I Think I'm Giving Up Again

In the late 1980's a personal computer appeared called the Amiga which was known for cool features and a small but savagely loyal customer base. Few people today would remember this name as it has drifted into the mists of computer history. However, it serves as warning. Having a technologically sophisticated product is not sufficient for success.

Another good example is a collection of computer companies in the 1960's and 1970's called the BUNCH (Burroughs, UNIVAC, NCR, Control Data Corporation, and Honeywell) that competed unsuccessfully with IBM. IBM was never known for technological superiority. And yet it managed to beat out all the other companies that were.

What do these two examples have in common and what does it have to do with Second Life? Second Life is the most impressive technology to come along in a long time. And yet it is failing to capture the market, even though it is really the only competitor in the market. It is on wobbly financial ground. And it shows no prospects for living up to the hype it generated in late 2006. Why is this?

Having a technologically superior product and no business plan is a formula for failure. I have complained many times in this blog about how LL does not seem to have any idea what it is doing and events are beginning to bear that out. I think that Second Life is likely to go the way of the Amiga. It will have some cool features but no plan for business applications. It will have a small but savagely loyal customer base. It will continue to pursue the "fantasy world created by its users" strategy despite the fact that this has proven to be a faulty strategy. And it will fade into the mists of computer history. It is sad but I am having a hard time trying to justify wasting any more time on it. So, I am closing this blog with the following quote:

“For all sad words of tongue and pen, The saddest are these, 'It might have been'.”

John Greenleaf Whittier

Phil's Back

Apparently part of the reorganizing at Linden Labs, that led to layoff's of a third of staff, also lead to a replacement of the current CEO with the once and future CEO Philip Rosedale. I have a suspicious nature and can't help but wonder if the old CEO wasn't kept on long enough to lay off the people so any residual resentments would accrue to guy who left. But, that is just idle musing on my part.

I thought about this quite a bit and decided that this is probably a good move. Philip Rosedale is a likable, charismatic visionary kind of person who is needed to provide visionary leadership for a product like Second Life and a company like Linden Labs. I saw a recorded video of a talk that he gave and you cannot help but like the guy. And his childlike enthusiasm with technology is infectious.

This kind of leadership energizes a company and so I see it as a positive move. My main concern is whether or not that energy will directed into productive applications. And, I guess, that remains to be seen.

Voice Morphing

Linden Labs introduced a new feature for Second Life - voice morphing. For three dollars a month you can alter (read disguise) your voice. The vast number of free accounts compared to premium accounts attests to the fact that most people are unwilling to pay even a token amount for their Second Life experience. And yet Linden Labs believes that these people will fork over $3 a month to disguise their voice. Who would do such a thing? Well, several categories of people come to mind.

Celebrities who have very recognizable voices and are incognito in Second Life may wish to alter their voice so as not to be recognized. OK, that covers a dozen or so people. But really, aren't we talking about a different market here entirely? Who would need to disguise their voice? A few possibilities come immediately to mind: 1) men pretending to be women, 2) women with husky voices from too many years and too many cigarettes, 3) teens pretending to be adults, and 4) over the hill pedophiles pretending to be teenagers.

Do you get the point? Of all the things that LL could have spent development money on to make the product viable voice morphing is NOT one of them. After having laid off a third of their work force you'd think they would stop barking up the wrong tree. But, they seem to like that tree and they seem to like to bark. So, I guess I shouldn't expect any better of them.

Downsizing at Linden Labs

There were numerous articles, forum posts, blog entries and the like, this past week, about the major downsizing at Linden Labs. The staff was cut by 30%. Operations are being consolidated in North American. And they are focusing on a new strategic direction.

First, I would like to offer my condolences to all those people who were laid off. Losing your job is never a pleasant experience and in the current economy is it even more dire. Add to that the special status of Lindens in the Second Life world. It will be very difficult to return to being a normal person.

I suspect that many employees got caught up in the hype just as the residents did. There is no end of bitter residents who thought their Second Life careers would make them millionaires only to find their dreams dashed and their wallets a little emptier. Now I suspect that there will be no end of ex Linden Lab employees who saw themselves as the next generation of Internet start up millionaires only to find themselves unemployed. For these people there is no upside to this situation.

Nonetheless, there is a potential upside for both Linden Labs and the residents of Second Life who still see its potential value and have hung on all these years despite the problems. I say potential because, although this is a good step, it is still unclear that thinking at Linden Labs has turned in a fruitful and positive direction.

There are two elements of their new strategy as noted in several of the postings and articles that give me pause. The first is the elimination of the custom client in favor of a web browser based client. And the second is the improvement of the "In world experience". I will take these topics up in the next few posts.

Same Ole, Same Ole

I get Google Alerts for Second Life. I should say, in passing, that I highly recommend setting up an alert for any topic that you would like to track. The alerts are not perfect, of course. Some times the key word Second Life refers to a rejuvenation, rebirth, or second chances. But, by and large, the items selected are about Second Life and worthwhile to know about.

I mention this because I was looking over the most recent set of alerts. There were several stories about new applications for Second Life. And a number a alerts about LL getting sued by residents who are unhappy about policy changes in virtual property rights.

This is significant largely because it is not significant. When I first joined in the Fall of 2006 there were residents who where unhappy about something and new users who were trying to develop novel new applications. In 2006 that was expect and hopeful, respectively. In 2010 it is just tiring. Unfortunately, the cycle of enthusiastic new users who go from excitement, to realization, to alienation, to bitterness has been repeated too many times while the anger and resentment of residents who feel they have gotten a raw deal somehow just seems to shift from one group to another.

It would be nice to open up my alerts one day and see an application that has some real business utility; one that may get some traction and enjoy some longevity. A killer app as they say. One that would put Second Life on the map read by regular people. It would also be nice to hear about a mutually beneficial strategic partnership between LL and some residents that may prove to yield a bounty for both. But, alas, maybe that is just not realistic to hope for.

Coming Soon

LL has added a new blog or a new section of their blog called Coming Soon which is intended to alert users and businesses to new features and upcoming changes. The current page mentions the new viewer, an update in a graphics format, and some issues with related websites. It is, as they say, down in the weeds.

Anyone who may be planing a serious business in SL would like to know what the overall strategy and direction is for the product. Having been burned several times in the past with tanking land prices, the elimination of gambling, the exile of adult content, and most recently the revised licensing policy, serious users are reluctant to invest serious time and attention in a product whose direction seems to be driven more by whims than by a coherent business plan.

The apparent lack of a strategy is not a major problem for the business person who owns a few islands and sells virtual products like hair and clothes. In the worst possible case they would be out a few thousand dollars for the land, a few hundred dollars a month in revenue, and many hours of invested time. However, despite these set backs, they could rationalize that it was great fun and the experience was worth the money. I do not, in any way, mean to demean the small business people of Second Life. But, in the scheme of things they do not have a great deal on the line.

What, on the other hand, if a company was considering the investment of tens of millions of dollars into virtual meetings, distance education, virtual tourism, or any of the potential applications of this technology. Is Second Life the platform they would choose? I suspect not. It just seems too risky. It isn't just the lag, or the instability or even the griefers that are the problem. It isn't the poor documentation or lack of development tools or the lack of management tools. It is the fact that there is no plan for addressing these issues that keeps investors at bay.

But what are the alternatives? Well, there appear to be two. First, is the option of using the open source software to create your own virtual world. Some companies are doing this. Second, is the option of just waiting. Wait until somebody comes along who will embrace this technology and offer it to others in a form that seems worthy of investment. And, overwhelmingly, this second option is the most popular.

Here is what I would like to see. Coming Soon: A company that knows how to develop, advance and market this impressive virtual world technology. That would make me very happy!!

Another Revealing Article

I came across another revealing article about Linden Labs from which I would like to emphasize two points.

First, it says, "Linden Lab's plans for Second Life are as visionary as ever -- 'to enhance and improve the human condition.' " The inner quote is presumably from Linden Labs, and, I believe I have encountered it elsewhere although I don't have the link. Nonetheless, this is not a business strategy. It is not a business plan. It is not even a legitimate philosophy of life. It is, at best, silliness. What is the 'human condition'? How can it be improved? How can it be enhanced? Being guided by such nonsense, it is no wonder they have had the struggles they have. How can you make a business decision if you first must determine how it affects the 'human condition'. Is it better to provide free accounts or charge for them? Well, which one improves the human condition? Is it better to maintain intellectual property rights over in world content or relinquish them to the creator? The answer is simple. Just choose the option that enhances the human condition.

Second, it says:

"'I'll settle for a million active users by the end of the year,' said Tom Hale, chief product officer for Linden Lab, which develops and operates Second Life. The service now has about 700,000 active users, who spend more than an hour per month logged in, up from 680,000 active users in February."

Back in 2006 they were boasting some 13 million accounts. Now they are admitting that less than a million of those accounts spend more than one hour a month in Second Life. My guess would be that there are more like 100,000 regular users; that is people who log in everyday, spend a few hours, and participate regularly in the Second Life economy.

The problem with this is that a lot of people made investment decisions believing that Second Life was a much bigger, more popular, more robust economy. I know I am one of those people. While my financial investments have been somewhat limited, my investments of time learning the application have been enormous. A lot of people who were similarly duped feel betrayed.

I still maintain two key points that I have maintained all along. First, Second Life is the most amazing technology that has come along in a long time and the future potential impact of this technology is enormous. Second, having this technology in the hands of Linden Labs is a lot like turning over national security to a group of summer camp councilors.

Caught Up in their own Fantasy

I was reading an article yesterday about Pathfinder Linden leaving Linden Labs. The article was a bit sketchy so I don't want to draw too many conclusions from it. But it did occur to me that one of the problems that LL may be having is that too many of their people have gotten caught up in their own fantasies. Allow me to explain.

First, it is not new for a high tech firm to get caught up in its own fantasies. During the dot com expansion, it was standard operating procedure. People began to ignore conventional wisdom about price earnings and began to believe that the old rules of economics no longer applied. It was a classic economic bubble mentality and the economy stuck back, as it always does, in the dot com crash.

The problem in the case of Second Life a little different. For example, I believe that virtual land and virtual products have real economic value. And, I believe that virtual worlds represent an opportunity for economic expansion not unlike discovery of the new world. So, that is not the issue at hand.

The fantasy that so many residents of Second Life get caught up in is how easy it is to do things. You can fly. You can make friends. You can dress well. You can own your own business. If you want to be a scholar, actor, counselor, or world class lover, just put a group tag over your head and Bang! you are what you want to be.

This fantasy of ease has led many residents astray. They buy islands and set up businesses or speculate in virtual real estate with the fantasy that they will become the next millionaire. While a few do manage to eek out a small profit, most leave angered, disillusioned, and disgusted. Some even abandon their thousand dollar investment in order to avoid future tier fees. Unfortunately, the old rules of hard work and good business sense still apply. And you cannot make a go of it, even in a virtual world, without following those rules. I had a class of mine several years ago interview business owners in Second Life. They found, not surprisingly, that nobody really had any idea of how a business operates.

It did not occur to me until I read that article that the employees of Linden Labs might suffer from similar illusions. And, further, that may explain why this amazing technology has not done any better than it has. Next time I will make the argument for why I believe that may be case.

Second Life Viewer 2

The new Second Life viewer is now available for download and I have very mixed feelings about it. On the positive side, they are clearly making an effort to make Second Life easier to use and the new look has some positive features for new users. The most significant positive feature is that you can fiddle around with the interface and figure things out. With the old client, you nearly always had to ask someone how to do something. The second positive feature is that much of the unnecessary functionality (at least unnecessary to new visitors) available in the old client is now hidden.

On the other hand, the new client is somewhat frustrating to veteran users. I am constantly trying to figure out how to do something that I already knew how to do using the old client. Some times I just give up and relog using the old client.

I've also noticed a new Welcome Island and a new Discovery Island. Apparently these islands replace the old Orientation and Help Islands. Personally, my favorites were the ones a few generations ago that had a Disney Land feel to them. But, critiquing the new client and the new islands seems to miss the point.

There was a hit movie in the late 1960's called Midnight Cowboy staring John Voight and Dustin Hoffman. In this movie Hoffman played a homeless character in New York City named Ratso. One day Ratso steals some items from a sidewalk stand and takes them home for dinner. The items are just whatever he could grabs so he makes a makeshift salad out of coconut, green beans and yellow squash or some similar hodgepodge. Later on in the movie Ratso falls asleep and dreams of being the star of a cooking show. With great fanfare he makes his salad of coconut, green beans, and yellow squash. It is both sad and funny because he has no idea how to cook and thinks whatever he does had appeal if he can just get it out in front of the right audience.

With the new client and new islands, Linden Labs is once again offering its coconut, green bean, and yellow squash salad to its customers. I suspect that the reception will be no better this time than it has been in the past. If you want to be the star of a cooking show, you need to learn how to cook. And if you want to offer software applications in an application dense environment, you need to learn how to design them.

Development and Consulting Services

Once the client and server software is readily and freely available for creating virtual worlds, innovative system admins will begin downloading and installing it. It is free, after all, and impressive. As that happens, a lot of companies will find themselves in a "all dressed up and no place to go" situation. I have actually seen this happen several times. Somebody downloads and installs the open source version and nobody else will have anything to with it. The problem (certainly not the only one) is that people cannot see the potential. The learning curve is huge and the payback is not obvious. Nonetheless, some companies will invest the time and effort to experiment with the software.

But only the most dedicate will persevere on their own. Most will need some help and that is where the development and consulting services come in. The first step in building a relationship would be to send out a small team of imaginative application specialists to discuss the possibilities of using virtual worlds for business applications. This should be relatively inexpensive as you cannot expect someone to commit a large amount of money until they know what they may get for it in return. This team will discuss the possibilities with the companies management and see if there are any opportunities. Most likely there will be as virtual worlds have a great deal of potential.

Once the application team has identified the most promising area for a business application, the consulting team is sent in. The consulting team proceeds to identify the requirement for the application being built. There is potential here to develop a proprietary methodology for gathering the requirements of a virtual world application. When the requirement phases is done, the company will have a spec for a business application.

The company then can take the spec and attempt to develop it themselves, or they can purchase further services in the form of development services. Either way this turns out as a win for LL. If the company decides to have LL develop the application, then they provide development services, for a fee, of course. If the company decides to develop it on their own, then there will be yet another virtual world application and the their development team will be in need of training and documentation. Training and documentation is yet another busienss opportunity that I will turn to next.

An Old Crisis in Information Systems Development

Most people today are too young to remember the early days of Information Systems development. However, those early days were fraught with problems, cost and schedule over runs, and failed development efforts. In fact, the number often cited, at the time, was that 75% of all Information Systems development efforts ended in failure. That number can certainly be dissected and discussed at length. However, the point is that things did not go well in the early days. And one of the reasons was that most people really had no idea what they were doing.

A common response to this lack of understanding and experience was to hire a consulting firm who did have some experience to guide you. Over time consulting firms developed their own software to use as a base for their consulting (so as to avoid reinventing the wheel with each client) and this lead to the current state of application generators.

When web applications became popular this problem did not repeat, or not, at least, to the extent that it had occurred before. One of the reasons for this was that inexperienced web developers could always look at successful websites as models. And in most cases, at least in the early days, you could also look at the code if you wished. There was a lot of "Monkey See, Monkey Do" and far fewer disasters.

Now we are once again facing the "I have no idea what I am doing" problem with virtual worlds. But this time around companies are not diving into the technology because they are not under competitive pressure to do so. But the market is ripe for Development and Consulting services. A few killer apps would set off the competitive pressures and the demand for services would grow. Next time I will develop a business model for Development and Consulting services.

Software versus Fantasy

Linden Labs currently sells fantasy. The Second Life experience from creating your avatar look, to social experiences, to buying clothes or land, to attending classes is all fantasy. There is nothing wrong with this and they do an excellent job. However, from a business perspective there are two major problems. First, the market for self induced fantasy experiences is somewhat limited. And, second, this is a fickle market with little in the way of loyalty. I don't mean to demean the fantasy market. I can easily see a day in the future where somebody creates a compelling fantasy experience and others pay to participate much in the same way you would pay to see a movie. But that day still lies too far into the future for today's business plan. So, in order to remain economically viable, Linden Labs needs to move into a new market. That market, I believe is the software and services market. Today, I will consider software. In future posts I will address services.

In order to have a virtual world, you need a simulator which is the virtual world equivalent of a web server and a client which is the virtual world equivalent of a web browser. LL has both of these, of course, but they are proprietary. There are open source versions but the development required removes them from consideration. So, the first thing LL needs to do is make freely available versions of their simulator and client that anyone can download and install. Currently, there is is a dearth of imagination regarding virtual world applications. Until talented people can download the software for free and play with it the dearth is likely to continue. But, it is difficult to make money on free software.

The second thing LL needs to do is provide a subscription service for enterprise simulator features. Anybody can download the basic software and play with it. But, if you want enterprise applications, you will have to pay. I am not prepared today to describe these enterprise applications. I will save that for a future post. However, I can say that if we look to the early days of enterprise web servers we can get some ideas.

So, free software goes out to anyone who wants it. They, in return, develop applications and new ideas. Corporate sponsors pay subscription fees and in return get advanced enterprise features. The subscription fees pay for the free software deployment and the free software deployment provides ideas for more (enterprise) applications.

This effort should be kept completely separate from the current self induced fantasy market. In fact, that service should be treated like just another client. Hopefully, by the time this fickle market finds a new home, the software business will be sufficiently viable to thrive without it. But, the software subscription service is not the only new business. In fact it is only the beginning. In the next couple posts we will look at two additional markets: Development and Consulting, and Training and Publications.

Supply Push versus Demand Pull Technologies

There was an article on the front page of the Washington Post yesterday about entreprenuers in Second Life. It was an upbeat article even though the facts did not support the upbeat tone. There was an entreprenuer cited who makes several hundred dollars a year on virtual products. Of course, you cannot live on several hundred dollars a year. It also mentioned the number (a few dozen, if I recall correctly) of people who actually make a living in Second Life. A few dozen out of millions is not good either. So, why was the article and others like it so upbeat? That got me to thinking.

Most technologies are supply push technologies. That is, the technology is developed and marketed, THEN people buy it and find uses for it. Computers, laptops, cell phones, web sites, etc. etc. all follow this model. In fact, as I have written many times, when I first introduced the idea of cell phones to a class of mine back in the very early 1990's they did not think it sounded like a very good idea. And, yet, when cell phones became available, and affordable, everyone wanted one.

Other technologies are demand pull. That is, there is a demand for the technology before it is actually available. Two rather stunning examples come to mind: robots and intelligent machines. People envisioned uses for these technologies before the technologies were availabe. In fact, in these two cases, the technologies actually failed to meet the demand. A simpler example that did succeed was digital recording and play back of videos. People were ready for this technology before the technology was ready for the people. This is a great example of demand pull.

I think virtual worlds are a demand pull technology not unlike robotics and machine intelligence. They have captured the imaginations of visionaries who cannot wait for them to become a reality. However, virtual worlds, unlike robotic and machine intelligence probably will deliver on the technology. This give me an idea for a workable business model for Linden Labs which I will turn to next time.

Virtual Worlds - Slow to Catch On

I ran across an interesting article yesterday that suggested virtual worlds are not dead they are just slow to catch on. I am inclined to agree with the essence of the author's argument but would like to expand upon it just a bit. In order for a technology to catch on there needs to be two things: capability and need. That is, the capability has to be there and within the reach of the average person; and the capability has to allow them to do something that they need to do. If the capability is not there or the need is not obvious, the technology will not catch on. If the capability is there and the need is there, then the benefit has to be worth the effort.

In the case of Second Life, both capability and need have fallen a little short of the the mark. However, this condition will not last forever. The capability will improve when there is an open source simulator that will allow anyone to download software and create their very own virtual world. This does not yet exist in a form that is accessible to the average person. In addition, a browser is needed that will be able to access any virtual world created by any person. This does not exist either. Finally, there need to be tools that will allow on to easily create their own virtual world. This does not exist either.

The needs will also have to be better understood. I have ranted enough in this blog about a lack of imagination and a lack of applications. These will come along eventually as well.

So, I am inclined to agree with the author of the article that virtual worlds are not dead but just slow to catch on. It will take time for all of the things to come together. But when they do, there will be no stopping them.

My Free Home

I mentioned, a couple posts back, that Second Life was offering free homes to premium account holders. I took advantage of the offer, even though I already own some land, so I could experience the new communities and see how they develop. It took me a couple days to look at the options before I decided on one of the models in Elderglen.

To their credit, they have done a great job creating some lovely houses with fewer than 100 prims and laying them out on 512 square meter lots in a way that does not look like a trailer park. And they have created a variety of home options so that choosing is not an easy task. With the First Land program of several years back, you were allowed only 117 prims for the house and furnishing. With the new program, the house does not appear to count and you have 117 prims for your furnishings. So, at first glance it all looks good. Linden Labs clearly has some artistic as well as technical talent.

Where their shortcomings lie are in their business and social skills. I have ranted enough about their business skills so I will focus on their social skills here. The first thing you notice as you look around the new neighborhoods are the ever present ban lines. Ban Lines, for those who don't already know are the red lines that pop up when you attempt to enter a piece of land for which you do not have access. It makes a stroll through the neighborhood very difficult and quite unpleasant as you have to continually navigate your way around restricted areas. Last night, as I was looking at the various models, I inadvertently stumbled into somebody's private property and was immediately ejected. This does not make for a friendly neighborhood.

There does not appear to be any criteria for acceptance into a neighborhood. I suspect, overtime, that plonking people down in close proximity without any concern for their social organization, commonality of interests, or shared values is going to create problems. And, I suspect, that the impact on Linden Labs of the Free Homes program will be an exponential increase in Abuse Reports. But, all we can do is wait and see.

Second Life as Art

When I first visited Second Life back in the late Fall of 2006, I ran into a resident from an even earlier era who appeared as a mermaid and lived in a cave behind a waterfall. She explained to me that the first generation of Second Life residents were there to create art. That was all they cared about - creating beautiful art. The did not care about commerce, gambling, pornography, land sales, or numbers of accounts. They just wanted to create beautiful places to visit.

Since my brain was on fire, at the time, with the business potential of Second Life technology, I only half listened. How could you make money just creating beautiful places to visit? Would you charge admission? Would you clutter your art with shops to sell virtual products? I just couldn't see how it would work and didn't think much further about it.

Since then, I have visited many, many beautiful places. I am always impressed with the creativity, the detail and the level of effort that the land owners invest in their creations. It is like visiting a three dimensional painting in a virtual art gallery. I still don't know how they make money. I suspect they don't. They probably pay month fees to exhibit their art. But whether or not these creations are economically viable, they certainly have great value. So, I thought I would take a break from the business of Second Life for a few weeks and highlight some of these lovely places.

Visiting the Free Homes

I took a peak at what I believe are the free homes for premium members. I have to qualify this because like everything else in Second Life it is poorly documented and word of mouth. I received a landmark through a group I belong to and went there to look. But there were no signs to confirm I was in the right place. Nonetheless, I will go with the assumption that I was in the right place.

Molly Linden has created a set of new homes and laid them out on a piece of land. I have to give her credit for good taste in both the home design and he layout. The homes are quite nice and the layout, despite being somewhat dense, does not feel dense. There are enough models laid out with enough variety that it doesn't have that ticky tacky feel of suburban sprawl. So far, it is promising.

I counted the prims in one of the house and came up with around 80. This could be a problem because it leaves the resident with only 37 prims for furnishing. However, I don't know if they plan to hold to the 117 prim rule. So I can't say for sure if this will be a problem.

Most of the homes have huge picture windows which makes them feel bigger and more airy. This is good, but since you can see into everyone's home, there won't be much privacy. This will either hurt the pose ball trade, or force residents to put up curtains which will take up prims. But, I am willing to see how it all works out. My initial impression is quite positive.

I do see two potential problems, though. The first is whether or not residents will be able to modify the builds. Since Second Life tends to inspire one's creativity, residents may be unhappy if they can't make changes to customize their homes. On the other hand, few residents have the good taste that Molly has and if allowed to make changes they are likely to junk up the neighborhood.

The second problem is how neighborhoods are constructed. A hodgepodge of people is worse than a hodgepodge of houses. If neighbors are not selected based on some sort of compatibility it is easy to see how the situation could deteriorate rapidly. Having had neighbors who rival the Saturday Night Live Church lady for moral superiority on one hand, and other neighbors who plumb the depths of depravity on the other, I know what it is like to like in a hodgepodge neighborhood.

But, I don't want to identify problems that have not yet occurred. The houses look nice and the neighborhood looks nice. Hopefully, things will continue along in this positive direction.

Houses For Premium Members

I received emails for several of my alternative accounts stating that Linden Labs is going to be offering free homes in Second Life for premium accounts. On the surface, this seems to be a good idea. Yet, I can't help but wonder if LL has thought it through. It is a good idea because it addresses several problems with premium accounts in Second Life. First, there is little incentive for people to become premium account holders. Very few people are seduced by the lure of being able to buy land. Basic account holders who want land can rent if they really want a place to call home. So, the 'right' to buy land, especially given the softness in the virtual real estate market, is little incentive. From this perspective, the premium membership is little more than just an added tax on those who want to buy land anyway. Second, showing up in Second Life without knowing anyone is a lot like showing up in New York City without knowing any one. It can be a cold and lonely place. Having homes in communities can provide a sense of belonging that current does not exist.

There was a program several years ago refereed to as 'First Land' where premium residents could buy a 512 square meter piece of land for L$512 and put a home on it. However, it failed and was terminated. The main reason for its failure is that many, if not most, people who bought their first land for L$512 turned right around and sold it for L$9000 feeding the speculative bubble in virtual real estate. The speculators got what they deserved, however, as land prices crashed and are still about half of what they were at the time. And Linden Labs got what they deserved for not having thought this through a little more carefully.

First, consider the math. L$512 is roughly $2 US. L$9000 is roughly $36 yielding a profit of $34. A one month premium member ship cost around $10. So one could spend $10 and make $34. While this is not a huge profit, it is a profit. And when you consider the hype at the time along with the fantasy elements of Second Life, a lot of people felt good (in their fantasies) about making money in virtual real estate. So, the idea that most people would simply buy and sell was entirely predictable. Further, the notion that this buying and selling would create a real estate bubble was also predictable. And the consequence of the bubble bursting at some point was also predictable. So, the First Land initiative turned out to be an unqualified disaster. But, money was not the only reason why it failed.

There were at least three other reasons why this initiative was doomed to failure. First, most new residents do not know enough about building to build a home on their first land. So, nearly everybody put up one of the freebie homes. This was fun for the 45 seconds it took to rezz the freebie home but not much fun after that. Second, 512 square meters with 117 prims is not enough to do anything with. This is like selling somebody a bite of a prime steak for $2 and telling them the second bite (and every bite after that) is $36. Finally, without any kind of a development plan, the hodgepodge of First Land plots gave Second Life the feel of a trailer park without any zoning restrictions.

Hopefully, this new initiative will be thought through a little more careful although I am not optimistic about that prospect. Nonetheless, I will look into some of the key issues next time.

Is Second Life Empty or Just Not Happening?

Numerous articles have appeared recently discussing the question of whether or not Second Life is empty. I know from personal experience that students of mine report rarely encountering other people when they visit Second Life. Since Second Life is largely a social technology, this is a problem. Linden Labs counters these claims with statistics that show the number of hours spent in Second Life along with the amount of money spent is increasing. All these statistics show, however, is how out of touch LL is with everything.

It isn't how many hours or Linden dollars are spent. It isn't how many accounts there are or how many islands have been created. It is the perception of the average person of the Second Life experience. This perception can be first or second hand. Both are important and neither is captured in the statistics.

First hand experience is when someone creates an account, logs into Second Life and does something. If that something is exciting, rewarding, interesting and memorable it is positive and the person will want to return. If it is frustrating, boring, and confusing it is negative and the person will probably not want to return.

Second hand experience is when someone reads something in the newspaper or overhears someone else talking about Second Life. It is the 'buzz' as they say. When there is a lot of buzz, people believe that Second Life is happening. When there is no buzz, people see it as a failed technology.

The statistics only matter to the extend that they reflect the first hand experience and generate second hand experience. So, the problem here is not whether or not Second Life is empty. The problem is whether or not Second Life is happening. In the next couple of posts I will explore this question further in terms of first and second hand experiences.

A Lack of Vision

I read an interesting article about how the power users of Second Life are holding back the development of Second Life as they pressure Linden Labs to do the things that they would like rather than allow them do things the ordinary user would like. There are certainly no end of things of things that would make the Second Life experience better for average users. Security could be better. There could be a lot less lag. There could be better management tools and better development tools. There could be a whole host of better better applications. And yet, Linden Labs keeps tinkering with a small set of specialized issues such as mega prims that most people do not give a hoot about.

It raises the question of whether applications should follow technology or if if technology should be developed to support applications. While this is an interesting question and worthy of discussion, I believe that it misses the point. The point is why is Second Life in the shape that it is in after more than five years of serious global exposure. And the answer is very simple - a lack of vision.

Linden Labs appears to have absolutely no vision of where they would like this wonderful technology to go. They have some vague claim about a world created entirely by its users. This is no more a vision than getting a job to put food on the table would be a vision for one's career. I am a big fan of the mass collaboration movement and applaud LL for its support of the concept. But mass collaboration does not work automatically. It takes a lot more than just a simple notion. It requires a vision of where all the efforts of the mass collaborators should be directed. Otherwise you just get a lot of people milling around and nothing getting done.

The power users apparently have little vision either. If they did, their collection of efforts would amount to something. Instead, they view the next technical achievement - such as mega prims, or allowing you have more than 25 groups, or allowing you to hide your groups - as worth goals. But, I would ask - why do you need to have more than 25 groups or why do you need to hide your groups? Since LL has no vision of where it is going, it cannot say whether these are worthwhile changes or not.

This is a symbiotic self destructive relationship between LL and its power users. LL doesn't know what it is doing and the power users give it something to do. This allows them to ignore what they really should be doing which is developing a long term product strategy and a vision for the technology. The power users, on the other hand, are unhappy with the progress that their efforts in Second Life have made and think that if they have mega prims, they will be happy. But they won't. Mega prims are not the problem. They are just a diversion. A lack of vision is the problem.

I think the clock is ticking for Linden Labs. This is a wonderful technology and somebody is going to figure out how to take it to the marketplace. Sadly, as the clock ticks, the likelihood that this somebody is Linden Labs decreases.

Hippo Open Sim

I visited another Open Sim project, this one called Hippo Open Sim. You have to download a Hippo Client which is, as far as I can tell, an open source version of the Second Life client. Hippo is more advanced than Open Life with much better freebies and more features working. Hippo also offers a feature where you can download the simulator to your computer and add your sim to the grid. I haven't tried this but from what I can tell the claim is genuine. And if the claim is genuine, it represents a major advance in the state of the art for virtual worlds. Although it is a bit more complicated, this could to for virtual worlds what the Apache server did for websites.

Virtual land prices are, at once, a bit too high and exceedingly soft. This keeps a lot of organizations away. But, if you can download the simulator software for free and tinker with it on your own computer this opens the markets to huge numbers of people with more technical talent than money. This is both exciting and promising.

I will look in this more and try to get some of the facts nailed down.