#29 – The Metaverse Part 1 – What is it? When will we have it?

In this episode, we talk about the Metaverse - or is the metaverses? - specify what it is/will be, debunk myths around it and detail its/their key enablers. Everything you wanted to know and also … that you didn’t know you needed to know. This will be followed by episode 30, focusing on understanding what the key players are doing in this realm, as well as implications to entrepreneurs, investors and others. Navigation: Intro (01:34) Section 1: The Typical Silicon Valley hype machine?/ Definition of Metaverse (01:57) Section 2: Key enablers to the Metaverse (17:44) Conclusion (41:21) Our co-hosts: Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder at App Annie, business angel, advisor to startups and VC funds, @bschmitt Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro Our show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news Subscribe To Our Podcast Intro (01:34) Nuno Welcome to episode 29. In this episode, we will go into the metaverse, not literally, but we will discuss the metaverse, its definitions, how people see it evolving, its core enablers, and some of the lessons learned that we believe entrepreneurs and venture capital firms should have. Bertrand, metaverse, what is the metaverse? Bertrand Big question. I guess that's a billion dollar question. There's been so many definition of what the metaverse is or is not. I like one definition from Matthew Ball—a well respected analyst—and I believe he has his own VC firm. By his definition, "Metaverse is a massively scaled and interoperable network of real time rendered 3D virtual worlds, which can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data such as identity, history, entitlements, objects, communications, and payments." Bertrand That's the full definition. I like it, because you are not missing any piece of the puzzle, at the same time, by its very complexity, I feel it's showing us that it's not an easy definition. It might even be seen as a very contrive definition. If you think about the internet, how different is it really? The 3D part for sure. Beyond that, it's not very clear, actually, except that it's maybe more unified than the internet that we know. You could argue if you are just inside Facebook, how different it is about just being inside Facebook and just never leaving Facebook. Of course it to be horrible, at least from my perspective, using Facebook less and less. That's one vision. Some will say, we'll talk about what it is, but also what it is not. I will quote again Mathew Ball. For him it's not just a virtual world. It's not just a virtual space. It's not just VR. It's not just a digital virtual economy. It's not just a game. It's not just a virtual theme park. It's not a new app store. It's not a New UGC platform. For sure, it's a big buzzword in Silicon Valley these days, especially thanks to meta rebranding itself. Just from that perspective, it was huge on Google trends. Since the renaming of Meta everyone has been Googling what the metaverse is, I guess. What you think, Nuno? Nuno A lot of respect for Matthew Ball as an analyst, and his definition, as sound as all the other definitions that are out there. I have a couple of objections to his definition. It starts with interoperable. It starts with, "The metaverse as a massively scaled and interoperable network of real-time render 3D virtual worlds." Interoperability is not a given in the metaverse. Nobody has told us that the metaverse will be an interoperable bunch of worlds working together. Actually, if I had to make a bet, using my computer engineer hat and architect, we will not end up in anything that is interoperable. We'll end up in silos of worlds that are interoperable between them, but they're owned by specific entities. So in my simplistic world of the old internet, if we're delayering the internet, when we're thinking through the network layers, the transport layer, where TCP/IP was lying, I think the analogous of what we're having going forward might, in some ways, be fulfilled by what now people are calling—in my opinion very poorly—web 3.0, which I would call internet three, sort of the blockchain stack and what's being implemented. Again, I'm not saying it's all going to be blockchain, but there's some elements of that that might be blockchain. Here the analogy is, this is the upper layers, this is the application and presentation layers, that's where the metaverse will reside. If we're thinking through this, who owns the applications? Well, the different players own the different applications, and they own their different worlds. They create their worlds around those applications. What I'm seeing is, everyone's talking about the metaverse, and I'm like, "No, it's not the metaverse. It's going to be the metaverses." That's the first issue that I have, because I don't assume interoperability, therefore you have siloed owners, and therefore it's likely that we will have competing owners. And we're already seeing that. We're going to talk about players and what they're doing, and Facebook is doing what Google's doing, and all the other players are doing, to create their own worlds, to create their own entities. For me, it is clearly virtual. It is clearly a realm that goes beyond the physical world. It's not clear to me that it's only virtual. Our favorite movie, Ready Player One, edifice a bit of that. It's not clear that it's fully virtual. There might be some consequences in the real world as well. Input and output manifests itself in the real world, but it's certainly a world that is constructed beyond the world that we're in. I think the experiences that are being created are experiences that are either synchronous or asynchronous. I don't think they all need to be synchronous experiences, so that's the other part I have an objection from his definition. They don't all need to be persistent. If anything has been taught to us, people don't want persistency in everything. The advent of messaging tools and communication tools like Snapchat has shown us that people actually sometimes just want to send something that disappears, and they want to do stuff that is not persistence. Actually, if anyone's building virtual worlds or metaverses right now that are listening to us, please do allow us to have the ability to make stuff disappear and never be found again, which we're missing in the internet today for the most. Definitely, I think the experiences don't all need to be persistent either, but there is an element, and that for me is what is a metaverse. It's sort of a different type of universe in itself, where those manifestations are bound by different rules, by a different ecosystem, by different interactions, and that what makes it powerful. I agree with Matthew and him saying this is not a new app, not a new as a generated play. It's not just a very basic virtual 3D world. It's much more complex than that. I agree with all of that stuff, but I do think it will have different manifestations. In the world where it has different manifestations, the likely prayers that we'll be able to build it are players that already have virtual experiences that are very powerful. Gaming companies come to mind. Gaming companies would be an obvious creator of metaverses. We'll talk about, later on, a bunch of companies, but obviously companies like Epic Games, and what they're doing seem to be well positioned in the creation of these metaverse or metaverses. We're looking at companies that are very pervasive today in the tech stack, like Facebooks, etc, of the world. I have great respect for Matthew. I think the definition's a decent one. I think he's taking a couple of things for granted and making the definition very complex, but I'm not sure it's a given. I'm not sure any of these elements are given. Interoperability—I come from a world I spend a lot of years in Telecom— interoperability is never given in systems, never, never when there are different players that have different incentives, it's never given that there will be interoperability, so I wouldn't give that as a part of the definition of what it is. Bertrand I respect Matthew Ball a lot. That's why I pick his definition, because it's probably as good as it can get. I think the big issue is that metaverse means different things to different people. How do you define this? And the fact that when you hear in the news at push of a metaverse, everyone means something different. I don't see how a single player being as big as Facebook, who owns that piece of puzzle. If one player is not owning it, good luck with interoperability. Of course, if you think interpretability from an internet perspective, like different players have some level of interoperability, yes, you can have common standouts, that's possible. But to go that far, massively scaled interoperable network of speedy worlds, it's not an easy one at all. And the other piece is, how is it beneficial? That's the part where I'm constantly struggling. Typically you start something, you need to solve a pain point. Here I'm not clear about the pain point we are really solving. And that's probably a bigger piece of the puzzle for me. That connection to 3D it's great, but what does it really enables that you cannot enable otherwise? Don't get me wrong, I like a lot of 3D games, first person shooters, so there's a logic for using 3D in a lot of situation, but for that one, I'm not that clear. Maybe to go back, you touched briefly about the book, Ready Player One, which was made into a movie. It was really an eye opener. It was at the time a preocular,...