Venture Capitalist Shares 3 Tips For Startups Entering The Metaverse

September 6, 2022
Venture Capitalist Shares 3 Tips for Startups Entering the Metaverse

There’s no longer any doubt that the metaverse matters! With big brands finally entering the Web3 space, Meta CEO Mark Zuckerberg’s remarks that the Metaverse is “the next chapter for the Internet” couldn’t be more true.

During our recent livestream, Gigster’s Director of Blockchain, Cory Hymel, spoke to Venture Capitalist Lauren Stephanian, a partner at Pantera Capital, who shared her views on the direction venture capital is poised to flow towards and how Web3 startups can position themselves to help bring an interactive virtual world to life. Here are some of the biggest takeaways from their discussion:

The Early Mover Advantage

A recent McKinsey Report showed that Venture Capitalists poured a whopping $120 billion towards startups interested in developing metaverse technology and infrastructure in the first five months of 2022. Per the same report, the value of the Metaverse could reach over $5 trillion by 2030. The report further indicated that 59% of consumers were excited about doing their daily activities on the Metaverse, while 57% of metaverse-aware companies declared they were early adopters.

Web3 startups waiting on the sidelines as large corporations invest billions in transforming their platforms and capabilities for the Metaverse need only to consider the history of past technological trends. The transitional trend from the early days of the internet progressed to mobile, crypto, NFTs, Virtual Reality, and now the Metaverse.

According to Stephanian, the phenomenal demand and growing adoption of the Metaverse has so far been caused by the widespread use of NFTs by artists, celebrities, and brands. She believes that as the Metaverse evolves, Web3 startups experimenting with the concept can take advantage of the first-mover advantage to capitalize on it and position themselves for success.

How Startups Can Establish First-Mover Advantage in Metaverse

Stephanian believes startups that embrace an innovative mentality and have a clear strategic vision to execute efficiently are more likely to attract venture capital and capture the first mover advantage. Her advice to Web3 startups is to consider the emerging next big ideas, such as:

Data Analytics

While the Web3 concept of data ownership promises great potential, using the available data remains technologically impossible for most entrepreneurs. There’s a vast market for blockchain-specific data aggregation and analytics tools specifically for Web3, gaming ecosystems, and NFTs. Startups could easily avail funding for developing go-to platforms that benefit creators and curators looking for data analytics for all things blockchain.

CeFi to DeFi bridges

As more businesses begin accepting crypto payments for goods and services, Deloitte predicts over 75% of retailers could accept crypto in the next two years. That’s an excellent opportunity for Web3 startups to unlock customer experience possibilities. Entrepreneurs could consider availing exclusive metaverse brand offers or customer loyalty programs using NFTs or digitalized versions of physical products.

Web2 to Web3 Transition

The driving force around Web3 is a decentralized internet where utilities benefit both owners and users. That’s unlike Web2, where only the platform owners draw benefits. Web3 startups can consider developing infrastructure that facilitates peer-to-peer transactions instead of the peer-to-e-middleman organization.

Some ideas include concepts like incentivization, gamification, and loyalty rewards. Braintrust, a startup that Pantera Capital recently funded, runs a decentralized business model that allows users to receive revenue tokens for the labor they provide.

Closer than We Realize

The impact of the Metaverse on different industries, which looked like science fiction a few years ago, is closer than we realize. Having studied the concept closely, venture capitalist Lauren Stephanian believes the revolution has already started, and only startups that move strategically will be best positioned to leverage the future.

You can check out the full interview to learn more about the Metaverse from a VC lens.

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