Mind Crunches #13: Thoughts & Observations On the Metaverse
Alternatively: Why 10X is easier than +10% in the Metaverse
“I want to break free”
Queen predicting the appeal of the Metaverse in 1984
Almost 10 years ago, I launched “The Phygital”, an initiative that was exploring the intersection of our physical and digital worlds and commented on how our lives were about to become digitally redesigned. It was an attempt to publicly share my thoughts on the increasingly hybrid reality we were all living back then and to form a small think tank that would guide organizations to better adapt to a “phygital” world. The only thing that remains from that initiative is a dormant Twitter account and a very valuable personal lesson. Regardless of how “digitally native” someone is, every person I interacted with back when I launched this initiative understood the concept of a phygital reality, which back then I considered more like a unique insight that only enlightened people had.
In case the word “phygital” rings a bell, it’s because it’s a primitive name for Metaverse which is the new favorite buzzword of the tech industry. The reason I am opening up this post with that personal story is not to humble brag about my insights but to actually do the contrary. The idea that the digital world is becoming increasingly present and ubiquitous and therefore transforms our “physical” experiences is very old. It started as a sci-fi theme and then became a reality with Second Life and early VR headsets. Therefore, the recent obsession with the Metaverse shouldn’t surprise us. Metaverse is a great headline for mainstream media because it includes a de facto dystopian element which always excites the masses. However, there is something which has changed since the last time we went crazy about virtual reality and phygital environments. We are now much more technologically mature to build a truly virtual universe and digitally enhance our physical world with AR. (I had written about the O-Ring problems of technology here)
What Exactly Is The Metaverse
The term “Metaverse” comes from the 1992 Neal Stephenson novel Snow Crash, widely considered one of the core works of cyberpunk sci-fi. The metaverse concept has been also rehashed in other hits like Ready Player One and Matrix. (for what it’s worth, taking a step back it’s very interesting to observe that cyberpunk authors were pretty accurate to predict the decades that followed — the internet, the fragmentation of society, the weirdness of A.I)
A short definition of the Metaverse that I like is the one of “embodied internet”.
A slightly longer and very concrete version is the one from Satya Nadella below. (by the way, Nadella was the first tech executive to endorse the Metaverse as a strategic goal on May 25, 2021. This is an important note for the next chapters of this post)
A pretty long but well thought and articulated version of the Metaverse is the one that Mark Zuckerberg gave to his recent interview at Stratechery:
The metaverse is a vision that spans many companies — the whole industry. You can think about it as the successor to the mobile internet. And it’s certainly not something that any one company is going to build, but I think a big part of our next chapter is going to hopefully be contributing to building that, in partnership with a lot of other companies and creators and developers. But you can think about the metaverse as an embodied internet, where instead of just viewing content — you are in it. And you feel present with other people as if you were in other places, having different experiences that you couldn’t necessarily do on a 2D app or webpage, like dancing, for example, or different types of fitness.
I think a lot of people, when they think about the metaverse, they think about just virtual reality — which I think is going to be an important part of that. And that’s clearly a part that we’re very invested in, because it’s the technology that delivers the clearest form of presence. But the metaverse isn’t just virtual reality. It’s going to be accessible across all of our different computing platforms; VR and AR, but also PC, and also mobile devices and game consoles. Speaking of which, a lot of people also think about the metaverse as primarily something that’s about gaming. And I think entertainment is clearly going to be a big part of it, but I don’t think that this is just gaming. I think that this is a persistent, synchronous environment where we can be together, which I think is probably going to resemble some kind of a hybrid between the social platforms that we see today, but an environment where you’re embodied in it
Where To Start
The past weeks have clearly demonstrated that the Metaverse may have already become a media buzzword (like Digital Transformation) but from a business and technology perspective it is where all the giants will converge. The Metaverse will become the gateway to most digital experiences, a key component of all physical ones, and the next great labor platform. You can imagine that this requires some serious “building” mostly from companies but also from individual creators and bright developer minds. The reason that Facebook, Microsoft and other giants are now openly talking about their Metaverse plans is exactly because we are currently in the “building” phase. We will soon witness a fierce competition in all levels: software, hardware, competitive moats, OEMs, ecosystems and this will be a textbook example of a “first mover advantage”. The organizations that will build the roads and the railways of the Metaverse and the ones that will correctly figure out the sociological side of this new world (behaviors, user experiences, trends) will be set for success the same way that the likes of Google, Microsoft and PayPal are on the Internet.
Another important note is that it will be very important to set strong, transparent and ethical foundations (like standards and protocols) if we want to have a “fair” Metaverse, in the same way that we have a “fair” Internet. I believe (and I hope) that the tech industry is now collectively smarter than it was a few years ago and the early signs (commercial partnerships, open protocols, policymaking) are definitely positive.
I am listing below my early thoughts, observations and predictions on the evolution of the Metaverse but before that I will share a few essays and interviews which I have found to be really helpful in my journey to better grasp this new world. I highly recommend you reading them! (ideally, even before you read my thoughts)
Matthew Ball’s 2020 essay on the Metaverse (if you read only one thing, read this one)
Matthew Ball’s Metaverse framework
Ben Thompson’s interview with Mark Zuckerberg
Ben Thompson’s thoughts on Meta
Early Thoughts & Observations
The Metaverse will eventually become something so ubiquitous like the Internet which means that it is wrong to assume that each technology company will build its own metaverse. However, I also believe that this will take some years. Metaverse won’t directly come into existence; there will be no clean “Before Metaverse” and “After Metaverse”. Instead, it will slowly emerge over time as different products, services, and capabilities integrate and meld together.
Until the Metaverse becomes fully persistent, we will witness individual and siloed metaverses since the tools, protocols, formats, services, and engines which serve as de facto standards for interoperability will not exist.
Microsoft is currently the best positioned company to lead the Metaverse. The main reason behind this is that Covid has completely reshaped how we work and how we define “work”. Covid not only decoupled location and employment but also accelerated the development of the “creator economy”. In the post-Covid world, the boundaries of when we work and use the Internet for personal entertainment/creativity are practically non-existent. Knowledge workers and creators will be the first and heaviest users of VR shifting productivity, commerce and communities to virtual environments. Enterprise, consumer and creator businesses will merge into a new form of economy that will be powered by VR and the most well-suited and interoperable platform to host this new paradigm is Teams. (Ben Thompson has a great post on that)
If the above proves to be true (and I am very confident that this will be the case), then we can all better understand why Microsoft was pursuing to acquire “consumer”-focused companies like Tik Tok and Discord in the near past!
This concept of an enterprise-driven Metaverse means that Meta (Facebook) will soon build a stronger enterprise presence and suite of offerings spearheaded by Horizon Workrooms.
It also means that Matthew Ball’s famous Metaverse Framework may be missing some key components. Short thread below 🧵
The Metaverse should be open and decentralized. A Metaverse that anyone can innovate on is the only way forward if we want to truly unlock productivity. Web3 will be the main “language” of the Metaverse.
Digital twin technologies will become very popular. In a way, digital twins will be the 3D Printing of the Metaverse.
Interoperability will make or break the Metaverse. Zuckerberg’s thoughts on this topic are really spot on: “I think the most important piece here is that the virtual goods and digital economy that’s going to get built out, that that can be interoperable. It’s not just about you build an app or an experience that can work across our headset or someone else’s, I think it’s really important that basically if you have your avatar and your digital clothes and your digital tools and the experiences around that — I think being able to take that to other experiences that other people build, whether it’s on a platform that we’re building or not, is going to be really foundational and will unlock a lot of value if that’s a thing that we can do.”
The Metaverse could potentially unlock infinite “sustainable” economic growth by decoupling it from use of physical resources.
Safety will be a hot topic in Metaverse. If we consider Metaverse as a version of “embodied” Internet, then bullying and harassment can have an even more detrimental effect to people than they do today. A rude comment on Instagram will be nothing compared to having your VR persona being attacked or having all your digital goods stolen from you. If we also consider Metaverse as a collage of environments developed by different companies, this means that we will have to develop a common set of rules, playbooks and standards.
There will be a fundamental shift on how users manage their data not only from a privacy but from a business point of view as well. This will be a result of people getting tired of companies poorly governing their data but also from being increasingly aware of the collective nature of online data. We will witness the emergence of Data Cooperatives that will function as intermediary fiduciaries who will negotiate with companies to establish guidelines around the use of our shared data; set limits on who can view, store, use, or buy it; and route the benefits back to us: in dollar form, in-kind, or through recognition and access.
Biomicry will be the dominant practice for building Metaverse solutions and environments. Biomimicry, the practice of nature-inspired innovation, is already gaining momentum because it has proven to solve complex engineering and design problems but it will become even more relevant since it can provide a human-centric approach to a de fact digital universe like the Metaverse.
Unreality (or post-reality) will be a mainstream philosophy/school of thought. The idea that younger generations are increasingly trying to escape reality and that reality has been surpassing fiction (especially in the US) has been extensively analyzed in Bruno Macaes’ “History Has Begun”. (you can read my review here)
There will be a need for a shared narrative and mythology to connect the Metaverse users and give “meaning” to their experiences. In our “real” world, these narratives are usually built by religions and politics and brought to the masses via art. My prediction is that we will witness a revival of community-centric initiatives and practices with NFTs and DAOs playing a critical role. (I had written about crypto in Mind Crunches #12)
Metaverse startups I am bullish on: Gather.
Mind Crunches
Christopher Mims on how space technology trickles down to consumer technology.
On the fallacies of “professional futurists” + some good predictions for 2050!
Acemoglu and Weyl, two of my intellectual heroes, on the myopic and limited view we have about the AI capabilities.
I am now a Citizen of CityDao, an experiment in decentralized ownership of land. This means that I have the right to vote in a DAO that owns some land in Wyoming! Super bullish about this project.
Privacy as a competitive differentiator. Chart!
HBR can be cool! Their NFT piece is really insightful and informed. Bonus: there is a special mention to the Jenkins The Valet project for which I had written in SynapsesFest #12.
Capsule is one the most intriguing startups out there. Decentralized social media FTW.
On how data cooperatives can give us more power over our data!
David Bowie was so ahead of his time that he had invented tokens before it was cool!
Li Jin, the most influential thinker in the creator economy space, on the power of legitimacy. (inspired by Buterin’s original post)
Consumer Citizenship is now officially a thing.
Get a cat if you want to be more innovative.
Recommended book: Radical Markets. This is one of the books that has really influenced my current way of thinking and led me to some conclusions I never thought I would even consider. It is the book that somehow started the RadicalxChange movement, whose concepts I find very interesting and convincing. There are some very powerful ideas and arguments presented in this book about things that we have come to consider as “written in stone” (like for example what private property really means) and Weyl offers a different point of view which seems rational and radical at the same time. Highly recommended!
Recommended podcast: Stanley McChrystal on the military, leadership and risk- Conversations With Tyler (My thoughts about this podcast)
Recommended Newsletter: The Intrinsic Perspective by Erik Hoel
Quote of the month: “Americans see the world as an action movie, Europeans as a documentary!" Bruno Macaes
Photo of the month: Matthew McConaughey exploring Christopher Nolan’s version of the Metaverse in Interstellar.