To plan how and when to jump into the metaverse, consider your use of existing web technologies
You’ve heard enough about the metaverse to know what it is and how important it could become, but how and when do you plan your business’s first move?1
When we consider the metaverse not as an unprecedented revolution but instead as an evolution of the web, we can hypothesize that companies’ present web strategies—their use of both Web 1.0 sites and Web 2.0 platforms—can be used as predictors of their future metaverse use. These use archetypes fall into three primary categories.
Even though Web 2.0 is nearly 20 years old, most companies’ core offerings still exist outside the internet. Consider that e-commerce sales in 2021 accounted for only about 13% of total sales in the United States.2 However, it’s still the rule, not the exception, that companies maintain an online presence, even if it’s one with limited functionality and flexibility. From plumbers to professional services firms, most businesses are expected to have basic web pages with information about their offerings.
Similarly, some companies will probably use the metaverse as a simple brochure for their products and services. For example, they might purchase ads in a virtual reality storefront or an augmented-reality–enabled billboard. Although they’ll have a metaverse presence for the sake of promotion, their core business models probably won’t change materially. If you’ve used Web 1.0 sites and Web 2.0 platforms for business promotion only, that’s probably how you’ll use the metaverse.
For these organizations, there’s less urgency to take immediate action. Companies in this group have the luxury of avoiding risk and uncertainty by waiting to see how the metaverse unfolds. They might delay investing until one or more metaverse platforms begin to command significant market share.
For others, the metaverse could provide an opportunity to “plus” today’s offerings in richer, more engaging, and more brand-enhancing ways. Consider the decrease in in-person retail sales during the COVID-19 pandemic.3 A few consumer brands began experimenting with metaverse storefronts,4allowing consumers to recreate aspects of the in-person experience, yet they still depend on traditional e-commerce platforms to drive sales.
A portfolio of traditional web and emergent metaverse properties can work together to help these companies diversify their sales channels. Sales and business operations likely stand to be substantially altered but not completely metaverse-dependent.
Companies that already use social media to engage customers while relying on an e-commerce site as their primary go-to-market strategy are probably plussers and will likely approach the metaverse in a similar manner. They will have more urgency to act than businesses in the first group, but they still have the flexibility to wait and see how the metaverse unfolds.
Consider the enthusiastic dawn of Web 2.0, when some restaurants tried their hand at rich online experiences. As it turned out, restaurant-goers of that time only wanted hours of operation, a digital menu, and a to-go order form. Later, as technology and customer expectations evolved, restaurants successfully leveraged third-party platforms to “plus” their core businesses with to-go orders and meal deliveries. In that vein, as customer expectations become clearer, plussers will continue to cook up new ways to leverage the maturing metaverse to augment and enrich their core offerings.
Pioneers see the metaverse as a newly open frontier to be settled. These are the risk takers, innovators, and builders who are already pouring billions of dollars into key foundational metaverse technologies, platforms, products, services, content, and other enabling components. Their first-mover inclination is in service of their goal: sustainable competitive advantage.
Businesses in this group could face a high degree of risk. According to one study, the yearly failure rate for dot-com companies averaged 14%, peaking at about 20%.5 But the same study showed that dot-com firms’ failure rates were on par historically with those from other emerging industries, suggesting that some risk is necessary to reap the rewards of being a successful first mover.
Bloomberg Intelligence expects the global metaverse revenue opportunity to approach US$800 billion by 2024.6 Competition for a piece of this pie is expected to be fierce,7 so startups and incumbents that are comfortable with the risk should probably already be making investment moves.
In determining your organization’s metaverse strategy, consider how your customers might be interacting online in 20 years. How might this consumer behavior intersect with your future business models and capabilities? By evaluating how your company evolved through the Web 1.0 and Web 2.0 eras, you may yield a pragmatic indicator as to when to consider ramping up your investment strategy.