Tuesday, November 24, 2009

Some Thoughts on Linden Lab

Written 24 November, 2009

Some Thoughts on Linden Lab

Linden Lab, founded in 1999, was the brain child of Philip Rosedale, created to bring to reality his vision of a three-dimensional virtual world-- Linden World, later renamed Second Life.

People said Philip was crazy, but somehow he managed to not only overcome the many technical obstacles: bandwidth, graphics performance, storage, a viable economy-- he managed to convince venture capitalists to fund the Lab and created a workable platform, the Second Life we know and enjoy today.

Under Philip's direction, Second Life grew and become more sophisticated (think torii, flexible prims, Windlight, voice, and sculpties).

There comes a time when visionaries must step aside and allow new leadership. Philip was wise enough to know when his time had come; in March 2008 he stepped down as CEO. Philip was replaced by Mark Kingdon (known in world as M Linden). Philip remained as Board Chair. He is still listed as such on the Linden Lab website, although he announced in October he has decreased his involvement with the Lab in order to start a new company.

It was clear Kingdon's job was to grow Linden Lab, to make it sustainable and profitable. This expectation is customary and expected, for without profit Linden Lab will not long endure. He's acting, as best as I can gather, like the CEO of any small company.

But Linden Lab isn't making donuts (notice how I never pass up an opportunity to mention donuts in this blog) or jeans or automobiles. Instead, it's creating virtual space in which hundreds of thousands of people spend time and money. It's creating an experience for its customers-- of which I'm one and, since you're reading this, you probably are too.

Some of Second Life's (and by extension, Linden Labs') customers are corporations and companies. Many more are individuals. Both classes are sources of income and, hopefully, profit.

Second Life has more than proven its utility as a place for virtual meetings, cooperative endeavors, prototypes and simulations, training, and higher education. Savvy corporations and several hundreds of colleges and universities know this and pump dollars into the economy to buy sims (i.e., rent virtual space on Linden Labs' servers). IBM, for instance, has more than 40 regions.

Linden Lab has worked hard to accommodate its educators and corporations. Nonprofit sims are available for half price, for instance, making it possible to maintain a presence in Second Life for less than $150 USD per month.

For corporations, the Lab has created private "behind the firewall" grids-- in essence, entirely private virtual worlds. I suspect these private grids are the Enterprise Beta, currently in development. Those who partake in the Beta get advanced customizable avatars, their own currency, more simulator power (an option we peons on the main grid don't have and can't purchase), the ability to load, save, and roll back entire regions, a custom viewer, and more security by being separated from the main grid-- all for $55,000.

All well and good, but if Linden Lab is to prosper, it must do more than get five-digit sums and monthly tier from several dozens of corporate and university customers. It must make Second Life grow in scale from the current concurrency of 50-60 thousand people to hundreds of thousands or even millions of people online at the same time. It must reach more people like you and me and give them a reason to stay in world. Only in this way will Second Life-- and Linden Lab-- hit the big time.

Linden Lab shouldn't give up on its efforts to woo corporations and educational institutions, but it mustn't forget where its bread is really buttered. It must bring individuals into Second Life, and it must give them a reason to remain here, for collectively they will generate far more income for the Lab than corporations ever could.

Some recent and past decisions by Linden Lab show a disregard for and even disdain toward the residents of Second Life. The first thing that comes to mind, of course, is the dreadful news that items on XStreet will be taxed merely for being in the database. This spells disaster for small merchants, who, like myself, sell ten times more items on XStreet than in our stores. The lack of process ("Hey, we had three office hour sessions? What? You didn't hear about them?"), the catering to the loud demands of a few large-scale sellers, and, perhaps most of all, the arrogant tone of Colossus Linden's posts is disheartening, to say the least. It provides one more set of data points leading credence to the assumption, common on the grid, that Linden Lab isn't very much interested in the welfare of its non-corporate residents.

And let's not even talk about the bait-and-switch on openspaces.

Just a thought here: I know of NO Lab decision that has negatively impacted its corporate customers.

For many of us, Second Life is important. For me it's so compelling that two years ago I've been paying Linden Lab more than I pay my electric, water, telephone, and heating companies combined. That's a lot for someone with at my income level. But from it I get entertainment, friendship, learning experiences, and private time with the notorious Sweetie, so I pay it, and I don't complain except when I get slapped in the face by the Lab.

Most Second Life residents, of course, don't spend nearly as much as I do, and some spend nothing at all. But many of us DO spend money, and 100 times the customer base will increase the economy by a factor of 100.

It's not hard to see the real money is going to come not from corporations, but from regular citizens.

There is no shortage of social networking applications that are flat and boring, and more than quite a few virtual worlds that lack Second Life's creation tools and its healthy system of free enterprise. Without its entrepreneurial opportunities (which the Lab has lately done a lot to destroy), Second Life might as well be Facebook, a flat screen with words and pictures.

One thing is for sure-- the best way for Linden Lab to lose its base of paying customers is to remove incentives for being here. Making stupid decisions about land pricing, then reversing that decision, then re-reversing it, meddling in the economy by purchasing XStreet and OnRez, then shutting down OnRez, then making listings on XStreet prohibitively expensive, becoming Wal-Mart and bulldozing all the small businesses, that's the way to destroy Second Life, for sure!

So what SHOULD Linden Lab (in my inestimable opinion) be doing?

Well, how about this, for a start (in no particular order of importance):

* Keep developing solutions for corporate and educational citizens

* Value land owners and content creators and stop making decisions which impact their income negatively (and reverse that horrible XStreet policy decision). In fact, how about spending as much brain power and time on improving Second Life for small sellers and ordinary merchants as you do for the corporations?

* Increase incentives for paid membership (anyone else remember First Land and the $400 L/week stipend?)

* Work on making the initial Second Life experience rewarding and pleasant for those logging on the first time so they'll return. This is a huge drain on the Labs' potential income, and you're fools for letting this go unchanged for so very long (see my next post about the Labs' plan to route newcomers through corporate welcome areas)

* Re-engineer (from the bottom up!) the server and client software for scalability, modularity, stability, and improved graphics performance, and make it accessible for people without high-end computers

* Stop bragging about putting more regions on new, more powerful servers and use more processor power per sim, increasing performance; and while you're at it, increase prims from the present 15k/region to at least 20k.

* Stop trying to turn the Second Life experience into a stupid and dull suburban existence on Bay City and Nautilus on the mainland and begin to value private articles. Remember that Second Life isn't a mall; it's a world.

The alternative is to just limp along until everyone leaves for a new and better-- or at least a less expensive-- virtual world.

Some of the OpenSim grids are getting pretty close to the tipping point. I'm keeping my eyes on them.

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