The word “metaverse” is being thrown around a lot in Silicon Valley lately, usually as some future world where the internet and real life converge into one fantastical reality. It may sound a little like augmented reality, but it’s so much more.

According to Matthew Ball, investor and managing partner of VC firm EpyllionCo, the metaverse will be as transformative and influential as the internet was in the 1990s. It’ll be a lot like the internet, where the physical and virtual worlds exist together, and, like the internet, it’ll be hard to escape — companies will sell you things on it, media will be available to stream on it, and social media will incorporate feeds into it. 

Even Mark Zuckerberg wants to be a part of it. In June, he announced to employees that Facebook would become a “metaverse company.” Perhaps Zuckerberg had something like the metaverse in mind when his company bought VR startup Oculus back in 2014.

Matthew Ball, meanwhile, has been excited about the metaverse for a while, writing a popular essay about the phenomenon in January 2020. In a recent email exchange, Ball explained why the metaverse is a “fun intellectual challenge,” its biggest misconceptions, and where he sees it going in the next five years.

The metaverse: What’s exciting, what’s myth, and what’s next

The Business of Business: What’s new with EpyllionCo? What startups are you excited about investing in right now?

Matthew Ball: I’m most excited about virtualization and infrastructure companies. A lot of time with blockchain and NFT-related companies too. Both in gaming and outside it. And we launched a metaverse ETF on the NYSE in June (Ticker: $META)!

You’ve written extensively about the metaverse. What about it excites you?

What’s most exciting about the metaverse is that its implications will be profound and wide ranging, yet also incredibly difficult to predict. This presents a fun intellectual challenge for anyone interested in technology, business, or philosophy, and as an investor, it produces opportunity, too. Think back to the 1990s or 2000s. Most believed the future would include more online entertainment, digital payments and UGC. Those theses were right, but they didn’t lead you directly to battle royales, bitcoin or TikTok. And those are fairly “simple” examples compared to how the global economy and culture have been affected by the internet.

Where do you see the metaverse in 5 years? Will there be a mass-scale adoption of it?

There’s no “before metaverse” and “after metaverse”. At the peak of its popularity, ICQ had tens of millions of monthly users. WhatsApp has a billion daily active users. This reflects continuous growth in how many people are on the internet, how frequently they use the internet, and how important it is to their lives. The internet existed the entire time.

In five years, I expect more time, more spend, more work, and more “things” to be in and connected to the metaverse.

What are the biggest misconceptions about the metaverse?

The metaverse is not VR, for example. That’s like calling the iPhone the internet, or a smartphone the internet. Even if VR is the primary way we access the metaverse, which is unlikely by the way, it is a gateway device and platform to the metaverse, not the metaverse itself.

Similarly, we should think of the metaverse as a successor state to the mobile internet and internet, rather than a platform or service on the internet. Facebook and Google aren’t “internets,” they’re horizontal platforms on the internet. And the internet is a bundle of many things – hardware, networking infrastructure, standards and protocols, etc. Having a virtual world, or social VR experience, doesn’t mean you have “a metaverse”, just like having an app doesn’t mean you have “an internet.”

How can media companies benefit from the metaverse, and how should they prepare?

The answer isn’t unique to media. The internet disrupted many long-standing industries, companies, and products, and then the mobile internet did this again. Think of how PayPal and Skype disrupted payment and telecommunications companies in the 90s and 2000s, then how companies like Square and WhatsApp emerged in the 2010s. And now, we have proto-metaverse companies like Coinbase or Discord changing these categories again.

Most companies will need to invest, test, reinvent or change.

How should investors prepare for the metaverse?

This will be a multi-decade transformation that will create, destroy, and transform trillions in value and reach nearly every industry and category. The best advice is to stay curious and humble. The second best advice might be to check out the Roundhill Ball metaverse ETF on the NYSE.

Who will the metaverse negatively impact?

This is the wrong frame. Who did the internet negatively impact and why? We can point to industries that had to change, or skills that depreciated, but it’s not so simple as saying “industry X” or “people Y,” especially over a multi-decade basis.

Why are media and tech trends so impossible to predict?

Because humans are unpredictable and the best new technologies solve – or create – altogether unpredictable problems. The petroleum industry transformed the world in many positive ways. Then we determined the harm it would do to the environment, and now we’re struggling to address these problems on a behavioral basis, while also striving to create new technologies to aid us.

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