Last Wednesday morning, I was scheduled to meet Alex Howland in the metaverse at 8:45 a.m.
I’d updated the software on my laptop, and my digital avatar was ready. But then a nor’easter knocked out the power at Howland’s home in Dartmouth.
What exactly is the metaverse, the concept that Facebook (err, Meta) has decided to rename its entire company after? The term was coined by the sci-fi novelist Neal Stephenson in his 1992 book “Snow Crash.” It’s a virtual world that you can enter, build things in, buy and sell goods and services in, and collaborate with others as a digital being. If you’ve seen the Steven Spielberg movie “Ready Player One,” much of the action takes place in a metaverse. If you’ve played the video games Minecraft or Animal Crossing — or you’ve been in Second Life — those are versions of the metaverse, too. It’s an always-there “place” you can visit, as opposed to a Zoom or Microsoft Teams meeting that exists only for a scheduled stretch of time.
The company that Howland has built, Virbela, is a pretty neat nascent example of the metaverse. You can download the software for free (the Web-based version isn’t as good) and create an avatar. Once in, you can roam around a “campus” that includes a conference center, offices, and outdoor spaces where you can kick a soccer ball, hike to a lighthouse on a bluff, or play a team-based strategy game. Two nice things about Virbela: you don’t need to own a pair of virtual reality goggles to enter it, and you also don’t need to have your camera on to communicate with others; all conversation happens via audio or text chat.
Virbela was hatched in 2012 at the University of California San Diego. At the outset, it was a virtual space built for education. One early project involved business school students setting up their own car dealership in Virbela, competing to see who could sell the most cars. Pretty soon, though, companies began using the software as a place where employees could connect. One of those was a real estate firm, eXp Realty, that wanted to avoid spending money on brick-and-mortar offices for its agents as it expanded around the world. In 2018, it acquired Virbela, paying $11 million, according to a Securities and Exchange Commission filing.
Up until the pandemic, Howland says, when he’d show the Virbela metaverse to someone “there were a lot of doubters — people who’d say this is not going to work. Then, they’ll jump in and play a game like Fortnite.” The popular game is in itself kind of a metaverse where players can not only fight one another, or dance at live concerts, but build structures in the Fortnite world.
Unfortunately, eXp Realty doesn’t break out Virbela’s revenues, but in March Howland wrote a blog post noting that it had added more than 300 new customers (including MIT, auditing firm PwC, and the NBA), increased its monthly subscription revenues 15 times over, and grown the Virbela employee base from 20 to more than 170. The company is technically headquartered in San Diego, but during the pandemic Howland has been spending a lot of time in Massachusetts. “When the pandemic hit, we started recruiting from all over,” he says. “We will never go back to that in office thing.” (The company does still maintain an office for some virtual reality contracting work it does with the Office of Naval Research, he says.)
But we’re at a strange juncture, where people aren’t eager to commute to a “real” office, but they’re also not yet accustomed to hanging out in virtual offices, waiting to chat with colleagues or prospective customers who drop by in avatar form. Many of the business customers that Virbela serves, including the medical device maker Boston Scientific, are still “dipping their toes in,” Howland says, holding the occasional meeting or conference in the metaverse. Virbela’s owner, eXp Realty, has between 1,500 and 3,000 people on its virtual “campus” on a typical workday, he says. That’s out of 67,000 agents.
Because of last week’s storm, Howland and I wound up speaking by phone, rather than meeting in Virbela. But while we were talking, I dropped into Virbela’s own virtual office, and found no one there. (Yes, it was strange to be roaming the halls of someone else’s empty office, hearing only my footsteps. Howland explained that it gets busier later in the day, since many employees work on Pacific time.) I went to an empty conference center — in the past, I’ve been to virtual events held there — and then to an expo hall, where eventually a Virbela marketing staffer, Molly Evola, tracked me down to see if I needed anything. Howland had told her that I was roaming around.
“We’re at the very beginning of this journey,” says J.P. Gownder, a principal analyst on the Future of Work team at Cambridge’s Forrester Research. Even though many organizations have been scrambling to find ways to get things done over the past 20 months, he says, we have “not necessarily reached the endpoint for how collaboration should happen in the future.” Zoom fatigue is real, Gownder adds, and “people are more burned out than ever.”
Gownder says that Virbela has competitors that include other startups such as Spatial, Teamflow, and Sophya, as well as bigger players like Facebook and Microsoft, which has a metaverse offering called Mesh. He sees these digital environments being used in the business world for conferences and special events, as well as employee training, but says that the incentives to be in a virtual office on a daily basis are still somewhat vague: “How does it integrate into all the other tools we communicate?” he asks. “These are not mature offerings at this point, but it is a great time for people to start experimenting.”
One open question for Virbela is how effectively it will be able to compete as a division of a larger company, Washington state-based eXp, that is focused on being a real estate brokerage, not a purveyor of digital tools. Howland says there have been discussions in the past about spinning Virbela out as an independent company — “we explored it with a bunch of bankers last year” — but for now, eXp has decided to keep Virbela in-house.
Another startup with local ties, Sophya, recently raised $15 million to pitch its own “office in the metaverse” offering to companies. Sophya chief executive Vishal Punwani says that the deal came together in two weeks in August, with offers from seven investors. He calls that “a testament” to how much interest there in the metaverse. The company has 28 employees, and aims to double that number over the next two months.
If these companies can figure out how to market their offerings successfully, it’s a distinct possibility that for some workers, their future desk might not be downtown — but in the metaverse.
Scott Kirsner can be reached at firstname.lastname@example.org. Follow him on Twitter @ScottKirsner.