Archive for Business

Is Amazon Destined to Replace Marketplace and Buy SL?

Posted in Op/Ed, Real Life, RL, SecondLife®, SL® Business, Virtual Worlds with tags , , , , , , , , , , , , , , , , , , on January 10, 2013 by Valiant Westland

For years I’ve been predicting that the next wave of Virtual World development would be driven by the inevitable competition of e-commerce, marketing and gaming heavyweights like Google, Amazon & Microsoft.  All of these players have a huge vested interest in capturing the annuity income produced by the rapidly expanding world of Virtual Products and services.

SL Now On AmazonSo imagine my “surprise” when I saw the Second Life Community announcement, about Linden Lab offering Start-up and Enhancement Kits on Amazon!   I believe this is a first step towards the eventual disbanding of the Standalone SL Marketplace, in favor of an Amazon-powered alternative.  If I’m right, SL itself could be an acquisition target for Amazon in the not too distant future.

The early failure of Google’s Lively Virtual 3D World and the lackluster performance of Sony’s PlayStation Home Virtual World offering, should not be used to throw out this line of speculation.  These earlier efforts have one thing in common that Amazon and even SL doesn’t, a lack of profitability.

In addition to an Alpha-level user interface, no realistic profit potential is the main reason Google pulled the plug on Lively.  Interestingly enough, Sony, in response to Microsoft’s hugely successful webstore, has used this years CES show to announce it is bringing its own SEN (Sony Entertainment Network) store to the US and integrate it with the PlayStation Home experience.

Amazon Web ServicesSo why would Linden Lab give up running its own primary revenue source (Marketplace)?  Total Cost of Ownership (TCO) and a potential increase in Net Revenues by outsourcing e-commerce to an organization like Amazon.  Amazon has arguably the most cost-effective and efficient e-commerce platform in the world.  They also have something Linden Lab does not, more than “164 Million paying customers!”  This is a huge potential untapped market for Second Life, that would be almost impossible to reach, without this type of partnership.

Many people, not directly involved with Second Life’s back-end development, might be surprised to learn that since 2006 “Linden Lab has used Amazon Simple Storage Service (Amazon S3) to store elements used in the Second Life world and to distribute the Second Life Viewer to end users.”  In fact, Amazon has featured Linden Lab in a Case Study, from which this quote was taken.

Every company reaches a point where one or more things happen.  They either fail, diversify with new products & markets to sustain growth, go public, acquire additional private capital or are acquired.  Linden Lab has thus far failed to expand its market.  Their attempts to diversify their product via their Enterprise product was, as reported by Hypergrid Business, “a costly mistake.”  Their more recent Time to Sell!Patterns and Creatorverse products seem unlikely to generate the type of revenue or market expansion required to have a measurable impact on their overall business.  Going public is an unlikely option and it is doubtful any more private capital would flow into a stagnant business model.  The only remaining choice for the original investors to cash out, sell Second Life!

Amazon’s Jeff Bezos has proven he is a fierce competitor who is willing to take risks and sacrifice margin to dominate an industry.  In fact, a Jan 8th, 2013 Bloomberg Businessweek story on Amazon was summarized like this: “As long as consumers are consuming and shareholders are buying what Bezos is selling, Amazon looks fairly unbeatable.”

Hang on to your virtual hats ladies and gentlemen, I think 2013 could shape up to be an interesting year.  My advice.  Buy Amazon (AMZN) stock and look forward to a Virtual e-Commerce SL Marketplace experience powered by Amazon in the near future!


Second Life ‘s “Cloudy” Future

Posted in Op/Ed, Real Life, RL, SecondLife®, SL® Advertising, SL® Business, SL® Education, SL® Fashion, Virtual Worlds with tags , , , , , , , , , on January 2, 2013 by Valiant Westland

2012 – The SL Future That Wasn’t

Before we look forward to what I believe is/should be SL’s “Cloudy” future, we might want to glance back at what 2012 brought us.  As we entered 2012, Linden Lab CEO Rodvik Humble told us we could look forward to:

  • A New Path-finding SystemMesh Avatar
  • Server side performance upgrades and bug fixes
  • More Premium benefits/features and content
  • New tools, like those used to develop Linden Realms
  • Stable tier pricing
  • Additional advanced features (Mesh!?)

Two of the most anticipated upgrades of 2012, Mesh and the new Path-finding System, are still not fully deployed.  I and many others have begun upgrading our inventory with Mesh creations, but the lack of a completed Mesh Deformer as part of the release viewer continues to generate wailing and gnashing of teeth for those with other than model-“perfect” forms.

Redgrave, one of Second Life’s most respected and innovative brands has refused to wait and introduced their own “Liquid Mesh (TM)” solution, that automatically adjusts their Liquid Mesh clothing designs to most avatar shapes.  It remains to be seen whether this bold move will result in a net gain in market share or cause confusion and ultimately frustration, when the lab finally releases built-in deformer technology.

Path-finding is another “almost here,” enhancement that can’t seem to make it to prime time.  The promise of enhanced path-finding is vehicles, BOTs and other objects being able to move more smoothly, including over sim boundaries, with less lag.  The reality for most users, who know nothing of these enhancements, is a strange new symbol and accompanying message appearing in their viewer.

Second Life URL Bar with Pending Changes Icon

Navmesh has pending changes The region has pending changes that have not yet been baked into the navmesh.

My primary SL property is a mainland region that is bisected by a Linden Road.  I have yet to see any path-finding benefits.  The same vintage automated 2005 vehicles continue to bounce and bumble up and down the road, in the same herky jerky manner, typically stalling, sinking sideways or even sling-shotting violently over the SIM border crossing near my home.

Why “Clouds” Matter

Disclaimer:  For those who are not aware, I make my RL living as a Consultant, helping companies develop and implement Technology and Online-media Marketing Plans that align with their strategic business goals.  I always urge my clients to be unabashedly “market-driven” and “surf” the technology waves whenever possible, rather than trying to fight them or create their own.  In 2013, I’ll be publishing a book on “Technology Planning In/For The Cloud.”

Cloud PartyWhile Linden Lab was busy trying to roll out in-world enhancements like Mesh, obviously designed to boost its revenues, through upgrade and new item sales revenues, the greater (Real) and virtual worlds continued their headlong flight to cloud-based computing.  In the Virtual World space, two cloud computing-based offerings, Kitely and Cloud Party saw significant user growth.  Many SL developers are eagerly porting content, in the hopes of establishing themselves as brand/solution leaders on these new cloud-based platforms.

Meanwhile the Google Apps cloud-based office productivity suite and Google Drive continue to steal market share from Microsoft’s venerable Office solution offerings, despite Microsoft offering their own cloud-based Office 365 solution.  There has been an explosion of Smart Phone and Tablet use.  In fact, tablets are now out-seLumiya Viewerlling laptops!  Unfortunately, with the exception of a couple of txt-only clients and one limited graphical viewer for Android devices called Lumiya, there is no way to access Second Life or even, from a Linden Lab official Smart Phone or Tablet client.

Although Linden Lab dabbled with a browser-based client over a year ago, there is no official timeline for the release of a full-featured cloud-based offering that I’m aware of.  Worse still, the primary user experiences in SL are still tied to antiquated 1960’s-era plain text NoteCards and graphics formats that 99% of the world doesn’t use!

Now Is NOT Time To Listen To Your Mother!
(Translation:  Get Your Head In The Clouds!)

If Second Life is going to survive, I believe they must aggressively move towards cloud-based offerings.  The longer the Lab waits to make their move to the cloud, the more regions, developers and regular users they will see opting for other platforms.

A 2013 Wish List For LL/SL

What follows is my personal 2013 wish list of SL enhancements, that I believe would go a long way towards slowing or even reversing SL’s slow downward spiral into irrelevance and make a majority of SL users happier and more productive! (Listed in no particular order)

  1. Deploy SL in a current-content-compatible cloud-based platform, similar to Kitely’s, with a pay-as-you-go option.
  2. Give us TRUE, persistent, Universal Status Indicator, that appears next to each persons name.  Allow status to be set prior to login!
  3. Consolidate login, account maintenance and inventory among “Alt”ernate accounts.
  4. Bring back user selectable Last Names!
  5. Provide automatic synchronization & watermarking of Pictures/Textures with users choice of Picasa, Flickr, etc.
  6. Replace the antiquated NoteCard system with integrated Google Docs / Drive functionality
  7. Upgrade My so that it’s mobile friendly and supports bi-directional web<>in-world messaging!
    Better yet, how about replacing the messaging engine with Google Chat!
  8. Deploy a C# application development/scripting environment and enhanced APIs for bi-directional object/data manipulation

Last but not least…   Please consider creating a true Reseller/Partner Network for the next generation of Second Life.  I continue to believe there are thousands of small businesses, franchises and vertical markets that could benefit from Virtual World solutions.  This market can ONLY be effectively tapped, if resellers have a S.M.A.R.T. annuity revenue incentive, support structure and marketing that originates with Linden Lab!

To all my Virtual Friends, Business Associates and Clients, whether still in SL or not, I wish you a healthy and prosperous New Year!

Second Life’s Conflicted & Challenged Economy

Posted in Real Life, RL, SecondLife®, SL® Business with tags , , , , , , on January 19, 2009 by Valiant Westland


It’s obvious Second Life’s  economy is both conflicted and challenged.  A quick review of Second Life (SL) history and Group Tools reveals the Linden Labs (LL) founders had an egalitarian, quasi-socialist vision for the SL economy.

SL would be a pastoral wonderland of equality, governed by the benign royalty of the Lindens.  The Lindens would provide this “nirvana” of creativity and “commerce” in exchange for “token” tribute, paid in the form of premium memberships and tier.

What happened next was a classic example of free market economics run a muck.  The virtual pimps, sex peddlers, gambling interests, hustlers and crooks moved in and began making/taking money out of the system as fast as it came in.

Linden Labs laissez-faire attitude towards these commercial uses of the platform, along with ZERO zoning regulations, generated rapid short term growth, but sowed the seeds for many of the problems faced by the SL economy today.  Many of those making profits during the SL boom had little/no concern for the long-term stability of the economy, virtual quality of life or the welfare of SL’s citizens.

Without the vigorish profits associated with gambling and faced with a rapidly deteriorating real estate economy, the  glut of freebie products that stifle legitimate sales and the burden of unprofitable (free) accounts, LL faces serious fiscal challenges.  Add to these economic challenges the overall instability of the platform and the capricious behavior of LL regarding land pricing and it makes SL a tough sell for business.

It’s widely believed there are people in SL who have made money in virtual Real Estate.  How many actually did or continue to make money is a matter of pure conjecture.  Like so many other aspects of SL, there is no solid data from which to draw informed conclusions.  The most thorough and some say daming analysis of Second Life’s economy, titled “Second Life: Revolutionary Virtual Market or Ponzi Scheme?,” was written almost two years ago, when hype surrounding SL’s use as a business platform was nearing its peak.

wrote in “the Coming Second Life Business Cycle,” “If Linden’s goal is to create a setting for a stable, growing economy that will provide the most satisfaction to the most residents, it must avoid the pitfalls of interventionism that plague real-world economies.”

Real business people, as opposed to hobbyists, who want/need to generate a true Return On Investment (ROI), will NOT look at SL as a serious business platform, until it offers the following:

  1. A truly “Free-market” economy with L$ tied to negotiable assets and free from artificial manipulation by LL.
  2. Timely and accurate statistical data on all facets of the economy, including land holdings & sales, transaction volumes, etc.
  3. A system of positive identification and fraud prevention, similar to eBay/PayPal, for all those who wish to sell goods or services within SL.  This must be coupled to a procedural mechanism that allows LL to freeze and/or force the forfeiture of monies associated with illegal activities, including content (IP) theft.
  4. A “business-class” infrastructure that provides a stable and reliable platform for conducting business.

Without these elements in place, SL’s future will likely mirror the demise of AOL.  A community filled with a steadily dwindling number of users who have difficulty “letting go,” despite having better options elsewhere.  The rest of us will take our quest for a Virtual World that can be used as a platform for REAL business plans elsewhere.

No Earthly Business

Posted in SecondLife®, SL® Fashion with tags , , on September 17, 2008 by Catero

Second Life® can be a great tool for inspiring and empowering people to utilize their underused creativity. Real life barriers which previously may have hindered unexplored interests can melt away upon logging in with very little investment required, aside from one’s time. Hell, you don’t even have to change out of your pyjamas.

Always wanted to be a singer? Don’t let your unsuccessful American Idol audition squelch dreams of your name in lights. Get a mic headset, an audio stream, and stock up on some karaoke tracks.

Dreamed of being an international runway model? Your 5’7” (171 cm.) female or 5’9” (175 cm.) male stature inhibits your catwalk aspirations. Grab some fashion poses and animations, a sleek array of avatar customization products, and max out that height slider.

Haunted by the overwhelming desire to dress up like a fox and register for a furry fandom convention? Forego the cost and cumbersome nature of a full-body fursuit. Assume a furry identity by getting familiar with some anthropomorphic attachments.

Anyone can make up for lost opportunity in real life by taking advantage of the resources offered in-world.

Take owning a business, for example. As long as one has the talent, ability and know-how to create vendors and ads, promote their products and/or services in the usual forums and has a little capital for start-up *bam* you’re marketing virtual land, selling prim baked goods or creating clothing items.

The beauty of SL is that one does not need any real world experience with the inner workings of a business environment to start their own company.

The curse of SL is that one does not need any real world experience with the inner workings of a business environment to start their own company.

No, I didn’t just get mixed up and contradict myself. The freedom of being able to open one’s own store based on their heart’s desire is a double-edged sword.

Business owners with little concept of or consideration towards good customer service practice are, quite frankly, a pain in the ass to transact with. And there’s no infrastructure for a ‘Better Business Bureau’ to advocate on the consumer’s behalf.

Buying a product or service from a retailer who does not have the willingness to appropriately liaise with customers and appeal to common sense trends is frustrating to deal with – making them unlikely to get repeat business. A bit like shooting oneself in the foot. “Hey, I have this great product, but I’m such an asshole that asking me why I sell no mod pants because you want to buy them will send you running in search of a comparable product from a competitor”, isn’t a good base upon which to establish one’s business strategy. Neither is “I piss off Second Life one customer at a time” a good corporate motto.

A curmudgeonly shopkeeper that keeps him/herself in ignorance can drive their own customers away. Imagine that.

Some time ago – before they subscribed to their own domain/hosting plan and cleared out the old free WordPress blog – Shopping Cart Disco asked its readers to comment on less-than-favourable experiences with shop owners.  One commenter shared how she and a friend had been browsing in a particular store while the aging “couture” designer herself was there making chit-chat with shoppers. The resident, who had fully intended to make a purchase, left the store appalled by the designer’s own inappropriate behaviour.

Shop owners: having a location stocked with your reasonably-priced goods isn’t enough.

Here are a few simple things that keep customers happy:

Customer service:

  • Whether you speak the language of your patrons or not, treating people with dignity and respect is a universal that crosses all boundaries. Even when your customer loses his/her cool and acts like a complete ass, keep calm and be clear.
  • Remember to pick your battles and keep it professional. Some people get worked up and can’t see beyond their own frustration (and for some reason they haven’t sought help in anger management to the point where mild hiccups during the course of virtual life drives them into a tizzy). Don’t follow their flawed example. Plus, consider the comedic value of posting the chat log on your store blog for the blogosphere giggle at.
  • Never underestimate the power of a customer service rep. If you suck at being nice to people, find someone who doesn’t. You may not make the weekly/monthly revenue to pay staff, but getting paid in your products or clothing may be as gold to some.

Product permission and demo sensibilities:

  • It ‘aint rocket science. Hair and skin styles should have demos. Give people an opportunity to try before they buy, otherwise, be prepared to field IMs from those who have gone out on a limb based on the vendor/ad photos and purchased your product.
  • To be courteous, set the demo price at L$0. “Hai, here’s a demo of my product. You might not like it, but give me your money anyways.”
  • It doesn’t hurt to make pants (and sometimes shirts – especially dress shirts that go under suit jackets) modifiable. Allow your customers to choose the level of fit to the items that will compliment their virtual identities.

Listen to your clientele:

Most designers invariably make products that they themselves would want to purchase, which drives initial sales interest. Many shoppers see your products and visualize all the possibilities based on your style/approach. People who shop in your store or subscribe to your service have an external perspective on your business that you don’t have. Sometimes a bold customer will come to you with a feedback about your brand. Of course, some people have asinine suggestions, but don’t be so sure to dismiss the ideas of those who have sane and constructive advice. Their suggestions of additional colours or cuts are insight into appealing to a broader market than just your own tastes. Be adventurous and consider taking their recommendations. And – hey – it’s free market research.

Empathy is your friend:

Everyone in the world is a customer at some point or another in time. Think back on positive or negative experiences you’ve had as a consumer and reflect on the reasons why you felt that way. The bad stuff: endeavour not to repeat and project it on your own customers. The good stuff: adapt it to your current needs and make it a part of your approach.

Above all: don’t slam the door on your own business.

Can’t cope? Read Customer Service For Dummies.

(FYI: There’s gonna be a lot more “u’s” used around here. Favourite. Colour. Honour. Learn to love ’em.)