Ready Player Me’s CEO Timmu Tõke about Meta’s layoffs and policing the metaverse
In a new format for Startup Europe – Sifted Podcast, we’re taking a break from the news cycle to bring you longer format interviews, designed to get into the minds of Europe’s big names and the rising stars of the tech and startup scene. This week, Eleanor interviewed Timmu Tõke, co-founder and CEO of Estonian 3D avatar company Ready Player Me.
Ready Player Me started making headlines when Facebook changed its name to Meta and very publicly began investing in the metaverse. Earlier this year, the startup raised a $56 million funding round led by US investor Andreessen Horowitz (a16z), who specifically cited the metaverse as a reason to invest in the company.
But at the time of the recording, Meta announced massive layoffs and the crypto markets had hit turbulence, so Tõke took us through his vision and his perspective on metaverse skepticism.
To listen to the entire conversation, and hear why Mark Zuckerberg may or may not be a genius, you can find the episode here.
What is the metaverse and why do we need it?
The Metaverse is a 3D virtual world or collection of worlds, more like a network of 3D virtual worlds that you can visit to play games, hang out with your friends, educate yourself, and do all kinds of different things. It’s kind of a 3D version of the internet in some ways.
Almost 3 billion people play games every year, so it’s already a massive market – it’s already a $200 billion industry. But what is missing in the real metaverse if you ask us is the interoperability or connections between different worlds. At the moment, any virtual world is a closed platform, a closed experience, a walled garden. And it doesn’t feel like one big virtual world. To make it a true metaverse, we need to connect these worlds, have some form of value transfer across worlds, and have some form of consistency across [them]. So the real Metaverse is more like the internet where you can navigate between different pages and different worlds.
We’ve recently seen some headlines about Decentraland, which is a metaverse platform valued at more than $1 billion and has only 39 active users transacting over a 24-hour period. What do you think of these speed bumps? And what do they tell us about how things are going to turn out for the metaverse?
It will take a long time for people to find out [Decentraland] — how to use web technology in new ways that actually create new use cases and actually use the value that blockchain can provide. It will be very speculative. People just get excited about the theory of what the technology can bring in the future.
“It’s worth a billion dollars, because people are speculating with the land, and people are speculating with assets”
The game in Decentraland doesn’t hang in a virtual world, it’s speculation, and that’s okay. Like, I have hundreds of NFTs, I like to buy NFTs and collect them. But that’s not a field of use for most people in the world, right? So it’s worth $1 billion because people are speculating on the land, and people are speculating on assets. It’s a whole kind of thing.
So I don’t think empty virtual worlds without engaging experiences can really be compelling to the masses. And I think that’s what people are learning and figuring out now after it’s been tried many times. There is a team in a garage at the moment hacking together the next Web3 game or concept and using NFTs and crypto in a new way. And that actually unlocks the power and creates a new use case. And then we will see the space blow up. We work with 4,000 companies and we see a lot of new games coming up, so I’m very positive in this area in general.
Meta has been posting these huge losses in the metaverse part of their company and now it’s also laying people off. What does it signal to you as an entrepreneur in this space?
Nothing. The laid off I think 11% of your people. One of the best tech companies ever, Stripe, laid off 17% of its employees. That’s because what a great company means has changed dramatically over the past 12 months. It used to be about growth and just top-line stuff, and now it’s about being smart and actually generating cash flow. It’s very normal for companies to make adjustments because it’s been like free money for decades, especially the last three years. So it’s pretty predictable.
I don’t think anyone expected them not to lose, especially them. The question is more like whether it makes sense to invest $10 billion or $12 billion dollars a year on a future technology for a decade, and then hope it works out. I think their perspective is that they know what it feels like to operate on someone else’s platform – mobile, Apple, Google – and it hasn’t really worked out very well for them. They know what that means and they want to make sure that the next platform, which they believe is VR and AR, is not going to find someone else. And that’s where they’re willing to invest $100B+ or even more in the space, because they think it’s the next platform and they want to own it.
“We don’t think the metaverse is going to be filled with the mindset of today’s centralized big platforms”
Is it practical or not? I don’t know, I’m not the best person to give Mark Zuckerberg strategic advice. I think he’s pretty smart. But the markets don’t agree with his strategy at the moment. It could turn out to be genius over the next decade.
But we don’t think the metaverse is going to be filled with the mindset of today’s centralized big platforms. There is a wave of decentralization at the moment with the Web3 movement. And Web3 is a set of technologies, but it’s also a philosophy and a movement essentially towards breaking up the big platforms and being more open and more decentralized.
With Ready Player Me’s product, it’s about having an online identity that remains constant. How big a part do you think personal identity is going to be in the future of the internet as you see it?
Your avatar is naturally going to be a very consistent part of your virtual experience. You have it in every app, and it’s the central part of your metaverse journey. So it makes sense that an avatar is the starting point. We think it is very important, and also that there are two paths for the future. One is a more centralized path, and the other is more decentralized and open.
For the open metaverse to have a chance, there must be standards and protocols and services that link the various virtual worlds together. It really gives the open metaverse a chance, because there has to be ways for developers to take part in the network or be part of the network. That’s why we need to build avatars to travel across worlds, because it helps break down some of the virtual walls and connect the different exterior experiences.
We build our interoperable avatars to show the world that interoperable experiences are actually good, and they are a better user experience. They also make it easier for you to monetize your game because you can sell sneakers and shoes and NFTs for avatars that travel across thousands of worlds instead of being stuck in one game.
How have you built inclusivity and self-expression into your product?
First, we have avatars you can generate from a selfie. So we try to do a good job of predicting avatars that are different and then you can customize it to your liking by using different customization tools that we provide, [but] I wouldn’t say we do the best job. For example, we don’t have body types at the moment, which is a big limitation. And it’s very difficult to do that, because there are a lot of people who make assets for avatars – shirts, pants and all these things. It’s a battle across 4,000 games. There are different game engines, different types of apps. Some of them are VR. So the actual avatars are very different based on the experience.
So when we build body types, we need to build a system that supports assets from anyone in the world that works in any engine in the world, that scales up and down and sideways. There are many things we have to consider when introducing something like that. You want it to be automatic, you don’t want artists to have to create like six assets from scratch themselves. It must be fully automatic, or at least look good.
We’re also going to be adding more styles in the future, so that’s an extra element. It’s basically awesome, and that’s why it’s so much fun. But overall, we can’t possibly give avatars and avatar accessories and fashion and all these things to every person in the world, because we’re a biased company. Every company is biased. We have our own background. We think we know what’s cool, but it’s only cool to us. So our approach is to open up the platform and have someone else create avatars, avatar accessories, avatar fashion for their communities that they know and want to serve.
We’ve heard stories of people with female avatars entering the metaverse and then being harassed by male avatars. How do you feel about that kind of identity-focused behavior in the metaverse?
Generally when you put a bunch of people into a room—it could be an online forum or it could be a 3D virtual world—they’re anonymous, and they’re going to do something stupid. It is guaranteed. A lot of research is being done on it. So when you use a real identity to a person, they act very differently.
In fact, when you think about the traditional social media networks, they are all based on real identities. Facebook, LinkedIn, Instagram, Twitter are a bit in between. In general, if you have real identities, the network effects of the platform are stronger, because it is naturally persistent, it is linked to your real identity. It’s not something you’ve created temporarily, like an identity you want to discard.
“Generally when you put a bunch of people in a room – it could be an online forum or it could be a 3D virtual world – they’re anonymous and they’re going to do something stupid”
And that’s not the case in the metaverse yet. Neither world has a true identity. It’s interesting to see that if revealing your real identity, say in a different way, or putting your status on the line, maybe that could be a solution to that. Because these things always happen in anonymous worlds, where people have no responsibility.
Who will monitor user behavior in these many different metaverses?
It’s something we don’t have first-hand experience with, but if you imagine platforms that scale today, like Roblox, and how much effort and how much cost they have involved in policing and making sure it’s safe for kids, it’s very important. It is very difficult, much more difficult to do that in a virtual 3D world where you have a lot of freedom. There are many ways you can be inappropriate. But who is monitoring us in the real world? We have our identity, we don’t want to destroy our status. Other people will judge us and all these things somehow work in the virtual world as well. But I don’t have a good answer for that.
Steph Bailey is Head of Content at Sifted and co-produces the Sifted podcast. She tweets from @steph_hbailey.
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