The Metaverse and how it is Affecting Businesses
When Facebook rebranded to Meta a few months ago (October 2021), Mark Zuckerberg made his goals very clear – “to bring the metaverse to life and help people connect, find communities, and grow businesses.” Let’s look at the metaverse and how it is affecting businesses.
Fast track to February 2022, and Meta is now one of the most commonly used words in the social networking world.
However, as an entrepreneur, you’re probably more concerned about Meta’s impact on small and medium-sized businesses. Is it good for businesses? Can the metaverse help you grow your small business? And more importantly, what are the opportunities and challenges? Let’s begin with a definition.
What is Meta?
Meta is the new name for Mark Zuckerberg’s business empire, formerly only known as Facebook. This was originally comprised of the three social media giants Facebook, Instagram, and WhatsApp. The name change signifies Zuckerberg’s focus shift from social media-first to metaverse-first.
A “metaverse” is a network of 3D virtual technologies focused on social connection. It loosely translates to a universal virtual world facilitated by virtual reality (VR) and augmented reality (AR) technologies. Zuckerberg plans to invest an initial $5 billion to build a global metaverse platform. “Meta” would be one “area” of the larger metaverse. Microsoft and other entities are also creating spaces in the metaverse.
How Meta Impacts Businesses
The following are four main ways Zuckerberg’s formal entry into the metaverse will impact small businesses;
1. From entertainment-first to goods and brands
This was originally a place where players enjoyed themselves and whiled away time. However, the metaverse is about to become one of the biggest platforms to sell consumer goods and build global business brands.
Unsurprisingly, the market for in-game goods is already very high. Metaverse users regularly purchase weapons, hairstyles, outfits, and accessories. For example, Balenciaga, Ralph Lauren, and Gucci have thriving partnerships with selected metaverse operators. Zuckerberg’s entry will bring even more brands into the game.
2. New opportunities and the demand for new skills
A mass-market consumer platform backed by Zuckerberg’s empire (worth $593 billion) is an opportunity many consumer brands will keenly follow. Likewise, expect many brands whose products cross over between physical and virtual worlds to develop new ways to sell.
Similarly, the metaverse requires unique skills to bring some ideas to life. For instance, current graphic design skills need VR and animation skills to deliver solutions suited to the metaverse. Cybersecurity professionals must also supplement their skills to become effective in the metaverse. All of these are new opportunities for small businesses.
3. An increased need to adopt crypto
If you feel like you’re just “catching up” with the crypto revolution, you may need to work even harder as metaverse goes mainstream. Why? Because metaverse transactions will almost certainly be in cryptocurrencies such as Ethereum, Solana, and Bitcoin.
The main reasons are decentralization and security. A decentralized environment means users don’t need to know or trust anyone. This is critical for a metaverse with billions of users. Similarly, decentralization reduces points of weakness while optimizing resource distribution.
4. IP rights challenge a major worry
Unfortunately, the metaverse also presents businesses with a major IP rights challenge. Specifically, how do you protect yourself from forgery and copying in a metaverse with hundreds of millions of users? Especially, when you consider they are from cross-judicial virtual worlds. Worse still, the metaverse makes it easy to copy/forge products, and detection is very difficult.
Experts claim the non-fungible token infrastructure offers solutions. But, does it really? For one, NFTs are only effective to the extent that consumers are willing to purchase genuine brands. How many people actually bother with authenticity today? It’s an extremely complex situation. Thus, businesses must navigate this carefully to stay safe and to keep their consumer’s data safe.
The potential of the metaverse and how it is affecting businesses is vast and yet also somewhat unknown. It is complex, fast-moving, and yet to be truly identifiable. As a business leader, you must be prepared to put in the work to learn, commit resources, and weather the initial storms to be successful.