Gabor Retfalvi CEO, Next Earth David Taylor Token Architect, Next Earth
For those who are not familiar with what Next Earth does, could you summarize your mission and how you become one of the world’s largest metaverses?
Sure thing. We actually stopped using the term “the world’s third largest metaverse” because it’s something easy to kind of stick to but then obviously the question is based on what. Nevertheless, we are still one of the largest metaverse companies on the planet and we are only ten months old. If we talk about the mission, one important distinctive factor of Next Earth is that we are the world’s only Earth-based metaverse that runs on the blockchain. And that opens us the door to create what we call mixed reality experience, for example, our recently announced partnership with Iomob and Vueling is a prime example of that.
These companies have gone to all the metaverse companies and failed to create a tangible use case because it was really hard to grasp real-world economic entities like a commercial airline understanding how they can join the metaverse because 99% of all the metaverse companies are basically video games on steroids. So building on top of that foundation our mission is to turn Next Earth into a fully operational DAO (“Decentralized Autonomous Organization”) to completely democratize the metaverse and completely democratize the digital experience with a very heavy focus on environmental and social charity. We’ve already donated more than a million dollars to environmental charity which basically puts us at the forefront of environmental impact in the entire industry.
What was the most challenging period during the life of the company and why?
Basically, the most challenging period started 17 August when we started selling tiles from the map and it is still going on. The entire experience is very challenging obviously, because in such a short period of time we have become such a large company. I’ve been working in the startup scene for 12 years. I am pretty much used to the high volatility environment, ambiguity, uncertainty but in crypto this is probably true tenfold, when it comes to Next Earth I think it even brings us to higher levels of uncertainty and ambiguity by probably at least an order of magnitude. The reason for that is that when you’re creating a company your first job is to find early adopters, we did that within a month. Then, once you find early adopters you need to find product-market fit, we did that in two months. And after that we have started going up and up and up in sales right up to the point when we were having 250K dollar a day revenue in December. Obviously market conditions played into that really well, because as we started selling NFT-minted land in our metaverse in August, two months later Mark Zuckerberg announced that he’s renaming Facebook to Meta, that obviously blew everything up. But then, the interesting thing is, once you start growing like that, how do you create an organization that is actually capable of supporting that growth? So we’re going through what’s called hypergrowth where revenues might fluctuate just with the market conditions, crypto is volatile, but we are seeing a plethora of opportunities. We constantly need to re-evaluate what is the kind of company that we want to create, who is the best kind of person for this job or that job not just to keep that product-market fit but also to build on top of that and reach the next milestone, reach the next sort of big thing for the company. I think, scaling is definitely one of the most challenging parts, but that is something that has been going on for the last nine months.
As you mentioned you have more than 10 years of experience with startups, do you have any advice on how to tackle this period?
I think that’s a billion dollar question when it comes to startups. We are in a very fortunate situation because we have generated enough revenue and we have launched our own token which skyrocketed in value so as a completely bootstrapped company we never actually required outside capital which means we can burn money.
When you are scaling, once you find your product-market fit, basically you need to start pouring money into that system because the more money you pour into it, the more it will generate.
But that usually has an expiration date, and you need to find a sort of next level of that product-market fit, before that initial PMF expires. You need to scale the organization up to that level before that expires. Usually, startups in a sort of capital poor environment would go out and raise funding then try to find product-market fit, and once they find product-market fit, they would go on and raise even more capital so they can start pouring money into the company and basically, accelerate growth. What we’ve experienced is no matter what we did, growth was happening, it was accelerating. So the question is: how do you capitalize on something that is already capitalizing on itself?
How do you find the next big thing so that you can say, OK, I’m thinking I’m here then actually, I’m way up there. Even when we start to think about the big visions, the master plans of the company, things that we’ve written down in a Google Document as far-fledged ideas in September are already behind us in May. That is something that is absolutely impossible in the startup world. Coming from a capital poor environment I would definitely raise outside funding in order to be able to fund the fact that I need to probably spend on two-three full projects and maybe one will work. What we are currently going through, the startup world calls this blitzscaling based on Linkedin founder Reid Hoffman’s terminology.
Blitzscaling means you are at a crossroad with your company. You can go left and build that kind of organization, you can go right and build another kind of organization, and maybe you have a third or forth route and instead of having to choose – if you have enough money – you can afford to, basically, go down all of those roads.
This means that your capital will be wasted away but then time to market is reduced by two-three orders of magnitude because you can afford losing money just to be able to find the right kind of fit. ROI in this period is incredibly low but the strategic position you can get in the market is amazing. This is what we’ve done, this is how we have become literally the only platform as a service provider in the metaverse industry within just such a short period of time.
That’s very impressive! And how do you experience this hypergrowth internally, in the day-to-day life of the company?
Lots of stress obviously. I think as a founder, as former founder, as someone who has built several companies, one of the hardest things is to understand as you start building a company, some kind of talent, some kind of approach might be great for you to get you from A to B, but to get you from B to C you probably need a different kind of team. Understanding on a day-to-day basis where are the limits of some people: Do I need to hire somebody to help them? Do I need to hire somebody who will support them? Or do I need to actually find another place for them in the organization and do I need to hire somebody into that position? Making those decisions is incredibly hard and incredibly difficult because you’re playing chess with other people’s lives. That is an incredible responsibility as someone who is leading a company that is going through this. And obviously, our job as the leaders of the company is to create an environment of trust, create an environment where people feel safe and create an environment where people feel they have room to grow both professionally and personally. Sometimes it works, sometimes it doesn’t and when we screw up it hurts a lot. And obviously, we do screw up, everybody screws up.
It’s a process and probably, one of the most crucial elements of the day-to-day basis. And there are a lot of ad-hoc things so on Monday we create a system, and then on Tuesday it turns out the system doesn’t work. On Wednesday we create a reporting structure, on Thursday it turns out that nobody has time to write or even read reports. Sometimes the best things we do are ideas that come out on a Thursday evening and then we do them on Monday, and it makes us a million dollar revenue in a week. Then, other times we plan major shifts in the product for weeks and it gives us nothing. We need to live with that because that is all part of the process. So it’s a very ambiguous, very uncertain, very stressful situation and environment. The team that we have right now is, I think probably, we have amassed the best of the best that at least, Hungary has to offer. We also work with a lot of international people, some have moved here, some are working remotely. This team is basically the one that you can confidently go to war with.
You’ve mentioned your new partnership with Iomob, and Vueling, the Spanish airline, also joined the initiative. Please tell me more about how this initiative came to be!
I’ve personally been working in the crypto space for seven years. I designed NXTT and the whole token economy.
I’ve been designing crypto currencies for seven years so I have a quite sizable global network. One of my friends from New York, who runs a communications agency reached out to me and said: “Hey, I have actually another client who is doing this transportation and mobility services company and looking to integrate with the metaverse, and they went to Sandbox and they didn’t find the right kind of solution with Sandbox. Can I introduce you to them?” I said: “Sure, yeah, please introduce me!” Shortly after the first conversation we clicked immediately. It was pretty clear for everybody, them being the transport layer, us being an Earth-based metaverse, they even use the exact same mapping technology that we do underneath the hood. They were like I want to create a decentralized mobility services company so I can bring other transportation companies into my company as customers. But I need a platform where I can build all of that, I need a metaverse where I can build all of that. Within two months, we got from the initial introduction to actually having the partnership agreement because it was just such a clear use case for both of us. Then, we both went to Vueling and presented the use cases to them, and they’re like: “Yeah, this is exactly what we need!” For them, I’d say this half FOMO, they just don’t want to be left out of the whole metaverse thing, but also they realized that the metaverse is nothing more than a spatial internet. You have the internet, but you have a spatial dimension to it which in turn enables you to remove physical boundaries in the real world. So I can not only buy a plane ticket. Buying a plane ticket in the metaverse doesn’t make too much sense, but then having the ability to follow and track each and every bit of impact that my purchase is making on the planet through a digital platform is something that Vueling has been unable to do today.
What do you consider Next Earth’s greatest achievement so far?
I’d say that we have had the luck of recognizing early trends and opportunities in the market. So I think I could tell you about luck, probably. And the market seems to be reinforcing that. The fact that we realized early on that we need to be an Earth-based metaverse and not a video game-based metaverse, because most metaverse companies are just trying to recreate Second Life whereas we are actually trying to connect the real world with the digital one.
That was one of the sort of big AHA moments for us. Obviously, creating the token and launching the token and creating this whole platform as a service business model to sit as a kind of middleware layer to the whole metaverse industry. I think understanding how that will strategically impact the entire industry has been one of the most impactful things. The impact of which is yet to be seen, but we are already seeing in the kinds of partnerships, kinds of companies that are approaching us – either directly or through our partners – who want to work with us because of our unique position, because of our platform as a service, because we are middleware. There are loads and loads of brands – most of them are protected by NDAs – that are just eager to come to us, to work with us because we are representing the real world and not a video game which means that we are inherently interoperable with their business models. Whereas a video game based metaverse would find it really hard to do that.
One last question, where do you think the company is headed in the next five years? What’s your vision for the future?
Next five years? I can’t even see past October.
Let’s say for this year!
Here’s the thing. A lot of people in the web3 world think that we are competing with Decentraland, Sandbox and with all the other metaverse companies. We are not! I think the whole metaverse experience is basically a philosophical thing that is happening because most companies think that the metaverse is a space that is why they’re creating digital, virtual spaces with VR goggles and AR and whatnot. I think metaverse is a point in time, much like singularity. It’s the point in time when your digital life becomes more important to you than your physical one. So let me ask where do you usually make your money? Is it more on the internet or is it offline?
On the internet.
And where do you spend your money?
On the internet..
So what would happen tomorrow if you’d be cut off from the internet?
That’d be disastrous!
Exactly! And that is something that we are yet to grasp as consumers that our digital lives are now becoming more important to us than having access to heating. Because most people especially in the West think: as long as I have access to the internet I can make money, I can spend money, I can move, I can find utilities, but if I don’t have that, I’m being cut off from the ability to generate revenue, generate income. And the moment that becomes more important to us than our digital lives is when we start living in the metaverse. But the real question is, when I live in the digital world, who owns the digital version of me? Am I free person? Or am I owned by somebody else? Up until now, web2 companies have been owning our digital lives. An average user has 150 digital accounts, on all sorts of websites and all of the data that is created by you, that is you in the digital sphere, is actually not yours. It is owned by them and monetized to oblivion by them. So I think the real challenge for the next five years, for the next ten years is not between Decentraland and Sandbox and God knows what other kinds of companies will come, but between web2 and web3. The true digital ownership moving back to the consumer, to the internet user or staying with the fan companies that’s the big question we are trying to solve. I think – and this is why we are becoming the middleware layer in the metaverse – that no single metaverse will be the winner of this race, I think most web3 metaverses will become fully interoperable in a multiverse of metaverses where I can come and go as much as I please between Sandbox, Decentraland and Next Earth, and the fourth one and fifth one and who knows what. But I am owning what is mine, I am owning myself and not becoming a digital slave, I do have agency over what kind of data I give to other companies to monetize, how they can monetize it whether or not I actually get revenue back from that monetization strategy. Next Earth has an incredibly solid, mathematically proven economic model that I’ve designed and that is completely based on true digital ownership and agency, and our goal is to make every single metaverse out there interoperable with this single goal so all web3 companies can actually take up the mantle against the big fan companies and basically avoid this cyberpunk dystopia.