Although it\u2019s difficult to\u00a0pinpoint precisely how big an emerging market like the metaverse will be, Citigroup believes it could reach somewhere between\u00a0$8 trillion and $13 trillion by 2030<\/a>. <\/p>\n

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But, as Sir Winston Churchill famously said, \u201cA pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.\u201d <\/p>\n
And that\u2019s precisely what successful entrepreneurs are good at: Seeing the opportunity through the chaos. So, when pitching your metaverse startup to a room full of pragmatic VCs, it\u2019s important to show them exactly what the business opportunity is. However, when dealing with fledgling markets, that\u2019s often easier said than done.\u00a0<\/p>\n
To help startup founders looking for funding better understand how to approach this unique market, I recently sat down with Dmitry Volkov, Ph.D.<\/a>, founder and general partner of Social Discovery Group<\/a>. The global technology company, investment fund and\u00a0venture studio is investing heavily in the metaverse and constantly evaluating who the winners in the race to metaverse greatness might be. <\/p>\n
The company recently committed an initial $20 million to metaverse-related ventures focused on social life 3.0 applications. However, as Volkov explained, the company is also evaluating broader opportunities within the market.<\/p>\n
As startup founders prepare to approach VCs, Volkov offers these important tips and insights. <\/p>\n
Tip #1: Follow the industry\u2019s standards as they develop<\/h2>\n
\u201cOne of the biggest challenges the metaverse faces is a lack of cohesion,\u201d said Volkov. \u201cEven though the space is exploding, in terms of hype and the number of new projects being launched, the market remains extremely fragmented. Unlike Web 2.0, no gateways lead to a broader metaverse. There are some great worlds like Decentraland, Sandbox, Roblox and others to explore and monetize within, but none of them are interconnected in any practical manner.\u201d<\/p>\n
But the good news, he says, is that headway is being made. Organizations like Microsoft,\u00a0Epic Games, Adobe, Nvidia, the Khronos Group and others have joined the new Metaverse Standards Forum<\/a> to address the lack of interoperability that currently plagues the space. <\/p>\n
According to its website,\u00a0the organization is focusing in on interactive 3D assets and photorealistic rendering; human interface and interaction paradigms (including AR, VR and XR); user-created content; avatars; identity management; privacy; financial transactions; IoT and digital twins; and geospatial systems. Not only is this list a nice breadcrumb trail for entrepreneurs to follow, it highlights the industry\u2019s top priorities.\u00a0\u00a0<\/p>\n
\u201cAnyone looking to innovate within the metaverse should consider joining the Metaverse Standards Forum and other industry alliances,\u201d said Volkov. \u201cIt\u2019s always better to know which way the current flows before jumping in. It\u2019s also good to know who all the players are, and where your venture fits in.\u201d<\/p>\n
Tip #2: Focus on a minimum value product<\/h2>\n
\u201cThere\u2019s no doubt that startup founders need to be visionary leaders,\u201d said Volkov. \u201cHowever, they must also be pragmatic. It\u2019s great for founders to share their vision of how their company will become the next Roblox.\u201d<\/p>\n
Volkov also noted that it\u2019s important for startups and investors to remember that there is already a Roblox. And, it took the company nearly 15 years to become a success.\u00a0<\/p>\n
The point is: Before challenging the industry heavyweights, a founder\u2019s primary focus needs to be on identifying an untapped market opportunity and quickly developing a minimum viable product that the market will respond positively to. <\/p>\n
Once revenue is coming in, it\u2019s all about scaling and growing the business. And, this is exactly where startups need to be to attract early-stage VCs. It\u2019s much easier to sell a VC a small reality than a giant dream.<\/p>\n
Tip #3: It\u2019s better to sell picks and shovels than mine for gold<\/h2>\n
If the California Gold Rush has taught entrepreneurs anything, it\u2019s that when you chase gold, the chances of a big payoff are slim to none. Most prospectors headed west in 1848 believed mining gold would be easy money. <\/p>\n
But the reality was that many endured extreme hardships and returned home broke. However, if those same miners had instead sold picks and shovels, they would have made money off of every prospector that came through town.\u00a0<\/p>\n
\u201cIn metaverse<\/a> terms, let\u2019s say you\u2019ve created a technology that can automatically generate personalized NPCs (non-player characters),\u201d said Volkov. \u201cWould the better short-term market opportunity be to create your own metaverse? Or, would it be better to license the technology as a service to metaverse platforms that need an easy way to populate new worlds?\u201d<\/p>\n
Inworld AI went for the latter and it paid off significantly. The company recently announced the closing of a\u00a0$50 million Series A backed by some of the biggest names in VC. They understood that selling picks and shovels was a much better path than mining for gold.<\/p>\n
Tip #4: Keep an eye on government regulation<\/h2>\n
\u201cAll the right signs are saying that the metaverse is indeed the next big frontier for entrepreneurs,\u201d said Volkov. \u201cBut as with all big markets, the metaverse comes with some potential downsides. Experts are warning consumers about privacy issues, mental health concerns, addiction and more.\u201d<\/p>\n
Last year, whistleblower\u00a0Frances Haugen told Congress\u00a0that\u00a0the metaverse would be highly addictive\u00a0and rob people of even more personal information. This has many questioning how involved the government will be in regulating the metaverse.\u00a0\u00a0<\/p>\n
Adding more fear, the Federal Trade Commission is working to\u00a0block Facebook\u2019s recent VR acquisition<\/a>. But, the U.S. government has its sights on more than just Facebook. Congress\u00a0is currently pushing to pass its first major effort to regulate big tech since the inception of the internet.\u00a0<\/p>\n
Whether you like Big Tech or not, this is something to keep an eye on, as it could make it harder to make an exit down the road.<\/p>\n
Tip #5: Beware of the philosophical arguments<\/h2>\n
The metaverse<\/a> has much momentum in its favor. And, it offers many benefits for entrepreneurs and businesses alike. But is it good for customers and society?<\/p>\n
\u201cThe thought of life in the metaverse brings many questions,\u201d said Volkov. \u201cWill we be more connected but feel lonelier? Will we live an illusionary life? Will we create an extended reality only to become an extension of vast, complex and intelligent machines? For many, The Matrix<\/em> sounds like an argument against the metaverse.\u201d\u00a0<\/p>\n
Another pessimistic argument was proposed by American philosopher Robert Nozik. In his thought experiment, Nozik introduced an experience machine where people could live out fantasies like marrying their favorite Hollywood star or winning the lottery. Nozik believed this way of fulfilling desires would not be fulfilling and would prevent us from grasping a deeper reality. Will the metaverse fail because of this?<\/p>\n
Closing thoughts<\/h2>\n
In Volkov\u2019s view, life in the metaverse can be as real as it gets. Unlike Nozik\u2019s experience machine, there will be real interaction between real people in the metaverse. And unlike The Matrix<\/em>, visitors can make informed choices and exercise free will. They will have the ability to join and leave the virtual world at their discretion.\u00a0<\/p>\n
\u201cIf we as entrepreneurs and creators build the metaverse right, users will have a positive and fulfilling experience,\u201d said Volkov. \u201cAnd that should be our goal. I\u2019m confident the industry can work through its growing pains and make the metaverse a safe and profitable place for all who venture within it.\u201d<\/p>\n
Jay T. Ripton<\/em> is a business consultant and freelance writer. <\/em><\/p>\n
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Although it\u2019s difficult to\u00a0pinpoint precisely how big an emerging market like the metaverse will be, Citigroup believes it could reach somewhere between\u00a0$8 trillion and $13 trillion by 2030. And, if the investment banking and financial services giant is correct, in less than a decade, there will be nearly five billion people working, playing, socializing, shopping<\/p>\n","protected":false},"author":1,"featured_media":611109,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1020,334,46],"tags":[],"class_list":{"0":"post-611108","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-founders","8":"category-startup","9":"category-technology"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/611108","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=611108"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/611108\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/611109"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=611108"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=611108"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=611108"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}

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