Doing Business in the Metaverse
Hope you had a wonderful weekend!
Today we’ll spend a little bit of time thinking through how businesses will have to adapt in a world where the Metaverse exists. There is so much to think about, but if the Metaverse is as big as everyone is saying… then businesses will need to fundamentally change and reorganize (just like when the Internet popped up).
P.S. We have so much to write and too little time, so we may be launching some ad-hoc longer reads where we collaborate with other writers in Web 3. Stay Tuned! 👀
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We’ve talked a lot recently about the impact of the metaverse on the individual. Things like how will we make friends, how will we represent ourselves.
The key to understanding the metaverse is that it’s a virtual world fusing our physical world and digital lives together. Therefore, anything happening in real life (IRL) can (and will) be replicated online.
Beyond that, there will be transformative new ways of working, connecting and living that are bound to change our real, physical lives in return.
So if we extrapolate this further to businesses, we can expect the nature of how companies interact with customers (and vice versa) to radically change too!
And why shouldn’t it?
If the metaverse is adding a new paradigm in which people can interface, it naturally follows that the way we behave as consumers will evolve.
How can the metaverse change the relationship between companies and individuals?
For the former, what new ways of working will they have to adopt, and for the latter, what new experiences will be unlocked?
Gaining ground 📈
While the fully fledged metaverse is still decades away (AR, VR, XR and everything in between meshing together), there are already examples of companies taking advantage of the tech available today.
In our last article, we think we are in the Minimum Viable Metaverse stage 😁
Some use cases where digitalization is creating unique experiences:
Travis Scott’s Fortnite concert attracted 27.7M attendees (more than could attend IRL)
The Gucci Garden Experience sold virtual products, including a virtual-only digital replica of a Gucci Dionysus purse (worth more than its real-world counterpart)
Christie’s, the auction house, created a virtual venue within Decentraland as a showcase and sales venue for digital (NFT) art
And these are just a handful of examples that come to mind. 🧊
Often when people talk about the metaverse, they are focused on how to re-create the real world in the metaverse. Certainly re-creating and re-imagining the real world in the metaverse is one train of thought… but the metaverse doesn’t just virtualize IRL experiences. In the metaverse, we can self-create independently of the real world and influence the real world.
The examples above are interesting because they’re actively changing the way consumers interact with brands. And it’s a two-way street: not only is the metaverse shaped by real world experiences, but even our real-world, day-to-day lives will be molded by what happens online.
For example: Nike partnered with Roblox to create “Nikeland”, a virtual world where players can compete in games like dodgeball. Down the line, Nike plans to integrate products like accelerometers into the game (jump IRL and your avatar will too). You can dress your avatar in Nike gear, so on and so forth.
At first look, these may just feel like brands leveraging worlds we already see in video games into their business … but it’s way bigger than that.
The genius of the metaverse (and its potential impact) lies in the fact that businesses will have an infinite (rich and 3D) digital world to test their products and engage with consumers at a scale like they’ve never had before.
The metaverse tears down the constraints of the real world, both body and mind: not being tethered to your physical self and being able to create beyond your wildest dreams.
Anyone else getting “when eCommerce first popped up” vibes? 👀
So what does this mean for companies?
Brands like Nike can use this digital playroom to tease future products, allow consumers to co-create items and personalize their orders like never before. It’s a way for them to test out new products too…. if something is popular in Nikeland, it’s likely consumers would wear those designs IRL too.
Metaverse-created attire could serve as a new status symbol, just like the Bored Ape NFT… and with any status symbol, there’s a good chance brands will be jumping on the trend (and this is already happening).
We’ve argued owning a certain NFT signals something about you in both the virtual and real world. Well, with the metaverse, wearing a certain outfit in both the virtual and real world can signal your participation online with a certain brand… creating yet another channel for businesses to explore.
Imagine a cool Nike sneaker only Nikeland participants can buy (for now, Nikeland has free entry, but that could change). After all, the desire of people “to fit in” is something that will never go out of style (no pun intended).
In short, what goes on in the metaverse will influence the trends / behaviors of shoppers IRL, where businesses will benefit from a constant feedback loop.
It’s a whole new way of engaging with consumers, which can ultimately drive brand affiliation and thus, revenues. 💰
And this is only the tip of the iceberg. 🧊
We think the metaverse is way bigger than just events online. Similar to how the internet became more than just a place where companies spun up websites.
For example… outside of events to foster consumer interaction, businesses can use the metaverse to make informed decisions like never before.
Vail ski resort in Colorado created a digital version of the mountain, complete with snowfall and years of weather data, to help increase the predictability of skiing conditions. Coupled with tactics IRL (remote monitoring, automatic snow machines), Vail can potentially extend the ski season = make more money. ⛷
(oversimplified) Framework for Companies Entering the Metaverse
Think back to the early days of the internet and the skeptics it faced: back in the ‘90s, companies that didn’t invest upfront in the Internet were left scrambling to hire new software developers, designers, UX testers.
Companies that aren’t capitalizing on these trends will only fall behind. We’ve been on a long march toward the metaverse and the trends that enable it.
In a world with the metaverse, companies will need to confront some key questions (and soon).
We group them in two ways: design parameters and org structures.
On Design Parameters:
To the first group, the main question that comes to mind for us is: how does the metaverse fundamentally change the game / rules for competing over consumers’ attention?
Some implications to think through…
Digital experiences that can feel like IRL experience, which means companies have to create experiences that now cater to 10x, 100x, 1000x the audience they are used to, in a digital world that consumers will expect to have the same IRL feel
Breaking down walls and all of a sudden having to be always “on” and engaging a community of fans
Needing to replicate the “community feel” of in-person events where we can make new friends, which is part of the driver for attendance IRL
Figuring out how much data from real-world experiences is applicable to the metaverse to make decisions
Of course, these sorts of “parameter” questions in designing events are one piece of the puzzle. Then there’s also the “people” part of the equation.
On Organization Structure:
The next key question for us becomes: in a world with the metaverse, how will an existing organization need to reorganize / evolve their functions, talent and organization structure?
Just like the Internet invented new business models and changed every part of a business, the metaverse will likely do the same.
In the future, companies will need to look at all their functions, talent and organization structures and redefine them for a world where the metaverse is front and center…
To name a few:
What will customer support look like in the metaverse?
What new roles will companies need to hire for?
Digital Events Coordinator
Chief Vibes Officer
When shifting from likes / subscribers to virtual experiences and communities, how do companies measure success? (especially when some segment of the population can be/will be bots…)
How will companies implement Web 3 technology (like NFTs) that have shared value capture baked in to engage their community?
Yes, all this sounds a bit crazy today, just like a SEO / Digital Marketer at one point sounded crazy as well.
The other interesting thing to watch is the game theory that naturally companies in a specific sector face with each other.
If Company A in a sector doesn’t jump but Company B does jump, does Company B get rewarded in an outsized fashion?
What would you do if you are running Company A? 🤔
Putting it all together
The metaverse is sort of like the “second coming” of the internet.
Facebook’s parent company, Meta, published content saying that the metaverse is “the biggest opportunity for modern business since the creation of the internet”.
Platforms that are willing to evolve will lead the way in defining what the future looks like. You can bet other performers will be modeling their shows off Fortnite.
It’s not too hard to imagine companies shifting their business models to favor metaverse experiences. The same way companies had to adjust to the internet and were forced to (or become dinosaurs), we’ll likely see the same in the metaverse.
Soon, we’ll have a marketplace of virtual-to-virtual commerce, along with physical-to-virtual and virtual-to-physical. For example, we can buy things in person that we wear online, or buy things online in the metaverse that get shipped to our physical homes (remember that Nike sneaker example?).
The possibilities are literally endless! 🦄
And before you think, Well, this is cool but probably limited to certain use cases. I can’t envision a ton of industries adopting this…
Let’s take a far-left field example. Even fast food chain Wendy’s got in on Fortnite via the new game mode, Food Fight.
Essentially, the mission of the Wendy’s avatar (classic red pigtails, blue dress) was to destroy all burger freezers in the game, in keeping with Wendy’s motto: “fresh, never frozen beef”.
It may sound crazy to some, but people are willing to pay for this.
And again, while many metaverse use cases have been confined to video game-like experiences similar to Wendy’s, this is only the beginning.
Bottom line: if you can dream it, you can become it.
The only limitations that exist in the metaverse are the confines of your imagination.
Imagination is endless.
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