By Barbara Weltman –
(This article was originally published on the Small Business Insider blog, April 2023.)
The media is ablaze with references to the metaverse, but an exact meaning is difficult to pin down. The term refers to various new technologies and how we relate to it. Essentially, it’s cyberspace and it encompasses such things as virtual reality platforms, digital currency, and virtual identities (e.g., avatars).
The term “meta” has come to mean self-aware and self-reflective. Last Fall, Facebook rebranded itself as Meta with a new corporate logo of the infinity symbol in the familiar blue. Because the metaverse is still nebulous and evolving, exactly how entrepreneurs and small business owners will use it to their advantage will continue to emerge. Some options are available now, with others yet to come.
Certainly, small business owners should pay attention.
Understand Metaverse Terminology
Just like the Internet required everyone to understand new concepts, such as email, blogs, and apps, the metaverse has its own language describing new technologies.
Virtual reality (VR): A simulated (fictional) environment made possible with the use of VR headsets.
Augmented reality (AR): A real environment enhanced by digital elements also made possible with the use of smartphones. For example, using a smartphone’s camera, you can overlay data to create a hologram.
Mixed reality (MR): An interactive view of combined real-world and computer-generated elements.
Cryptocurrency: A decentralized digital method of payment.
VR, AR, and MR Industries
According to Tulane University, the AR and VR market impacts how we work, play, and learn, and is expected to be $209.2 billion this year. “VR and AR are transforming industries through software and hardware development, graphic design, research, and more.” Obviously, it opens opportunities for small businesses engaged in software engineering and development, software maintenance, and graphic design.
The gaming industry is already well entrenched in AR and VR. AR apps offer such games as Pokemon GO, while VR headsets that work with certain play stations or independently offer numerous gaming options. The medical field also already uses AR, VR, and MR for medical education and training, surgical simulation, neurological rehabilitation, psychotherapy, and telemedicine.
Augmented eyeglasses (smartglasses) can enable unlimited AR enhanced activities. There are a number of smartglasses already being sold and Meta plans its smartglasses to be released in 2024. For example, wearing them can display recipe directions while the wearer is preparing a meal.
How does small business fit in?
You decide. Some small businesses will be developers creating experiences for the metaverse and some will be merchants who sell devices for the metaverse. As the metaverse becomes mainstream, you’ll be better able to interact with your customers. Expect the metaverse to enhance how you interact with data, through new finance and accounting processes.
You know about Bitcoin and other digital currency; perhaps you own some and are already using it as a payment method for customers and workers. It’s estimated that about 30% of small businesses accept cryptocurrency for payment and it could be more than 50% by the end of this year, according to a Sage study. It offers lower transaction costs for merchants (although there are still fees if you go through PayPal and some customers may prefer this option. Whether the use of cryptocurrency will become universal in small businesses remains to be seen because there are a number of concerns at present with this payment method:
What you’re being paid can vary from minute to minute. Undoubtedly, you’re aware of the extreme volatility of various cryptocurrencies. You may think you’re charging $100, but the value of the crypto may be $90 when you redeem it; of course, it could be worth more. Using a merchant service such as BitPay or Coinbase allows for an immediate exchange into cash value.
Tax computations are challenging. The IRS views payment in crypto as payment in property, so you need to determine the fair market value at the time of payment. And information reporting cryptocurrency transactions in 2023 will be reported to the IRS by brokers in 2024 (details are not yet clear).
Exposure to hacking. Unfortunately, breaches to crypto accounts are not rare and your holdings do not have FDIC insurance or any other protections.
We’re at the dawn of the metaverse, but it can’t be ignored. It’s certain the metaverse will transform work, shopping, learning, and socializing. Continue to monitor developments and to think about innovative ways in which you can use the metaverse—now or in the future—to advantage in your business.
Barbara Weltman is a member of SBE Council’s advisory board, and has been a leading consultant for small businesses of every kind for over twenty years. She’s the founder of Big Ideas for Small Business® and has written numerous books on small business operations, including J.K. Lasser’s Small Business Taxes, Complete Idiot’s Guide to Starting a Home-Based Business, and The Rational Guide to Building Small Business Credit. Follow Barbara on Twitter @BigIdeas4SB.