One Thousand Entrepreneurs, One Thousand Metaverses

What are we talking about when we talk about the metaverse?

Some people say that the metaverse is a decentralized technological utopia, a virtual ideal country, where people can do everything that cannot be done in the real world.

Some people also say that the Metaverse is an epoch-making opportunity that will create countless wealth and is comparable to the Internet and mobile Internet, so we must go all in on the Metaverse.

Others say that the metaverse is not an immersive VR game mastered by some giant in the future, but another expression of all the technological advances happening now. Once a certain singularity is reached, it can be said that humans have entered the metaverse era.

The last time people discussed a trend so enthusiastically and mysteriously was the Bitcoin and blockchain craze. But this time, the big players have voted with real money.

Roblox went public, and is it worth $40 billion? Let's take a look at the opportunities of UGC game platforms; ByteDance spent 9 billion to acquire a VR equipment company, it seems that hardware entry is very important; Facebook is going to transform into a metaverse company? And changed its name? Go and listen to what Zuckerberg has to say.

The Metaverse has become a commercial spectacle . A game, a social product, a video software, anything digital can be linked to the Metaverse - and now almost all of our time, attention, and money seem to be flowing in the form of numbers and radio waves.

On October 28, 2021, Zuckerberg changed the name of Facebook to Meta under the watchful eyes of the public, pushing this round of Metaverse craze to a peak visible to the naked eye. For a time, the voyage of the sea depended on the helmsman, and the voyage of the Metaverse depended on Zuckerberg.

You may still not understand what the Metaverse is, that’s okay. 36Kr interviewed some people related to Metaverse to show you how this latest technology concept has inspired a group of loyal Chinese believers. This may be another dream-chasing story after the Bitcoin craze, which is not lacking in controversy, fog and absurdity.

Dawn of the Preacher

After the Spring Festival this year, the UGC gaming platform Roblox's valuation increased tenfold after its listing, Musk promoted Clubhouse to become popular, and blockchain and cryptocurrency became popular - these three major fires directly transformed the "Metaverse" on the other side of the ocean into the "metaverse", igniting the Chinese venture capital circle.

Tencent CEO Ma Huateng was the first Chinese Internet company executive to publicly discuss similar concepts. In an article published last November, he used the term "full-real Internet" instead of "metaverse" to describe the next upgrade direction of the Internet, but people generally believe that it was just a difference in wording. It is said that Yao Xing, the former vice president of Tencent who created the entire Tencent AI system, first proposed the full-real Internet, which was adopted by Ma Huateng. However, Metastellar denied this.

Later, Yao Xing simply left Tencent to start his own business, and from the beginning he received strong support from first-tier venture capital firms such as Gaorong, Wuyuan, and Hillhouse. He is the highest-ranking entrepreneur to leave Tencent in many years, and this change is obviously a huge shock to the Chinese AI community.

In early October this year, NetEase CEO Ding Lei seemed a little anxious. He posted within the company: Is anyone researching the metaverse? You can send me a private message!

This reveals a certainty: when it comes to the metaverse, all big companies cannot hide their anxiety and are quickly entering the game in various ways .

The actions of large companies are like weather vanes, and people with a keen sense of smell act quickly.

A blockchain industry forum temporarily added Metaverse to its subtitle on the eve of its convening; a VR game company, which had been struggling to survive after the boom collapsed a few years ago, suddenly began to receive investors asking if they needed financing this year; a fund simply changed its name to Metaverse, "focusing on Metaverse investment."

Yin Sang, the founder of the overseas social product "Oasis", told 36Kr that since then, investors have invited him for coffee almost every day to learn about his company, the industry and competitors. For entrepreneurs who were originally engaged in AI, game editors, social networking and blockchain, "Roblox's listing has helped everyone find their place, and everyone has discovered that we are actually (the metaverse)."

This trendy and fashionable concept, like Velcro, has tied together the messy threads of different technological developments. The concept of the metaverse has gradually gained popularity in the domestic venture capital circle and has been widely recognized, and investors have begun to pay for it.

Behind game AI companies such as Hyperparameter Technology, Yuanxiang Weisi, and Qiyuan World are capitals such as Gaorong, Wuyuan, and GGV. SIG Haina Asia led the investment of MetaApp with US$100 million. Code Qiankun was exposed to have introduced ByteDance as a shareholder, although this round of investment was actually completed as early as 2019.

Yahaha, which comes from the Unity game engine team, completed three rounds of financing in a few months. The original announcement date was postponed again and again due to the continuous entry of new investors. Soul, which calls itself a "social metaverse" and was almost listed, was ridiculed by many, but the gaming upstart miHoYo was still willing to subscribe for US$89 million.

Later on, almost every day we could see various "Metaverse" projects announcing financing, and Metaverse-themed conferences of various names being held.

As an entrepreneur in the field of VR and mobile social networking, Yin Sang has seen the market heat up - not only has capital started to bet with real money, but more importantly, "entrepreneurs are understood." At least, Yin Sang no longer needs to worry about investors falling asleep when introducing the company to them - which actually happened in 2019.

Yin Sang still remembers that embarrassing moment. He had only opened the PPT and spoken for three or five minutes when the investor across the table became sleepy and yawned wildly. "I could clearly feel the disappointment on his face." He couldn't stop to question the other party, so he had to bite the bullet and spend half an hour to finish his speech. "I thought my speech was not boring, but the investors at that time were not interested in the VR industry."

Yin Sang is a serial entrepreneur. When public opinion was most friendly to entrepreneurship a few years ago, he was featured in the Wall Street Journal, Bloomberg Businessweek, and various variety shows and TV announcements. Two years ago, Yin Sang went from Shanghai to Beijing to meet with a local technology media. Wanting to start a VR social business, he carried a heavy computer and a complete set of VR equipment to the cafe downstairs of the media, but the reporter only listened for about ten minutes and left, and there was no follow-up contact.

He also faced difficulties in recruiting. "When we talked to the candidates, the first thing they said was, 'Isn't the VR industry a bubble? Isn't it dead?'" For feasibility reasons, he had to shift the main direction of the product to the more mainstream mobile platform.

In early 2019, he went to the United States to meet with VCs and found that many American investors were already looking at and investing in Roblox, a multiplayer online creative game community. But in the same year, of all the first-tier dollar funds he met in China, "at least at the partner level, none had ever heard of Roblox."

In an environment full of doubts, Yin Sang had to seek out comrades-in-arms and keep each other warm.

In 2020, as Epic Games and Roblox once again talked about the concept of Metaverse, entrepreneurs from Oasis, MetaApp, Rct AI, Roblox China and other companies also began to form some small WeChat groups, using terms such as "Metaverse Dreamer" to describe themselves. They encourage each other, share the latest industry information, forward different people's understanding of the Metaverse, and even share investors and media resources.

But in 2021, especially in the second half of the year, all of this has become redundant. The Metaverse is finally on fire.

Pre-announced bubble

In July this year, as Facebook CEO Zuckerberg confidently declared that he would "become a Metaverse company within five years", ByteDance was revealed to have acquired VR hardware startup Pico for RMB 9 billion. With the popularization of mass media such as CCTV, this concept, which was originally only popular among technology venture capitalists, has unsurprisingly become popular.

In October, Facebook officially changed its name to Meta, and Microsoft launched an office product that allows people to continue to make PPTs in the Metaverse. Almost at the same time, well-known serial entrepreneur Luo Yonghao also talked about the Metaverse he recognized on Weibo. As long as human attention is mainly on the digital world, that is the beginning of the Metaverse. Humans will eventually move towards a more digital Metaverse era, even whether we like it or not.

Zhongqingbao, a Shenzhen Stock Exchange-listed company and the "first online game stock" in the A-share market, which was once the focus of regulatory authorities for its "integration" with blockchain technology in 2018, has seen its share price rise fourfold in the past two months because it once claimed to have launched a metaverse game.

Despite the fact that the regulatory authorities have been sending inquiry letters and the company itself has repeatedly issued risk warnings for abnormal stock price movements, investors in the secondary market still vote with their money and firmly believe that you are not only a Metaverse company, you are the leader of the Metaverse, and your stock price must rise. In short, if you say you are, you are, and if you are not, you are not either - the Metaverse fever has reached a bubble peak that was announced in advance .

Various Chinese-style metaverse associations, seminars, and working committees have been established across the country

When a new concept reaches this point, even those who once believed most that the metaverse is the future will feel embarrassed and worried.

"Now everyone can use Yuan, okay." Investor Han Ou said helplessly to 36Kr.

At the end of 2020, Han Ou shared within the company that with the development of computer vision, VR/AR, graphics, and the corresponding AI technology, there is a high probability that something new will come out. But what this thing is is vague. At that time, he felt that not many people thought so, so he wrote a PPT to popularize the concept of Metaverse that his American counterparts were discussing.

"Who knew that after the Spring Festival, Metaverse would become a consensus." Since he had researched the development of these technology fields in China very early and knew their pros and cons, Han Ou's views subsequently shifted. Compared with the lively environment, he became the most conservative among investors.

Some colleagues advised him to start a business in Metaverse right now. As long as he wrote a Metaverse keyword in his BP and drew a random layout, he could raise a lot of money. From historical experience, this is not just a joke, but is actually feasible. "But I am not that kind of person."

Some star projects have received huge amounts of financing, but from a traditional perspective, many projects have not shown the value of the corresponding valuation. "What kind of shit is this? It's suddenly been forced into the current popular concept." Han Ou was confused, and the worst thing was, " Even if you don't agree, you can't prove that you are right, because the metaverse is really too far away ."

Some entrepreneurs who were originally moving at their own pace have been swept up in this round of trend.

MetaApp's products include 233 Paradise, a game aggregation and distribution platform that relies on algorithmic recommendations, with more than three million young users logging in every day. On March 11 this year, the day after Roblox went public, MetaApp announced a $100 million Series C round of financing led by SIG Haina Asia. It may be the project with the highest valuation and the most single-round financing among the projects holding high the banner of the Metaverse, and the benchmarking is very obvious.

MetaApp needs a lot of time to cultivate its user and developer communities. MetaApp's CEO Hu Sen did not intend to announce the financing in a high-profile manner. He did not even want to raise funds because he did not want this nascent industry to be caught up in a war of burning money for subsidies. It takes time to cultivate a community atmosphere for UGC content.

"But this is already clear. If I don't follow, others will raise a lot of money, spend money on promotion, the market will grow rapidly, and they will recruit people, then I will be very restricted." He fell into a typical prisoner's dilemma.

The concept of the metaverse is becoming increasingly popular, but some people are discouraged.

An investor who has been following the social entertainment track for many years left the early-stage investment industry this year. One of the reasons was that some projects he did not approve of received huge amounts of financing by telling the concept of the metaverse. "The metaverse may eventually produce large companies. The general direction is fine, but I can't convince myself to accept their story and participate in such a game that is likely to be a bubble."

Baidu Vice President Ma Jie, who is in charge of Baidu Metaverse business, issued an unusual warning at a recent public event, saying that according to Gartner's technology maturity curve, the Metaverse is currently at the peak of its expected period. He even gave a specific time, " By the second half of next year or the year after, this round of bubble will definitely burst. "

The innovation dilemma

On the evening of July 31, a high-end cruise ship on the Huangpu River in Shanghai may have briefly become the place with the highest density of Chinese Metaverse believers this year.

Several founders of gaming artificial intelligence startup Rct AI, who were born in the 1990s, dressed in formal attire and greeted guests at the dock where the cruise ship docked, guiding them to take photos, which would be uploaded to the live stream.

Before the boat set sail, Rct AI designed a unique Chinese and English broadcast for this night cruise on the Huangpu River to create a sense of unreality: "From Shanghai to the metaverse", "The third cosmic speed is 16.7km per second", "Please do not use any weapons or pulse devices", and "Passing through other spaces will cause bumps."

Rct AI, which had just raised a round of funding and was negotiating the next round, was in high spirits and chartered the 800-ton, 300-passenger sightseeing boat named "Yuexing No. 6". Since its launch in 2019, "Yuexing No. 6" has been used for weddings, group visits, and cultural promotion meetings. Its sponsor has changed from real estate developer Evergrande to local milk brand Bright. According to the official website of Shanghai Pujiang Cruise, the hourly rental price of "Yuexing No. 6" is 35,000 yuan.

Rct AI chartered a cruise ship for a "Metaverse Tour"

At 8 o'clock in the evening, the cruise ship carrying the mission of "MAYFLOWER TO THE METAVERSE" slowly set sail. The Mayflower was a famous ship used by the British to immigrate to the North American continent. Rct AI used this metaphor to express its ambition to "immigrate" to the metaverse.

Zhang Yan, co-founder of Rct AI, repeatedly stressed the importance of faith. He also wrote articles to popularize Metaverse, "Faith can be seen in what we write."

Zhang Yan, born in 1995, is a member of the core team of Rct AI. Even in the Metaverse startup circle, many people doubt the ability of this young team (the oldest CEO, Chen Yuheng, was born in 1992), but Zhang Yan is not worried. Since the real Metaverse is foreseeably very far away and cannot be realized within ten years, he sees "youth" as another advantage. "It's hard to imagine a bunch of people in their 40s and 50s really believe in the virtual world."

During the two-hour "Metaverse" cruise, what people shared the most was not the Metaverse products, but the WeChat business card QR code. Occasionally, when the cruise ship sailed into an area with weak mobile phone signals, they could only take a photo of a stranger's WeChat QR code and store it, and then scan the code when the signal was restored.

In an ideal metaverse, all human bodies, tall buildings, sounds and lights in this world should be just a collection of data. We will no longer be restricted by the physical world and will not need to scan WeChat QR codes. Our consciousness will roam infinitely in a virtual world. But if people want to reach the future, they will always reach the future that looks like the future first.

"Whether you like this process or not, you have to accept the arrival of the metaverse in the end." Yin Sang told 36Kr after getting off the boat after the dinner. His Oasis is a client of Rct AI. Not long ago, this product just applied Rct AI's technology and launched AI virtual pets to accompany users.

Data from November 2 showed that Oasis ranked first on the free list of social apps on Google Play in the Brazilian market, surpassing TikTok and all Facebook apps. Currently, Oasis is entering the US market.

Yin Sang, who is full of energy at the moment, is just a member of the venture capital circle obsessed with disruptive innovation. In this world, growth is the right, only right, and always right thing, and people will panic and feel frustrated for missing every opportunity.

Chen Yuetian, who invested in Rct AI, believes that referring to the market value of Unity and Roblox and the primary market valuation of Epic, it makes sense for Chinese VCs to bet on Metaverse. "Even if you invest $200 million in a company, as long as it can become China's Epic, China's Unity, or China's Roblox, there will still be a hundredfold return."

Who can do it? While conservatives are skeptical and hesitant, top venture capital firms such as Sequoia, Hillhouse Capital, Wuyuan Capital, and Gaorong Capital have all put out hundreds of millions of dollars to vote for believers and radicals. Moreover, those who sit at the table first often bet right in the previous game and make a lot of money. They have a cost advantage over others and are more likely to withdraw first before the collapse.

When this situation becomes more common, even the most conservative investors who think they are the first to study the metaverse will begin to doubt themselves, "Are we getting old?" "Is it because the light is dark?" Han Ou was unable to give himself an answer.

"Invest if you believe" - ​​In the investment circle, when investors with different opinions cannot convince each other, and the market has not yet verified whether they are right or wrong, this is the consensus that they can all accept in the end, which cannot be called a consensus.

No one is unaware of the current market frenzy. If you talk to everyone in this wave of the Metaverse, most individuals are rational. But when these rational individuals form a collective and become "Metaverse projects", "Metaverse concept stocks", "investors" and "stockholders", they can easily fall into the greater fool situation of "I know I am hyping, you know I am hyping, and I also know you know I am hyping".

The vision of "the metaverse is the future, it is a brave new world" has become a consensus like a tide. In the face of the tide of consensus, the conservatism and rationality of any individual will be crushed in one blow.

Even Zuckerberg, the biggest flag bearer of the Metaverse, has his opponents, and the most weighty reservation comes from John Carmack, a legendary Silicon Valley programmer: " I oppose all of Facebook's efforts in Metaverse. Developing Metaverse is not the best way to achieve Metaverse. "

In 2013, Carmack joined Oculus Rift as CTO due to his optimism about VR technology, which was later acquired by Facebook. With Facebook's support, he almost thought that his dream of a virtual world for many years was about to come true. At least in reports and technical forums in 2014, Carmack had already been promoting the concept of Metaverse, and he directly promoted the VR craze in 2016.

But history has proven that even the mobile Internet has not reached its end. It was too early for VR to be popular among the public, and the craze cooled down. Perhaps it is precisely because Carmack has experienced these cycles that he has a conservative attitude towards Zuckerberg's strategic adjustment.

"The naive programmer or planner who just wants to talk big at the highest level doesn't care about the specific implementation details of GPUs, microarchitectures, networks, streaming media, etc.," Carmack said.

After the "leading stock of the Metaverse" Zhongqingbao surged for several days, the Shenzhen Stock Exchange issued an announcement on the evening of November 5, saying that it would focus on monitoring "Zhongqingbao" which had abnormal recent gains. Obviously, if the development of the Metaverse is difficult to control, or if it colludes with speculative capital, it will inevitably attract a higher force to burst the bubble.

With some faith and a lot of speculation, this shows that the trend is really hot.

(At the request of the interviewee, Han Ou is a pseudonym in this article)

This article was written by Zhang Xinyu and edited by Qiao Qian. It was first published on the official account "36氪" (ID: wow36kr), China's leading new business media, providing cutting-edge and in-depth business reports. Welcome to follow.