The business case for the Metaverse is still stuck between paradigms
Weekly insights 7: What needs to change before the Metaverse matures?
Almost a year ago, I wrote a brief article on the paradigm shift that needs to happen for the Metaverse to unleash its full potential. The creative economy is an expression of the changing society that needs to go through to increase the quality of experience and redefine what is meaningful. At the time, two key moves influenced this reasoning:
Outside-in move: The shift from Consumer to Creator meant open participation in creating products and experiences rather than using what's available.
Inside-out move: The shift from Worker to Creator gave people a right to choose how they relate to the objects they create and who they do that for in a more empowering way rather than being dictated by company guidelines.
The two-pronged attack is still relevant and highly likely to disrupt entire markets as it greatly challenges how people think about the future of work and what it means to "make a living."
A year later, the Metaverse is boldly growing, making its way into the market by experimenting with different technologies, tapping into the power of communities, and disrupting the norms. Looking back, many of these early initiatives seemed reckless and superficial, but they provided valuable lessons and served as stepping stones to mature the conception of “metaverses.”
An interesting example is the Bored Ape Yacht Club, which shook the market with its crazily priced NFTs that even now sell for 100,000$. But not for long; the hype wave is calming down, and the work of integrators slowly begins as great efforts are focused on solving the two most challenging dimensions of the Metaverse: managing the knowledge gap and building the business case. The way they are being resolved is still a work in progress, and no one has a definite answer, but it's interesting to look at the changes required for a new paradigm compatible with the Metaverse to emerge.
Is the knowledge gap a learning gap or a creative one?
For any newcomer, the Metaverse feels quite alien. You have to learn quite a lot before taking any meaningful steps inside. First, you must learn the vocabulary that extends to key building blocks such as Web3.0, AR, VR, blockchain, 5G, cloud and edge computing, cryptocurrencies, and NFTs. Then, you must build a framework for the concepts that constitute the foundation of how things "move" inside: ownership, interoperability, token-based exchanges, centralized vs. decentralized autonomous systems, open vs. closed Metaverse, etc.
Learning new things is often intimidating and can prove overwhelming if it's not done under the right circumstances. The communities forming now are hubs for discussion and knowledge exchange that can facilitate a learning experience for those who want to make an entry. But is learning all these new concepts guaranteeing you will eliminate the knowledge gap? I'm not so sure. The ones who make the most out of the Metaverse's potential are creative people with "tech-savvy" appetites and skills.
However, being in the Metaverse doesn't entail that your experience will be immersive or that you will feel a new sense of belonging. The hype could wear off quite easily, and all that remains is a bland taste of a sophisticated and unnecessary application on top of the internet UI.
Managing the knowledge gap doesn't mean only taking care of the informative aspects but also requires people to rethink how they relate to what they know or don't know. Instead of resisting change and holding onto limiting beliefs, embracing the Metaverse could mean embarking on a creative lesson that can empower everyone to grow much more than it was previously possible:
"Most people don't understand that this technology can break the pattern of operator dominance that has been in place for the greater part of the information age." (Navigating the Metaverse)
While efforts are necessary and helpful, it's important to highlight what is and is not possible in the Metaverse, as well as the impact working with like-minded people can have on stretching those limits.
"The knowledge gap can be bridged with creativity."
Suppose there are special activities you'd like to transpose in an immersive virtual format. Creators can get together and build it, whatever the experience you want to simulate. Perhaps, curiosity is the only limit.
Where does the true value for the Metaverse reside?
The vocabulary mentioned earlier makes up some of the key ingredients required to create your personal metaverse experience. But the development process is still very experimental. One of the most important aspects hasn't been uncovered: how to build a case of true value for the Metaverse.
The struggle to gather investments for metaverse experience is still real as many companies aren't yet convinced by the business value and the kind of profit it can generate. Most businesses are still used to traditional approaches to products and services, undermining the value of experience, which is the cornerstone of the Metaverse. So, building a strong business case for it requires a shift in priorities that goes back to reshuffling the components of the paradigm shift related to experience.
The Metaverse operates on three key principles:
Experience: People don't just want to consume. It's far more engaging to have engaging, gamified, or contextual experiences.
Identity: People value their unique digital personas and want to carry them across the Metaverse and even into the real world.
Ownership: Wherever people choose to spend their time, they want some "skin in the game" and tangible benefits.
To stress the importance of true value, it is worth considering an adjustment to the three principles:
Identity and Ownership are subcategories of experience, as they will be void of substance and are intangible without the possibility to experience them.
This may sound like a small change, but it has profound implications for how the Metaverse will evolve. Experience is the core of the creative economy, and it is what determines the value, utility, and lifespan of any Metaverse. But what it means to experience anything is questioned and creatively crafted into a set of immersive worlds. The increase in the quality of experience should be the foundation of the business value, and anything else added on top will only make the case stronger.
Technology and culture have never been this tied and blended. Whether you genuinely see opportunities within the emerging ecosystems or are simply there for the ride out of curiosity, your contribution – however passive it may be – will leave a print on how the Metaverse is developing.
There are two main types of experience metaverse creators need to consider:
The event experience (action) is an activity that can be performed in a virtual environment to give a participant the power to behave and express freely. VR gearsets, avatars, and game-like immersion are constituent parts of the event type.
The "state" experience (mood) refers to the subtlety of the emotions that emerge in the participant. Feeling entertained is no longer a luxury but a default option. Deciding how you want to feel will determine how the Metaverse arranges to fulfill that request. Even when attending a super-upbeat concert, if it's the peace you want, you should have the freedom to lower the volume, take out certain instruments to listen only to the acoustic version, remove the avatars of the other participants from your visual field, etc.
The current Web2.0 has many flaws as it conditions people to stay within a limited range of experience. The algorithms have the power to feed the audience with the same type of content because of the objective to drive consumption instead of offering more relevant and purposeful content. Experience is oversimplified, and emotions are reduced to trigger activities that value superficial and sometimes biased reactions and opinions over a healthy and open-minded knowledge exchange.
The limits of the current Internet are quite pronounced, and even though the Metaverse and extended technologies cannot solve all problems, it at least unlocks new creative streams the current world needs. Some issues could get heightened, but that's up to us to reset and reimagine its boundaries. I believe technology always delivers on its promise, but do people? We'll have to keep an eye on that and respond quickly when that's not the case.
Subscribe to receive more weekly insights!
Some interesting links and materials:
NFT hype in 2022 (Bored Ape)
Example of a cool open metaverse project (YOM)
Navigating the Metaverse (Book)
Previous article: Metaverse: between hype and hyper-reality (2021)
For more insights and stories, check out: