The golden decade of the Metaverse detonating digital wealth

In The Innovator’s Dilemma, Harvard Business School professor Clayton M. Christensen argues that innovations that require end-user behavior to change are market-disrupting innovations. It can bring huge business value and is called “discontinuous innovation” or “disruptive innovation”. Management scholar Charles Handy (Charles Handy) proposed a more intuitive and understandable “second curve” theory. He believes that for any trend, technology, company, or product, its development often follows the law of the S-curve. To put it simply, when a trend has just emerged, it is often not optimistic at the initial stage, and the development speed seems to be slow, but it is actually in the most potential “exploration period”. With the development of technology and the increase in the number of users, this trend will show an explosive growth similar to a parabola, entering a “growth period”. However, at the peak, the growth rate of this trend will slow down significantly, entering a “mature period”, followed by a further “recession period”.

Charles Handy believes that innovation and improvement along a certain S-curve path is called “continuous innovation”, which is incremental improvement and development within a curve, which is also called “the first” curve”. After reaching the limit point of the first curve, the market will take a new direction and start the second curve of growth. The brewing stage of innovative technology is a very short but endless window of opportunity. The market transition from the first curve to the second curve will encounter many difficulties, but only in this way can we usher in a truly huge development space. Such an innovation process is called “discontinuous innovation”.

The development process of the Internet also follows the law of the S-curve. In 1994, China connected to the Internet.Around 2000, the Internet began to explode. Now there have been two waves of times from PC Internet Web 1.0 to Mobile Internet Web 2.0, that is, two S-curves. From 2000 to 2010, Internet users mainly used PCs, and the information superhighway was rapidly constructed and gradually opened up, which is the first curve. With the popularity of smartphones, the Internet began to transition to the mobile Internet. By 2012, the proportion of Internet access through smartphones in my country reached 74.5%, surpassing 70.6% of desktop computers, officially proclaiming the advent of the mobile Internet era. In the following ten years, the Internet has penetrated into all aspects of life through mobile terminals, and the development of the mobile Internet also follows the law of the S-curve, which can be considered as the second curve.

The golden decade of the Metaverse detonating digital wealth

On the morning of January 9, 2007, at the Macworld conference in San Francisco, USA, Steve Jobs wore his classic black turtleneck and announced to the world that “Today, Apple will reinvent the mobile phone.” At that time, many people dismissed the appearance of the original iPhone, thinking that it was just an iPod (Apple Music Player) that could make calls. We all know now that the iPhone is not just a “three-in-one” device for browsing the web, making calls, and listening to music, but the beginning of the mobile Internet revolution. In fact, in 2010, the average proportion of Internet usage in countries around the world reached 34.8%. The Internet penetration rate in the United States has reached 79%, and the Internet penetration rate in China has reached 34%. Therefore, the growth of users relying on computers has begun to slow down. The PC Internet has entered a “mature period”, and transformation has become an inevitable trend.

At that time, only a handful of extremely sharp companies realized that the Internet was about to enter the second curve.Sequoia China, a well-known venture capital institution, is one of them. Sequoia Capital entered China in 2005 and established Sequoia Capital China Fund (referred to as Sequoia China). In the spring of 2009, at a hotel called Commune at the foot of the Great Wall on the outskirts of Beijing, Sequoia China held an annual meeting of Internet invested companies with the theme “Mobile Only”. Shen Nanpeng, founder of Sequoia China, said in an interview after the meeting: “If the CEO doesn’t realize that he has to think about the product from a new angle, it will be very dangerous. I don’t know how to translate the theme ‘Mobile Only’ properly. , we just want to give everyone a wake-up call, the new era of mobile Internet is coming.” After 2009, Sequoia China’s investment direction began to tilt towards the field of mobile Internet in an all-round way, covering the four areas of clothing, food, housing and transportation. Mobile Internet.Sequoia China has invested in a number of companies in the core field of mobile Internet, such as Vipshop, Meituan,, and Didi Chuxing.

Meituan (which raised $10 million in Series A funding from Sequoia China in 2010) also took this idea to the extreme. In 2008, Groupon, the originator of group buying, was established, and domestic entrepreneurs entered the game in 2010. In 2011, almost all traffic websites launched group buying related projects, and there were more than 5,000 group buying websites. In the same year, Groupon’s accumulated financing before listing reached 1.16 billion US dollars, and its IPO valuation reached 10 billion US dollars. But a year later, the industry was shut down, a large number of group buying websites went bankrupt one after another, and Groupon’s stock price also plummeted. In 2012, Wang Xing made an important decision, that is, Allin (full investment) mobile Internet, all the resources on the PC side are imported into the mobile terminal. Wang Xing said at the “12th Annual Conference of Chinese Business Leaders” in 2013:

We go to where our users are, they turn to mobile phones, and we turn to mobile phones…Although the impact of the Internet has been predicted to be very rapid, when the impact really comes, it is still much more violent than imagined…In the process of reform, Not to mention detours, the general direction is very clear, it depends on whether you can run fast enough.

Facts have proved that this decision is very correct and timely. Two years later, 90% of Meituan’s group purchase orders have been transferred to mobile phones, and almost all other group purchase projects that survived the Thousand Regiments War have collapsed in front of the mobile Internet. Only Meituan, which saw the window period and successfully transformed, has truly become one of the top companies in the mobile Internet era. In May 2014, Meituan completed a Series C financing of less than US$300 million, with a valuation of US$2 billion to US$3 billion. By August 2021, the share price of Meituan will reach a peak of HK$460 per share, and its market value will be HK$2.7 trillion, or about US$340 billion.

From 2009 to 2019, in the US stock market, the proportion of the Internet sector in the market value of technology stocks increased from 25% to 36%. Apple’s market value rose from $199 billion in 2009 to $1.29 trillion in 2019; Microsoft rose from $268.6 billion to $1.2 trillion. By July 2021, Facebook, Google, Microsoft, Amazon, and Apple, the five major U.S. technology Internet giants, will account for 22% of the market value of S&P 500 companies. These are the technology giants that have successfully transformed in the mobile Internet era, and they have created legends and created huge wealth in the golden decade of Web 2.0. But there are also companies with poor transformation, such as the giant Intel in the era of Web 1.0, which failed to take the lead in the field of mobile Internet equipment chips. Its market value was $112.7 billion in 2009, and its market value rose to only $256.7 billion ten years later. .

The situation in China is also very similar. Whether it is the traditional giants Alibaba, Tencent, Baidu and, or companies such as Toutiao, Pinduoduo, and Meituan that have risen in recent years, all of them have seen the limit of the first curve of Web 1.0. They have the courage to transform in the short window period of the second curve transition and become the winners of the Web 2.0 mobile Internet era. We believe that in the era of the Web 3.0 Metaverse, China is expected to maintain and enhance its innovation advantage in the Internet field. For example, there is a “Dragon City” in the prime area of ​​Decentraland, which displays many Chinese cultural artworks.

The golden decade of the Metaverse detonating digital wealth

The golden decade of the Metaverse detonating digital wealth

From a macro perspective, in the golden decade of the mobile Internet, the digital economy of all countries is in the fast lane of development, and the Internet industry has created huge wealth. In 2010, the US Internet economy accounted for 3.8% of GDP, while China’s accounted for 3.3%. In 2019, the scale of the US digital economy reached US$13.1 trillion, accounting for 61% of GDP; the scale of China’s digital economy reached US$5.2 trillion, accounting for 36.2% of GDP. In 2020, the US digital economy will continue to rank first in the world, with a scale of nearly 13.6 trillion US dollars; China ranks second in the world, with a scale of close to 5.4 trillion US dollars. From the perspective of proportion, the digital economy of Germany, the United Kingdom, and the United States occupies a dominant position in the national economy, accounting for more than 60% of GDP.

Industrial innovation and upgrading is the process of transitioning from one S-curve to another. At present, the mobile Internet has been widely popularized. In June 2021, the number of netizens in my country has reached 1.011 billion, an increase of only 21.75 million compared with December 2020; the Internet penetration rate has reached 71.6%, an increase of only 1.2% compared with the end of the previous year; the scale of mobile Internet users has reached 1.007 billion, an increase from the previous year. In December, it only increased by 20.92 million; the proportion of netizens using mobile phones to access the Internet was 99.6%, which was basically the same as that in December 2020. Obviously, the mobile Internet has entered a “mature period” and gradually entered the era of stock fighting. It’s time for us to transition to the next second curve.

As key technologies such as 5G, artificial intelligence, cloud computing, big data, Internet of Things, industrial Internet, VR, AR, and blockchain become more mature, the third-generation Internet (Metaverse) is about to emerge, and the development of the Internet is coming again. At the new transformation node, the critical window period has quietly opened. Each round of Internet upgrades will bring huge new opportunities for innovation, entrepreneurship and wealth upgrading, and new giants are often born during the critical window period of industrial upgrading. The construction and popularization of the Metaverse will promote the deep integration of the digital economy and the real economy, and realize the further upgrade of the form of wealth. With the advent of the Metaverse era, the proportion of the digital economy in the global economy will continue to increase. By 2030, the global digital economy is expected to account for 80% of GDP. The essence of digital wealth is the result of the development of the digital economy, so we can boldly predict that 80% of the digital wealth in the future will be created in the Metaverse. The next ten years will be a golden decade for the development of the Metaverse, and it will also be a golden decade for digital wealth. The key opportunity comes from the third-generation Internet, and the upgrade of digital wealth will also be the strongest outlet in the next decade.

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