SPOKES Privacy Technology Conference Fall 2021

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Privacy in the Metaverse

Jan 3, 2022 | Marketing, Privacy

Headshots of Justin Antonipillai of WireWheel, Eric Davis of AGC Partners, Momei Qu of PSP Growth, Aaron Jacobson of NEA, and Andrew McClure of ForgePoint Capital

It’s inevitable that the metaverse will be the number one social network in the world.

— Michael Gord, Metaverse Group Co-Founder

“It wasn’t that long ago that the metaverse concept didn’t exist outside of science fiction books,” says WireWheel CPO Rick Buck. “The term is often associated with Neal Stephenson’s Snow Crash or Ernest Klein’s Ready Player One. But the metaverse is far from science fiction. It’s here today and it has captured significant interest in the investment community. 

“It’s a new channel, a new technology, a new industry, with enormous potential. But, if we think of the Metaverse as an extension of the Internet, then we also need to think about the problems and issues that we’re dealing with on the Internet: challenges that can be exacerbated in this new metaverse world.”

An expert panel gathered to discuss the metaverse from both a privacy and investment perspective during the Fall Spokes Privacy Technology Conference. Jennifer Vancini, General Partner, Mighty Capital; Christy Steele, Principal, Sands Capital; and Jeremy Greenberg, Privacy Counsel, Future of Privacy Forum joined WireWheel CPO, Rick Buck for Privacy in the Metaverse: What You Need to Know Today.

Is the metaverse big enough for new entrants?

It is really a matter of how many users you have on your platform. How much engagement do you have? While there is a high costs to build this type of platform and retain users, at the same time the reverse is true. There are very low switching costs for users who will sign up very quickly for a new platform to give it a try. 

— Christy Steele, Sands Capital

“It comes down to the company’s model” says Mighty Capital’s Vancini. The fundamentals apply: “What’s unique about the team in terms of achieving what they want to achieve? Are they best of breed of something that they’re doing that will contribute to this metaverse?” 

“We look closely at dependencies on APIs. What is the likelihood that they’re very dependent on one particular giant and the risk that…they decided to cut access or frequently change what that API looks like? What is that company’s ecosystem strategy? I want to see you’re covering 50 to 100 different things so that you have different areas to grow in different areas to exit and got acquired.” 

“The user experience and the quality or the diversity of experiences the user can have is really important,” opines Steele. “We’ve seen platforms build incredible user bases very, very quickly, but that doesn’t mean it will last. We look for tools that work across a multitude of platforms that will empower users and businesses across multiple – and any new platforms – that exist.”

Conversely, “there may be advantages to the small nimble newcomer. Particularly those with a highly specific focus that draw users,” offers Steele. An associated risk, however, warns Vancini, is that “if you’re too specialized, the company looks more like a feature than a full product” and it is “way too easy for the big players to replicate it.” 

“Privacy is one area where they can maybe have a leg up because it’s a very specific context for why they’re communicating with you. Continuing to offer additional value in an ongoing relationship.”

Privacy in the metaverse

“A lot of the concerns involving privacy relate to the scale of data being collected, a lot of it being sensitive,” says Greenberg, noting that “studies have shown that 20 minutes of VR can generate up to 2 million unique data elements related to an individual. And that’s just virtual reality. If you have a metaverse that’s integrating a number of technologies – VR, augmented reality (AR), mixed reality (MR) –  all of these different sensors are potentially collecting vast amounts of sensitive data relating to the human body and unique to the individual.”

The privacy risks are then magnified when decisions are made, based on the collection of this data. In the ‘2D’ web, information is collected to build a user profile that decides which content to serve or not serve a user. Which experiences they will have or not. This can cause things like filter bubbles and create all sorts of divisions politically or culturally. 

But in a 3D environment, those decisions are not just online or on your mobile device. They’re potentially happening to the world around you that you’re walking through and experiencing.

— Jeremy Greenberg, Future of Privacy Forum

Importantly, as Greenberg warns, “a lot of this technology is going to be used in public, so there are all sorts of questions about transparency and control over data collection of bystanders who might come into contact with someone using this technology.” The implications of this are both complex and profound

Does it feel sort of icky?

As Vancini rightly points out, “knowing past history, there’s a little bit of suspicion around the metaverse along with the excitement and curiosity. We know it’s about advertising dollars. However, it’s too early to know what the value of this data in this advertising will be.” 

In terms of diligence –with every company that’s dealing with consumer data – the first test is simply ‘How does this feel as a potential user or consumer of the product or platform?’

Does it feel sort of icky or inappropriate? You don’t want to be involved in that type of product or platform.

— Christy Steele, Sands Capital

“It’s also important with the founding team,” continues Steele, “to get a sense that they are aware of the privacy challenges and understand that this will be an evolving challenge. They need to be as transparent as possible with their users about what they’re collecting and how they’re using it.

“I think the transparency and control element of this piece is really important,” says Greenberg. “Of course, the onus falls on the user. Granular controls can be great but can also be overwhelming. It is really important to think about some current privacy-enhancing technologies or techniques and mapping them to this 3D space.” 

“Just having a privacy-first mindset is very helpful,” offers Vancini. “There’s certainly the opportunity for business models around privacy as part of the product value that you’re giving the consumer or the organization.

What is Government’s role?

The beginning of wisdom is the definition of terms.

— Socrates

As Greenberg notes, legislation right now is “an uphill battle.” But in terms of the metaverse – involving all these different technologies – “we don’t know what it’s going to exactly look like. We don’t know what tech it’s really going to entail.

“When we talk about things like virtual reality there’s more or less consensus over what that is, but we don’t have standardized definitions.

Just really thinking about the definitions we have today – biometric data is often defined based on the ability to identify a user – the privacy risks in the metaverse…also concerns the inferences you can draw from the collection of this biometric data, [such as] my psychology based on eye-tracking data, for example. 

Rethinking some of the definitions we have out there is really just a first step. 

— Jeremy Greenberg, Future of Privacy Forum 

Vancini calls out that ”these are clearly difficult areas because what’s the balance between the government, the oligopolies, and monopolies and then the end-users? It’s impossible to say it’s really a free market in terms of the content being served up to us. Our metaverse has come down to a very tiny microverse and there are risks inherent in that.” 

Things to come…

As Steele notes, “we all have a vision in our minds, whether it’s from Snow Crash or Ready Player One of this virtual world that we’re living in all the time. I think, in reality, the way that we look at it as it stands, is that there’s this continuous overlapping of our physical world and digital world that gets a little bit more augmented where we’re continually uploading and downloading more information from the virtual world.”

It is human nature that we overestimate what we can do in the short-term and underestimate how much can be done. In the long term. Three years from now, maybe we’ll see a couple of breakout cases and disruption that are super interesting. 10 years from now we’ll be talking about a completely different set of companies.

So let’s just say some of the mega giants we know today could be the Yahoos of tomorrow. 

— Jennifer Vancini 

Greenberg predicts that in the short term the “ metaverse is going to be really idiosyncratic.” And 10 years from now “you’re going to have broad adoption…Folks who haven’t heard of any of this today are going to be participants…We are going to move between physical and digital worlds seamlessly. To the point where we might not even be cognizant that we’re doing so.” 

WireWheel’s Buck closes plaintively: “Let’s hope that evolves into a utopian versus dystopian world.”

Watch the entire SPOKES session here.

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