This is Going to Take Longer Than I Thought

In another couple of months, I will reach my third anniversary of working with Second Life. My 'rez day' as they call it, was November 3, 2006. I have to say that I thought a whole lot more would have happened by now. I am, at once, still optimistic and disappointed. I am optimistic because I think this technology has enormous potential that has yet to be exploited but will be. I am disappointed because I think that a major reason why this has not gone further is a complete lack of vision on the part of Linden Labs. Despite the endless complaints about lag, reliability, griefers, and such, I think they do a reasonably good job at the operation level. I think that any operational deficiencies could easily be cured if they were to charge a small fee for membership and use that money to shore up operations.

However, at the tactical and strategic levels they seem to be completely unequal to the task of launching this technology. They have a gold mine here and they are sending people in to mine the gold with plastic spoons. They hire people who know how to use plastic spoons and their research agenda is consumed with finding better quality plastic spoons.

I still plan to use Second Life in the classroom as I think it has a great deal to offer in helping students to envision the new world of computer applications that is slowly coming about. I also plan to continue promoting the use of Second Life in educational applications as I think its potential has only just begun to be exploited.

However, as the academic year begins and I have to decide where to invest my limited time (especially my limited writing time), it does not seem worth it to try to write a weekly blog on Second Life. Consequently, I will step back a bit and write only when I feel I have something important to say. This is going to take a while and if I am going to be in it for the duration, I will have to pace myself.

Retention and the Learning Curve

Two recurring problems that Linden Labs faces with users of Second Life are retention and the learning curve. And, of course, these two problems are not unrelated.

I don't have up to the minute figures handy, but the last time I did the analysis, the percentage of accounts that logged in during the last 30 days was in the single digits. This is not good news for Second Life. It means, on the face of it, that of the millions of people who have tried it, only a few hundred thousand have found it worth while to continue on a regular basis.

There are some mitigating factors to consider, although they don't mitigate much. First, a lot of people create an account just so they can say that they checked out Second Life even though they may have had no intention of staying. Second, most die hard Second Life residents have multiple accounts, called alts. Some will create an alt, use it for a while, and then create a new one to have a fresh start. So, the number of accounts does not reflect the number of real and active users.

The number batted around for Second Life accounts which is in the 15 million range is not a hard number for active users. If I had to guess, (and this is only a guess), I would put the number of warm bodies at the keyboard closer to 3 million with only a few hundred thousand warm bodies logging in on a regular basis. At some point I will analyze the numbers again and try to provide some better data. However, I don't think these guesses are too far off.

Why is this amazing technology so under utilized? And why is the retention rate so poor? Well, there are a number of answers to those question but the one I started this post with is the learning curve. Others include the lack of structure and the failure of most people to realize the potential of this technology. But, I can only take on a piece of this at a time.

Linden Labs has tried several attempts to address the learning curve problem by developing multiple varieties of Orientation Island. However, these efforts are all misguided. It is like saying "People don't seem to like my mulligan stew. So, I tried mulligan stew with oregano. Then I tried mulligan stew with cumin. Then I tried mulligan stew with curry. Nothing seems to work." Maybe the problem is that you don't know how to make mulligan stew.

As I have said before, I think Linden Labs should take a page from the playbook of video game designers and develop quests. I think quest based learning is one possible solution to both the learning curve and retention problems. I am beginning to develop some learning quests at Cosmos Academy and I will explain it further in the next post.

Time Out to Bitch

I get very frustrated at times because I see so much potential in this technology and Linden Labs seems so unequal to the task of exploiting it. Recently, it appears, they have begun a new policy regarding adult content. I say 'it appears' because I've had to piece this together from conversations that I've had with various people and note cards I've collected from unhappy vendors. I'm sure they would say, "well the policy was stated in..." some unclear statement on some obscure page on some obscured blog or forum. If I wanted to get clarification of the policy the chances of talking to a live human are so infinitesimally small that it would not be worth the bother. So, I have to go with what I have garnered.

Apparently, adult content is being moved to a separate area. This is a good idea. I wrote earlier about the need for zoning and this seems to be a step in that direction. And they are requiring age verification for people to visit those areas. This also seems like a good idea on the face of it. It will help ensure that minors are not exposed to adult content. But, when you think about it, the logic quickly begins to unravel.

First of all, minors have access to adult content all over the web already. So, the notion that protecting minors from exposure to these things is a red herring. Second, people who have fantasies involving adult content are the most likely to want to protect their anonymity. So, a lot of these people will be scared away by age verification. The claim is that age verification is anonymous and it may well be. But, people who are doing odd things anonymously in Second Life are not going to want to take the chance. So, this move will have a chilling effect on the red light districts of Second Life.

Some may feel this is a good thing and others may feel differently. I am not here to judge the morality of it. I am only commenting on the business strategy. A while back they banned gambling which seemed to have a serious impact on land prices. I suspect that age verification will have a similar negatvie economic impact.

I have also written in previous posts about the problem of anonymity. People who are in Second Life to conduct real business want to know who they are dealing with. This was part of the zoning discussion. So, I support user authentication.

However, the current policy, as I understand it, will require a measure of authentication from those most likely to desire anonymity and require no authentication whatsoever from those who would most likely benefit from it. So, the current policy seems to achieve exactly the opposite of what they would want to achieve.

I am reminded of a comment once made by ex president Lyndon Johnson. I believe he was talking about the UN when he said "these guys couldn't pour piss out of a boot if the instructions were written on the heel." This quote comes back with a special resonnance every time I hear about another business decision from Linden Labs.

Trying on clothes, Virtually

One of the problems with niche marketing of clothing is knowing what measurements to produce clothes for. The standard sizes that we currently have represent averages that fit some people better than others. If you wanted your clothes to fit perfectly, you would have to have them custom made which would be very expensive. Or would it.

Imagine that you have an avatar that actually corresponds to your measurements. This may not be ideal for a fantasy life but it is ideal for clothes shopping in a virtual world. Let's push this just a bit and say that you have multiple avatar that reflect your usual weight gains and losses throughout the year.

So you decide to go clothes shopping in a virtual world. First, you step on the scale to get your current weight. And then you select the avatar developed for that weight. As you look at items in the store, you select ones that you like and have them put on your avatar. This provides several benefits over our current ways of shopping.

First, you cans see how this particular items looks on you. Not every item will look as good on each body type. Second, you can try the item in different colors and fabrics to see which one works best for you. Third, you can look at yourself from all angles without having to crane your neck as you would in a store with those full length mirrors. Fourth, you can see how this new items goes with things you already have. Say it is a new jacket and you wonder if it will go with some slacks you already have. Well, just put the virtual copy of those slacks on your avatar and you can easily see. Fifth, you can get the opinion of friends. Have a friend teleport to the store and have a look. Maybe you thought that lime green jacket went pretty well with the slate blue pants but your friend might have a different opinion. Sixth, you could consult an expert (software) fashion adviser who could tell you if certain colors, textures, and styles work together and what they are appropriate for.

Finally, when you are done, the specifications for the items of clothing can be sent directly to the clothing manufacturer, fed into the tailoring machine, and your items will be sent to you with a few days. Stretching the imagination, one can see a day when these tailoring machines may be located locally, so you can just go pick up your clothes in a couple hours like you might pick up your dry cleaning.

Of course, the specifications would then be added to your inventory and the next time you go shopping, or it you were trying to figure out what to wear to a particular event, all of these items would be available to try on.

Some of the elements of this scenario can be accomplished today. Some require a little imagination and some advances in technology. However, we can't consider the possible uses of a new technology in a world frozen in the present. We have to consider it in a world that has been changed by the technology.

Clothing Sales in Second Life

Mass marketing became very popular in the middle of the last century. There were, as far as I can see, two reasons for this. First, the mass production of goods brought down the price making them affordable by a much larger number of people. And, second, mass appeal advertising (possibly due to advances in media technology) created the demand needed to justify mass production. However, before the end of the century, pundits were predicting the end of mass marketing. Alvin Toffler was one of those pundits, if I recall correctly. And stepping up to provide an excellent example of a new way of marketing, Dell Computer started allowing customers to go to their website and customize their personal computers.

Now, lets think about what this means for a moment. The marketing paradigm shifted substantially. In the mass marketing paradigm, product designers created products that can be manufactured in great quantity with little variety. Then they endeavored to convince consumers that these products are what they needed. In the niche marketing paradigm, consumers design products that will be produced in small quantity with much more variety. And nobody has to convince them to buy as they have specified exactly what they want.

But, some problems arise with extreme niche marketing. First, how to do you make custom products at an affordable price? And, second, how do you get the specifications for the custom product from the customer to the producer. As to the first, I can only say that making more flexible automated production lines seems to be the answer. That is not my area of expertise. So, I will leave that to the process control people. However, the answer to the second is virtual worlds and that is something I know a little about.

Next time, I will describe the process of buying clothing in a virtual world that dovetails very nicely with this concept of niche marketing.

Second Life for Retail Sales

My last few posts were addressing the use of Second Life for virtual meetings. I chose that because it was a fairly mundane but important and easy to implement application of virtual world technology. Next I want to turn to the use of virtual world technology for retail sales. Several companies such as Dell Computers and a couple book sellers have attempted to come into Second Life to sell their products. These attempts have ended up as abysmal failures casting a lot of doubt on the viability of Second Life, or virtual world technology, for retail. Personally, I believe that this technology has enormous potential for retail sales and will provide some examples over the next few posts. However, in this post, I would like to offer some basic principles for achieving a successful retail presence in a virtual world.

First, don't try to replace the web! The web is very, very good at what it does. It is a big interactive document which allows you to get information about products and then purchase them. Hence, any retail application in a virtual world should link back to the retailer's web site to complete the sale. Web technology is cheaper, faster and better at this and it should be used in conjunction with virtual world technology. Virtual world applications should never attempt to replace web applications. They should, instead, augment them.

Second, use the virtual world for what it does best. I will provide several examples of this over the next few posts. However, for now, suffice it to say that there are things you can do in virtual worlds that you cannot do on web sites and that should be the focus of retail applications in the virtual world. What are some of these things? We, you can try on clothing in a virtual world. You cannot try it on at a web site. You can test drive a car in a virtual world. You cannot drive it at a website. You can demonstrate how to use a product or have a speak explain it in a virtual world. You cannot do that easily at a website.

Third, take advantage of the social interaction available in a virtual world. When you are on a web site looking at a product, you may be there with hundreds of other shoppers. But you cannot turn to them and ask what they think. Nor can you turn to a representative of the retail company and ask questions. Both of these are achievable through awkward means on web sites. For examples, many websites have product reviews. And often you can IM somebody for technical support. However, nothing beats just turning to another person and asking a question. And that you can do in a virtual world.

Finally, and this is critical, decouple your sales from the In World economy. If you buy a shirt for your avatar in Second Life, you will pay around 250 Linden dollars for it or the equivalent of one US dollar. If you are using Second Life to buy are real shirt, you will pay around $20 US which is around 5000 Linden dollars. Talk about sticker shock!! The disparity between the In World and Real World economies makes it very difficult to sell real products in-world. And, the solution is to decouple real world sales from the virtual world. In other words, provide all the pre-sale support through the virtual world. Then, when it is time to make the sale, go to the website and let it does what it does best.

Over the next few posts, I will explore specific retail applications and how they can take advantage of virtual world technology.

Third, Marketing

Second Life received a lot of press in the Fall of 2006 and the following Spring. There were stories about fortunes being made, political candidates offering speeches, real world vendors setting up islands to sell their products, large companies like IBM making major investments, television shows like CSI NY using Second Life as an extension of their shows, and so on.

But the publicity often cut both ways. There were stories about a lurid sex trade, pedophilia, and infidelity. Following he 'get rich quick' stories there were 'get poor quick' stories about falling land prices and vendors pulling out.

The upshot is that Second Life has a major image problem from a business perspective. And marketing a product as a Second Life capability would be a real uphill battle. So, this capability to hold meetings in Second Life could not be marketed as such. In fact there should be no mention of Second Life what so ever.

Second Life meetings would conjure up images of griefer attacks, naked avatars parading around, people sneaking off to meet with escorts, and all manner of antisocial behavior. People wishing to hold business meetings would not find this an attractive prospect at all.

Instead it should be marketed simply as "Virtual Meetings". The benefits of Virtual Meetings should be emphasized which include cost savings, functionality and ease of use. People don't have to drive and park, or sit in airports and hotel rooms. Instead of loosing three days for an out of town meetings, only one day is lost.

Unfortunately, Second Life today is like a pristine wilderness inhabited sparsely by eco-friendly artists. It has potential, but in order to exploit that potential, some of the pristine quality of the wilderness must be loss. It is a 'hand in the cookie jar' problem. If you do not exploit the technology nobody will ever appreciate it. If you do exploit it, it will loose a lot of its original appeal.

Perhaps another analogy might be to say it is like having a priceless painting locked in a closet. Putting the painting on display could damage it. Restoration could alter it. And yet, leaving it in the closet is not an option because its value is derived from viewing.

The exploitation of Second Life will alter it forever. However,not exploiting it will leave it unappreciated forever. Personally, I would go with the exploitation and see where it takes us.