How a VR Company Became the Airbnb for NFTs

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Jacob Lowenstein started Closed my talk at the Augmented World Expo by apologizing.

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It was a small crowd—less than a hundred masked and distant—in Ballroom B at the Santa Clara Convention Center in the heart of California’s Silicon Valley, waiting to hear about collaboration software. Lowenstein heads business development local, a venture-backed startup that over the years has convinced enterprise customers they need to strap on a headset and buy into its virtual reality meeting apps. But on Wednesday of last week, Lowenstein began a presentation on NFT, the virtual art house, the Utah Jazz NBA team, and the curse of naming the app “the work of the future.”

“It’s a strange situation,” Lowenstein began. “For those of you who have used Spatial, you might be wondering, ‘WTF? What’s got Spatial? How many more buzzwords can they throw out…’ And the answer is, infinitely more buzzwords if It helps us make money. It was a joke.”

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Lowenstein may have added humor to the company’s money-making goals, but Spatial is really chasing the money. Right now, it is headed in the direction of the much hyped NFT art market. NFT refers to “fungible tokens”, often described as certificates of ownership of digital assets. Some individual artist is making millions by selling not only a piece of digital art, but that tokenized proof of ownership. Tokens are managed on the blockchain, which means crypto is the default currency. according to recent bloomberg report goodThe crypto art market generated $3.5 billion in sales in the first nine months of 2021.

“It seems the industry is rallying around this idea of ​​an interoperable, NFT-powered metaverse that we think is a unique one,” Anand Agarwal, co-founder and CEO of Spatial, said in an email. , super-simple and fast service.” to Wired. Spatial’s rapid transition from hosting VR board meetings to hosting NFT auctions marks the rapid steps they are taking if they hope to sell a product that is better and cheaper than what larger competitors are offering. But for Spatial, which had aligned itself with partners like Microsoft and has been selling its software to customers like Mattel and Pfizer, donut drift in the notoriously volatile world of NFT art seems particularly risky.

meta masterpiece
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Aggarwal and Lowenstein say that the change to using Silicon Valley’s language was more of an evolution than a pivot; Their users decided what would become Spatial. Certainly, being able to appear as an avatar in the “holographic office” was useful, especially as the white-collar world embraced remote work during quarantine. To give remote employees a sense of presence with one another, some office leaders were using Spatial to host virtual team events. (Switching to the web from a Meta Quest 2 headset, I once met the Spatial team in their own apps, which all support Spatial apps. Nerdshala’s Julian Chokkattu also uses Spatial.)

But something strange happened. When the Spatial app first launched on the Quest 2 headset in 2020, most of its users were accessing the app in VR. the company thought Moment had arrived – given that the world was living through a pandemic – where people would be more comfortable wearing VR headsets for extended periods of time. Not so much. Spatial started getting feedback that people really don’t want to have endless meetings in VR and that they’ll have the option of just clicking a link and joining the web like they can in a Zoom meeting. So the company created a mobile app and became web friendly. 75 percent of people who use Spatial’s virtual reality meeting rooms are no longer using a VR headset at all.

“It’s almost entirely on a desktop computer, sometimes on a mobile one,” Lowenstein says. “So during this month, when the metaverse has been the most talked about ever… what most people relate to isn’t a headset-based experience.”

Then, in January of 2021, something else happened. A Parisian artist named . Is Yasin at Kasis was tasked with creating a virtual museum to celebrate the tenth anniversary of Alix, a fully digital, genderless, nation-agnostic ambassador created by the United Nations. The artist, who sometimes goes by the yak, chose to host the virtual museum event in the spatial app.

A few months later, visual designer Jarlan Pérez and contemporary video producer and sculptor Federico Klapis—whose sculptures baby holding iphone in utero and vr-headset-wearing Mothers Bearing Invisible Children There is a shocking interpretation of the modern world – even in the spatial. He took the virtual space created by Spacials for giant corporations to go to PowerPoint or fiddle with 3D product renderings and created galleries for their artwork instead. And then they started selling NFTs.

The whole notion is astonishingly succinct: showcasing digital art, combining something beautiful or pretty bizarre in a completely virtual atelier, in a completely virtual atelier, and then selling it as a blockchain-based non-fungible token. a buyer who cannot be physically to control Art, but at least for some viewers, can prove that they own a unique copy of it. Never mind: Soon, 90 percent of Spatial’s users were NFT artists using the app’s virtual environments as exhibition spaces.

The Spatial team responded quickly, claiming to create a one-click option for artists to integrate an Ethereum wallet, pull in their NFTs, and choose from one of several galleries to host an event. did. The app became a virtual Airbnb for artists selling NFTs. ,

Not all spatulas were on board; Two of the company’s executive team bought in in a frenzy, but most of the others were convinced. Also, Spatial hasn’t shared how many users it has right now or how many pieces of art it has sold, although Lowenstein says there are individual success stories. For example, artist Tyrone Webb was able to sell his first 12 NFTs when he began performing in Spatial.

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But other certainly more corporate entities are also using Spatial to sell NFTs. In September, the NBA’s Utah Jazz sold 30 NFT collectibles and, as part of the purchase, offered exclusive access to meet and greets with the team in a virtual locker room. The franchise hired contemporary artist Krista Kim and AR/VR designer Michael Potts to build the virtual locker room, which they created using Spatial.

“It was an opportunity for the Utah Jazz to create storefronts that are both physical and digital,” says Kim, who also built one of the first digital homes to be sold as NFTs, called Mars Planet, “This is where the future of these sports franchises will go. Star players don’t have to leave their house and everyone wins.

new money

A business model in which multi-billion dollar sports franchisees are using your software may not be bad for Spatial — and it’s probably no different than selling your software to Fortune 500 companies. In the future, Spatial plans to sell its own custom-designed virtual space as an NFT, or it could build an affiliate business where it gets a cut of the art it sells, Lowenstein said. .

But there is sufficiently established doubt around the NFT art market right now as to whether Spatial’s axis could be an unfortunate one. Some artists have suggested that their fellow creators being sold at speculative price And the promise of prestige more than anything else. Others have expressed concern about the real environmental toll crypto-fueled art will take. At the AWE conference, where Lowenstein was presenting his case, some Metaverse developers were less than excited.

“There’s definitely a lot of hype in the NFT art field right now,” says Brielle Garcia, a veteran AR and VR developer. “I think it is great that some artists are getting well compensated for their work, but I think many of the real technological benefits that NFTs and blockchain provide are being lost in the current gold rush. ” (Garcia also spoke to me during a panel about AR at last week’s conference.) The technical value of NFTs is in the token itself, Garcia says, and art mixes with the tokens with projects.

Garcia envisions these tokens to be more useful if you’re looking to build a decentralized competitor to Ticketmaster — which can’t be far from the Utah Jazz’s attempt to sell access to all of its virtual locker rooms.

When NFTs become a pyramid scheme, Lowenstein is not surprised when asked what happens to Spatial’s business. “We are not a hammer looking for a nail in the case of NFTs,” he says. “The trends we care about are the creator economy and creators getting paid for their work and the general trend of creators getting access to a market that isn’t gate-keeped by Sotheby’s or Christie’s.”

“Even if the value of Ethereum crashes or a bunch of top NFTs go down in value, creators are bought out,” Lowenstein says. “They’re not all making a lot of money, but they’re making money, and nobody’s taking it from them.”


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