The details of the metaverse are still very much coming into focus, but the investments being made are real and significant. Entrepreneurs and small businesses need to watch for developing and expanding opportunities. The building blocks and foundation of the metaverse are here with immersive technologies being utilized across industries, creating opportunities for entrepreneurs as well as providing solutions to economic and societal challenges.
What is the metaverse?
For now, one could say that the metaverse is the development of experiential and innovative technologies – such as virtual reality (VR), augmented reality (AR) and mixed reality (XR) – combined with or as part of ever-expanding power and speed in internet, computer and telecommunications technologies, that will create more immersive, interactive and engaging intersections between the digital and physical worlds.
Even this broad definition, however, is debated among those innovating and investing to build the metaverse, with some saying that the metaverse will enhance traditional experiences, others arguing that it will create separate, virtual experiences, and many seeing each of these areas, and others, developing.
Indeed, visions of the metaverse very much differ. McKinsey & Co. offered a definition in their recent study “Value creation in the multiverse,” which is broader, simple and allows for various outcomes and ongoing changes:
“Our working definition positions the metaverse as the next iteration of the internet that seamlessly combines our digital and physical lives.”
As the experiments, developments, investments, innovations and changes proceed, some basics for entrepreneurs and small business owners aren’t really in doubt. For example, the metaverse will:
• allow businesses to raise their profile, to scale and to find new customers;
• expand communications and improve customer service and engagement, including customers having more immersive interactions with one’s brand, products and customer service agents;
• enhance sales of current products and open doors for creating new products, such as through virtual goods, stores, marketplaces and locations;
• reduce costs, expand opportunities and increase flexibility in areas such as marketing, which have been hallmark results from ongoing investments made in social media, computer and communications technologies;
• further expand and improve training, education, collaboration and networking.
How significant might these opportunities turn out to be?
The recent report from McKinsey & Co. estimated the economic value of the metaverse could generate up to $5 trillion by 2030. It is noted that the metaverse “is shaping up to be the biggest new growth opportunity for several industries in the coming decade, given its potential to enable new business models, products, and services, and act as an engagement channel for both business-to-consumer and business-to-business purposes.”
Here are a few more estimates/points from that study:
Regarding a survey of more than 3,400 consumers and executives: “Almost 60 percent of consumers using today’s early version of the metaverse are excited about transitioning everyday activities to it, with connectivity among people the biggest driver, followed by the potential to explore digital worlds. Some 95 percent of business leaders expect the metaverse to have a positive impact on their industry within five to ten years, and 61 percent expect it to moderately change the way their industry operates.”
“Industries most likely to be impacted by the metaverse include consumer and retail, media and telecommunications, and healthcare, and those industries are also among those already undertaking metaverse initiatives.”
“… we estimate it may have a market impact of between $2 trillion and $2.6 trillion on e-commerce by 2030, depending on whether a base or upside case is realized. Similarly, we estimate it to have an impact of $180 billion to $270 billion on the academic virtual learning market, a $144 billion to $206 billion impact on the advertising market, and a $108 billion to $125 billion impact on the gaming market. These effects may manifest in very different ways across the value chain, however.”
U.S. entrepreneurs and small businesses are well known for ability to innovate, seize opportunities, and be flexible. All of that will be needed and on display as the metaverse emerges and develops. And if one questions how important metaverse investments and opportunities are to small businesses, keep in mind that most industries in the United States are overwhelmingly populated with small businesses, from manufacturing to energy to retail.
What to do now?
Two recent points from small business leaders are worth keeping in mind.
First, writing at ITBusinessEdge.com, Jonathan Kalibbala advised:
“Despite the uncertainties, the potential benefits of the metaverse for small businesses are significant. In addition to providing a new way to interact with customers and employees, the metaverse can also be used to create immersive experiences that can promote your brand and drive sales, so time spent understanding the metaverse and developing applications may turn out to be a great investment.”
Second, SBE Council President & CEO Karen Kerrigan recently summed it up quite well:
“I believe the metaverse will offer extraordinary opportunity for entrepreneurs and small businesses. But, again, there is nothing to panic about. The wider adoption of Web3 technology tools and the metaverse as now imagined by many will not happen overnight. There is time for entrepreneurs to think strategically and thoughtfully about how they could design a digital store, presence, and brand that will create unique and innovative customer experiences.”
There’s no better time than now to begin to explore immersive technologies and the potential of the metaverse. Again, as observed by Kerrigan: “The full arrival of the metaverse is making its way into our economy and culture, and preparing for it now will help make a small business more competitive both in the short and long-term. After all, businesses that excel are always looking for ways to attract new customers and offer those customers outstanding experiences.”