It was with great interest that I recently read the article by Bob Evans discussing the new Walmart entry into the technology solution game joining firms like Microsoft and Salesforce in the marketplace go-to market revolution. It raised a very interesting thought in my mind: If every company is becoming a technology company, in our Metaverse and data-driven future, will every company, by virtue of that, also be able to profitably monetize technology and gain revenue for their business?
The answer is more complex than it may seem at first. In fact, in the words of H.L. Mencken, “For every complex problem, there is an answer that is clear, simple, and wrong.” The answer in other words is not a straight line—“if you build it, they will come”. In fact, for most firms, it’s much more complex than that and will take years of effort, potentially decades of societal change, and countless investments to even make a play to gain revenue providing technology.
Don’t believe me? Well before I start my argument let me tell you a little about one of the simpler examples of creating a bespoke application (let’s start there) and reselling it. Today, there are about 200k Independent Software Vendors (ISV) in the market and the forecast by Jay McBain, a noted industry analyst, is that there will be over 1 million ISVs by 2027. And that doesn’t even count the millions of apps in the Apple app store.
Why this rapid growth? Because applications built for purpose, often very industry or user-specific, use cases, are on the rise. You could say that software is no longer eating the world (the famous 2011 quote from Marc Andreesen) in the Metaverse: Software is the World.
Complex Environments and Complex Solutions
These ISV solutions are sometimes from an enterprise that developed them and will now resell them. But, most often, they are sold via a solution channel partner who will package up 10s to 100s of ISV solutions to achieve a full solution for their end-user enterprise customer.
These are complex environments and complex solutions, reselling them on a bespoke marketplace from the enterprise that developed the one application certainly has a future for a limited set of firms, but for most firms, the cost of go-to market would be overwhelming. After all, we don’t all have a Walmart-sized technology or marketing budget.
Most firms will, in fact, license their technology to a marketplace for sales or utilize a third-party distribution network to resell their technology. Many firms will do neither because that is not their route to profitability. And that’s the critical point—in a world where technology, particularly software in a Metaverse, defines our future.
Your solution may be something you would never sell-off. Imagine McDonalds selling off their secret sauce recipe on a marketplace versus using it in their thousands of franchised locations. It doesn’t make sense for them. But conversely, Peter Lugers Steakhouse does resell their steak sauce because their cost of owned distribution would be too high to be profitable. The real-world rules for how you profit are a guidepost in some ways then for how you will profit in the new metaverse led world.
A Fresh Perspective on Revenue & the Virtual Workplace
That world requires a fresh new way of thinking about revenue for every firm—physical, digital, and hybrid. It challenges the very norms of how we gain revenue. This moves far beyond simple art projects in NFTs or using bitcoin for transactions. This is a redefinition of offers, pricing, profit, and returns, the likes of which we have never seen in our industry. This is as significant as when the world moved from barter of goods to gold and from gold to currency.
Sure, the Metaverse may sound scary or even creepy to non-digital natives reading this article. But, for kids in elementary school today, this will likely be the “real” world they know best. They’ll get their first jobs in a world where everyone works hybrid, where platforms like Zoom are gone because they have an avatar and a virtual world meeting space, and where many of their most precious assets are in that virtual world versus the physical world. In that world, every firm had better have figured out the balancing act between virtual and physical as well as how to profit from those worlds.
Large Corporations are Making Big Moves
We already see larger corporations investing. Walmart continues to accelerate its technology market takeover, recently filing trademark applications, including one that seems to signal it will be creating its own cryptocurrency and its own collection of NFTs.
The home of the Big Mac, Mcdonald’s is also stepping up their game filing 10 trademark applications that include one nifty number for a virtual restaurant that would deliver to your actual home.
Even PWC recently announced it has purchased virtual property on Sandbox signaling their willingness to dive into the metaverse.
These big firms know that the Metaverse trend, as it’s already a big trend, will become a megatrend with the potential to be a $30 Trillion market within 15 years. As a frame of reference, the entire economy of the United States last year was about $25 Trillion, and these big corporations are, as a result, taking big bets to try to develop the winning formula. That bet is neither simple nor guaranteed to win but it’s a necessary forward motion with these firms testing and learning, adjusting, and finding pathways to profit. That is, after all, the bottom line in this trend for most companies: profits.
What’s in your plan to profit from the Metaverse?
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