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Chain Reactions: How Creators, Web3, and the Metaverse Intersect
This week, I wanted to take a moment to draw some throughlines. These topics might seem disparate, but they all interrelate. Together, they’re forging the next generation of technology and culture.
To offer an oversimplified, one-paragraph summary on what comes below:
We’re becoming a digital-first species, and at the same time we’re rejecting institutions. Those two factors are combining to make work more disaggregated and creative, fueling the creator economy and letting everyone build with technology. Web3 and new business models will better allow creators and their communities to capture and exchange value, forming robust digital economies. Ultimately, this will lead to an immersive, decentralized metaverse.
Below, I’ll go through 10 key shifts affecting consumer technology and explore in more detail how they build on each other.
1️⃣ Digital Natives
On her song “Coney Island”, Taylor Swift sings:
'Cause we were like the mall before the internet
It was the one place to be
It’s a simple line that captures the longing for a bygone relationship. It also, in my mind, captures how we’ve become a predominantly digital species.
As a 90s kid, I’ll never forget loitering in the food court with friends, frequenting Cinnabon, or braving the tomb-like depths of Abercrombie. The mall was the hub around which our social lives revolved. Today’s kids hang out on Snapchat, on TikTok, in Roblox, in Fortnite. The internet is the new place to be.
In 2010, there were 2 billion people online—about 30% of the world’s population. Over the last decade, that’s swelled to 4.5 billion people and 60% of the world.
The scale of the internet is stunning. Every minute on the internet:
Netflix users stream 404,444 hours of video
Instagram users post 347,222 stories
YouTube users upload 500 hours of video
Consumers spend $1,000,000 online
LinkedIn users apply for 69,444 jobs
TikTok is installed 2,704 times
Venmo users send $239,196 worth of payments
Spotify adds 28 tracks to its music library
Amazon ships 6,659 packages
WhatsApp users send 41,666,667 messages
And 1,388,889 people make video and voice calls
With technology, we communicate, create, and collaborate in new ways and at an unprecedented scale. Transitioning to a digital-first species is the defining shift of the 21st century.
2️⃣ Reclaiming Agency
As technology seeps into more of our lives, it collides with massive behavior shifts. In The Memeification of American Capitalism, I wrote about how today’s youth want to “reclaim agency”. During the GameStop craze, one user commented on the r/WallStreetBets subreddit: “This is the first time we all literally get to decide our destiny.” We’re seeing a massive backlash to institutions and authority.
These are aftereffects of the 2008 financial crisis. Today’s young adults grew up watching their parents work within “the system”, only to lose their jobs during the Great Recession. As a result, they aren’t interested in “renting” their time or working within the system; they’re interested in using their hustle and savvy to dictate their own fortunes. Gen Zs trade Millennial idealism for shrewdness and practicality.
There’s an old adage that business model innovation is more impactful than technological innovation. I’d argue that shifts in culture are even more disruptive. We’re at the beginning of a decades-long backlash to centralized power. We see this in growing populism (from Bernie Sanders to Donald Trump), in the deification of Elon Musk (Exhibit 1: Dogecoin), and in the ~10 million people who joined Robinhood in 2020. This backlash is also fueling the disaggregation of work.
3️⃣ The Disaggregation of Work
Technology makes it easier to channel the distrust of institutions and “reclaiming of agency” into new forms of work, eschewing traditional career paths.
By 2027, over half of the American workforce will be contractors.
The internet enables new career paths. Roblox developers made $300 million in 2020; Patreon has paid out $2 billion to creators; over 300 OnlyFans creators earned over $1 million last year. Almost any skill is now monetizable. Behavior shifts and the growth of the internet are the compounding forces behind the disaggregation of work.
This has ripple effects. Education will need to become lifelong and skills-based. The American social safety net of healthcare, benefits, and retirement planning—today tethered to corporations—will need to be rebuilt. But most fundamentally, people will earn a living in more flexible, diversified, and creative ways.
4️⃣ The Shift from Consumption to Creation
As the internet evolves, it becomes more participatory. People move from passive consumers to active creators. In The Building Blocks of Tech, I charted how it’s become easier for people to use the power of software to create—from the early days of building a website on Wix, to low-code / no-code work apps, to video creation on TikTok.
The best companies cultivate robust creator ecosystems. This is true in enterprise, as well as consumer. Airtable, Figma, and Notion all have marketplaces for developers to build and share their creations. Earlier this week, Mashable ran an article about “spreadsheet influencers”—people earning over $100,000 selling templates they make in Google Sheets, Airtable, and Notion.
The best creator tools layer in new features over time. Figma isn’t only replacing Sketch and InVision, but PowerPoint and Miro. Dylan Field, Figma’s CEO, likes to say: “Keep the simple things simple, but make the complex possible.” Figma’s mission is to make everyone a designer, and it expands that definition over time.
More broadly, it’s easier than ever to build companies. Amazon Web Services and Stripe are Lego-like building blocks that make it fast and easy to launch a business. Software is becoming more accessible to use, allowing anyone to be a creator entrepreneur.
5️⃣ Creators Bring Communities
Hand-in-hand with the rise of creators comes the rise of communities. I’ve written about how the internet enables niche, often pointing to the 6.7 million Discord servers or 2.6 million subreddits. Community dovetails with growing distrust of institutions. Instead of seeking comfort from government or big corporations, young people turn to Emma Chamberlain or JoJo Siwa.
AI makes it easier than ever to find community. If early social platforms like Facebook and Instagram used our real-world friends as proxies for our digital connections, newer platforms like TikTok and Clubhouse use algorithms to pinpoint exactly who we should be interacting with.
In Digital Kinship: How the Internet Is Reacting to the Loneliness Epidemic, I argued that if the 2010s were the decade of status online, the 2020s are the decade of community. An entrepreneur I met recently pushed back on that framing. No, he countered—status still matters, and what’s paramount to people today is status within a community. You don’t care as much what your Instagram followers think, but you care what your fellow Billie Eilish stans think.
6️⃣ Web3 Enables Value Capture
Web1, or Web 1.0, was about information. The World Wide Web reduced transaction costs and made information searchable and transferable. Google was arguably the “winner” of this first era of the internet.
Web2 brought social and commerce platforms. Producers and consumers of information, goods, and services were brought together; peer-to-peer value exchanges were born. While Web1 was primarily one-way (i.e., reading Google search results), Web2 was more bidirectional. On Uber, you can be a driver or a rider. On Instagram, you can post content and consume content. Facebook is the dominant company born in the Web2 era.
While Web2 created enormous value, value always passed through a middleman. Centralized platforms—Facebook, Uber, Twitter, YouTube—control the data and make the rules. Web3 is about ownership. It’s about the direct connection between creators and consumers, obfuscating the gatekeepers.
Blockchain is the innovation that makes Web3 possible through trusted, secure value transfers. Web3 will remove the brokers and intermediaries who have traditionally monopolized value. Today, we “rent” music plays from Spotify, domain names from GoDaddy, and blog posts from Substack. We aren’t true owners. And creators aren’t the owners either. (Look no further than Taylor Swift’s recent battle to own her art.)
Web3 is about winning back that ownership.
7️⃣ Business Model Innovation
Most big Web1 and Web2 companies make money through advertising. For Web3, the internet is shifting from ad-based business models to commerce-based business models. Commerce has more room to run: the global advertising market was $647 billion in 2020, about 50% of which is already online. The global commerce market is $25 trillion, and only about 20% online.
Gaming is at the forefront of business model innovation. The ~$150 billion industry is powered by microtransactions and virtual currencies, which comprised 75% of revenue in 2020 and will grow to 95% by 2025.
Gamers ascribe value to in-game purchases, and in-game value leaks into real-world value (e.g., having status in your friend group for owning a certain Fortnite skin).
Digital commerce is becoming more common beyond gaming: Bumble has Bumble Coin, Duolingo has Gems, Twitch has Bits. Facebook is now offering a virtual currency called Stars—one Star is redeemable for $0.01. Gaming continues to lead the way and act as a harbinger for the future: Facebook’s gaming creators earned $50 million in Stars in 2020, and more than 2,000 creators are earning $1,000+ per month through Stars.
8️⃣ Digital Economies and NFTs
Digital economies go hand-in-hand with non-fungible tokens. NFTs make digital ownership possible. They also offer provable scarcity. Imagine how much more valuable a Fortnite skin is when its quantity is limited. Using NFTs, Fortnite could limit Captain America skins to 100 or 1,000, making each skin a more valuable and sought-after good.
NFTs will enable robust digital economies. Check out this spectacular data visualization from Zima Red, depicting NFT transactions on OpenSea, the largest NFT marketplace:
That visual captures the future of the internet: massive, complicated virtual economies with millions of active participants.
Today, the NFT space is overheated. Hype will die down. But long-term, NFTs are a critical piece of the internet’s infrastructure. Crucially, NFTs will shift from being collectibles to being utilities. They’ll be more than a $69 million piece of art; they’ll unlock access for a mass market of consumers. Smart contracts can tie certain powers to Fortnite skins, grant certain access to creators, and so on.
Gaming has shown us that digital economies can thrive. Scarcity and ownership are key pillars of any economy, and NFTs are the tool that will unlock the ultimate digital economy: the metaverse.
9️⃣ The Road to the Metaverse
While we’re spending more time than ever online, most of our online interactions lack a sense of presence.
In an interview with The Information, Mark Zuckerberg—who has long viewed virtual reality as the next major platform shift—captured the importance of presence:
One of the things [that] I think is really underestimated is when you’re in a Zoom call, you have that grid. You don’t really feel like you have a sense of space, right? If you’re to the left of me on my grid, that doesn’t mean I’m to the right of you on your grid. We don’t have any kind of shared sense of reality. As I go through my day—and I have five or six or ten meetings or whatever it is—it all kind of blends together. I don’t feel like I was in a unique space with a set of people.
But the meetings that I’ve done in VR have that a little bit more. You’re actually sitting in a circle with people or standing in a circle. If you are to my right in VR, then that means I’m to your left, so we have a shared sense of space. That’s reinforced by the fact that when you speak, the audio is coming from my right, which is this kind of subtle cue to our minds that is actually something that you remember. It helps you place the whole conversation better and it just feels more real.
Virtual interactions will become increasingly immersive. In the Index portfolio, we’ve seen this with Roblox, Rec Room, and Gather. Each emphasizes a more frictionless and engaging form of online connection that mimics the shared sense of social presence in the real world.
Lines between physical and digital will continue to blur, with VR and AR underpinning future virtual worlds. Last week, I wrote about Code Miko and the rise of synthetic media.
In the future, we’ll all have more complex digital identities—either as ourselves or, as Miko has shown, as new personas altogether. Avatars will unlock new forms of self-expression.
The metaverse isn’t a destination; it’s a series of destinations (much like websites on the internet) stitched together in an always-on, persistent shared space. A key question is whether the metaverse will be centralized or decentralized—will it be owned by Google and Facebook, or will it be owned by the people?
Tim Sweeney, the founder of Epic Games, says:
The metaverse is going to be far more pervasive and powerful than anything else. If one central company gains control of this, they will become more powerful than any government and be a god on Earth.
This is essentially the premise of the book / film Ready Player One—keeping an evil corporation from gaining control of the metaverse. Sweeney, to his credit, is the rare CEO who publicly advocates for decentralization. He’s currently waging a battle with Apple on a similar theme, and yesterday said in court:
Epic is trying to build a metaverse where the majority of the profit should go to the creators themselves. With Apple taking 30% off the top, it makes it very, very difficult for Epic and creators to exist in this world.
This comes full circle to reclaiming agency and to young people rejecting centralized power. DeFi (decentralized finance) and r/WallStreetBets are reactions to Wall Street. TikTok and Instagram are reactions to Hollywood heavy-handedness. The creator economy is a reaction to broken and rigged career paths. The march toward decentralization—combined with the rise of crypto—bodes well for Sweeney’s vision.
America came to power by revolting against centralized power; Americans are generally skeptical of authority. These ethos will extend to the next generation of the internet: Web3 and the metaverse will finally fulfill the internet’s promise of removing gatekeepers.
These are the topics that get me excited. They boil down to how technology changes people, and how people change technology; the two interrelate and combine to change culture.
The pace of modern innovation is stunning. As one small example, here’s the evolution of the Mac over the last 20 years:
Concepts like virtual reality, digital economies, and the metaverse may seem far-fetched—until you realize how far technology has already come.
Sources & Additional Reading
Visualizing Ethereum’s History | Andrew Steinwold
The Token Economy | Shermin Voshmgir
The Metaverse | Matthew Ball
The Ownership Economy | Jesse Walden
Economy of the Metaverse | Tim Sweeney
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