Writers love feedback. After my recent article on market euphoria over electric vehicles(EVs) it was fascinating to field so many queries as to the best ‘picks and shovels’ to play the EV gold rush. It also prompted additional thought. I will expand on that original question a bit later but first I want to highlight a few other ‘tools’ which caught my eye this week. We’ve had a pretty decent sporting week so let’s start on the pitch.
Cryptocurrencies might be experiencing some turbulence in recent days but, just like the EV revolution, there is no doubt digital currencies will be a part of our Web3 future. However, the challenge for crypto and Web3 franchises is how to generate consumer curiosity, awareness and ultimately engagement. Clearly, sport is one of the the most powerful tools to engage the wider public. Check out the announcement by the LA Lakers basketball franchise of a $700 million deal with Crypto.com for the naming rights on their Staples Centre home. Say hello Jack Nicholson(he might use other words…) to the Crypto.com Arena for the next 20 years and then marvel at the $1 billion spend by this Singaporean crypto outfit on various sporting partnerships with the likes of Paris St Germain, Formula 1 and UFC. Game on but it’s not just sport.
The gaming world is possibly the closest Web2 version of what Web3 and the metaverse might commercially look like. Think of all those ancillary revenues generated by selling customized characters (“skins”), aspirational tokens for super-powers/boosts and access to new virtual worlds or gamer communities. We are already reading about consumer giants like Nike prepping for digital versions of their products which customers will proudly wear in the metaverse. And it might not be cheap; Epic Games have just partnered with luxury house Balenciaga to bring high-fashion Fortnite “skins” to the game.
Of course, the competition will be hot to attract consumers to particular metaverses or virtual properties. Ground breaking graphic design software is an obvious resource for gaming companies to use or even buy. So, it was no huge surprise to see gaming development giant, Unity, splash out $1.6 billion on Weta Digital which was co-founded by Peter Jackson of Lord of The Rings directorial fame. Jackson had incorporated Weta Digital to house the software developed in the productions of Avatar, Avengers and Fellowship of The Ring. The “tool” thinking from acquiror, Unity, is clear. Unity is the development partner of choice for 70% of the top 1,000 mobile games on the market and they have swooped on Weta’s cutting-edge technology to provide more tools for games creators. It feels like the race is truly on to deliver enhanced experiences in the new digital environments promised by Web3 but don’t assume the basic digital tools will remain untouched. Passwords? Try again…..
Password trauma may soon be a curse of the past. We note with interest that authentication developer, Stytch, has just achieved unicorn status. Investment house, Coatue, is leading a $90 million Series B funding round this week at a $1 billion valuation for Stytch. The company also announced its first biometrics product which is another important step in its mission to kill the password as a means of digital access. Any tools which reduce online friction and make digital consumer life easier will be in serious demand. To tweak a well known mantra of Stripe it feels like the ‘GDP of Digital’ is expanding rapidly. If one needs convincing, as cryptocurrencies wobble, check out these real world developments of recent days:
- 40 major UK retailers have partnered with digital wallet fintech, Mode, to give online shoppers cash-back rewards in….. Bitcoin. That’s right…crypto cash back(!) and Boots, Homebase and Ocado have been referenced as partner brands in this customer loyalty initiative.
- Nigeria’s central bank has just rolled out a digital currency, the e-Naira, which has prompted half a million people to create their own digital wallets.
- The Republican party might be defecating all over the US Constitution these days but a rare copy of the original Constitution document was just purchased at a Sotheby’s auction for $43 million. The story is not the price but the under-bidder; a digital community or Decentralised Autonomous Organization (DAO) teamed up to try to buy the rare Constitution copy and raised $41 million in crypto-based money from 17,000 “investors” in a matter of days. Intriguingly, Sotheby’s recognized the Ether/Ethereum bid as official money in their auction guide. The attempt to buy one of just 13 original copies of the US Constitution may have fallen short at Sotheby’s but expect more DAO philanthropic action in the coming years.
- No doubt Christie’s and Sotheby’s will be happy with the whopping $2 billion of art auction sales transacted in recent days but there might be even bigger days ahead. Morgan Stanley reckons the non-fungible token (NFT) market for ownership of digital assets is set to grow to $300 billion by 2030.
- Harvard Business Review gave an interesting analysis of the NFT space: “Owning an NFT effectively makes you an investor, a member of a club, a brand shareholder, and a participant in a loyalty program all at once. “ No wonder adidas, Starbucks, Coca-Cola etc are ramping up NFT activity. But also wonder at all the tools which are typically used to support investors, brands, clubs and communities? Big bucks to help Starbucks me thinks.
And if you’re still with me at this point, my answer to the greatest EV tool opportunity out there would be chemistry. Batteries are the critical battle ground for EV supremacy and the best batteries are the most efficient ones. Global battery dominance will be driven by the greatest scientific break throughs in chemistry . What a delicious irony it would be that a DAO would find and buy the rights to potentially ground-breaking science and become the Lord of The Tools!