Review on 13 June 2022
The emerging web3 scene – an umbrella term which includes cryptocurrencies, non-fungible tokens (NFTs) and the metaverse – may seem to be on the fringe to many mainstream businesses, but it will impact every organisation as surely as the internet has done.
While recently there has been significant tumult in the crypto and NFT markets it is important to remember that the underlying technology, blockchain, is only 13 years old.
So, like all teenagers, some volatility is to be expected, but the opportunities as the technology and the business models mature will be remarkable and that is why mainstream businesses are getting involved.
Major corporates like Starbucks and Microsoft are accepting crypto payments, while Tesla, Block and even KPMG are buying crypto to hold on the balance sheet as part of a diversified corporate treasury strategy.
Decentralised Finance (DeFi) went to $US200 billion of value last year and major banks like ANZ and JP Morgan are minting their own stablecoins.
The NFT market went from US$13 Million in 2020 to US$41 Billion in 2022 and hundreds of corporates are embracing NFTs as a major marketing tool.
Samsung, HSBC and PWC all have presences opened or about to open in the metaverse. McDonald’s has filed patents which will allow metaverse users to buy burgers while cruising the metaverse and have them delivered to their door.
It’s clear – every organisation needs a web3 strategy.
The metaverse is not a new idea. In 2008 we had the virtual land of Second Life. It was big news at the time, Telstra launched a customer service island there and the ABC had an island there.
Always being first in line to drink the Kool-Aid, I was a true believer. So much so, I was invited to speak at the opening of an island in Second Life.
I navigated my avatar to the auditorium and looked out on an audience of hundreds of avatars – a bizarre assortment of angels, bikies, fairytale characters and more.
To show my mastery of the technology, I hit what, I thought, was the sit-down command to make my avatar sit on the on-stage chair. Unfortunately, my avatar lay down under the chair. Awkward!
I hit the stand-up command, but my avatar just hit his head on the bottom of the chair. The more I hit the button, the more frenzied his movements.
It is very difficult to seem like an expert in something when stuck having a fit under the presentation chair. Still, I survived and with therapy can now discuss this openly.
So, what is different with the metaverse promoted by Mark Zuckerberg and others today when compared with Second Life?
The key difference is that we are now moving into web3.
Web1 was where we read the internet, web2 is now where we can read and write to the internet and web3 is different in two ways. Not only can we read and write, but now we can also own things on the internet (via NFT tech) and our experience of the internet will move from two dimensions to three dimensions.
They call web3 the embodied internet. Everything we do online, be it working, shopping or playing will become a 3D experience.
Hence, the market opportunity is massive.
The migration of our 2D internet experience to 3D will take some years to get to critical mass and will involve a variety of technologies.
Much of the innovation which will affect the mainstream will come from the gaming industry which is leading the way in both user experience and business model revolutions.
Some of the more popular metaverse platforms include Decentraland, Sandbox, and Zuckerberg’s social virtual reality platform Horizon.
Zuckerberg’s $10 billion investment in the metaverse is driven by a need to follow the market. Traditional social media will lose share to more gamified social platforms and popular crypto-native channels like Discord in the near future.
Sportswear brands like Nike, Adidas and New Balance were quick off the mark to open user experiences in metaverse platforms, often involving NFTs. Fashion brands like Balenciaga, Louis Vuitton and Gucci and drinks companies, including Budweiser, Miller and Coke were fast followers.
Others like McDonald’s, Walmart and the NYSE have been preparing for the move by filing metaverse-related patents and trademarks.
So web3 is big business and every organisation needs a strategy but if you are ever asked to speak in a metaverse land, make sure you know the difference between the “sit-down” button and the “lie down” button.