What Will the Use of Data Look Like in the Age of Metaverse and Web 3.0? Reflections of a Panel Discussion
As the VC capital continues to flow to Web 3.0 and Metaverse startups, many questions remain to be answered: How will the next era of digital communications look like? How much time till we see actual Web 3.0 projects materialize? How will individual users’ data be protected? Will users have actual ownership and control over their data? What will decentralized decision-making models look like in practice? These and many other questions were addressed in the panel discussion, where Prifina’s CEO Markus Lampinen also explained Prifina’s current focus and vision at the event, which took place on October 18, 2022, at Microsoft Reactor.
On October 18, 2022, Microsoft Reactor hosted a panel entitled “Product Management in the age of Metaverse and Web3. The panel was moderated by Naveen Akunuri, and the speakers were Ankita Verma, R. Paul Sing and Prifina’s CEO Markus Lampinen.
You can watch the entire panel on YouTube (the discussion starts at 41 min.).
Here are 6 key takeaways👇
(1) What’s going on with Facebook and Metaverse? Is Meta failing?
The discussion began with the panel moderator Naveen Ankuri raising a question about the current situation at Meta: the dramatic decrease in the stock price of Meta, decreasing monthly active user numbers, and slowing developer hiring rates.
R. Paul Singh suggested bearing in mind that although Meta is a publicly traded company. Therefore, many of its activities must be disclosed in its financial reports — they can not simply be hidden away from investors and regulators.
Then, R. Paul Sing encouraged us to approach Meta’s ambition to build Metaverse from the lense of a startup: Building metaverse is like a startup journey, and no matter how much a project is funded, the project has to go through that journey with all of its ups and downs.
Ankita Verma from Persona noted that we should see Metaverse development from the perspective of the user journey. User journey usually consists of the following four steps:
(1) user discovery (how does a user discover Metaverse?),
(2) user onboarding (how does the user is onboarded?),
(3) user retention (how does a company make the user come back to the Metaverse?), and
(4) user growth (how does the user base grow?).
With Metaverse, we are still at the user discovery stage. While Metaverse could be meaningful in various areas (e.g., travel, hospitality, health, etc.), today, the use cases are pretty superficial, and Meta still needs to figure out the user engagement issues.
“I am a firm believer that metaverse is going to unlock so many things that we cannot even think of today. Of course, it will come with its own set of challenges which we will learn to deal with.” (Ankita Verma)
(2) Pros and cons of building enterprise-first Metaverse
Naveen Ankuri then raised a question to the panelists about his impression that Meta appears to be mostly focusing on the enterprise side of the Metaverse — so that the end-user is not the individual but a an enterprise. Naveen asked the panelists whether this is a risky strategy or not because Meta may end up creating experiences that are good for the company, but not good for the people.
Markus Lampinen from Prifina noted that enterprise is probably the most feasible place for Meta to focus its go-to-market. One possible vertical application could be the fashion industry and shopping experiences: if you navigate online stores in Metaverse, what does your personal experience look like? How do you imagine you’re picking your clothing and shoes, testing them in front of a mirror? What does your avatar look like in the Metaverse and a metaverse mirror? That’s one very consumer-focused use case.
“If Meta manages to find real vertical use cases where it makes sense, they might succeed. But my concern is they don’t have an enterprise DNA and you don’t get that overnight. We have seen how many companies fail when they try to change their DNA to something else.” (R. Paul Singh)
(3) Who will own and benefit from data in Metaverse?
Bearing in mind that all of the interactions in the Metaverse will take place via a proxy (your avatar), one of the fundamental questions relates to the use of data that determines the features of your avatar. Markus Lampinen explained that at Prifina he is already working on various biomarkers and biometric data (e.g., user’s sleep data, user’s physiological features, and wellbeing data). While these data sets do not provide a complete information for buildign avatar, it’s necessary to start somewhere.
“How do we ourselves create a realistic avatar? The data must come from somewhere. We need this data to construct the reality watn to interact with.” (Markus Lampinen)
Ankita Verma and Naveen Ankuri referred to the fact that nowadays all the data is owned by enterprises. Your body movements, your facial expressions, and your gestures are bundled into large data sets that companies use to build their products. However, various data privacy regulations, such as the GDPR and CCPA in California, give more rights to individual users to access data collected by service providers. Ankita also noted that there are new types of privacy-friendly web browsers, such as Brave — something that represents a shift in the market toward more privacy-preserving approaches to user data.
Ankita also explained the new form of interactions in the Metaverse: in this decentralized environment, users will interact anonymously, i.e., their identities will be unknown to third parties. However, the value for different stakeholders will be generated from various incentive mechanisms that will give users better control over their data.
“We’re all unique… We are not segments in the centralized database — we’re individualized human beings. If we’re actually going to create representative apps, representative experiences and services, we have to start from an individualized data set.” (Markus Lampinen)
(4) The value of privacy: practical perspectives
R. Paul Singh then raised an ethical question about the value of privacy: how much is a common person really worried about data privacy? Do people even care about data privacy? Where does the need to protect data privacy stand in the Maslow’s hierarchy of needs?
Markus Lampinen jumped into the discussion with a very practical suggestion to assess what we would think about data privacy in the following situations:
- Would you be willing to share our data for creating better drugs for treating childhood cancer? (everyone in the audience raised their hands)
- How many of us are willing/eager to share our data to optimize targeting ads? (Only R. Paul Singh raised his hand)
- How many of you are interested in sharing your DNA with Spotify to create better playlists for you?
- How many would you like to see what type of playlist your DNA would create if you didn’t have to share it?
Based on these specific questions, Markus Lampinen invited us to think about data privacy not as a binary (yes/no) issue. Rather, we should undestand that data privacy is not a simple question; data privacy is use-case specific. It’s not just asking do you want to share your data or not.
Then issue of framing has come up when R. Paul Singh asked if Apple is actuall acting honestly by introducing “Ask app not to track policy”. Framing the question in that way they clearly made a business decision to nudge people to opt out of tracking; still, it is no public secret that Apple still user data to run adds in its own iOS environment.
“Data privacy should be approached as a value question: What is it for you as a user? … All things being equal, why on earth would you want some random app to track you? That’s creepy, isn’t it?” (Markus Lampinen)
All panelists agreed that when we speak about data privacy, we should ask what a user get from sharing his/her own data. If, by sharing personal data, a person feels like he/she is contributing to something important (e.g., developing cancer treatment drugs), that’s fine. But if a user’s data is used to tweak some random company’s advertising algorithm, then most people would probably be willing to be counted out.
“I always raise this question to my students: Which jungle do you want to go? Do you want to go to Google jungle? Or do want to go to Apple or Amazon jungle? Because whichever jungle you go, there is no way out: you are caught in that jungle and … you’re will become a slave of that jungle.” (R. Paul Singh)
(5) How open/decentralized will Web 3.0 be?
Current regulations in in the EU and California, and especially the recent EU Data Act proposal, speak for themselves about the ongoing shift to unlock the data from silos. In the Web 3.0 and the Metaverse debate, two other elements are quite characteristic for the emerging new data economy: (a) increasing role of (developer) communities and (b) the fact that individual users will actually be able to own and control their data.
The panel members spent quite a bit of time discussing whether the next iteration of the internet will be open or closed. Ankita explained that companies that position themselves as “decentralized” or “Web 3.0” companies take different approaches to governance: while some of them ar fully decentralized and are run by DAOs (= Decentralized Autonomous Organizations), others are a mix of centralized and community-driven decision making structures.
“The beauty of decentralized approach is that you get to build products that your customers love and they feel like they are a part of. Yet, it also comes with the challenge that decision-making gets hairy a little bit because there are so many people involved in making those decisions.” (Ankita Verma)
All speakers appeared to agree that the likelihood of fully decentralized institutional arragements will be unlikely. This could be explained from a very practical perspective: to run a successful business, to build a successful consumer-facing product, there must be a clear structure of decision making. While some sort of decentralized decision making structure could be feasible in some instances, in it most likely that the future of internet companies will be built on some sort of hybrid governance solutions. In the words of R. Paul Singh:
“The world is never going to be black or white. … We will see a very different picture version than what the purists of Web 3.0 imagine — it won’t be totally decentralized. The truth is that we will be somewhere in the middle. That’s how things work out most of the time.” (R. Paul Sing)
Markus Lampinen seconded to that idea: even if in some cases it is exciting to think about community-driven innovation; at some point, there must be a human in the loop. Some problems need to be solved and decided upon by real people; and those decisions need to be made rather quickly. “You can order a pizza that would have all the ingredients that everyone at a party would wish to have.”
(6) How will we be making business in Web 3.0 environment?
Naveen Ankuri asked the panelists to paint their vision about the differences of marketing and business models in Web 2.0 and Web 3.0 environments. Will the same user acquisition and growth metrics be used, or will there be any differences?
R. Paul Singh compared tokenization and NFT models that get so much attention nowadays as a well-known version of bribing early adopters. He emphasized that real consumer products and communities around them are built not by briging early adopters, but by building a product that attracts mass adoption of people who really care about the product regardless of whether it gives them a token or not. In other words, incentives do not matter if there is no mass adoption of the product.
Ankita continued to elaborate on the idea that Web 3.0 business models are in essence focused on the same well-established methods of building products. She suggested taking into consideration the following three points: (i) are you solving a problem? (ii) do your users care about it? and (iii) how well have you solved the problem, and are the users willing to use your product?
“In Web 3.0, the way how you reach your customers will be different. But at a high level, you still have to think about (1) use-case, (2) problem, (3) solution, and (4)execution.”
(7) The role of product managers in building Web 3.0 products
“ I think there is a need for a code of conduct for product managers. It is needed not only for Web 3.0, but also for web 2.0. We need product manager code of conduct for AI, and for everything. If we don’t have that, we are going to create so many irresponsible products that are really going to be beneficial to us, that are probably going to be harmful.” (R. Paul Singh)
Paths forward
Thinking about the future, the speakers expressed their wish that the whole debate about web 3.0 is not that hyped; instead, people and teams working on new data and tech solutions should be focused on the utility of their products and solving real-world problems. Ankita expressed her dream to have one single ID to access multiple services; and R. Paul Sing encouraged everyone who is working on “traditional” web 2.0 projects not to worry about losing their jobs in the near future : )
The transcript is available here.
Here’s the recording of the panel (starts from 41 min.):
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