I’ve been dancing around the topics of the metaverse and web3 all year without talking about what they are and why they matter for your business—or not. And, while this is by no means a comprehensive look at these potentially transformative technologies, it’s far past time for me to take a far too quick look at the metaverse, web3 and what they mean for the future of digital.
What is the deal with the metaverse? Is it something you need to worry about? And what about web3? Will these technologies replace the web as we know it? And if they do, is your business in trouble?
Well… maybe. But there is almost certainly a way you can compete no matter what happens. What is it? What do you need to do? And how much should you worry about the future? Give a listen to our “far too quick look at the metaverse, web3, and the future of digital,” and, hopefully, you’ll get some answers you can work with.
Want to learn more? Here are the show notes for you.
Thinks Out Loud Episode 349: "A Far Too Quick Look at the Metaverse, web3, and the Future of Digital" Headlines and Show Notes
Show Notes and Links
Here are this week’s show notes for Thinks Out Loud with links and news related to this week’s episode. Be sure to check out all the links that matter for your business once you’ve given the episode a listen.
- What Do the AGFAM’s Earnings Tell You About the State of Digital in Q2? (Thinks Out Loud Episode 348)
- Metaverse – Wikipedia
- What Is the Metaverse, Exactly? | WIRED
- The metaverse, explained: what it is, and why tech companies love it – Polygon
- The Metaverse, Explained for People Who Still Don’t Get It
- Why Build in Web3
- Chris Dixon thinks web3 is the future of the internet — is it? – The Verge
- Mobile Payments, Millennials and Voice Computing Make Mobile Commerce Matter More (Thinks Out Loud Episode 199)
- Why I’m Bullish on Mobile Payments and Messaging (Thinks Out Loud Episode 158)
- U.S. Chamber of Commerce Foundation on Twitter: "While most of us are still trying to figure out what the #Metaverse is, it’s expected to reach a global market size of $716B in the next 5 years. Learn what that means for your business from @CathyHackl & other experts on May 17 at 2 pm ET: https://t.co/ooW1nReSck https://t.co/98MGN6h2RW" / Twitter
- Drew Harry on Twitter: "I am once again begging anyone talking about the metaverse to read up on Second Life. All these dynamics played out. SL started with transit hubs, and switched to teleportation. It had gated communities, HOA-like entities, land speculation, harassment, IP theft…" / Twitter
- Buying real estate in the metaverse – Protocol
- Visions of the Internet in 2035 | Pew Research Center
- Web3 is the future, a scam, or both: The crypto and NFT rebrand, explained – Vox
- Are You a Legacy Leader? Or Are You a Future Leader? (Thinks Out Loud Episode 336)
- How Much Will 2022’s Top Tech Trends Shape Your Digital Strategy This Year? Not Much (Thinks Out Loud Episode 334) – Tim Peter & Associates
- What 2022 Trends Should Marketers Care About? (Thinks Out Loud Episode 335) – Tim Peter & Associates
- What Netflix’s Struggles Can Teach You About Your Digital Strategy (Thinks Out Loud Episode 347)
- The Future of Content Marketing is Already Here (Thinks Out Loud Episode 350)
- How to Build the Business Case for Digital in Your Budget (Thinks Out Loud Episode 353)
We have some free downloads for you to help you navigate the current situation, which you can find right here:
- Digital & E-commerce Maturity Matrix. As a bonus, here’s a PDF that can help you assess your company’s digital maturity. You can use this to better understand where your company excels and where its opportunities lie. And, of course, we’re here to help if you need it. The Digital & E-commerce Maturity Matrix rates your company’s effectiveness — Ad Hoc, Aware, Striving, Driving — in 6 key areas in digital today, including:
- Customer Focus
- A Modern Content Marketing Checklist. Want to ensure that each piece of content works for your business? Download our latest checklist to help put your content marketing to work for you.
- A Brief Introduction to Thinks Out Loud. As a bonus, we’ve also included this PDF document that highlights some of our core episodes to help you dig into what the show is about. We think it will help you capture the show’s essence while you’re working your way through the 300-plus episodes published so far. Download it here.
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Past Insights from Tim Peter Thinks
You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:
Technical Details for Thinks Out Loud
Recorded using a Heil PR-40 Dynamic Studio Recording Mic and a Focusrite Scarlett 4i4 (3rd Gen) USB Audio Interface into Logic Pro X for the Mac.
Running time: 22m 28s
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Transcript: A Far Too Quick Look at the Metaverse, web3, and the Future of Digital
Welcome to Thinks Out Loud, internet marketing expertise, your business needs. I’m Tim Peter. Well, hello again, everyone. And welcome back to Thinks Out Loud, your source for all the digital expertise your business needs. My name is Tim Peter. This is episode 349 of the big show and thank you so much for tuning in. I just so much appreciate it that you choose to do so every week.
Is the Metaverse a Big Deal?
Today’s episode is a quick follow up to something I was talking about last week about the state of digital and what we learned about the state of digital from Apple, Google, Facebook, Amazon and Microsoft—the AGFAM’s—earnings calls, what they told us in Q1 was a big deal for them. And I talked briefly about Facebook’s upcoming plans, Meta’s upcoming plans. I know they’re called Meta but come on you and I both know them as Facebook, right?
So I’ve been dancing around the topic of the Metaverse and web3 and things like that pretty much all year. Going back to what were the top trends that I thought you should pay attention to this year and the trends that I thought maybe weren’t worth talking about that much. And obviously, the Metaverse and web3 were near the top of the list of things that I thought were probably, more hype than reality right now. And I still think they are somewhat more hype than reality.
I also think it’s very much worth talking about them a little bit to understand what they mean to your business, what they might mean to your business and how you get ready for them in a meaningful way.
The "2 Year/10 Year Paradigm"
And I want to be very fair. We are always cursed when we talk about where things might be going in terms of what I think of as the "two year, 10 year paradigm."" There’s this quote Bill Gates uses, I’ve said it lots of times here on the show, that "we always overestimate the change in the next two years and underestimate the change in the next ten.""
And when we talk about the Metaverse, when we talk about web3 those are things that I think everybody’s a little over hyped at the moment because they’re talking about things that are probably, not two years in the future, they’re overestimating the change we will see. Also, they probably, will be really meaningful within the next 10 and of course, you always have to ask the question two years from when? What’s the start date, what’s 10 years away, what’s two years away? And so today is 10 years later than something and in fact, you can look at where we’ll be two years ago by looking at where we were five to eight, excuse me… You can look at where we’ll be in two years time by looking at where we were five to eight years ago. Now, if you look at the technology that I was really bullish about and others were really bullish about in 2014, 2015, 2016, mobile payments were very near the top of that list.
How Mobile Payments Demonstrate the 2 year/10 Year Paradigm
And if you look today, suddenly mobile payments are everywhere. So I was undoubtedly early on that, I was undoubtedly bullish on that in a way that took a while to come to fruition and frankly took a pandemic to really reach the mainstream in a big way. It also just illustrates, you have to be thinking about where are we in that two year, 10 year paradigm. By the way, I did go back and look and I’ll put some links to the show notes to other technologies people were talking about in 2014, 2015, 2016. And AI and VR and augmented reality or what people are calling extended reality—the combination of these definitely—were things people were talking about. Some we’re probably not too far away from the Metaverse being a more real thing. But because those were such early days then where’s mobile payments if you go back five years before that, you go back to 2010, people were talking about them.
I suspect we’re probably, still closer to 10 years away than two years away for the Metaverse. I don’t think the Metaverse is going to be as big as we think quite as quickly as we think or as some people think.
What I’m Talking About When I Talk About the Metavese
I tend to think of the Metaverse in pretty simple terms. I think of it as the technology, that will be the successor to the mobile internet. One of the things that we look at is what comes next, wherever we are today there’s always some new technology that’s going to happen. Something is going to follow mobile.
A Quick History of Technology
If we oversimplify things there’s a quick, here’s a complete history of how we got here. This is going to be a gross oversimplification but:
- Mobile followed the internet.
- The internet followed the personal computer
- The personal computer followed mainframes and time sharing.
There’s no situation in which something doesn’t follow mobile. I realize I just grossly oversimplified 60 years of computing. But the idea is pretty straightforward. Something will always follow, mobile will be followed by something.
And there are really a series of technologies that people seem to think will be the thing that follows mobile: basically 3D experiences whether you access them via VR, where you’re wearing some sort of headset or you’re wearing some sort of glasses that immerse you in the internet and in digital all the time; augmented reality, where your phone enables you to interact with the world around you, the physical world, around you in a digital way; and digital ownership and this is the web3 thing, things like cryptocurrencies, things like a decentralization of digital assets to where you have them and where you have control.
I Am Bullish on the Metaverse and web3… Generally
I am generally, bullish on all of these technologies. I think they’re all pretty cool. I also think they’re incredibly hyped by people who have… What’s the right word? Who have motivations beyond just what’s the next thing for why they’re doing it.
Now, I talked about this last week with Facebook. Let’s talk about them for a second here. Facebook needs something where they own the customer experience end to end, what they have learned from Apple and Apple’s pp tracking transparency, privacy restrictions that they’ve put in place is that’s going to cost them something like $10 billion per year because they don’t have access to the customer. We all know that gatekeeper is going to gate and Apple is the gatekeeper in this case gate keeping Facebook and preventing them from getting the sorts of data they used to have that made their advertising platform so successful. So Facebook needs Meta, needs another device that they control the Oculus in this place or whatever follows it to be the device that everybody uses so that Facebook can actually, control access to the customer instead of in this specific case, Apple.
In another for instance, let’s talk about people who want to decentralize the Web with web3. And again, this is a place where their incentives don’t necessarily align with their verbiage. One advocate who I talked to online said decentralized, our infrastructure is "a new paradigm that favors transitory purpose-built organizations that accomplish a thing and disappear once the thing is done. It punishes, centralization, culturally and financially." Most importantly, he continued, "by building monetization into the protocols, they don’t need to be subsidized by coalitions of AGFAM sized organizations."
The Argument Against Decentralization
Now, I want to be fair, there’s some really cool stuff here and some things that I think will succeed. At the same time, I have two problems with this argument. One is we already have a decentralized web. It’s called the web. Anyone can set up a web server, anyone can launch a company or a product or an app or a movement on the web easily.
The centralization that has emerged in recent years is a bug. The fact that we have the AGFAM is definitely, a bug of the system. But it’s also a feature. Users don’t want to have to randomly type in web addresses in hopes that the one they land on serves their needs. And so intermediaries and gatekeepers have emerged to help users find what they want.
VCs and Motivated Reasoning
The other place where this doesn’t quite ring true to me is that a number of venture capital firms have invested in web3 startups to the tune of around $30 billion in 2021. Now call me crazy but VCs make money when their portfolio companies get sold whether to larger firms but later funding rounds or public markets. Those exits that they are banking on assume that these companies will generate revenues and profits or will lead to some other entity to generate revenues and profits.
A decentralized web doesn’t actually, help them reach their goals. I don’t think the venture capital community is betting on a decentralized web so much as it’s betting on a re-centralized web with their portfolio companies at the center.
Web 1.0 and the Metaverse
I go back to the person I was talking to, talking about the culture and financial models, "don’t really favor people doing this in web3." But let’s be fair, that same theme was true in "Web 1.0." The web was very non-commercial. One of the defining quotes of the era was Stewart Brand’s famous quote that "Information wants to be free."
Now, if we’re being honest, that’s an incomplete version of the quote. What Brand actually said is, "Information wants to be free. Information will also want to be expensive. That tension will not go away." And the same is true in web3.
I am in no way trying to malign venture capitalists. I’m saying they’re doing their jobs by investing in technologies that potentially allow them to return large sums of money to their investors. That’s their whole reason for being and I don’t think they’re investing in web3, again, to have this decentralized web where nobody owns the customer. It doesn’t fit logically.
I Am Bullish on the Technology. Really
Now, I want to be really clear. None of this is to say these aren’t cool technologies that don’t have plenty of awesome use cases. I’m actually, super-bullish on the ideas of extended reality, on the ideas of augmented reality and virtual reality and digital ownership.
Potential Benefits for Privacy and Customer Control
Especially when we start talking about how customers might be able to have better control of their personally identifiable information, when it might enable greater privacy because we have the ability to control who might get access to our token. That’s a really cool concept and something that I think has enormous implications as we go forward. So I hope none of this sounds like "old man yells at cloud" and says, ‘None of this is ever going to happen.’" I don’t mean it in that way at all. I mean, I don’t think it’s going to happen in the way it’s being proposed at the moment.
Will the AGFAM Own the Metaverse?
And I’m going to explain one of the reasons why I think it’s going to be a little bit different. One of the reasons is I don’t think it’s terribly likely that the various AGFAM companies will all succeed at bringing the Metaverse to us. Not because they won’t try to but because it’s very rare for one company to make it through technology shifts from one generation to another. It doesn’t happen very often. Now, you look at Microsoft, they did great in desktop computing. They did terribly in the internet for a long time. They had Internet Explorer but they really did very bad at the mobile web. And they only got back in the game when the cloud became a thing. Apple lost on desktop technology and they really won on mobile. Google so far has only really lived through search and mobile. Facebook has only really lived through mobile and social. So we’re going to have to see how these folks do.
Now, I’m not saying that they won’t succeed. Some of the things that Google is doing in terms of mixed use search, where I can take a picture of something and then ask questions about the picture is nothing short of astonishing. It is truly the Metaverse brought to life, because we’re interacting with the physical world and the digital world at the same time. That is nothing short of extraordinary. And I think it provides a clearer example of what the Metaverse might look like than almost anything else I’ve seen to date.
What Can You Do to Be Ready?
The questions that you need to ask are A.) What do I need to do to be ready? And B.) Wow do I ensure that whomever the gatekeepers are whether it’s the AGFAM or some group that we haven’t even seen yet, the proverbial two kids in a garage, how do I ensure that I’m connecting with my customers most effectively?
Be a brand people search for by name. And this is where I want to loop back around because the thing that we need to focus on is connecting with our customers. If you look at the brands who have successfully navigated previous technological shifts, they’ve done so by being brands people want to be associated with. The easiest way to game Google these days—we know that gatekeeper is going to gate and we know that they’re making it harder to get to the top of the search results—the easiest way to make sure that you show up at the top is to have people search for you by name. You’re guaranteed to be the place people find you. And if they don’t find you on Google because somebody’s out bidding-you or Google changes their algorithm or things along those lines, they’ll still be able to find you on social whether it’s Facebook or Instagram or TikTok or LinkedIn or wherever it happens to be. They’ll still be able to find you by going directly to your website. They’ll still be able to find you by purchasing your NFTs if in fact that’s something you opt to pursue.
Focus on customers. But the success comes from understanding, what is it that your customers need and how do you become the brand that they seek out by name consistently? Because then it doesn’t matter as much what happens with the technology. It doesn’t matter as much as to what is the successor to the mobile internet. What matters is your customers say, "I know where to go to get an answer to my question. I know where to go when I need help. I know where to go when I’m looking for product or service X," that your company has provided them for years. As I’ve mentioned many times before on this show, digital transformation is fundamentally driven by customers and by them getting what they need. So it doesn’t matter whether we’re talking Web 1.0, Web 2.0, web3, whether we’re talking the Metaverse or the meat space. We know that customers are looking for you when you actually, solve their problems.
Conclusion: A Quick Look at the Metaverse, web3, and the Future of Digital
And that’s why I’m plenty bullish on the Metaverse. And I’m plenty bullish on web3. But I’m far more bullish on brands and on doing the right thing to ensure your customers look for you by name.
Now, looking at the clock on the wall, we are out of time for this week. As I always do. I want to remind you that you can find the show notes for today’s episode as well as an archive of all past episodes by going to timpeter.com/podcast. Again, that’s timpeter.com/podcast. Just look for episode 349.
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Finally, and I know I say this all the time but I very much appreciate you taking time out of your very valuable day, out of your very valuable week, out of your exceedingly valuable life to spend some time with me each week and to listen to the show. It means so much to me and more than I can possibly say. So with that said, I hope you have a great rest of the week. I hope you have a wonderful weekend and I look forward to catching up with you here on Thinks Out Loud next time until then please be well, be safe and as always take care, everybody.