Series entrepreneur with 2 endings, author, faculty, investor. Phygtl, founder and CEO.
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Web 2.0 and its main pillars such as social media and online advertising have reached their limits in terms of engagement and attracting new users. The numbers are falling. The question is, what replaces social media or at least greatly improves it? Is it the metaverse?
When the word metaverse is mentioned today, most people associate it with blockchain games, some of which use VR: a pixelated environment or cartoonish background where users have to log in to be rewarded based on the time they spend there. This is approaching the Web3 behavior change with a Web 2.0 mindset. It’s like thinking of the internet as a dial-up connection: yes, that’s where we started 20 years ago, but look where we are now.
The same goes for the metaverse: it started on a gaming platform, so gaming will be the first industry to be completely restructured by the metaverse. But eventually the metaverse will be applied on a much larger scale, across all industries. And a major driver of getting there is seamless integration into our lives, made possible by the convergence of the physical world with the digital, Web3 realm: the phygital metaverse.
Contents
What is the phygital metaverse and why does it matter?
I define the phygital metaverse as stage three – the most mature stage of the metaverse. We no longer have to type “www” or wear a bulky headset: where we stand is where the metaverse will be. We just need a way to access it.
Basically, the phygital metaverse combines products, people, and purpose with an immersive, blockchain-based digital world. This enables people and businesses to derive value from a new, expanded dimension anytime, anywhere.
It is based on three primary pillars:
1. Augmentation and immersiveness
The core idea of the metaverse is to experience data we own in an expanded dimension. It is not limited to a virtual world, but rather expands the physical world. Immersive experiences touch all our senses to hold our attention. It’s easy to swipe through your social media feed, but users can’t swipe through immersive experiences.
The phygital metaverse will be something like painting over the analog physical world with an enhanced data layer. It’s all about connecting physical reality with the benefits of the Web3 metaverse. Soon we will associate the metaverse with physical activities such as shopping, socializing, exercising, learning, listening to music, traveling, attending a conference, or even sleeping.
2. Co-creation and community
Since the rise of social media, we’ve been introduced to new terms like ‘influencers’ and ‘followers’. Social media is basically a popularity pyramid where those at the top (“influencers”) are reinforced by those at the bottom (“followers”). This is an inefficient system because followers get nothing tangible in return.
But in the metaverse, everything is community-oriented. It will be a place for everyone to spend time, create content (in all formats) and get compensated for hits. For example, Metaverse platforms today offer software development kits, no-coding tools, and other ways for users to easily create products and content for the entire community to use. And in return, all creators can be compensated, either by the community itself or through NFT sales.
This sustainable model keeps the community thriving based on individual contributions and financial motivation – I call it collaborative value creation.
3. Tokenized reward mechanism
Building on the premise of augmentation and co-creation, the next step is a complete behavioral change on the part of the consumer.
The idea of a universal reward mechanism is based on the assumption that human attention is valuable: if you give someone your attention, you should be compensated for it. For example, you watch a YouTube video today by paying attention (and maybe money). The result is entertainment that is elusive.
But what if you get rewarded for watching that same video? This creates an economy in which consumers are compensated for their contribution. When consumers are compensated for their contribution, they begin to value their time.
Phygital extends this further by adding the reward layer to practically everything consumers do:
• Contribute to an online community.
• Building something on a Web3 platform.
• Share feedback.
• Interaction with the brand.
• Give attention.
How can companies leverage this behavior?
I believe one of the easiest ways for companies to take advantage of the phygital phase of the metaverse is to create a gamified reward mechanism. Here are some suggestions for achieving this:
• Stimulate your followers: The key to having an active follower base is stimulating them with incentives. Organize AMAs, giveaways, contests, etc. to keep them engaged and excited.
• Create a community: While we don’t have a functioning metaverse at this time, we do have the resources to create a community. Even if you’re not a Web3 company, you can take lessons from the way Web3 protocols run their communities, as having a community reduces your reliance on a third-party platform and arbitrary algorithms. Also, community members become much more involved in the success of the organization than followers.
• Create a distributed content production system: Your community can create more content about your brand than you can on your own. Find a way to encourage people to create content about your brand, product and/or platform. This exponentially increases your digital footprint and extends the reach of your brand. Let their creativity run wild.
Final thoughts
Metaverse is a huge invention with far-reaching benefits, just like the Internet. And the phygital market is becoming the most used experience in the metaverse. That’s why I like to say you don’t play in the metaverse – you live in the metaverse.
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