This Week in Web3: Friday, August 5, 2022 (The Metaverse Edition)
Metaverse Isn’t a Slam Dunk for Growth, Zuck says Meta and Apple are in ‘very deep, philosophical competition, The Metaverse Is Not a Place, It’s a communications medium and much more!
Hi Friends,
Welcome to the Metaverse edition of This Week in Web3. This is an extended version of our weekly newsletter.
I’m asked about the Metaverse every day, later this month I’m giving a talk on the topic, and on September 16 I will be co-hosting a day dedicated to Marketing in the Metaverse, with Adweek’s Brandweek Miami.
The truth is I am certainly no expert, I’m not sure anyone is, but there are certainly people like Cathy Hackl and Matthew Ball who are incredible thought-leaders. Both have recently written books and both believe that the Metaverse is going to revolutionize everything…..at some point in the future.
As part of my attempt at understanding the Metaverse, and with a goal of having a real point-of-view on the subject, I’m trying to consume as much as possible and so today, I’m sharing the latest news, articles, research reports, books, and podcasts on the topic, but not with a goal of pushing and promoting, but to provide a balanced perspective of what it is, where we are and what the future might look like.
Before we jump in, let me walk you through one perspective which I’ve been noodling over in my mind for the past few days. Let me know if you agree, or not.
As we know Mark Zuckerburg has made a pretty significant bet that the Metaverse is the future of the Internet and his company, now rebranded Meta, is positioned along with the likes of Apple to determine “what direction the internet should go in,” according to a recording of his comments during an internal all-hands meeting obtained by The Verge.
The specifics of Mark’s bet are still somewhat unclear, in his own words, this is more about the philosophy of ideas, and less about creating shareholder value in the short term. How long before Meta sees a return on its close to 10B bet on the Metaverse? He doesn’t know, and no one is prepared to say. This is smart, but it also gives critics something really meaningful to chew on.
Let’s go back to one of Mark’s biggest swings, and ultimately the one major strategic bet he made back in 2012 which resulted in Facebook becoming one of the most valuable companies in the world.
The single most radical platform shift in the history of technology was the shift to mobile, which was catapulted by the introduction of the iPhone in 2006. But at the time, Facebook was slow to respond to this shift, and consumer adoption from desktop to mobile was far ahead of Facebook’s ability to pivot the fundamentals of its core user experience. At the time, Facebook’s stock was at $18. So how did Mark take them from $18 per share on Aug. 26, 2012, to $75 per share at the end of January of that year?
It will probably go down in business history as one of the smartest, perhaps bravest decisions, as Mark pulled off something that very few would have been able to accomplish. He announced to the company, including all of his engineers that they would focus their entire effort and their resources to pivot to a mobile-first strategy.
Did it work? Today, over 95% of Facebook’s advertising revenue now comes from mobile. It was a monumental move, perhaps an obvious one, but nonetheless, it was the type of swing-for-the-fences decision that required an incredible amount of conviction in how he saw the future of social media and advertising.
So let’s compare this to today, and Mark’s most recent swing, the Metaverse. Could this be as significant to his business? Could this catapult Meta to being a one or two Trillion dollar company?
Right now, I’m on the fence as to whether this could compare to 2012, but here’s one reason why he might be wrong.
In 2016, Mark said, “It Will Take 10 Years for Virtual Reality to Reach Mass Market”. If we use VR as a proxy for one aspect of the Metaverse then we’re due to reach mass market adoption in 4 years. This doesn’t seem too unreasonable, however, it’s hard to really understand how to measure what mass adoption really means.
From 2006 to 2012, the consumer technology space was going through a massive adoption shift, as close to 1 Billion people over that period suddenly had access to the Internet, consumer apps, and services for the first time via their Smartphones.
At the point Mark made his hard pivot to mobile, most people were already using a Smartphone and a significant amount were also using these Smartphones to access social media and other mobile Internet services. When you compare this to today, and look at the number of people who are using the Metaverse, it’s tiny, in fact, adoption is relatively slow compared to that of social media, mobile, or Internet 1.0.
If most of us are not in, or using the Metaverse, and if we’re still unsure of what the adoption curve will look like and over what timeframe, this feels way riskier to me. If the Metaverse is inevitable but we don’t know when we will reach mass market adoption, or even what the experience will look and feel like for consumers, then who can really say, and who could possibly know?
Here’s where I will now contradict myself somewhat. I’m actually more bullish on the Metaverse than you might think, and here’s why. Our entire experience of the Internet, how we use it, how it has become centrally important to our lives, and the amount of time we spend using it, has been the result of small incremental steps over an almost 30-year period. There have been major innovations, but adoption has actually been more smooth and more gradual than you would think. That was of course, until 2020 and the global pandemic. During the first 3 months of the Pandemic, we saw the single biggest shifts in human behavior since the Internet first went mainstream. Literally, Billions of people were forced to work from home and use video communications tools like Zoom, Google Hangouts, and Microsoft Teams to communicate with their colleagues, friends, and family. We went from spending 6-8 hours a day interacting with people via a blend of email, in-person interactions, conference calls, and video. In 2020 we saw an increase in video conferencing usage by over 500% and the value of the global video conferencing market grew from $3.85 billion in 2019 to $7.87 billion in 2020.
To me, this shift was more of a giant leap toward a future where we spend most of our lives communicating in digital spaces, characterized today by the Zoom-like experience. But if we continue along this path of adoption and technology iteration, it’s not hard to imagine that at some point in the near future, the Zoom experience will be better, richer, and perhaps 3D. Matthew Ball describes the Metaverse as the 3D Internet. This is fine but too abstract for most people to understand. I describe the Metaverse as the digital spaces where we spend time, interacting, engaging, and communicating in a real-time shared experience. If the Metaverse is the next iteration of how we connect and engage, then guess what, we’re already in it, it’s predominantly not 3D or virtual reality, but it is here and it’s being used by Billions of people.
So if I’m right, then the bet that Mark and others should make, or at least the way to communicate what the Metaverse is, should be grounded in what we are using today, and how it will evolve, and not in something that feels dystopian and more like a Sci-Fi movie.
Amiright?
Hope you enjoy and get some value from this week’s newsletter, let me know in the comments!
TL;DR
Match Group Pullback Shows the Metaverse Isn’t a Slam Dunk for Growth
Zuckerberg says Meta and Apple are in ‘very deep, philosophical competition’ to build the metaverse
Vitalik: Metaverse ‘Is Going to Happen’ but Meta’s ‘Will Misfire’
Inside the metaverse: Are your kids safe in a virtual world?
The Metaverse Is Not a Place, It’s a communications medium, by Tim O’Reilly
Deloitte: The metaverse and Web3: The next internet platform
The Metaverse: And How it Will Revolutionize Everything, by Matthew Ball
Into the Metaverse: The Essential Guide to the Business Opportunities of the Web3 Era
What is the metaverse, when is it going to show up and who’s going to run it?
Building the Open Metaverse: Ed Catmull, Founder of Pixar on the Metaverse
Journey Into the Metaverse on Day 5 of Brandweek Miami (September 16, 2022)
CAA Appoints Silicon Valley Media Exec Joanna Popper To Chief Metaverse Officer
Netflix Builds ‘Gray Man’ Metaverse Experience in Decentraland
Let’s Take a Quick Tour of EY’s Metaverse Space (It Doesn’t Suck), by Adrienne Gonzalez
What is Yuga Labs’ Otherside? Inside the Bored Ape Yacht Club Metaverse
News we’re following
Match Group Pullback Shows the Metaverse Isn’t a Slam Dunk for Growth
A common symptom of any hype cycle is for companies–no matter how far removed from the object of hype–to find ways to get on board. Then, when the cycle turns, executives become concerned about how, exactly, those investments will make money.
Such is the case with Match Group (ticker: MTCH), the company that owns dating apps including Tinder, Hinge, and OkCupid. Match earlier this week told investors it was pulling back from ambitious plans to expand into the so-called metaverse, an as-yet-unrealized future in which much of the human experience is duplicated in virtual worlds.
Zuckerberg says Meta and Apple are in ‘very deep, philosophical competition’ to build the metaverse
Mark Zuckerberg believes that Apple and his company are in a “very deep, philosophical competition” to build the metaverse, suggesting the two tech giants are ready to butt heads in selling hardware for augmented and virtual reality.
The Meta CEO told employees earlier this month that they were competing with Apple to determine “what direction the internet should go in,” according to a recording of his comments during an internal all-hands meeting obtained by The Verge. He said that Meta would position itself as the more open, cheaper alternative to Apple, which is expected to announce its first AR headset as soon as later this year.
Perspectives we’re interested in
Vitalik: Metaverse ‘Is Going to Happen’ but Meta’s ‘Will Misfire’
The Ethereum creator said corporate attempts at the metaverse will fail because “it’s far too early to know what people actually want.”
Meta’s attempt at cornering the metaverse will “misfire” largely because nobody can come up with what the term actually means, according to Ethereum creator Vitalik Buterin.
In a Twitter thread discussing how the metaverse might look, he said corporate projects currently underway don’t look promising, and he specifically criticized Meta, the tech giant founded and run by Mark Zuckerberg, using the company’s former name.
Inside the metaverse: Are your kids safe in a virtual world?
Virtual worlds are for the most part new and exciting but they are also largely unregulated. Millions of kids across the country and around the globe are becoming immersed in the metaverse, where they can be exposed to hateful, violent or sexual content. NBC News Kate Snow took a deep dive into the dangers that children may face when putting on these headsets.
The Metaverse Is Not a Place, It’s a communications medium, by Tim O’Reilly
The metaphors we use to describe new technology constrain how we think about it, and, like an out-of-date map, often lead us astray. So it is with the metaverse. Some people seem to think of it as a kind of real estate, complete with land grabs and the attempt to bring traffic to whatever bit of virtual property they’ve created.
Seen through the lens of the real estate metaphor, the metaverse becomes a natural successor not just to Second Life but to the World Wide Web and to social media feeds, which can be thought of as a set of places (sites) to visit. Virtual Reality headsets will make these places more immersive, we imagine.
But what if, instead of thinking of the metaverse as a set of interconnected virtual places, we think of it as a communications medium? Using this metaphor, we see the metaverse as a continuation of a line that passes through messaging and email to “rendezvous”-type social apps like Zoom, Google Meet, Microsoft Teams, and, for wide broadcast, Twitch + Discord.
Research reports we’re reading
KPMG: Go boldly, not blindly, into the metaverse
The results of the KPMG Consumer pulse survey | Spring 2022 reveal that the metaverse is here and consumers are embracing it, providing new ways to interact and shop. Our survey found that nearly two-thirds of consumers are familiar with the metaverse; 71 percent of the men, and 59 percent of the women in our study. Limited only by the imagination, consumer and retail organizations that are ready to take advantage of new business opportunities and selling channels will win by developing a strategy for this market.
PEW Research Center: The Metaverse in 2040
Hype? Hope? Hell? Maybe all three. Experts are split about the likely evolution of a truly immersive ‘metaverse.’ They expect that augmented- and mixed-reality enhancements will become more useful in people’s daily lives. Many worry that current online problems may be magnified if Web3 development is led by those who built today’s dominant web platforms.
Deloitte: The metaverse and Web3: The next internet platform
Looking past the hype and critique, Web3 and the metaverse are shaping a new application layer for the internet. How can leaders better understand this evolution and what it means for businesses, organizations, and society?
Books we’re reading/listening to
The Metaverse: And How it Will Revolutionize Everything, by Matthew Ball
The term “Metaverse” is suddenly everywhere, from the front pages of national newspapers and the latest fashion trends to the plans of the most powerful companies in history. It is already shaping the policy platforms of the US government, the European Union, and the Chinese Communist Party.
But what, exactly, is the Metaverse? As pioneering theorist and venture capitalist Matthew Ball explains, it is a persistent and interconnected network of 3D virtual worlds that will eventually serve as the gateway to most online experiences, and also underpin much of the physical world. For decades, these ideas have been limited to science fiction and video games, but they are now poised to revolutionize every industry and function, from finance and healthcare to education, consumer products, city planning, dating, and well beyond.
Into the Metaverse: The Essential Guide to the Business Opportunities of the Web3 Era
In Into the Metaverse, Cathy Hackl, a globally recognized futurist and one of the world's first Chief Metaverse Officers, shares her insights on what companies need to do to harness the next iteration of the internet - the metaverse. In this book you'll find a wealth of information on issues such as:
What is the metaverse and what it means for your brand, organization or company
How to make money in the metaverse through understanding the underlying concepts behind it such as gaming, synthetic media, spatial computing and artificial intelligence.
How to lead in the metaverse through industries that are already forging ahead, such as fashion and marketing.
Who should manage the metaverse function within your organization and why some companies should consider creating a role for a Chief Metaverse Officer.
Finally, how to protect the metaverse and action steps you can take towards the future.
Podcasts we’re listening to
What is the metaverse, when is it going to show up and who’s going to run it?
People have been talking about the metaverse for years. But they’re talking about it much more these days, spurred by Mark Zuckerberg’s full-fledged embrace of the… actually, what exactly is the metaverse again, anyways?
Investor, analyst and metaverse explainer Matthew Ball, who’s already tried explaining this stuff to Recode’s Peter Kafka, has written a whole book about it, so he’s back again: Ball talks about what he thinks the metaverse is really going to be, what it’s not going to be, how long it might take to get here and why you may or may not care about it.
Building the Open Metaverse: Ed Catmull, Founder of Pixar on the Metaverse
Dr. Ed Catmull, Former President of Pixar and Walt Disney Animation Studios, joins Patrick Cozzi (Cesium) and Marc Petit (Epic Games) for a wide-ranging discussion that includes Dr. Catmull's insights on the creation of the first computer-animated feature films, personal experiences working with George Lucas and Steve Jobs, nurturing creativity in organizations, how openness advanced technology in the Computer Graphics community, and the storytelling potential of the metaverse.
Metaverse Marketing with Cathy Hackl
On Adweek's Metaverse Marketing podcast, host Cathy Hackl takes listeners on a journey into the future and prepares marketers to master the metaverse. Get up to speed on the tech that’s shaping the future of the internet; discover new opportunities and overcome the challenges presented by the metaverse; and learn how brands can prepare for tomorrow, today.
Cathy Hackl is a globally recognized metaverse expert, tech futurist, and top business executive with deep experience working in metaverse related fields with companies like HTC VIVE, Magic Leap, and Amazon Web Services. She’s the CEO and Chief Metaverse Officer of the Futures Intelligence Group and host of Adweek's Metaverse Marketing podcast.
Events we’re attending
Journey Into the Metaverse on Day 5 of Brandweek Miami (September 16, 2022)
Join us in Miami on Friday, Sept. 16 at Brandweek for a day dedicated to exploring the power, promise and potential of Web3 and the Metaverse.
A lineup of experts will explain why it matters, what it means for brands and how to capitalize. Brand leaders from PepsiCo, Alo Yoga, Tonal and more will also share how they're using the Metaverse and NFTs to deliver exciting and engaging new experiences.
This Week in Web3 subscribers can register for a free pass to attend Day 5:
Register here (Discount code already applied)
People we’re interested in
CAA Appoints Silicon Valley Media Exec Joanna Popper To Chief Metaverse Officer
CAA has hired Silicon Valley media executive Joanna Popper to serve as its Chief Metaverse Officer. Popper will be responsible for establishing and executing the go-to-market strategy and core business priorities for CAA and its clients within the Metaverse.
Popper will lead a dedicated team of Metaverse-focused executives, and will work closely with Alexandra Shannon, CAA’s Head of Strategic Development, and CAA Executive Adam Friedman, who guides the efforts of a cross-departmental team of agents working across the NFT landscape.
Nicola Mendelsohn, vice president of global business group at Meta, knows fashion has always had a story to tell. She also knows the metaverse is the incoming, omni-sensory platform for putting those stories out.
Use Cases we like
Netflix Builds ‘Gray Man’ Metaverse Experience in Decentraland
Decentraland users can now live a scene from Netflix’s new action movie “The Gray Man” from inside the metaverse
Streaming giant Netflix has touched down in the Decentraland metaverse.
The purpose is two-fold: promote its new action movie “The Gray Man,” featuring Ryan Gosling and Chris Evans, and explore new interactive ways that a brand can connect with fans virtually.
The film is a spy thriller, and Netflix’s 45-parcel Decentraland activation is aptly considered a “Metaverse Mission.” Decentraland recreated a landscape from the movie — a labyrinth that users must navigate by proving their knowledge about the movie’s plot along the way.
Let’s Take a Quick Tour of EY’s Metaverse Space (It Doesn’t Suck), by Adrienne Gonzalez
When the first glimpses of KPMG’s metaverse space appeared earlier this summer, my first thought was how much it looked like first-person shooters I played 20 years ago. I was also struck with a sense of deja vu, it looked oddly similar to the Maryland Association of CPAs’ CPA Island in Second Life which existed a whole 15 years ago (when the PS3 was still new).
All that to say, I was not initially impressed with this metaverse thing. I play GTA V after all, I expect my accounting firm metaverse meeting spaces to at least top the graphics of an almost ten year old video game that’s persisted through three entire generations of consoles. Just, you know, without the griefing. I would absolutely pay money to see Bill Thomas show up to a meeting room on an Oppressor MK 2 though, I think we all would.
Well now we’re getting a look at what EY’s been working on in the metaverse and let me say…I don’t hate it.
What is Yuga Labs’ Otherside? Inside the Bored Ape Yacht Club Metaverse
The creators of Bored Ape Yacht Club are behind ApeCoin-powered metaverse platform Otherside. Here’s how it works.
Popular non-fungible token (NFT) collection Bored Ape Yacht Club has been seen everywhere from comic books to burger restaurants.
Now, it’s branching out into the virtual world, with the launch of Otherside, a metaverse platform from BAYC developers Yuga Labs.