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7 Reasons Why Second Life Should Matter For Biz Executives

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Here’s some recent Second Life-related news items:

• A development studio based on an SL avatar secured venture funding from a NYC financier.

• A consortium of U.S. government agencies (including the Navy and Air Force) announced plans to develop a substantial presence in SL.

• An international coalition of labor unions is preparing to strike on behalf of Italian IBM workers at the company’s massive SL campus today.

deltadharmadawn-aubret-detail.jpgIf you’re a successful tech professional with zero personal interest in online worlds, those blurbs probably just provoked a bemused shrug. Even after reading constant rumors that Google (GOOG) itself is creating a competitor to Linden Lab’s user-created MMO, you’re probably still wondering, “But why should Second Life matter to me?”

In full disclosure, I’m writing a book on the subject, so I have a vested interest in replying. And while I’ve already written a lot about Second Life here, Om asked me to back up, and start from the beginning.

So, the brief answer: In a rapidly growing market of online world users, it’s the most successful example of an embodied, dynamically collaborative content creation platform that’s personally and economically transformative, and scalable to the entire world.

That’s a mouthful, so to break it down into individual parts:

1 – Rapidly growing market: By one reasonable estimate, 80 percent of active Internet users will participate in an online world by 2011, a trend largely driven by the young, who define and shape future Net usage. (A separate study forecasts 53% of all kids on the Internet will be in an MMO by that year.)

2 – Most successful: Currently with some 550,000 monthly active users, SL has grown rapidly and with general consistency since 2004 (12 months ago, it only had about 150,000 avid residents.) Yes, other MMOs are larger, but none of them are user-created, a crucial distinction I’ll get to later.

3 – Embodied: A 3D space navigated by user-controlled avatars that are convincing enough to make their owners feel a personal and social investment in the simulated world they’re in. MMO players refer to their avatars as “me”; several studies suggest this perceptual leap is a real phenomenon. When controlling a Second Life avatar, we even unconsciously obey our unwritten rules of eye contact and personal space.

But what’s so special about feeling like you’re in a 3D world? The better question is: what’s so special about words, numbers, and flat imagery? Those are relatively new tools, artificially imposed on a human evolutionary cycle of a couple million years. When we remember the past, plan the future — when we dream — we do so in the three dimensions displayed by our mind’s eye. Communicating information in simulated 3D seems to enhance learning and insight for that very reason: a common sense intuition that some studies seem to reinforce. Of course, other successful MMOs convey this embodied effect, but largely through content created and controlled by the world’s holding company. Which brings us to the next feature:

4 – Dynamically collaborative content creation platform: A medium where online multi-user content creation is updated in real time. SL is often called “a 3D wiki” — an apt analogy. Consider Wikipedia: At first, most entries in the amateur-driven encyclopedia were mediocre; through a networking effect, however, it quickly became an indispensable resource for every type of information. Second Life is Wikipediafying the universe in 3D, not just the real one, but fictional and even conceptual realities, including abstract art and mathematical theorems. Like Wikipedia, Second Life content skews heavily toward Internet culture in all its lovably geeky strangeness. But dismissing it on those grounds is like dismissing Wikipedia because most of its users (as this search ranking shows) are primarily interested in sci-fi/fantasy/videogames, celebrities, and sex.

5- Economically transformative: SL’s virtual currency (which can be bought and sold for US$) and intellectual property rights to user-created content (which are retained by their creator, even in non-SL projects) are transferable in and out of the global economy. In practical application, this has resulted in movie-makers, fashion companies, and even architecture firms using SL as a prototyping platform for their real-world businesses. The depth and variety of projects that have made the leap from online world to the real world market is unprecedented in other MMOs — or, arguably, in any other web 2.0 platform.

6 – Personally transformative: The striking thing is just who is doing this work, even making a living at it. Often they’re business-savvy homemakers, talented bohemians, physically or mentally impaired people, retirees, tech workers in developing nations, and people who’ve been otherwise kept out of the mainstream job market through real-world barriers that become irrelevant in Second Life. And this is what’s meant by personally transformative: a technology that improves people’s lives in a substantial, profound way. On the macro level, this leverages dormant human capital into the larger economy. eBay (EBAY) is revolutionary because it converted thousands of people into garage-based entrepreneurs and channeled enormous wealth back into the market. Second Life is an eBay of the imagination. (And unsurprisingly, eBay’s founder was an early Linden Lab investor.)

7 – Scalable to the entire world: Last January, Linden open-sourced its client code, and from this flowered a variety of alternate access portals into SL, including Wii controllers, cell phones, and thanks to a 15-year-old female hacker, the web itself. This makes SL a lead contender to become a universally accessible mirror world, where all our physical data is modeled in a dynamic network, an inconceivably valuable resource for scientists, governments, corporations, and beyond. Linden’s stated intentions to open-source their servers would make this outcome even more probable, while transforming the Net itself into a 3D medium.

That’s just the beginning. Many futurists envision a time when 3D printers will supplant or enhance much of our traditional modes of production. Impressive trial runs are already being conducted in Second Life, exporting avatars and other content into the real world — early glimpses, perhaps, of a time when most of our real world goods are developed and produced in the metaverse.

Does the above mean SL itself is an all-bets-on phenomenon? No, because it’s still staggering under scaling difficulties and poor retention rates, while a slew of competitors — Metaplace, Multiverse, HiPiHi, whatever Google’s cooking up, and near a dozen more — are attempting to outgun Linden Lab on their own terms. They’re creating new MMO platforms that’ll also feature avatar-based content creation where users own their IP, and some will probably do it better than Linden is right now. The ferocity of this competition proves one thing: from the market’s perspective, what Second Life originally unleashed is simply not going away.

Image credit: DeltaDharma Dawn

19 Responses to “7 Reasons Why Second Life Should Matter For Biz Executives”

  1. I spend a lot of time in Second Life, and run a successful business there. My business caters to in-world activities, and has nothing to do with the outside “real world”. That’s how businesses become successful in Second Life, and why many recent real-world business virtual ventures fail miserably. I posted an analysis of this at:

    And to Wagner/Hamlet, this was a brilliant article as it hits on all the key points that I also observe. And I must mention that Second Life is indeed “personally transformative”. I have witnessed myself profound changes in many virtual friends who have leveraged the virtual environment and anonymity to explore things about themselves and others they may never have been able to do in real life. And no, it’s not just about sex!

  2. I have mixed feelings about SL and all its cousins. On the one hand, I am optimistic about the new opportunities presented by online worlds and other emerging technologies.

    But I do worry about the human side of things. Some of my friends who are gamers have achieved the delicate real life vs. online life balance that I see as healthy. But too many get sucked into their virtual identities and lose touch with reality. Not to mention never going outdoors or having any physical human contact. How is this going to affect us in the long run?

    Ultimately, though, I tend toward optimism. The future of online worlds seems pretty darn cool.

  3. SL is a slightly better and slightly more popular version of Active Worlds, which has been around since the mid-1990s. It is getting a bit closer to success but there is still a long way to go for a successful and sustainable business.

  4. Sorry, virtual worlds may matter, but not SL…here’s a point by point rebuttal.

    1. Market: Not sure what you definition of an online world is, but it’s certainly not limited to SL. My kid is on Webkinz, does that count?

    2. Most successful: You said it yourself- not the most popular.

    3. Embodiment: Again a point that makes sense, but is not anything to do with second life. I think of my text postings on a MUD as me too.

    4. Dynamically blah blah: Check out Google Earth’s 3D Warehous…it’s certainly not a unique feature and is crucially not an open feature. I can’t host my own content. The winner in this market will be an aggregator of content from other companies, not just a host. Right now, SL is like Compuserv or AOL or Prodigy before the WWW.

    5. Marketplace: I’m much more interested in a place like Threadless where you can design t-shirts and buy shirts designed by others than I am something where I can buy bits. It’s like charging someone to build their homepage…except it’s in a walled garden.

    6. Personally Transformative: For how many users?

    7. None of this means anything until you can connect worlds together. That is what you should be anticipating- a standard that allows worlds to be created by people other than Linden Labs. You know, like the Internet. The one most people actually like. In other words, Linden Labs/SL could be something like Prodigy or Compuserv, or an standard for virtual worlds could emerge and they could be the AOL.

    The smart money is on building competing worlds to SL and pushing the standards that allow them to be connected.

  5. “But are 3D MMOs a tool for improving productivity? Will employees get things done quicker when they navigate 3D worlds, or are they much better-off sourcing information in text, for which Google have pretty much hit the nail on the head?”

    Ask IBM. They’ve recently partnered with Croquet-based Qwaq to work on what looks to me like a PLM application – only combining 2D desktop applications with 3D virtual simulation applications (similar to what some other PLM vendors are reportedly doing). You don’t get much more sophisticated than that when it comes to productivity.

    “My guess is most people…even the youngest among us will grow up to want to spend more time with people in-flesh, rather than in-world.”

    I wonder if people living during the introduction of television made the same point.

    In any case, the research I’ve seen indicates that it’s not a simple correlation; that more time socializing online necessarily equals less real-life social interaction. If anything, I’ve seen reports of just the opposite.

    Yes, there are news stories citing examples of husbands who’d rather socialize online than… sit in front of television all evening with their wife (as opposed to the wife being willing to give up the teevee for something arguably more engaging). But like the ebb and flow of press hype cycles, it’s best to not put too much faith in what has been increasingly and demonstrably shoddy reporting in this area.

    I suspect what people are neglecting is that the trade-off isn’t necessarily giving up RL social time for virtual activities, but perhaps rather giving up passive, non-social television viewing for virtual interactive social activities.

  6. I think SL is really interesting. I think businesses should know what it is, figure out if it fits into helping them to achieve what they want…but…I’m with Jonas on this one.

    My guess is most people…even the youngest among us will grow up to want to spend more time with people in-flesh, rather than in-world. We’ll see. But no one can convince me a virtual burger tastes better than the real thing!

  7. I’ve tested Second Life, and was disappointed. The problems?

    1 – requires download
    2 – slower than dial-up
    3 – 3D? haha, try slow-motion 3D
    4 – gives motion sickness

    There’s a lot of hype because it’s a virtual world, an idea that has fascinated people for decades. Second Life is the first to have some success, but in the long run it will be nuked by someone that comes along with a flash-based version, or something else that requires no download and runs reasonably fast.

    You can make money in Second Life? Who cares. You can make money on eBay. Oh it’s fake digital stuff? People have been selling fake digital stuff (logos, websites, etc.) for more than a decade now. If you want to make money selling fake digital stuff, you’re probably better off with a website and a Google Adwords account.

    Overall, the virtual world thing and these social network things all run up against The Wall. What’s that? It’s called 24 hours in a day, most of that devoted to sleep and labor. If you think the balance of that is going to be spent in a virtual world or on various social network sites, you have to be kidding me.

    In 2-3 years, the trade headlines will be “Web Fatigue” and you’ll see new Luddites emerging. There’s only so much we want and can handle.

  8. I go to office everyday and I dont understand why I have to roam around in a 3d world in pajamas to communicate with my coworkers , customers and partners. My current email and collaboration tools are doing just great!

  9. I expect a lot of execs have spotted the incongruity between the hype and potential on one side, and the actual number of people using SL and the typically subpar user experience on the other.

    Hopefully Metaplace (or something conceptually similar) will turn out to be the web to SL’s Compuserve.

  10. But are 3D MMOs a tool for improving productivity? Will employees get things done quicker when they navigate 3D worlds, or are they much better-off sourcing information in text, for which Google have pretty much hit the nail on the head?

    Denis – is the SL populations’ quest for porn more prominent than that of the population of the wider Internet?