EPISODE 92 OF THE MARKETING SOLUTIONS PODCAST: WHAT THE METAVERSE MEANS FOR SMALL BUSINESS

Sonya:
Imagine a virtual reality world where users can interact, game and experience things as they would in the real world. Now imagine that there is an almost infinite number of these virtual worlds, and you can jump in and out of them as you please. These virtual reality worlds aren't a thing of science fiction novels, and the concept isn't decades away. It's called the metaverse. And if you haven't heard of it yet, you soon will. Web 1.0 connected information and you've got the internet. Web 2.0 connected social media. Web 3.0, or the metaverse, connects people, places and things. But what exactly is the metaverse? And is it worthwhile exploring as a business now? Let's dive in.

Sonya:
Welcome to the Boom Your Biz Podcast, a podcast for the movers, the shakers, and even bigger action takers in business. I'm your host, Sonya McIntyre Reid, and each week I'll be exploring the question of what really makes businesses and organizations thrive. I'm on a mission to educate and power and inspire business owners and myself along the way.

Sonya:
The metaverse, cryptocurrency and NFTs. We're all hearing about these things, but do we actually understand them? Should businesses be thinking about getting involved? I mean, Facebook has already named its parent company to Meta, which can only be seen as good old Zuck planting his flag in the ground and declaring the metaverse is the direction we should be going in. So on the one hand you have CEOs like Mark Zuckerberg describing the metaverse as the future of the internet. On the other, we've seen platforms like Periscope launch to a similar level of hype, only to fizzle out in a few short months. I read a Wired article recently where they said talking about what the metaverse means is a bit like having a discussion about what the internet means in the 1970s.

Sonya:
I read a Wired article recently where they said talking about what the metaverse means is a bit like having a discussion about what the internet means in the 1970s. The building blocks of a new form of communication were in the process of being built, but no one could really know what the reality would look like. So while it was true at the time that the internet was coming, nobody could have ever imagined the internet to be integrated into our lives at every level as it is today. Now, while most business owners and brand managers who listen to this podcast won't need to rush out and immerse themselves in the metaverse, there is a real potential for the way we use and interact with the internet to change in ways we have not thought of yet. It's important to be informed. And while it's a lot to get your head around, I'm going to try my best to make it nice and easy for you.

Sonya:
So let's start with the most frequently asked question, what exactly is the metaverse? Simply put, the metaverse is a virtual reality world where users can interact, game and experience things just as they would in the real world. Using current AR and VR technologies, that's augmented reality and virtual reality, users can immerse themselves into this world and interact with objects and people in the visual world projected in front of them. It actually took me a while to get my head around the concept, but essentially there is no one metaverse that you can currently log into. And while many people assume that it's a gaming thing, I have to tell you the potential for the metaverse to integrate into our everyday lives is huge. It wasn't that long ago that we couldn't imagine the type of technology we have in our phones, and now we can't imagine life without them.

Sonya:
There are six main features that define a metaverse. Number one, a metaverse is endless. There are no barriers between the real and the digital. Number two, a metaverse is always on. Just like life, events go on even if you're not physically present. Number three, a metaverse is an immersive experience. It's the virtual reality of your dreams come to life. You can even level up the experience with extended reality tech. Number four, a metaverse is decentralized. All users retain their own agency and can't be forced to do anything. Number five, a metaverse works on digital currency. More on this in a second end. And finally, number six, a metaverse is a social experience. Think your standard online community on a whole new level, with no entry requirements or gatekeepers.

Sonya:
Currently entertainment, namely gaming, is at the forefront of the metaverse race, as most games have the infrastructure to create worlds, host community and develop marketplaces. The only difference with gaming in the metaverse is, where you once purchase coins or skins with your credit card, you now use cryptocurrency to make purchases.

Sonya:
So that brings us to cryptocurrency. We all know about it, but what is it? One of the best definitions I found on good old Google, and it says, "A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double spend. Many cryptocurrencies are decentralized networks based on blockchain technology, a distributed ledger enforced by a disparate network of computers." Try saying that 10 times fast. A defining feature of cryptocurrencies is they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation. Cryptocurrencies are fast, easy, and allow for secure online transactions without the need for a third party intermediary. And they have the potential to disrupt the way we pay for goods and services in a big way. Let's not go down that rabbit hole this episode though, or we will be here all day.

Sonya:
We are seeing many emerging metaverses creating their own cryptocurrencies for exclusive use within that metaverse only. They do this so users have incentives to stay for longer and spend more. The basic tenants of psychology and economics supply here. Competition, scarcity, supply, and demand. It's essential that each metaverse provides an economy that can support the activities of the user. There are a number of metaverses currently competing for the most popular crown, and I think it's going to be really interesting to see over the next five years who, if any of them, come out on top. The most common ones are Roblox. This was founded in 2004, and the platform now has 47 million daily active users globally, and 9.5 million developers who build out experiences, AKA user created worlds and games. Popular with both school aged children and adults, think of Roblox as the Candy Crush equivalent of the metaverse.

Sonya:
Actually listened to a really interesting podcast series recently that interviewed one of the founders of Roblox. And they were sort of saying that their version of the metaverse is kind of like 1.0. They're only touching the surface of where they feel the metaverse is going to go.

Sonya:
Number two, Axie Infinity, AXS. Similar to Pokemon in terms of game mode, Axie Infinity is built on the Ethereum blockchain. It is an NFT online game in which players battle, trade its governance token called AXS in a play to earn model. Users can redeem their rewards and exchange their earned assets outside of the platform in real time. So this is where we're kind of seeing the ability for people to earn money through the metaverse in the form of these cryptocurrencies that they can then transfer back into our general currencies we use day to day. As of August 2021, there were roughly 1 million players on the platform daily. In terms of revenue, the games earnings rose to a staggering 364 million, second only to Ethereum on the highest protocol revenue chart. While AXS remains its native coin, players who spend time on the platform are also rewarded with small love potion. Yep, SLP. Both are available for trading on major crypto exchange websites.

Sonya:
The third most popular is Decentraland. Also built on the Ethereum blockchain, Decentraland allows users to buy and sell real estate in the virtual world. Its users govern it through DAO, Decentralized Autonomous Organization. While gaming on Decentraland, there are an array of activities you can carry out. And it's kind of in my mind where I think the metaverse is heading. So some of these activities include showcasing your art in an NFT gallery, investing in virtual real estate, or buying and wearing NFT wearables. So there have been some brands that have actually launched collections in Decentraland, I think Gucci was one of them, where basically you've got like your character in the metaverse and you can purchase these wearables to style up your character. We've also seen some pretty impressive other brands dabble as well.

Sonya:
So as we already know, early adopters of new platforms often set the tone of how a platform is used, becoming influential experts in the space that others look to. This is the case not only within individual influencers, but brands too. But before we dive into the examples of brands doing weird and wonderful things, we should probably understand what an NFT actually is.

Sonya:
So an NFT stands for non-fungible token, which is basically a digital asset that is unique and can't be replaced with something else. NFTs are one of a kind. We're seeing NFTs of literally everything, from an autographed tweet from the founder of Twitter, to digital artworks like a clip art of rocks. I kid you not. NFTs are designed to give the owner, the buyer, sorry, ownership of a digital work. And just like only one person can purchase an original van Gogh painting, only one purchaser can be the owner of an original NFT. Keep an eye on our social media in the coming days. Our team have pulled together some of their favorite weird NFTs, and we'd love to know which ones you think are worth, well, anything really. Nams, my business partner, actually has quite a few NFTs he owns. Can't say I get the appeal just yet, but he may be the one having the last laugh in a few years time. We'll see.

Sonya:
So how are big brands using NFTs and interacting with the metaverse? Nike has just announced the acquisition of RTFKT Studios, which it calls a leading brand that leverages cutting edge innovation to deliver next generation collectibles that merge culture and gaming. So why acquire a studio rather than building their own? I think that because the digital marketplace is growing so rapidly, it makes more sense to acquire an already established business with a track record. In Feb, a collaboration with a teenage artist. Now bear with me, this is not the right pronunciation. FEWOCiOUS. Yep, there's a W in there. To sell real sneakers paired with virtual ones, managed to sell some 600 pairs/NFTs in just six minutes. So my understanding is that you get, or you got a real sneaker that had the print of your NFT on it. And you also got like the NFT, the virtual version as well. So your character could wear these sneakers in the metaverse. So this netted over 3.1 million at the time.

Sonya:
We've also seen some pretty incredible brand collaborations happening in the metaverse too. In July last year, Coca-Cola teamed up with 3D creators at Tafi to host an auction for special edition virtual loot boxes of NFTs, which took in over a million dollars. The sets included digital apparel that can be worn in Decentraland, which I mentioned just before. While Decentraland is hosted on the Ethereum blockchain, the winning bidder would also receive a real life Coca-Cola branded refrigerator, bringing the metaverse into physical reality. During the event, participants also bid on the Coca-Cola friendship box, a virtual take on Coke's classic vending machine. When they opened their prize, participants found various NFT goodies, like a futuristic Coca-Cola bubble jacket wearable and sound visualizer. Coca-Cola and Tafi created a strong sense of community within those already using cryptocurrency in the metaverse. This brought in new, young audiences to its social media channels. It's kind of like the Pokemon cards for the new generation.

Sonya:
So that's how the big businesses are doing it, but what are the opportunities for other businesses? We're seeing the entertainment industry embrace the metaverse in a big way, with gaming platform Fortnight holding virtual concerts by Ariana Grande and Marshmello, and Samsung even hosting David Guetta. When it comes to small to medium business marketing, there's real potential for the metaverse to help us do some really cool things. If you're marketing a product, you'll be able to create a virtual reality experience where users feel completely immersed in how the product looks, feels, and works, all without having to ever leave home. When I look at our client roster, I can see a real potential for car dealerships, retail stores, and even beauty brands. The technology may be a little while off, but when it's fully developed, I think it'll be something worth investing in.

Sonya:
So are we saying you should go all out, buy crypto, NFTs, and start getting into metaverses right at this moment? No. I mean, not unless you want to. But it's not something that I feel is going to make or break your business in the next two to three years. I would encourage you, however, to think back to how older generations reacted to the internet in its infancy, how they resisted learning about it, complained about it, but ultimately were eventually forced to participate and now can't live without it. I think we can all agree that at least learning a little bit more about the metaverse and doing so with an open mind may save considerable frustration and confusion later down the track. There's a lot of infrastructure to be created, plus privacy and security issues to be addressed. But it's exciting to imagine the possibilities. So watch this space. The metaverse for small businesses may be closer than you think.

Sonya:
(Music).