How Leaders View the Potential of the Metaverse

Sébastien Borget, co-founder and COO of The Sandbox, shares what investors should keep in mind as the metaverse becomes a hotter topic among business leaders and policymakers. Borget also talks about what the World Economic Forum (WEF) is doing to define and build the metaverse, along with how the metaverse came up in conversations at Davos 2023. 

What’s the significance of the World Economic Forum (WEF) metaverse initiative? 

We first need to demystify what the metaverse is today and how it will evolve three, five, ten years in the future. Those conversations need to happen across entrepreneurs, politicians, policymakers, users and non-profits from all walks of life.  

It’s crucial for us to begin the dialogue today so that we can co-create metaverse together with our partners and collaborators worldwide. This metaverse initiative is an effort to accelerate those learnings, so that we can share among our peers and build a metaverse that’s open and equitable - rather than closed and beneficial only for the gatekeepers. 

The initiative, where I am a contributor alongside my co-founder and CEO Arthur Madrid, is broken into two core working groups: Economical and Societal Value Creation and Metaverse Governance. These two working groups collaborated to create two initial reports: Interoperability in the Metaverse and Demystifying the Consumer Metaverse. These research reports are great first steps as we navigate the opportunities and challenges as the metaverse expands in the coming years. 

Together, we are building a toolkit across borders, both virtual and geographically. We aim to build the foundation of the open and equitable metaverse so that we are in the strongest position to realize the full potential of decentralized virtual worlds that connect, entertain and create value for users. From emerging metaverse jobs to new opportunities for socialization, business creation and services, there’s a lot to unpack as we work towards this vision. 

How did the metaverse come up in conversations at Davos?

The first thing that stood out was that it requires a more precise definition as something that exists across multiple platforms. It’s also not just virtual reality – in fact, it’s something that’s centered on an emerging digital identity in the form of avatars, which should move across different platforms in a seamless manner. With a portable, interoperable identity, we break through the closed walled gardens and siloed platforms that capture value from the users and restrain them from the freedom of ownership, trade and monetization of their digital goods. 

I was impressed at the level of interest in the role of the metaverse over the next decade. Especially as digital natives become the majority of the population, the metaverse is the gateway to trillions of value, affecting all industries, from entertainment to education, shopping to team collaboration. 

We also discussed how governments should prepare for digital transformation and recognize that true digital ownership should be a fundamental right for this younger generation. Certainly, while it’s not a pressing matter as the energy crisis or war in Ukraine, this is an important topic governments must keep in mind if they don’t want to fall behind their younger citizens.  

One of the most frequent topics of conversation was ensuring that the metaverse remains free, equitable, and open. We must carefully consider the opportunities ahead, and ensure that we don’t make the same mistakes we did with the current version of the internet, where a great share of value accrues to a few gatekeepers.  

Another common conversation has been around privacy, autonomy, and digital asset protection. We have to provide a secure and safe environment for users, and that’s going to take work from all parties involved.

Finally, an especially critical conversation was around sustainability and emerging technologies. How will we work together to ensure that new platforms, such as the metaverse, drive awareness and action on sustainability?

What impact is the metaverse expected to have on the current world that WEF describes as “fragmented”?

One of the main disadvantages of tribalism is that it encourages an “us vs them” mindset. 

The metaverse truly is a realm of infinite possibilities. While that can be seen as tech utopianism, the reality is these virtual worlds can be shaped by anyone, anywhere. They eliminate the false barriers between people created by borders and geography, and collapse the space between idea and creation. 

The metaverse, in the sense of interconnected virtual worlds, can become a uniting force that brings together people across diverse backgrounds in ways that just aren’t possible in the real world.  

We see the metaverse as a global digital nation, where avatars are the citizens of this new world, but with a great diversity of content and culture that’s local and accessible. Creating more inclusivity and equality can start by providing the same chances of access to the new opportunities of Web3 and offering tools that allow anyone to become a creator and take part in the making of these new virtual worlds.

We also have fragmented regulations, which led to different trajectories of innovations in Web3 and metaverse across the world. So that’s another key talking point among our colleagues: how can we build a balanced approach to regulations that allow metaverses to flourish? It requires collaboration – and vision – across our currently fragmented world.

As the metaverse becomes a hotter topic among business leaders and policymakers, what should investors keep in mind? 

We really are in the early days of the open metaverse. Think back to the internet bubble, when everyone thought that the web was a technology doomed to failure. We see the metaverse as a new way to engage with customers, users, fans and citizens, which is why it will have such a broad impact. 

To these ends, we must work collaboratively with business leaders and policymakers around the world to have a clear regulatory framework that nurtures innovation rather than stifles it. We’re at a critical juncture, as we try to put power and data ownership in the hands of the users while facing established platforms with hundreds of millions, if not billions of users. 

For investors, there’s no substitute for hands-on experience. Understanding user behavior in the metaverse at large, as well as the growth trajectory of individual platforms is essential for a deeper understanding of the investment opportunity. By becoming users of these platforms, they can really understand what they’re all about and understand better how millions of users already are socializing, creating and participating within these digital nations, having real emotions, fun and potentially turning their time into value through true digital ownership.

It’s also important to be on the ground, engaging with entrepreneurs at events such as Davos. This space evolves very quickly and staying close to those changes is imperative over the next few years – especially as regulatory regimes evolve. If we simply remake the metaverse in today’s image, it would reinforce existing power imbalances and give a competitive edge to existing, centralized, established actors whom governments are often already in conflict with. That won’t be a good thing for growth-focused investors who benefit when entrepreneurs have a fertile ground to build the next phase of the internet, focusing on culture, entertainment, creativity and community. 

This interview originally appeared in our TradeTalks newsletter. Sign up here to access exclusive market analysis by a new industry expert each week. We also spotlight must-see TradeTalks videos from the past week.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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