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‘Customer guy’ talks the metaverse

Real Conversations podcast | S4 E8 | July 21, 2022

 

steven

Biography    

As a global thought leader and bestselling author deeply passionate about the future of customer experience, Belleghem believes common sense, new technologies, social responsibility, and an empathic human touch are a winning combination in capturing customer’s hearts and business in the long term.

Steven Van Belleghem is a “customer guy” not a “technology guy”. In fact, he’s spent his entire career helping businesses become more customer centric. Now, as the metaverse becomes an increasing reality, he talks about what it will mean for brands and the customers they serve.

Below is a transcript of this podcast. Some parts have been edited for clarity.

Michael Hainsworth: The metaverse is expected to disrupt as much as 90% of the entertainment industry over time. But not far behind? Retail. Whether it be a smart mirror that places virtual sunglasses on your face in a store to an augmented reality headset helping you pick the ripest watermelon, over the next 20 years, the Metaverse will change the way we consume much like the way the internet has done over the last 20 years. Professor Steven Van Belleghem is an expert on the customer. The author of multiple bestselling books on the consumer experience including “The Offer You Can’t Refuse” says the metaverse isn’t ready for your mom just yet — but when it arrives, retail needs to be there for her with an open door, virtual or otherwise. He’s convinced it’s the next big thing, even if he isn’t a geek like me.

Steven Van Belleghem: That's right. I'm not a technology guy. I'm a customer guy. I spent my entire career studying the ins and outs of customer behavior, and I'm inspiring companies to become more customer centric.

MH: So then how do you define the metaverse?

SVB: The metaverse has so many definitions, Michael, at this time. For me, it's the next phase of the internet, where we move from video to three-dimensional experiences, where you're actually part of the internet, where you're moving around in the internet. And that creates possibilities for entertainment, to do business, to inform yourself, and to spend time with your friends and colleagues.

MH: It sounds to me like I can just hear the voices from the olden days of the worldwide web saying, we don't need another reason to spend more money. Is this really all about just another way to get consumers to open their wallets?

SVB: Sometimes it feels like that, doesn't it? It's definitely going to change the way that we spend money. If I look to my 10-year-old son, the thing that makes him most happy is to buy some V-Bucks in Fortnite. He would rather have V-Bucks in Fortnite so he can buy a new skin there than that we buy him a new physical T-shirt. So, you see how we're creating a generation of people that gives a lot of value and attention to digital assets, which is strange sometimes for people who are older than 40. It feels sometimes strange for me that I'm like, "Why are you spending all that money in a virtual world?"

Showing off will change in the future. Today, people show off with their car, their house, their art. In the future, people show off with the kind of fashion that they wear in the metaverse and the kind of house and things that they own in the metaverse. So, it will definitely create an enormous business potential, enormous money flows that we didn't have before. So, question is, how will that change? How will we spend our money 20 years from now? What will be the percentage that goes to our offline world? What is the percentage that goes to our digital twin? Who knows? But that it will create an enormous business, that is for me 100% certain.

MH: So, if money is changing hands in the metaverse, I can imagine we have an opportunity to learn from the lessons of the evolution of Web 1.0 into Web 2.0. When it comes to those digital assets that we're purchasing, where does the metaverse fit into web three?

SVB: Mark Zuckerberg hijacked it a little bit, the Web 3.0 trend. When he rebranded Facebook into Meta, suddenly it was all one big pile of hypes. We had blockchain, we had crypto, we had Meta. But there are two evolutions. You have the blockchain evolution on the one hand, you have the metaverse on the other hand, but they meet at a certain point, of course. When you start to buy digital assets in the metaverse, many of those assets will be NFTs. In the metaverse, you will be able to create your own business and people can pay you with real money, but they can also pay you in cryptocurrencies. Some people are buying pieces of virtual land and virtual houses today in the metaverse, and they put that on the blockchain. So, the buying parts in the virtual world is the link back to the web three hype that we're seeing right now.

MH: Is the future of the metaverse a centralized type of world as Zuckerberg sort of views it, or is it more decentralized? Because Facebook is definitely positioning itself as the go to metaverse, like nothing else exists, but Facebook.

SVB: Yeah. They definitely claim that they're going to be the market leader there. They've put all their money on the metaverse, which is pretty bold, if you ask me. Facebook has a lot of assets. They have 3.5 billion daily users on all their platforms. They have 10 billion US dollars that they're going to invest in research and development. They got 10,000 people on it. They got a brand awareness of 100%. So it looks like they got all the assets in hand. But there's one problem, it's that their model is just the extension of the existing model. They want to collect data. They want to sell stuff in their empire. They want to capture 47% of the money value and put that in their bank account. So, it's the next phase of the internet using the same economic model that they've been using for the last 15 years.

This could be their one weak point, because all the other people who are developing the metaverse and are working in the Web 3.0 space, they want to create a decentralized space. They want to create a space where you have a social network where the owners, not the owners, where the users of the social network get most of the value back, and that the decisions of the platform are made by the users. That's the dream that we're having with the metaverse and Web 3.0. But in all honesty, Michael, I'm not really sure if we will achieve that dream.

If we go back to Web 2.0, go back to 2008, I remember the early days of social media. The claims that we had done was that this is finally power to the people. We had the Arabic Spring. We had people who could install a democracy because of Web 2.0. We would have decentralization of power because of web two. And if you look up to what really happened is that a handful of companies never had more power than after the web two hype evolved. We had the biggest centralization of power and money in our entire history.

So, I put a big question mark behind this. I'm not sure if we will have the decentralized part because of the strong assets that companies like Facebook are putting in place. It's David against Goliath, and usually, Goliath wins, but sometimes David can win, so who knows. But I think I'm putting my money on companies like Facebook and Microsoft.

MH: And I suppose as well, companies like Apple who are expected to come out with an AR/VR headset, that certainly won't be cheap when it comes out if the rumors are accurate. But it feels like we're trying to break down the walled gardens that have existed over the last 20 years of technology. But the metaverse is at risk of being just yet another walled garden.

SVB: Yes. Yes.

MH: What does that mean for consumers?

SVB: Well, the one difference that I really believe in, and that I hope will make a difference, is the whole idea of your own digital wallet. Today, our Facebook account or our Instagram accounts, we use that to log into other platforms, and the Facebook data is being shared to others. In a Web 3.0 world, every consumer will have a wallet, not just with cryptocurrencies in it, but also a wallet that holds your digital assets, your digital art, and you are the owner of that. And I think this is a major change that we're going to see in the next 10 years. In the past 10 years, it was pretty easy for a company to collect data. We didn't know what was going on, and we chose convenience over privacy, and we're sometimes frustrated by it, but that's the way it goes. There's no alternative.

What if you have a system where your identity is also part of that wallet, where you can use that wallet to safely securely log into certain services and where you have the power to say, "Okay. This part of my data can be shared. This part cannot be shared. Or this company has no access at all because they've treated me in a disrespectful way." So, the moment that that ownership of data comes back to the user, then we're out of that walled garden. That would mean that we can take our data, our assets everywhere we go. And if we're sick and tired of the Facebook platform, and we want to go to Roadblocks, or a new platform, or Decentral and, we take our assets with us in that wallet, and we can decide what we do and what we don't do. So, the lock in power that companies like Meta have at the moment like that are lower than what they can be if we own our digital wallet with all those assets in it.

MH: A company is setting up a virtual burrito stand. Seems like a silly way to order a burrito until we layer on other reasons to already be in the metaverse and just happen to get that hunger pang. How do we get to that critical mass?

SVB: Today, I think we're still dealing with innovators, technology lovers that are trying out all these new devices or that are trying out platforms of virtual worlds. Younger audiences on average are trying out these things as well. The challenge will be to get my mom into the metaverse. The day that my mom is in the metaverse, we know that it's broadly adopted. My mom has an iPhone. She's part of that community.

Today, I think the benefit to join in is not high enough yet. And that has a lot to do with the quality of these virtual worlds. Every time that I put up VR goggles, I'm still a little bit dizzy now and then. I still think it's a little bit gimmicky, and it's nothing like the real world. It's not what they promised me. If I see all the videos from Microsoft and Meta about what it can look like. And then when I try it out, it's like a 10X difference in quality. And as long as that quality will not reach a certain level, we're not going to reach the mass. I think we need to wait for the iPhone after the Blackberry moment in the metaverse. Otherwise, you're going to get stuck in the chasm.

And this is the danger. This is the hype of the moment, but there's been a lot of hyping for other technologies in the past that never got across the chasm. And I think the chasm is quite deep here, because of quality issues, because of technology that is quite expensive, because of the dizziness. There are many reasons why people will not adopt it at this time.

MH: You mentioned your mom, and that's an interesting analogy, because when we talk about the five types of adopters, your innovators, your early adopters, the early majority, the late majority, and the laggards, I suspect your mom at the very least falls into the laggard category. And maybe she was a little hipper than other moms and got in on the late majority, but people like you and me, we are still at the innovator stage. And you talk about that chasm, the chasm that makes it difficult to go from innovator to early adopter. If we're at the innovator stage right now, what are we going to have to see before the early adopters come in and start making this more viable for us on the whole? You mentioned the analogy of Blackberries were ubiquitous until they weren't, and now we live in an iPhone world.

SVB: Right. We're going to need better technology and we're going to need better applications. I think the benefit of the iPhone was that it's extremely easy to use and you have the whole network behind it that brings a lot of value. Plus, it's fully personalized, let's not forget that. There is no iPhone with the same homepage. It would be very creepy to meet someone who has exactly the same apps as me on that page in the same order. So, the fact that you can make it your device makes it a partner in your day-to-day life. The day that we want to have the same for the metaverse, the metaverse will have to be a partner in our day-to-day life. It will have to bring value that we don't have in a different way. And that it's not just a hobby thingy. That you're not just curious to experiment it, but that it really changes the way that you live.

Like take B2B. The last two years, we've discovered online meetings and we're okay with that, but they have the limits. It's two dimensional. When they're done, you don't have the chit-chatting afterwards, and you can't read the body language as well as in 3D. What if you could do this in a way that it's exactly the same as in real life? And then the metaverse is the solution for that. Today, it's too gimmicky. The day that they do that in a way that the technology is so good that it's exactly the same, or maybe even better than what we have in physical meetings, then there will be no doubt. And then businesses will transform rapidly into three dimensional virtual meetings, but we're waiting for that moment. But I think we will get there.

I mean, look at Microsoft. You see the evolution. Microsoft is the best-placed company in the world to make that happen. They got Teams. Almost everyone is on Teams. Now they're going to start with avatars. So as from November, I think we're going to have these avatars. So, you won't see me anymore. You will see my cartoon-like version of Steven. And the next phase is that you go 3D. They have that, but with higher, higher quality. And if a company like Microsoft could launch that in a qualitative way, then overnight, you have an adoption rate of millions of people in the world.

MH: So long as again we've got the barrier to entry of the VR headset, or the augmented reality headset set aside. The cost of the headset is the known barrier to entry for the consumer who's interested in the metaverse. What is the undiscussed barrier to entry for consumers?

SVB: Benefit in life, quality of the product, applications that go beyond gaming and beyond watching a movie together. If you look at the most popular activities today in virtual reality, it's spending time together with friends, basically. It's playing a game together. It's watching Netflix together. It's going to a sports game or a concert together. That's cool. My children like that, but I prefer to spend real time with my friends because I'm from an older generation. I will only do that if the experience is so good that it brings additional value in my life. The costs will disappear as a barrier, the moment that the benefits and the quality and the applications increase in a way that we, yeah, fantasize about it, let me put it that way.

MH: I suppose there's an element of education that's required as well, because not everybody really understands what the metaverse is supposed to be about.

SVB: No. A lot of people have misunderstandings. A lot of people think it's just about gaming. A lot of people think it's just B2C. It's just for people that have a lot of time to waste. It's basically exactly the same, Michael, as it was in 2001 and 2008. In 2008, when Facebook came along, a lot of people were like, that's for youngsters, that's for people who are unemployed. And it's stupid to put a picture of you eating a hot dog on there. Those were the things that you heard. And now you hear exactly the same about the metaverse. And the moment that the tools become more convenient, that more and more people get on it, the value increases, and that's how people get educated. But today for most people, it's very abstract what we're talking about, so I think we need to make it more tangible. People will need to experience it themselves, and then adoption will follow.

MH: I can imagine that's one of the big reasons why Facebook is opening up physical store locations to show off their VR headsets.

SVB: Yeah. Yeah. The first one just opened up in San Francisco. I think it's a smart move. It's going to be interesting to see how many of these stores they open, and what the real experience is. It's not super innovative because Samsung had flagship stores all over the place before. I've been to their flagship store; I think five years ago in New York. Very cool place. You could experience VR there. But what I see... I have a company called NextWorks. It's one of the companies that I started, and we organize inspiration tours to innovative places. So, I take people to Silicon Valley, to LA, to Dubai, China.

And then of course, we always talk about the metaverse. And then we always have this demo. And then we say, we're going into the metaverse. And then people try it, and some get excited, but some say, "Yeah. It's still gimmicky."

And I'm afraid that Mark Zuckerberg can open as many stores as he wants at this moment. If the experience and the quality of the experience doesn't go up five times as it is today, we're still not going to have the impact. For a lot of people, it will be the evidence that they're not interested in it. So, I think that technology people get really excited about the metaverse, but they have to look at how the early majority, late majority looks at innovations. They don't just get excited because they can put something on their face. They will get excited because it brings real value into their life. And it's by understanding that value, that you will be able to deliver the right applications.

MH: It feels like my frustration in the early days of VR say, 2016, where Google was taking smartphones and putting them in cardboard-based headsets to give people an early taste of VR. They would sit you down in a chair on a roller coaster and you'd walk away feeling absolutely sick to your stomach and feel that it wasn't a positive visual experience as well, because the fidelity was low. And my fear was that people would say, "Oh, well, that VR thing, that's never going to take off. The quality is terrible." But we've seen remarkable growth on the hardware side. We need to see a commensurate growth on the content side now.

SVB: I agree.

MH: So. who among the innovators are doing the metaverse right today?

SVB: That's a very difficult question, Michael, because it's so early days that I wouldn't know who's going to, or who has something that is already making a difference today. I'm very intrigued and fascinated by some experiments. I like what Nike does. I think Nike is one of those companies that is really experimenting in a smart way. The audience of Nike is pretty young, so they're trying to address those. They've got their Nikeland in Roblox, where people can hang out and spend time on in Nike world. They acquired a company called RTFKT, which is a company that makes virtual sneakers. So, you can buy now virtual sneakers. You can buy virtual Nike gear. And I think it's a smart experiment.

I'm also convinced what they're doing now will completely be different than what they're doing five years from now. But they have this learning effect. They know what works and doesn't work. They have data from that. They can see reactions from their early customers. So, I think the wind for Nike is in that learning track, building that experience and understanding, based on that input, what the next phase will be. So, I think that's a fantastic example.

MH: Let's expand on that, because you've said an interesting word there, and that's experiment. We're still at the experimental stage. So, for a company that feels they need to stake a claim in this land grab that is the metaverse today, what's the best way to experiment that creates a positive customer experience?

SVB: Well, I think you need to look at your own brand, and you need to wonder how we can bring value, and what are frustrations or frictions that we have in our customer relation. Disney, for instance, is a cool example. Disney is thinking about ‘metaversing’ their team parks. We always think about... We talk a lot about VR, but AR is probably an even bigger opportunity in metaverse land. And Disney was thinking, okay, what is the most annoying part of going to Disneyland? That's waiting in line, right? You want to go on space mountain, you have to wait for 90 minutes. And you're like, "Okay. 90-minute wait for a three-minute cool experience," but still, we do that. And Disney tries to enlighten us a little bit by some games during the queue or some music.

But what if you can metaverse that? And what if we walk around, for instance, with Disney glasses and we would see all kind of cool things that are happening? Maybe Buzz Lightyear is joining you in the queue, and you can have a conversation with Buzz Lightyear. And then maybe you can fight with Darth Vader later on. So, there are so many options that opens up for them that if they could create an augmented reality Disney experience, they could lift that park like 10 times. And the creativity at that point is endless.

But you begin at looking at what is the frustration and how can we resolve that by adding augmented reality. And I think that's going to be the starting point for many organizations. Like if you're public transportation, people don't find the subway entrance, we're going to add augmented reality, and up, there you go without having to pull out your phone. So those kinds of experiments where you start from, what is the friction, where do we waste time of customers, and build upon that, I think that's a very interesting way to experiment, that's one way.

Another one is entertainment. I think there are huge opportunities in the world of entertainment. I'm from Belgium, Michael, and this summer, Coldplay is coming to Belgium.

MH: I'm sorry to hear that. (laughs)

SVB: I have tickets for that. (laughs) I'm very excited about that. But we had to have a small army of computers and people ready to make sure that we had tickets. There are only 200,000 tickets, but there were 1.2 million people who tried to buy tickets. So, 200,000 will go live, and we pay like 100 euros per ticket, right? All the others will have to wait until it's on YouTube, and then they have to watch it two dimensionally for free. What if you create an in between option there, and you say, people from Belgium, you can go to this exact same concert that we're holding here in Belgium, and you pay 10 euros for a ticket, and you're going to see it together with your friends. It's going to be state of the art, and we're going to do that in VR.

Then they're going to make like 10 million in revenue on top of what they already have. Very, very scalable. And you reach an audience that is massively larger. So, thinking about what kind of entertainment do we have, what kind of entertainment options can we create for free, but it can also be a business model, that could also be an interesting way to experiment.

MH: I want to come full circle, right to the beginning of this conversation where you pointed out that you're not a technology guy specifically. But I also want to tie this into the analogy you gave of the Blackberry versus the iPhone. I'm holding in my hand the Blackberry of VR headsets. This was $2,000, super high quality, tethered with a cable to a $2,000 PC. Knowing that you're not the technologist, look at this from the lens of Blackberry or any other consumer device evolution. How long before augmented reality devices and therefore the metaverse are as ubiquitous as the iPhone is today?

SVB: Yeah. Yeah. You said it, Michael, I'm not the technology guy. But from what I hear is that this is one of the biggest challenges we've ever had in terms of technology, because what we need to do is get all the technology that is now in an iPhone, we need to get them into a pair of glasses, glasses that look cool, not spacey, but cool, like your glasses look right now, otherwise, we will not wear them, and put a lot of power and possibilities in that. I heard this great interview with Mark Zuckerberg. He said, it's going to take at least another 10 years before we have that. Probably 10, 15 years before we are there.

MH: And what does the consumer look like in 15 years?

SVB: A lot of changes, except for consumers and humans. Our core expectations always remain the same. We want to have a good product and a good service and a good price. We want to have convenience because time is a scarce resource. We want to create a lot of value in our lives that can be by cost saving, that can be with entertainment, that can be by learning. And we want organizations to add value to society. And if you bring those together, I mean, that's what customers want. And that will stay the same for the next 10 or 20 years. The way that we deal with that, or the opportunities to deliver that will change, and the metaverse and VR and AR are a fantastic tool to create better partner in life experiences and to create more digital convenience for people. That's where the benefit and the killer application will be.

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