WEBVTT - ETFs Go Into the Metaverse 0:00:05.440 --> 0:00:12.760 Welcome to Trallians. I'm Joel Webber and I'm Eric bel Tunis. Eric. 0:00:13.000 --> 0:00:15.560 There was an announcement recently by kind of a big 0:00:15.560 --> 0:00:20.720 company formerly known as Facebook, now known as Meta Platforms, 0:00:21.400 --> 0:00:25.600 and I'm curious what your your take was on all 0:00:25.600 --> 0:00:28.920 of that, because what I saw was a company rebranding 0:00:28.920 --> 0:00:32.120 itself and the market just kind of went nuts for 0:00:32.120 --> 0:00:35.040 this idea of the metaverse. Yeah, you know, I'd heard 0:00:35.040 --> 0:00:36.640 of the metaverse. I mean, this is not a term 0:00:36.640 --> 0:00:40.200 I was unfamiliar with, and when I saw the announcement, 0:00:40.240 --> 0:00:42.720 I kind of thought, well, Facebook has really been that 0:00:42.840 --> 0:00:44.440 name has kind of been through the mud, and maybe 0:00:44.440 --> 0:00:47.279 they were just trying to like make an easy like 0:00:47.400 --> 0:00:51.560 news start. But when they did that, what happened that 0:00:51.720 --> 0:00:53.800 really caught my attention as an E t F analyst 0:00:53.920 --> 0:00:56.560 is the e t F with the ticker meta, which 0:00:56.600 --> 0:00:59.480 I assume Facebook probably wanted but couldn't get because it 0:00:59.520 --> 0:01:03.080 was taken the round hill ball metaverse. Et f UM 0:01:03.120 --> 0:01:06.119 started to see flows very quickly like and I thought, well, 0:01:06.160 --> 0:01:09.080 maybe people are like accidentally buying it, But over the 0:01:09.120 --> 0:01:12.240 past sixteen seventeen days, it just takes in more and 0:01:12.319 --> 0:01:17.000 more money. It's very reminiscent of Hack after the Sony 0:01:17.080 --> 0:01:20.840 Pictures Hack, where this news event becomes a catalyst moment 0:01:20.880 --> 0:01:24.440 for a theme. It's the perfect situation and Meadow was 0:01:24.560 --> 0:01:27.240 right there waiting. And I'll give you some numbers. It's 0:01:27.280 --> 0:01:31.559 now grown by sixfold since you know the Zuck moment, 0:01:32.120 --> 0:01:35.440 and it's also seen volume grow by fifty times. The 0:01:35.480 --> 0:01:39.080 options activity has grown by forty five times. The ETF 0:01:39.120 --> 0:01:42.920 is becoming. It's just it's basically done what you want 0:01:42.959 --> 0:01:45.720 to see in two years in about three weeks, which 0:01:45.800 --> 0:01:50.120 is impressive. So joining us on this episode of Joinings, 0:01:50.160 --> 0:01:54.720 We've got Matthew Ball, the guy behind the et F 0:01:54.920 --> 0:01:58.440 meta Also joining us Matt Canterman, an e t F 0:01:58.480 --> 0:02:01.400 analyst with Bloomberg Intelligence, where he's also the co host 0:02:01.440 --> 0:02:05.400 of a podcast called Into the Metaverse, along with another 0:02:05.440 --> 0:02:12.760 Bloomberg Intelligence guest, Rebecca Sin, this time on Trilliance Exploring 0:02:12.800 --> 0:02:20.080 the Metaverse. Mr Cantorman, Mr Ball, Rebecca Sin, Welcome to Trilliance, 0:02:20.919 --> 0:02:23.400 nice to be here, Thanks for having us. Okay, So, 0:02:24.240 --> 0:02:27.000 Matthew Ball, I want to start with you. Last time 0:02:27.480 --> 0:02:30.160 you and I connected a couple of years ago, you 0:02:30.240 --> 0:02:32.800 wrote like an article for Bloomberg Business week and then 0:02:32.800 --> 0:02:34.440 all of a sudden, like you're back with an E 0:02:34.560 --> 0:02:37.440 T F. What's been going on? Man? Quite a bit? 0:02:37.480 --> 0:02:39.600 I mean, funnily enough, the article that I wrote for 0:02:39.639 --> 0:02:44.119 Bloomberg was on the ongoing and soon to be precipitous 0:02:44.120 --> 0:02:47.080 decline of Hollywood in the box office. This is like 0:02:47.160 --> 0:02:50.600 before times, it was like nineteen pre pandemic was certainly 0:02:50.600 --> 0:02:52.480 pretty pandemic. But it's a good way to look at 0:02:52.520 --> 0:02:55.920 the metaverse, which is through my career I've jumped a 0:02:55.960 --> 0:02:58.520 few different times. At one point I was a wild 0:02:58.600 --> 0:03:01.080 firefighter in initial at act, if you can believe it. 0:03:01.919 --> 0:03:05.120 But I've spent most of the past fifteen years jumping 0:03:05.200 --> 0:03:07.600 from what I saw to be the new thing. At 0:03:07.639 --> 0:03:10.840 one point, that was the digital apps economy. Shortly thereafter 0:03:10.919 --> 0:03:14.560 it was digital communities. I then moved into s VAUD 0:03:14.600 --> 0:03:18.040 a few years before the streaming wars began, and then 0:03:18.040 --> 0:03:21.200 over the past five years, I shifted over to video gaming, 0:03:21.320 --> 0:03:24.639 and that very cleanly brought me to the metaverse, albeit 0:03:24.680 --> 0:03:26.160 at a time in which I still thought it was 0:03:26.200 --> 0:03:30.000 fifteen years away from fruition and at least five years 0:03:30.000 --> 0:03:34.000 from the public consciousness. And so what came first this 0:03:34.160 --> 0:03:37.560 e t F or or the idea of of just 0:03:37.840 --> 0:03:41.040 you know, putting a finger into what what this space 0:03:41.080 --> 0:03:43.480 could look like. So I've been writing about the metaverse 0:03:43.480 --> 0:03:49.360 since mid but it was mid twenty in which this 0:03:49.440 --> 0:03:54.440 is a macro super theme started to become an idea 0:03:55.200 --> 0:03:57.880 that investors would start to look at this. And then 0:03:58.240 --> 0:04:00.280 in the intwoing months in the back half of the year, 0:04:00.880 --> 0:04:03.640 we had roadblocks. File there s one. It was the 0:04:03.680 --> 0:04:06.640 first time in which we had the metaverse really driving 0:04:07.280 --> 0:04:10.320 a story to the street. We also had the I 0:04:10.440 --> 0:04:14.120 p O of unity. Those two combined were some of 0:04:14.120 --> 0:04:16.520 the biggest ideas the gaming industry had ever seen. They 0:04:16.600 --> 0:04:18.880 very quickly became some of the biggest companies in the 0:04:18.920 --> 0:04:22.400 gaming industry, and that gave us a lot more confirmation 0:04:22.520 --> 0:04:24.520 that now was actually the right time for an e 0:04:24.640 --> 0:04:28.480 t F. And so we began in late the second 0:04:28.560 --> 0:04:32.320 quarter of devising the methodology behind the index. In the 0:04:32.320 --> 0:04:35.840 third quarter, we began doing initial conversations with various et 0:04:35.960 --> 0:04:40.039 F providers. Secured that in the first quarter of one. 0:04:40.480 --> 0:04:43.719 But to be honest, even midway in the second quarter, 0:04:44.560 --> 0:04:46.799 we were concerned that we were too early. We didn't 0:04:46.800 --> 0:04:49.520 think we couldn't have a viable e t F. But 0:04:49.600 --> 0:04:51.760 we thought that it was largely going to spend a 0:04:51.839 --> 0:04:55.719 year or two proving itself from a returns perspective, but 0:04:55.880 --> 0:05:00.400 struggling to actually penetrate the average investor, certainly institu Oceans, 0:05:00.440 --> 0:05:04.599 but even many retail investors. Um And just before we 0:05:04.640 --> 0:05:07.600 go to meta here, for those of us who are 0:05:07.600 --> 0:05:11.880 the uninitiated, how do you even attempt to explain what 0:05:11.920 --> 0:05:15.680 the metaverse is when you know we're very early innings 0:05:15.720 --> 0:05:19.360 in what may transpire. It's a good question, and obviously 0:05:19.440 --> 0:05:23.159 I'm asked quite frequently. The honest answer is I tailor 0:05:23.240 --> 0:05:26.800 it to the audience, and that's based on the varying 0:05:26.839 --> 0:05:30.360 degrees in which they're familiar with the Internet. It's antecedents 0:05:30.400 --> 0:05:33.040 and so forth. But I think the most fun way 0:05:33.120 --> 0:05:35.360 I have to describe it is a riff on Daniel X, 0:05:35.440 --> 0:05:38.320 the founder and CEO of Spotify. He talks about the 0:05:38.320 --> 0:05:41.400 first fifty eight or twenty years of the consumer Internet 0:05:41.800 --> 0:05:46.280 as being this relentless quest to break down anything made 0:05:46.279 --> 0:05:50.200 of atoms and converted into bits. Think of your alarm clock. 0:05:50.279 --> 0:05:53.040 We all used to go to bed with an alarm 0:05:53.120 --> 0:05:57.239 clock on our nightstand made of atoms. And then today 0:05:57.360 --> 0:05:59.840 we actually go to bed with an alarm clock on 0:06:00.160 --> 0:06:03.440 our iPhone on our nightstand. We converted an alarm clock 0:06:03.520 --> 0:06:06.600 from something made of atoms into something made of bits software. 0:06:07.360 --> 0:06:10.400 This next stage, the metaverse, you can think of as 0:06:10.480 --> 0:06:14.920 reconstituting that alarm clock using bits, but into virtual atoms. 0:06:15.640 --> 0:06:19.080 There's a broad belief that that is a more intuitive 0:06:19.120 --> 0:06:21.680 model of interaction. You can take a look at forty 0:06:21.760 --> 0:06:24.880 years of the Internet's history and see is constantly shifting 0:06:25.240 --> 0:06:30.479 towards more tactile, more immersive, more visual experiences in much 0:06:30.520 --> 0:06:33.160 the same way we started on the Internet, representing ourselves 0:06:33.160 --> 0:06:37.080 with the user name and email address, sharing via text messages, 0:06:37.240 --> 0:06:42.200 message boards, slowly shifting too limited web pages, then profiles 0:06:42.240 --> 0:06:46.920 full of photos, video streams, Instagram stories. This next step 0:06:47.040 --> 0:06:51.479 is shifting online existence commerce into virtual three D objects. 0:06:52.080 --> 0:06:54.599 And I just follow up on that because there's a 0:06:54.640 --> 0:06:57.520 really important point that Matt has made um and you 0:06:57.520 --> 0:07:00.400 can check out We've talked about this extensively on our podcast. 0:07:00.400 --> 0:07:03.520 Into the metaverse. But the metaverse is not a device. 0:07:04.000 --> 0:07:06.839 You know, it's not defined by any individual access point, 0:07:06.880 --> 0:07:09.000 and there's a lot of misconception that the metaverse is 0:07:09.040 --> 0:07:11.480 a VR headset or it's an a R goggles, and 0:07:11.520 --> 0:07:13.920 that's not the case. The metaverse is device agnostic. The 0:07:13.920 --> 0:07:16.760 metaverse is the Internet. That's what Matt was saying. It's 0:07:16.840 --> 0:07:19.520 enabling the Internet with real time three D software. Unity 0:07:19.600 --> 0:07:21.960 likes to put out a stat that today two percent 0:07:22.000 --> 0:07:23.880 of the Internet is enabled by real time three D. 0:07:24.280 --> 0:07:26.800 And whether you think the CEO is is full of 0:07:26.800 --> 0:07:28.640 it or not, there's a trend in the direction. He 0:07:28.680 --> 0:07:30.760 thinks that ten years, fifty percent of the Internet will 0:07:30.760 --> 0:07:32.920 be enabled by real time three D. So you're talking 0:07:32.960 --> 0:07:35.680 about making the Internet exactly as Matt was saying, much 0:07:35.720 --> 0:07:38.720 more immersive and much more three D enabled. And and 0:07:38.760 --> 0:07:41.240 that's really the metaverse again, it's not a device. It's 0:07:41.280 --> 0:07:44.480 a really important point to make. And so, um, you know, 0:07:44.560 --> 0:07:46.600 as somebody who has a ten year old kid, he 0:07:46.640 --> 0:07:49.480 plays Roadblocks, I've seen it. He loves it. He plays 0:07:49.480 --> 0:07:53.160 with his friends. That's the metaverse, right, Matt Kenterman. Absolutely 0:07:53.240 --> 0:07:55.880 Roadblocks is like the only pure play in the metaverse 0:07:55.960 --> 0:08:00.240 right now. It is a virtual, social, shared persistent experience platform. 0:08:00.280 --> 0:08:02.920 That that is the definition of a metaverse platform. Now, 0:08:03.200 --> 0:08:04.960 there are ways that they can make it more immersive. 0:08:05.120 --> 0:08:07.440 There are ways that they can enhance that experience. There 0:08:07.480 --> 0:08:09.840 are ways they can do more from the business side 0:08:09.840 --> 0:08:13.360 on the monetization. But Roadblox is you know, Roadblocks Fortnite 0:08:13.680 --> 0:08:16.400 with ten cents done with honor of King's um. You know, 0:08:16.440 --> 0:08:19.040 these are some of the leading metaverse platforms out there today, 0:08:19.040 --> 0:08:23.600 even Minecraft within Microsoft, and so absolutely the metaverse exists today. 0:08:23.640 --> 0:08:25.880 But you know, we just interviewed Craig Donado, the chief 0:08:25.920 --> 0:08:28.720 business officer, on our podcast, and we're still in the 0:08:28.760 --> 0:08:31.320 first inning. You know, if you put this in baseball terms, 0:08:31.360 --> 0:08:33.000 we're not even close to getting out of the bottom 0:08:33.000 --> 0:08:36.000 of the first yet. And so let's put this into 0:08:36.000 --> 0:08:38.240 dollars and cents. Your job is analyst of Bloomberg Intelligence, 0:08:38.320 --> 0:08:41.040 is to try to find out the opportunity for investors 0:08:41.080 --> 0:08:44.240 who use bloomber terminals. So in one of my recent notes, 0:08:44.360 --> 0:08:46.760 I actually you know, associated one of your bits which 0:08:46.760 --> 0:08:49.720 talked about how the metaverse would be have a revenue 0:08:49.720 --> 0:08:54.200 of eight four estimated by you, um, how do people 0:08:54.200 --> 0:08:56.480 make money in the metaverse? Explain that? So, you know, 0:08:56.559 --> 0:08:59.720 our our forecast for the metaverse reaching eight billion by 0:08:59.760 --> 0:09:02.160 twenty twenty four is really driven by the consumer facing 0:09:02.160 --> 0:09:04.559 client applications. You know, I thought Matt and his team 0:09:04.559 --> 0:09:06.559 with Roundhill when they were marketing three TF did a 0:09:06.600 --> 0:09:09.040 good job of explaining that, and from that perspective, it's 0:09:09.040 --> 0:09:11.840 actually quite a conservative forecast. So we looked at, you know, 0:09:11.920 --> 0:09:14.720 four key areas. You know, from one hand, the metaverse 0:09:14.800 --> 0:09:17.160 is clearly growing out of online games. It's clearly the 0:09:17.200 --> 0:09:20.800 evolution of games into these shared social experience platforms. And 0:09:20.840 --> 0:09:23.120 so we looked at the online games market, which includes 0:09:23.160 --> 0:09:26.760 the software revenue, the services revenue, the advertising revenue. It 0:09:26.760 --> 0:09:29.280 also includes engine, the game engine, the real time three 0:09:29.320 --> 0:09:32.400 D software, which is so important. We looked at um, 0:09:32.440 --> 0:09:35.600 you know, social media advertising. You know, the metaverse platforms 0:09:35.640 --> 0:09:38.040 are going to be the next social platforms. They're going 0:09:38.080 --> 0:09:41.040 to eat into the advertising revenue of these big social platforms, 0:09:41.040 --> 0:09:43.160 so we took a big chunk of that. We looked 0:09:43.160 --> 0:09:46.160 at live entertainment, which I think is a really burgeoning opportunity, 0:09:46.280 --> 0:09:49.360 like such as virtual concerts, which alone is targeting a 0:09:49.360 --> 0:09:52.440 thirty billion opportunity just within the concerts. So that adds in, 0:09:52.760 --> 0:09:54.800 and then it's also the hardware that really used to 0:09:54.840 --> 0:09:57.920 access it. Although it's not any specific piece of hardware. 0:09:57.960 --> 0:09:59.880 The hardware clearly plays a piece, and that adds up 0:09:59.880 --> 0:10:02.000 to eight hundred billion. But there's so much that we 0:10:02.040 --> 0:10:04.439 haven't scratched the surface on. We didn't touch enterprise, we 0:10:04.480 --> 0:10:08.080 didn't touch education, because these are more long term opportunities 0:10:08.120 --> 0:10:10.920 where the monetization potential is still questionable in terms of 0:10:10.960 --> 0:10:14.240 direct revenue. And then there's also you know, secondary items 0:10:14.240 --> 0:10:16.559 such as you know, the cloud services that back all 0:10:16.600 --> 0:10:18.560 this up, the telecom services that back all this up, 0:10:18.559 --> 0:10:22.079 all the infrastructure that goes into building the actual networks 0:10:22.120 --> 0:10:24.960 that power the metaverse. That's all behind the scenes. That 0:10:25.040 --> 0:10:27.200 doesn't even touch So when when Tim Sweeney comes out 0:10:27.240 --> 0:10:29.720 and says the metaverse is already a trillion dollar opportunity, 0:10:30.040 --> 0:10:32.040 it absolutely is when you start including all of those 0:10:32.040 --> 0:10:35.959 secondary tertiary markets. And Rebecca, let me bring you into 0:10:35.960 --> 0:10:38.440 this um as a new member of our team, and 0:10:38.559 --> 0:10:41.439 I advised you to be bold and say interesting things 0:10:41.559 --> 0:10:44.319 in your notes. I think your fifth note said that 0:10:44.400 --> 0:10:47.800 metaverse CTFs could have eighty billion dollars in the next 0:10:47.800 --> 0:10:51.240 ten years. That is bold. I mean, honestly, I would 0:10:51.280 --> 0:10:53.160 say maybe eight to ten. But you went for the 0:10:53.760 --> 0:10:56.080 home run there. I guess with inflation, you definitely could 0:10:56.240 --> 0:10:58.800 get a little help there, But what's your logic to that. 0:10:58.920 --> 0:11:00.880 I'm I'm wondering if you just were hanging out with 0:11:00.920 --> 0:11:04.440 Matt cantervittle too much. So I remember when that note 0:11:04.520 --> 0:11:06.600 first came out and you laughed at me, you said, 0:11:06.640 --> 0:11:10.440 record are you crazy? And in hindsight, this was before 0:11:10.640 --> 0:11:14.760 Facebook had rebranded to Meta and before Korea launched their 0:11:14.760 --> 0:11:18.600 e t S, and I really genuinely thought that the 0:11:18.640 --> 0:11:22.040 market could be this large. And so I had predicted 0:11:22.040 --> 0:11:26.080 that the e t F meta space would become eighty 0:11:26.160 --> 0:11:30.320 billion and that could potentially be six hundred million in revenues. 0:11:30.760 --> 0:11:34.440 And in November, after Korea launched for new e t F, 0:11:34.520 --> 0:11:37.800 so on October twelve, Korea launched for new Metaverse et 0:11:37.920 --> 0:11:39.800 F S and it was one of the fastest growing 0:11:39.800 --> 0:11:42.199 ETFs to have gained a hundred million. So to give 0:11:42.240 --> 0:11:45.000 you some context, in Korea, two of their et f 0:11:45.040 --> 0:11:48.080 Samsung and Miray, reached a hundred million in assets in 0:11:48.200 --> 0:11:50.440 just under two weeks, so it was round six days. 0:11:50.800 --> 0:11:53.959 And so this is a record number of inflows. And 0:11:54.120 --> 0:11:57.040 in early November, I had published that the metaworse space 0:11:57.080 --> 0:12:00.360 would reach two billion, and this was achieved Act week 0:12:00.440 --> 0:12:03.640 earlier this week, and looking at Meta, you know, Meta 0:12:03.679 --> 0:12:06.400 has seen inflows of seven hundred million. But even in 0:12:06.440 --> 0:12:08.760 the Korea space alone, between the four et f s, 0:12:09.040 --> 0:12:12.319 they've already surpassed six hundred and fifty million in assets 0:12:12.360 --> 0:12:14.960 and they only just launched less than one month ago. 0:12:15.120 --> 0:12:16.880 And so I really believe that this space has a 0:12:16.920 --> 0:12:19.800 lot of potential. In Asia alone, we have other regions 0:12:19.840 --> 0:12:22.920 like Australia, Taiwan, Hong Kong, Singapore that are all looking 0:12:22.960 --> 0:12:25.880 to launch metaverse et s, and so the appetite in 0:12:25.880 --> 0:12:28.360 Asia is huge, and so I can see that this 0:12:28.400 --> 0:12:31.600 market could really reach eighty billion. Yeah, and I think 0:12:31.840 --> 0:12:35.360 eric it it's important to talk a little bit about 0:12:35.880 --> 0:12:38.880 where the long term can go here, and I think 0:12:38.880 --> 0:12:42.520 that there are a few different perspectives. First is Matt's 0:12:42.559 --> 0:12:45.680 where he talks about how much of the potential metaverse 0:12:45.720 --> 0:12:49.720 economy sits outside of the consumer facing applications. Well, the 0:12:49.840 --> 0:12:54.319 UN estimates that the global economy eighty seven trillion dollars 0:12:54.440 --> 0:12:58.680 is roughly eighteen percent digital. Now, of course, the Gaffam 0:12:59.040 --> 0:13:02.920 or big tech five companies Google, Amazon, Facebook, Apple, and 0:13:02.960 --> 0:13:06.959 Microsoft are about one point three trillion of that. The 0:13:07.000 --> 0:13:09.920 truth is that the vast majority of the digital economy 0:13:09.960 --> 0:13:13.040 sits outside of those big five companies, And in fact, 0:13:13.080 --> 0:13:16.360 we know that outside of that eighteen of the global 0:13:16.400 --> 0:13:19.439 economy that's digital, much of it is still powered by 0:13:19.480 --> 0:13:24.200 digital technology. Over time, we have seen the percentage of 0:13:24.200 --> 0:13:28.240 the global economy that is digital go up. My expectation 0:13:28.400 --> 0:13:30.880 is that that will continue to go up, in part 0:13:30.960 --> 0:13:34.440 powered by the metaverse, as the metaverse also gains share 0:13:34.559 --> 0:13:39.120 of that digital portion. Jensen Wang, the Nvidio CEO, has 0:13:39.120 --> 0:13:42.000 said that he expects the economy of the metaverse to 0:13:42.120 --> 0:13:45.400 eventually exceed that of the physical world. In other words, 0:13:45.440 --> 0:13:47.720 he's talking about a future state in which the global 0:13:47.720 --> 0:13:52.320 economy is perhaps to a hundred trillion dollars and fifty 0:13:52.920 --> 0:13:56.000 or more of that is in the metaverse. That seems 0:13:56.080 --> 0:13:59.320 a little large to me, but it doesn't surprise me 0:13:59.440 --> 0:14:04.000 that invests are so excited to invest in this theme. Technologists, 0:14:04.400 --> 0:14:07.720 business owners, investors have come to terms with the fact 0:14:07.760 --> 0:14:10.720 that the Internet caught many of us by surprise. The 0:14:10.840 --> 0:14:16.160 mobile Internet came much faster and proliferated faster than we anticipated, 0:14:16.240 --> 0:14:20.040 cloud was more disruptive. Just as business leaders have learned 0:14:20.040 --> 0:14:23.640 about disruption theory investors have learned about the pace of change, 0:14:23.960 --> 0:14:35.480 the enormity of a platform shift, and they're preparing. I 0:14:35.560 --> 0:14:37.400 have three visions in my head. You tell me which 0:14:37.440 --> 0:14:40.240 one is probably the most where we're going. One is 0:14:40.280 --> 0:14:44.040 Ready Player. One the oasis where one thing kind of 0:14:44.080 --> 0:14:47.480 becomes like the where everybody puts on their goggles and 0:14:47.480 --> 0:14:51.400 they all live in there, and yet society crumbles around them. 0:14:51.400 --> 0:14:54.720 That's probably like a dark vision, but that's one. The 0:14:54.760 --> 0:14:58.640 other one is more like Mark Zuckerberg's commercial on Good 0:14:58.640 --> 0:15:01.480 Morning America where he's sitting there a meeting talking to people, 0:15:01.520 --> 0:15:03.360 a how you doing like zoom, but like you're like 0:15:03.400 --> 0:15:06.000 a robot or like a fake version of yourself, whereas 0:15:06.000 --> 0:15:08.760 we're in the skeleton outfit. Then the other is something 0:15:08.800 --> 0:15:11.000 like Roadblocks, which I see my son playing, where he's 0:15:11.000 --> 0:15:14.160 too dimensional and he's sort of interacting. I I guess 0:15:14.200 --> 0:15:16.120 I'll throw this to Matt cantonman, you know, because I 0:15:16.120 --> 0:15:20.400 saw you shaking your head like um, you know, especially 0:15:20.400 --> 0:15:22.760 with Matthew Ball saying that that that much of this 0:15:23.800 --> 0:15:27.720 total revenue could come for total economic activity could come 0:15:27.760 --> 0:15:31.000 from in there, it seems like the oasis would be 0:15:31.040 --> 0:15:34.800 the vision that would exist. No no, I don't think so. 0:15:34.920 --> 0:15:38.000 I think that is a way to access the metaverse, 0:15:38.080 --> 0:15:40.720 but it's not the way to access the metaverse. I mean, 0:15:41.480 --> 0:15:43.240 you know, if you just think about the iterations of 0:15:43.240 --> 0:15:46.320 the Internet, right, we went from web pages to you know, 0:15:46.440 --> 0:15:50.040 social to mobile, and now we're entering the metaverse era 0:15:50.080 --> 0:15:53.120 of the Internet. And really we're just enabling everything that's 0:15:53.120 --> 0:15:55.640 out there with real time three D software and making 0:15:55.640 --> 0:15:58.800 it more social and more persistent. So an analogy would be, 0:15:58.840 --> 0:16:01.200 for example, you have face Book. You know, you're scrolling 0:16:01.200 --> 0:16:03.600 your wall or Instagram, and it's all photos and posts. 0:16:03.640 --> 0:16:06.560 It's all static, it's two D. It's not immersive. You're 0:16:06.560 --> 0:16:09.640 not interacting with it in lifetime. Imagine if that was 0:16:09.720 --> 0:16:12.840 a virtual bulletin board and you and your avatar were 0:16:12.840 --> 0:16:15.640 walking around and pinning things to the board and others 0:16:15.640 --> 0:16:17.840 were coming up and reading it in lifetime and the 0:16:17.960 --> 0:16:21.200 changes they make affect your board. That is a metaverse 0:16:21.400 --> 0:16:23.600 in theory, right, And then you talk about the business 0:16:23.600 --> 0:16:26.520 opportunities around that. So it doesn't have to be locking 0:16:26.560 --> 0:16:28.960 yourself in a headset. It doesn't have to be putting 0:16:29.000 --> 0:16:31.640 yourself away from the world. It's it's just a new 0:16:31.680 --> 0:16:34.400 way to interact and immerse yourself with others in a 0:16:34.480 --> 0:16:37.920 virtual world. I kind of love this question of anchoring 0:16:37.960 --> 0:16:40.480 in science fiction because, of course, the metaverse comes from 0:16:40.520 --> 0:16:45.480 snow Crash, and many, especially critics, tend to highlight the 0:16:45.480 --> 0:16:48.200 fact that all of the most popular conceptions of the 0:16:48.240 --> 0:16:52.640 metaverse or a virtual future come from dystopic science fiction novels. 0:16:53.480 --> 0:16:56.800 I found it funny because, of course, utopias aren't the 0:16:56.880 --> 0:17:02.160 best situation or construct human drama. By definition. There's a 0:17:02.200 --> 0:17:05.000 reason why we don't find many sci fi novels, nor 0:17:05.080 --> 0:17:08.080 any novels at all, that are set in a pacific 0:17:08.160 --> 0:17:12.280 perfect version of the future. It's a good narrative device. 0:17:13.080 --> 0:17:15.080 But to take a step back, I think one of 0:17:15.080 --> 0:17:17.679 the most interesting things about asking this question of what 0:17:17.760 --> 0:17:20.600 does the metaverse look like? A question many people ask, 0:17:21.400 --> 0:17:24.639 is that innovation is recursive. This is actually why disruption 0:17:24.840 --> 0:17:29.080 is so threatening to today's companies. A technology is created, 0:17:29.400 --> 0:17:33.080 which leads to new behaviors, which leads to new use 0:17:33.119 --> 0:17:38.080 cases for that technology, which leads to follow on innovations, creations, 0:17:38.200 --> 0:17:42.159 emergence of new business models, new companies. If you went 0:17:42.240 --> 0:17:46.360 to or two thousand and five and ask someone what 0:17:46.440 --> 0:17:51.240 does twenty one look like. The closest you'd get to 0:17:51.240 --> 0:17:55.679 today was essentially platitudes like more people online, more often 0:17:55.800 --> 0:17:59.359 from more places with better broadband. You don't get people 0:17:59.480 --> 0:18:03.840 describe being TikTok, which now owns the Billboard one. You 0:18:03.920 --> 0:18:10.040 certainly don't get the expectation that app based trading platforms 0:18:10.080 --> 0:18:14.240 with zero commission would lead to Yolo options trading on 0:18:14.280 --> 0:18:18.520 the subway because your board, which simultaneously rescues a company 0:18:18.560 --> 0:18:23.240 from bankruptcy. You don't get the idea that the most 0:18:23.440 --> 0:18:27.880 popular real time three D rendered experience globally would be 0:18:27.920 --> 0:18:31.160 Battle Royal games that didn't even exist until a few 0:18:31.240 --> 0:18:36.359 years ago. Innovation is recursive, It inspires, it is responded to, 0:18:37.119 --> 0:18:38.520 and so I think we can take a look at 0:18:38.560 --> 0:18:42.600 some of the early conceptions of the metaverse. The truth 0:18:42.680 --> 0:18:46.719 is it will probably look, feel and change our lives 0:18:46.720 --> 0:18:49.199 in a way we can't anticipate. No one thought that 0:18:49.280 --> 0:18:52.879 social media was going to lead to election engineering by 0:18:52.920 --> 0:18:56.040 foreign states in the way that it did, And that's 0:18:56.040 --> 0:18:58.680 actually what's going to happen here. It's the threat, it's 0:18:58.720 --> 0:19:02.520 the opportunity. Okay, So I want to ask another type 0:19:02.520 --> 0:19:05.879 of question, which was and and Matthew I'd love your 0:19:05.920 --> 0:19:12.200 perspective on this. Facebook embroiled in this massive, massive scandal 0:19:13.600 --> 0:19:16.040 basically pulls a rabbit out of a hat with like 0:19:16.200 --> 0:19:21.199 maybe you know a rebrand that will in you know, 0:19:21.320 --> 0:19:23.199 when we look back on this for years, like it 0:19:23.240 --> 0:19:26.520 could be like the greatest business case study of all 0:19:26.560 --> 0:19:29.560 time if they pull this thing off or it's Facebook 0:19:30.560 --> 0:19:34.680 now formerly Facebook also known as Metal Platforms, and all 0:19:34.800 --> 0:19:38.160 of the problems and societal issues that we've been grappling 0:19:38.160 --> 0:19:41.919 with in this Facebook context are now just amplified to 0:19:42.040 --> 0:19:44.359 the inth degree because now it's all in the metaverse. 0:19:44.880 --> 0:19:49.120 So where do you rate the rebrand scale of one 0:19:49.119 --> 0:19:53.199 to ten, ten being the greatest thing ever? Well? I 0:19:53.240 --> 0:19:55.480 think Mark has received some criticism as to whether or 0:19:55.480 --> 0:19:57.560 not this is a sleight of hand, whether his interest 0:19:57.560 --> 0:20:01.040 in the metaverse is new, and I think that misses 0:20:01.080 --> 0:20:05.480 a lot of context. Two years after he acquired Instagram 0:20:05.560 --> 0:20:09.040 for a billion, he acquired Oculus VR for more than 0:20:09.080 --> 0:20:15.120 twice that sum. In he reportedly tried to purchase Unity now, 0:20:15.119 --> 0:20:18.640 a seventy billion dollar game engine company. A few years ago, 0:20:18.680 --> 0:20:21.840 they acquired a company called Control Labs, the leader in 0:20:22.000 --> 0:20:26.760 brain to machine computer interfaces. They have been investing in 0:20:26.840 --> 0:20:31.480 this and other technologies for many, many years. His interest 0:20:31.600 --> 0:20:35.480 in this concept is certainly not new. I also want 0:20:35.520 --> 0:20:38.960 to highlight that Mark is actually a survivor of the 0:20:39.040 --> 0:20:42.919 pre mobile era. Facebook has become a case study for 0:20:43.000 --> 0:20:45.480 the speed with which a company can pivot to mobile, 0:20:45.560 --> 0:20:49.159 But that history often forgets He was late to mobile. 0:20:49.600 --> 0:20:54.199 Why because they bet on ht amount not apps. In 0:20:54.280 --> 0:20:56.919 two thousand and eight, Apple launched the app store. In 0:20:57.000 --> 0:20:59.080 two thousand and nine, they came out with their famous 0:20:59.119 --> 0:21:02.879 campaign there is an app for that in Sesame Street 0:21:03.040 --> 0:21:07.199 parodied that campaign, and yet it wasn't until twelve that 0:21:07.280 --> 0:21:10.520 Facebook actually launched a native app. Before then, it was 0:21:10.560 --> 0:21:15.400 a thin client based on HTML. Mark called that in 0:21:15.440 --> 0:21:19.639 the biggest mistake in the company's history. Within one month 0:21:20.240 --> 0:21:23.240 of rewriting the app to native code, time in the 0:21:23.280 --> 0:21:28.199 Facebook feed doubled. Imagine that. Imagine just changing your code 0:21:28.520 --> 0:21:33.800 and doubling engagement in an engagement based platform. Now they survived, 0:21:34.119 --> 0:21:37.160 But what did happen in two thousand and nine, when 0:21:37.160 --> 0:21:41.400 Facebook had three fifty million monthly active users. What's app 0:21:41.520 --> 0:21:45.840 was founded? It was specifically founded on being app based communication. 0:21:46.359 --> 0:21:49.560 They ultimately bought that company for fourteen billion dollars. It's 0:21:49.600 --> 0:21:52.800 now believed to be the most popular of the Facebook 0:21:52.840 --> 0:21:57.080 constellation of applications. What I see in this rebrand is 0:21:57.080 --> 0:22:01.400 a manifestation of many, many years of investment and belief. 0:22:01.760 --> 0:22:05.760 But most importantly, someone who understands the threat of platform 0:22:05.800 --> 0:22:09.320 shifts sees an opportunity to grow. They've been stymming by 0:22:09.320 --> 0:22:11.760 their lack of an operating system. They have a business 0:22:11.760 --> 0:22:15.159 model predicated upon one very flawed business model, and so 0:22:15.200 --> 0:22:18.720 he sees opportunity. But I think there's a genuine belief 0:22:18.880 --> 0:22:24.520 that this rebrand can be an important signal to investors, 0:22:24.760 --> 0:22:29.680 to partners, to current employees, to potential employees, and to consumers. 0:22:29.920 --> 0:22:32.680 It's very dangerous to have one of the most valuable 0:22:32.720 --> 0:22:36.840 companies on Earth and tell every shareholder you should now 0:22:36.920 --> 0:22:40.040 evaluate me on a thing I say is five to 0:22:40.119 --> 0:22:43.359 ten years away and which I am going to incinerate 0:22:43.440 --> 0:22:47.399