Two years into the pandemic, the meteoric growth of platforms connecting people online is running out of steam.
Not long ago, the appetite to spend time in the new digital spaces seemed limitless. Tech companies that offered ways to meet virtually found that users were willing to try just about anything. That is no longer the case. From Zoom to Roblox, Clubhouse to Peloton, new users are getting harder to find.
For our purposes, let’s call these platforms pandemic. Since March 2020, these popular services have ushered in a wave of groundbreaking experimentation that has laid the groundwork for tomorrow’s digital society. Along the way, entrepreneurs and tech executives have learned what people love and hate about living online.
“Crisis catalyzes change,” New York University professor Arun Sundararajan told me.
The gig economy was born partly out of necessity after the financial crisis. That shock gave companies like Uber and Airbnb a multi-source supply of labor and capital at a time when consumers were keen to try new types of money-saving experiences, said Sundararajan, an economics expert. informal.
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Other factors were at play. Peer-to-peer services would not have been possible without smartphones to connect us and social networks to reinforce trust between strangers. It also took time. For several years, users have adapted to the idea of sleeping in someone else’s house or traveling in their car.
Likewise, the shock of the coronavirus brought changes to the digital society. People have embraced new ways to connect virtually with colleagues, classmates, and loved ones. The range of goods and services we buy online has skyrocketed.
Gaming platforms, arguably the best positioned for the transition, showed that it was possible to create compelling live experiences like concerts in a virtual setting. Fitness platforms like Peloton and wearables like Whoop have turned bedroom workouts into a social experience.
In general, social media platforms embraced creators by offering them new ways to earn money. Dating apps have added new ways to interact, like video and audio calls. The live event experience has improved dramatically, lifting companies like Hopin, an event technology startup that investors valued at $7.75 billion last year.
More recently, decentralized autonomous organizations like the Friends With Benefits creator club are experimenting with hosting social groups on the blockchain.
But the growth of the platforms we have relied on is slowing.
The return of children to face-to-face education threatens platforms like Roblox, which have seen their daily active users and their working hours grow substantially. The uncertain outlook prompted a sell-off that wiped out two-thirds of the company’s share value since it peaked last November.
“Now that kids are coming back in a big way, will that usage go down? School is back. Homework is back,” said Neil Macker, a Morningstar analyst who covers Roblox.
Clubhouse, the audio-only app that Andreessen Horowitz and other venture capitalists valued at $4 billion last year, has seen downloads dip and level off after a spike when it launched publicly last year, according to the streaming service provider. Data.ai app analytics.
Pandemic stocks have faced a broad sell-off. Ask someone what word comes to mind when they think of Zoom, and they’ll likely say “fatigue.” The message seems clear: our collective embrace of early digital platforms was out of necessity, not desire.
Do not blame the platforms for the disinterest of the users. Both the nature of the pandemic shock and technological limitations may explain the change in attitude.
Unlike the financial crisis, the economic recovery from the low point of the pandemic has been surprisingly short, although, as inflation data shows, it has not been fully developed. The rapid recovery has implications for how consumers behave and whether they adhere to new habits or revert to old ones.
“People underestimate the importance of slow behavior change,” Sundararajan said.
It is also evident that the interactions through current technologies are not ready to replace the ones we have in real life. Virtual and augmented reality, the technologies best suited to fill this gap, are still a long way from delivering the “killer app” that will attract large numbers of users. VR headset maker Magic Leap posted one of the biggest valuation cuts in the past two years, shedding more than $4 billion in value in an October funding round.
For almost two years, people were ready to take a big step towards virtual life. And they may have moved on, had the technology been up to the task.
Here’s the silver lining: This recent era of experimentation has set a new standard for what users demand from immersive experiences. That feedback is invaluable information for technologists now building everything from Web3 protocols to virtual reality games.
In the long run, the pandemic’s most useful contribution to innovation may not be engaging more people with today’s Internet, but rather setting expectations for tomorrow.
Featured Image by Drew Sanders/PitchBook News