My First Two Months at Linden Lab
Thursday, July 24th, 2008 at 5:11 PM by: M LindenI’ve been with Linden Lab for two months and each day has surfaced something interesting — and often quite unexpected. So, what have I seen? Read on.
Second Life has evolved dramatically but perception has not kept up with reality in five important ways:
1. Second Life users are more mainstream than many assume. It’s not just tech-savvy early adopters or gamers. It’s a much broader cross-section of society with a median age in the early 30’s and nearly half the time spent in world is by women.
2. The diversity of use cases in Second Life is mind-boggling. If you were able to read every story around the world about Second Life, you’d see a tremendous variety of use cases presented – for instance, medical research and treatment, education, marketing, customer support…and the list goes on.
3. Second Life has an enviable business model. While some may have written off Second Life during our post-hype phase, Second Life has a business model most media, metaverse and social networking companies would kill for. We monetize unique users at many multiples of advertising based models. Plus, with a healthy and growing inworld economy of more than $330 million annually, our users are able to make real money and pay more than half of our fees with credits from selling Linden dollars they earned inworld — by creating valuable content and providing valuable services.
4. Second Life’s killer apps are just beginning to evolve. I’ve come to see a couple of use cases as future killer apps – namely virtual meetings and education. And, one simple feature – inworld voice – could be a significant product in its own right. Since launching 3D spatial voice inworld, our users have logged more than 7.2 billion voice minutes making us one of the larger providers of VOIP services.
5. Second Life is leading the industry toward interoperability. Finally, some have said Second Life is a walled garden that will go the way of AOL. Second Life is opening up, so the risk of that happening goes down every day. It dropped pretty substantially recently with the big news on interoperability from the IBM/Linden Lab partnership.
…Please read on as I expand on some of these points after the jump…
The diversity of use cases in Second Life is mind-boggling. The “hype cycle” drives Silicon Valley and Madison Avenue to identify trends, amplify them and then abandon them relatively quickly. Virtual worlds, and Second Life specifically, benefited and suffered from this highly amplified trend cycle. First came the hype, then the inevitable anti-hype. Now the conversation is more about the far-ranging and widespread set of activities that are happening in Second Life.
Every business day, I get a summary of the mentions “Second Life” and “virtual worlds” received in the web and print press around the world during the last 24 hours. On a light coverage day “Second Life” might gets a couple of hundred mentions. These figures understate press coverage because they do not include television or radio. Television has a big impact. A single news story in Poland featuring Second Life recently generated the highest registration levels we’ve had in a single day this year.
If you were able to read every recent article about Second Life, you’d see tremendous diversity in the use cases presented. Here are some “must-read” articles that show the incredible diversity of Second Life:
- Massively Paralyzed Man Walks for the First Time in Second Life
- Alcoholics Treated and Cured in Second Life
- IBM and Linden Lab Announce Successful Teleport between virtual worlds
- “Ignore Second Life at Your Own Peril” – Times Online
- MTV’s True Life features Second Life musician Keiko
- Enterprising Musicians Seek Fame in Second Life
- American Cancer Society’s Virtual Relay for Life raises $200K in Second Life
Second Life has an enviable business model. Most social media/social computing properties are struggling to build a business model (usually advertising driven) that can support their voracious appetite for hardware and bandwidth. Second Life is very different. Second Life is the only social media/social computing property where, at its core, user-generated content and the economy is the experience. As a result, our estimates place our monetization levels at 3-30x that of major media and social computing properties.
With a healthy and growing inworld economy of more than $330 million annually, our users are able to make real money and pay more than half of our fees with credits from selling Linden dollars earned by creating valuable content.
How so? All the content in Second Life (some 2.2 billion items, or 250 terabytes worth of data) is user-generated. Users buy and sell the digital goods they make using our virtual currency — the Linden Dollar. We generate revenue by selling land (where merchants build stores, land owners rent houses, educators teach and companies meet) and collecting monthly maintenance fees (somewhat analogous to hosting services), charging for currency exchange services (Linden Dollars to US Dollars and vice-versa) and for search and classified ad placement. We also make money as the economy expands and we issue Linden dollars to stabilize the exchange rate.
Another important comparison is with TenCent (QQ) – a Chinese internet company I have admired for quite some time. Though our user base is much smaller, our virtual economy is of a similar size to TenCent. A recent Wall St. Journal article reported that TenCent’s virtual currency (used by many of its 233 million regular registered users) garners about 45% of China’s $900M virtual goods industry or $380M last year. This figure is very close to the value of virtual currency transactions within Second Life. Based on our Q2 results (see earlier blog entry) Linden Dollar transactions in Second Life are just over $336M on an annualized basis. Because the economy is intrinsic to the user experience, our much smaller user base generates nearly as much economic activity in absolute terms as TenCent.
In addition, user-to-user transactions in Second Life grew 12% in Q2 and user hours grew by 6% (for definitions see earlier blog post). Land ownership is a critical component of the Second Life economy and the news is very good on this front. Second Life’s virtual world expanded by 45% in Q2. Resident-owned land now accounts for over 1.5 billion square meters of space in Second Life. Our growth in Q2 was due to a change in our land product and pricing strategy to make the purchase of land more accessible to first time buyers. The strategy worked.
Finally, and this is the most interesting part of our model, the number of “profitable” inworld businesses continues to grow. By “profitable”, I mean that they have positive monthly Linden dollar flow primarily from their content creation activities in Second Life. What our residents build in Second Life demonstrates amazing imagination and creativity. Second Life is user generated content and collaboration on a scale that is unimaginable on the 2D internet. You can build a room, a house, a conference facility, an office park, a nightclub, a stadium, a game, a consulate, a hospital – and the list goes on. There are public lands for all to enjoy and private meeting spaces limited only to members of your group or company. All this creativity, combined with Second Life’s vibrant economy enables tens of thousands of our residents are able to make real money plus pay more than half of our fees with credits from selling Linden dollars that they earned by creating valuable content. Because of our unique business model, Linden Lab is profitable.
We are taking a big slice of this good fortune and investing it in a substantially improved experience for users including better registration and orientation processes for new users, an easy-to-use interface on our downloadable client, better tools for specific user groups, much better platform stability (more on this in a separate blog post) and improved outreach and customer support. Our users have been vocal about their needs and we are working hard to meet them
Second Life’s killer apps are just beginning to evolve. Even though the initial novelty has worn off for me, I am blown away by how effective Second Life is for meetings. I am fully convinced this will be a killer app. There is a lot of research on how communicating through an avatar enhances self-perception and risk taking. Many people who haven’t experienced a Second Life meeting will say, “There is no substitute for meeting in person.” Try Second Life for a meeting.
For years, I have been advocating and using videoconferences to connect with customers and employees. They cut down on travel costs, reduce a company’s carbon footprint and eliminate time wasted in airports. Unfortunately, videoconferences can be deadly boring. A Second Life meeting is the antidote to the tiresome videoconference. You have all of the tools you’d use in a real world meeting – plus you can use your computer to review data, do quick reference searches, look at spreadsheets, etc. and you have the ability to add text questions, responses, opinions and subtle interjections. In fact, just last week we learned about a new resident created collaborative browser for use inworld.
Using the virtual meeting environment for education is an even more exciting killer app. Dozens of universities are buying land from us or working with other inworld providers every week and the pace is accelerating. Seventeen of the top twenty universities in the US have land in Second Life.
To keep track with what’s happening in education in Second Life, check out the SLED Blog. A list of recent news stories are below
- The Christian Science Monitor discusses how students from all over the world are able to study abroad through Second Life.
- Government Executive.com writes how government agencies like the center for Disease Control and Prevention are increasing their presence in Second Life to increase public awareness.
- CNET reports that the San Francisco Exploratorium will be streaming live footage of a Solar Eclipse in Second Life expected on August 1st.
- The Industry Standard reports that Cigna will try to make health education more accessible by creating its own island in Second Life.
- ComputerWeekly.com discusses how the British Computer Society has launched an e-learning specialist group in Second Life.
- The Dallas Morning News presents an article on using Second Life for higher education.
What makes Second Life so amazing for these things is the interaction between students and between universities. Voice is the key enabler. With a headset, residents can talk with other residents just as they would in the real world. With the 3D spatial voice in Second Life, residents can walk from one conversation to another as if they were actually hanging out before or after class. Serendipitous conversations just aren’t possible with other forms of online learning, teleconferences or videoconferences.
Second Life is leading the industry toward interoperability. With over $345 million invested in virtual worlds in this year alone, the lack of interoperability is going to quickly become a nightmare for users. We’re using our leadership position in the industry to drive the architectural standards we think will enable the metaverse to avoid the fragmentation that leads to slow adoption. Our announcement with IBM demonstrated interoperability between land hosted by IBM and Second Life. Other virtual worlds talk about being open – we are aggressively pursuing open standards and demonstrating results.
{CONCLUSION}
As you can tell, I am very excited about Second Life and the profound impact that virtual worlds will have on our lives. Like many of us at Linden Lab, I believe in a future where interacting in a virtual world is as easy as picking up the phone. As the leader in virtual worlds — in terms of numbers of users, user hours and the size of our virtual economy, revenue, profitability and brand awareness — we take our responsibility seriously. We will continue to invest in innovations that benefit our current and future residents as well as the entire industry. Two months in and more excited than ever! Thanks for your interest.
July 24th, 2008 at 5:22 PM
Thanks for this very thoughtful post.
July 24th, 2008 at 5:29 PM
I was just thinking about you, M! *Points* http://forums.secondlife.com/showthread.php?t=272611
July 24th, 2008 at 5:37 PM
A great post. I think this gets across the vast amount of possibilities that people are starting to see. As I have been saying the last few months in my interactions with customers to IBM, I am getting less “why would we bother” and a lot more “if I wanted too do x”. This fits very well with what you have documented.
Interop is of course a key issue too. Whilst this sometimes gets obviscated by the “I dont want my WoW avatar appearing out of context in Second Life” the ability to move any data (with appropriate IP respect) from one place to another is important. We are already seeing the movements in traditional social media, and virtual worlds extend that web 2.0 need. Users should own their creations, wherever they choose to place them.
Richard Bartle keeps referring to virtual worlds like SL as a place. He mentioned the other day that interop makes the place merely larger. This is of course true, but does not mean that in the conurbation of virtual places that each needs to be identical in function and form.
Personally, without my IBM hat on, I am glad that you are looking to the future, with profitibility, but not losing the spirit that has been so engaging for so many residents.
Finally, as I tell everyone at every turn, this is all about people. We are helping people connect in ways that have been filtered by the restrictions of technology.
July 24th, 2008 at 5:43 PM
I agree that SL ™ has a great future, and that some businesses are making good money, but the people who invested a lot of money in private islands to rent them out are losing out . this is due not only to the amount of land now available, look at the yellow on the map, but also to the disparity in charges due to VAT. When is this going to be adjusted. it means that in some cases some people are paying 25% more for the same service. OK, VAT can be claimed back, IF you make more than $50,000 US per year from business. Most users bought islands to make enough profit so that they could use SL without using their own money, as a hobby in other words, it has now become a VERY expensive hobby
Before the nay sayers start with ” its your governments fault”, LL ™Voluntarily added VAT, they were not forced to do so, and they refuse to talk about this. That is my main complaint, as usual, LL just totally ignore questions that they dont like.
July 24th, 2008 at 5:47 PM
Do us a favor. Evict Millions of Us and Rivers Run Red from Secondlife for their defection to Google and adoption of the policy that user created content is a negative thing. Those 2 companies need to be driven from Secondlife for forgetting their roots. They would be nothing without SL’s residents. Time for companies like that to hit the road and not let the door strike their bumpers. They are “too good” for Secondlife and need to be over in the pedo worlds where their customers throng.
July 24th, 2008 at 5:57 PM
So you should be excited but education institutions will not be led by the nose to bigger and more power hungry pc’s and you need to carefully consider how fast you grow the technical requirements.
As for land, as you’re new and have posted a very nice positive blog I’ll let you off this time, but there’s something rotten in the state of Denmark on the front.
July 24th, 2008 at 5:59 PM
I have to put an asterisk on 3; with this business model content creators are sort of part of the company but yet they’re like in a separate room from the developpers and they have to shout through the wall when they have problems.
I’m part of these disgruntled people.
It’s been impossible for me to fix thus sell my product (a flight assist, which took me 3 months to develop in my spare time in 2007) since havok4 release because of buoyancy bugs and I’m left on the ice with every server update, along with a total of 100 voters and 20 watchers for SVC-2013 and SVC-1792. Not counting my 100 or so customers (including a Linden).
Could we AT LEAST get a progress report on the Jira pages !? From the long history of these bugs, “Assigned” or “Fix Pending” really doesn’t mean anything.
July 24th, 2008 at 6:00 PM
I find this very satisfying. LL was smart to bring you onboard.
All the points you raised are excellent and true IMHO.
As well, SL culture is going to start having a huge affect on RL culture at some point.
Got my sims, just sitting back enjoying the ride to who-knows-where.
July 24th, 2008 at 6:03 PM
I’m glad you have mentioned the latter four points in more detail on your post because as much as I suspect that point one was one of the apologetic sort in light of Mr. Kapor’s earlier keynote speech, the other points themselves are ones from valid premises.
In particular, point two tends to prove itself everyday from what I’ve seen. Whether it’s someone’s experiment with the Havok engine in a sandbox or whether it’s someone’s attempt to tie web-based functionality within SL (such as the use of Google’s Translate functionality through its API to internal “universal translator” scripts), there’s always something that is adding value to the Secondlife experience directly or indirectly. It’s my own personal hope that in future iterations of LSL under the Mono VM that we’ll see improved functionality that goes to add more to that value added potential that scripters provide.
So, keep up the good work, M.
July 24th, 2008 at 6:06 PM
“We monetize unique users at many multiples of advertising based models.” O.o I owuld appreciate this sentence being translated into english please.
Otherwise, an interesting post, even if I don’t fully agree with all points.
July 24th, 2008 at 6:09 PM
Great post M , i agree with all but #3 not all avatars who invest in SL with real money creating objects get over many go under as myself. I’ve had 5 different locations for business were i start off well then when a larger business buys land close by selling simullar objects or clones of objects im doomed & force to move or just quit the business i spend more than i could make in SL go figure. Other than that i live like a multi millionaire & the best thing in SL is my bug zapper ( The Security Orb) haha
July 24th, 2008 at 6:10 PM
@4 i totaly agree with you but on a different level, the lindens are lowering prices ect on islands but what happens when some one puts their own sim down, most of us land owners who have been in since 2006 and payed for 10-15 sims back then have already lost 40% of our investment, and now when they get all this inter grid stuff working land will be even more overwhelmd but what does linden lab do? they manage to mug more people into buying islands that are going to be woth 0 in the very near future. and frankly the fact that not one linden will talk about what will happen to us who have spent so much just goes to show that they know this is comming and that they dont care. they should have warned people back when they signed up with IBM that when IBM has there own grid and everyone else like AT&T or whoever wants one. that their purchase that is worth 1000 will be worth nothing like all the land for sale in second life today.
July 24th, 2008 at 6:11 PM
[...] speaks on the blog. (You are more mainstream than many assume!) My First Two Months at Linden Lab Official Second Life Blog __________________ Χάος [...]
July 24th, 2008 at 6:13 PM
I still enjoy the round of lolz here when i read about the virtual world expanding 45% and the PURCHASE of land is more accessible to to first time buyers. Yes indeed flooded with land to drive the price lower, devaluing the land of so many so a first time buyer can more easily purchase (scoop it up).
However (setting everyones initial tier free 512 sq meters aside) the first bump up for a new buyer, with is now devalued land purchase is STILL the same 5 bucks US its been for sometime.
Nah…it isnt inital purchase that means squat, you can grab a 512 m2 parcel for under 2000 lindens, that parcel will cost 1335 lindens each and every month (based on the linden exchange average of 267 per US buck).
Over 16,000 lindens in tier for that 117 prim, 2000 linden postage stamp parcel.
Next economic target…the value of the linden dollar???
I am however glad to hear the strategy has worked… Kudos!
Sugar
July 24th, 2008 at 6:21 PM
All well and good but I’m hearing nothing about stability.Lag and keeping the Lindens out of peoples personal business and getting them focused onw hat they should be focused on taking care of griefers and offering tech support and back to point a stabalizing the grid.
July 24th, 2008 at 6:26 PM
NARF!
sorry, some of us must take the low road for humor. I’ll go back to sleep now.
July 24th, 2008 at 6:29 PM
Please don’t be like Tencent T_T they monetize at almost every possible chance, up and including IM avatars, where if you do not make payment your avatar only gets to wear pants… and these clothes expire.
Not to mention the QZone blogging service which needs you to install a custom IE plugin to view correctly… talk about interoperability…
July 24th, 2008 at 6:31 PM
Hmmmm… just downloaded iTunes to my new laptop to watch the mp4 video of the inter-sim transport between SL and IBM’s OpenSim… but now the URL for that is mysteriously gone 15 minutes later…
Probably will post a Windows Media Player friendly version in a little while…
Really wanted to watch that as I believe this is one of those moments in computing history that people don’t currently recognize as a “historical” moment — similar to first time someone viewed a web page hosted on another computer not on the same LAN… truly the “birth” of the open 3D Internet…
July 24th, 2008 at 6:33 PM
It is great to see an engaged CEO that writes to the residents frequently!
Please find a CTO or urge the VP of Tech to post to the residents on a proactive basis. One would think that the lead tech person would write once a month or so without having to be goaded into it. They should be addressing: what are the tech initiatives towards stability, and how far along are they?
July 24th, 2008 at 6:42 PM
As a senior citizen, I can loudly praise SecondLife for the ‘new life’ that I’ve recieved through this application.
It’s not as easy to get around any more: I have serious health issues, and I’m slowing down. My physical self is wearing out, but not my mind. In Second Life, I’m able to pursue a new kind of challange, that of carving out a virtual life in an unique new form of brave new world. I almost feel like a pioneer, and perhaps I am, in a way, as are all of us. We’re helping to shape a new virtual content by lending our input to the mix, all while having a heckuva good time.
Cheers to Second Life! It’s amazing!
Merri Magic
July 24th, 2008 at 6:48 PM
Nice to hear you’re settling in well M… if you want a guided tour of MY Second Life, give me a shout. Willing and able to show you… and maybe shock you a little !!!!
July 24th, 2008 at 6:53 PM
“We monetize unique users at many multiples of advertising based models. ”
What does this mean?
July 24th, 2008 at 6:54 PM
Thank you all for your kind comments, helpful suggestions and yes your firm nudges. There is a lot here to digest, of course, but do know I am reading it.
One comment related to stability and lag. I covered these two topics in an earlier post but let me repeat they are a major focus at the Lab. We have a series of “Technical Must-Dos” on our strategy road map and our team has been working hard on both topics and will continue to do so.
In addition, we are working hard to improve — dramatically improve — the Resident experience. Check out our latest viewer release. It is a marked improvement over the previous release.
Thank you again everyone.
July 24th, 2008 at 7:00 PM
Ah, I should have read further… this brings it more into focus for me:
“Second Life is the only social media/social computing property where, at its core, user-generated content and the economy is the experience. As a result, our estimates place our monetization levels at 3-30x that of major media and social computing properties.”
July 24th, 2008 at 7:02 PM
Yukinoroh@8: It would be nice if we didn’t have to update our flight assists regularly, but it is possible to adapt to Havok 4. Honest.
July 24th, 2008 at 7:07 PM
It’s nice you’re making these posts, but I do wish they weren’t in such a sales-pitch manner, and I could refute some of the things said, but I’ll wait for LL’s action to speak for them.
July 24th, 2008 at 7:29 PM
Another killer app I’m fond of is the automatic translator, such as X-Lang. Being able to communicate easily with people from around the world is -the- reason I decided to stay on Second Life, and though translators limit the users to text, they are very valuable tools.
July 24th, 2008 at 7:36 PM
@26 : (sorry for the off-topic) Try out the second test script that I have posted on SVC-1532 while standing and tell me of a way to fix that ?
That’s one issue, the other one with the two bugs is that unlike most flight assists, mine still allowed the avatar to move on all axis, so I can’t implement a movelock. I just need real buoyancy back, like in havok1. This is something I can’t fix with just LSL, this has to be fixed on the server side.
Well if you have any ideas feel free to IM me in-world.
July 24th, 2008 at 7:37 PM
@4
Yes, VAT is a HUGE problem. LL wiped out most of the European landowners by CHOOSING to REVERSE its policy of absorbing VAT as a global factor cost associated with new revenues from new markets. Electricity, infrastructure and labor costs vary around the world, yet these are not regionally priced. The same should be true of taxes like VAT.
July 24th, 2008 at 7:45 PM
@13
The 40% initial investment loss only calculates true if you’ve never made a single Linden from elevated over cost tiers or land sales revenue. Please, the math isn’t hard. The only ones that actually took a hit were the people that bought just prior to the decrease in prices. Beyond that the mindfull region owners have already made their inventment return. In numerous cases multiple times over.
It drove the land sales price down.. you bet it did. And made owning land more acessible for the average SL’er. Linden tiers however remained the same. The one sad result of the lowering of the region prices was the burst of new Void sims seen popping up like weeds across the grid. And more sadly being used far in excess of their well noted capabilities and carrying average resident end tier rates that are.. more than sad.. try absurd.
@ ML
Lots sounds good. .very good:). With regard to the second quarter earnings however, a question. How much of that generated revenue was the result of the flood of reduced price new region purchases + revenue generated from the land sales auctions?
Dittos #11.
“We monetize unique users at many multiples of advertising based models.”
Errmmm.. I know all those words and their meanings. I really do. But when I string them together in a read.. it.. … …
*waits for the understandable version*
My two penneth worth.
July 24th, 2008 at 7:51 PM
“our users are able to make real money and pay more than half of our fees”…
Read:The users create everything inworld yet see no profit.
um no, try 10%… if one has a good month. Besides, any business that has their bottom line being in the red every month is a failure. Could Linden or any company survive if it paid out more then it took in every month? Of course not. I think focusing on game play is a great way to brag since it is a great game!!! However if one seriously looks at the monetary numbers of business in SL is it not a selling point but more of a deterrent.It all starts as a new player learns they can make 2L$ for 15 minutes of camping… this ratio of work/time for money is a constant through out the business inworld. People often refer to the yellow on the map but there are just as many non-rented rentals out there again due to only one factor, money. This all stems from monthly fees.
Since business in SL controlled and hindered by the monthly fees it truly blows the mind of the real effect SL could have on business in the real world if monthly fees were cut in half. Simply put, sell one item for 1000$ and 10 people will buy… sell it for 500$ and 50 will buy it. At 1000$ and no profit referrals will not exist, at 500$ and then profit referrals will got through the roof creating more businesses, more fun and a greater selection of everything for everyone.
~
July 24th, 2008 at 7:56 PM
thank you for the post, it is nice to have a glimpse of you
it certainly seems that sl is growing steadily and i am seeing this in the land sales for myself
thanks for taking the helm and making sure sl stays ahead of the pack, i look forward to even greater successes
July 24th, 2008 at 8:00 PM
Sorry, but I’m on my way out of the game. There are several reasons.
(1) The addition of all that new land has devalued my own land to virtually nothing. I cannot even give it away, and I paid L$12,000 for it. I’m lucky that I’m losing only $50 here, but I feel sorry for the land owners who paid thousands only to see the value of that investment drop by half. Remember: “don’t bite the hand that feeds you”.
(2) The estate owner or LL can reposess my land if I don’t pay the tier without any returned benefit to me. This means the land has no intrinsic value. Any price I pay to “own” the land has no real meaning, because I don’t really “own” it.
(3) The tier cost is really expensive; making it too expensive to live here. Clearly the cost has nothing to do with bandwidth or hardware costs incurred by Linden Labs, because the cost kepts going up, not down as one would expect with the Moore’s Law. $295/mo for 15000 prims is a grossly hefty premium to pay for the concept. When you can get “expensive” websites that offer a terabyte of traffic for $30/mo I had to wonder what the $295/mo was going towards?
(4) SL suffers from several bugs which has frequently resulted in the loss of prims and scripts. These problems appear to be ongoing with no real “plan of action” to address them; if there is a plan, the residents are left in the dark about what they are.
Going forward, I emplore you to clearly identify Linden Labs short, medium and long term vision, so that people can make decision about what to do next. When the land store was first advertised, it gave me the impression that was a revamping of existing tools, not a mechanism to devalue my land to nothing.
Second Life is a good idea, but the vision isn’t the reality. It’s buggy and I have to pay too much to live here.
July 24th, 2008 at 8:09 PM
Thank you for your post M, please never run out of energy learning, leading and helping the Lab innovate. Ever since you came along, the company seems to be moving more in an organized manner, it is still a long way to go though, but organized. I personally can’t blame LL for seeming to run around blind in many issues, but as said many times, this is a new kind of company, a new platform. New rules and protocols need to be created.
Linden Lab is a pioneer and its problems are often unique, ever changing and evolving. I continue to hope that you will communicate often with us every step of the way. I expect someone with your expertise will guide LL and propel it from its position as being one of the worst in customer service, to being one of the best.
July 24th, 2008 at 8:13 PM
[...] Linden has capped his first two months at Linden Lab with an overview of his thoughts, observations, a bit of rah rah, and a lot of stats and support for his view that [...]
July 24th, 2008 at 8:22 PM
Why do sculpted prims have virtually no development priority, even for major bug fixes? It has been more than a year since the introduction of sculpts, and the technology has basically been unchanged. Fully fixed, and with a few minor additions, sculpts would be the most powerful building tool of SL. Instead we get the down time of a single developer, who spends most of his time working on _other features_.
July 24th, 2008 at 8:37 PM
@24
I see M Linden has answered the points raised except the one that was baltantly ignored YET AGAIN, dont like the question, so LL just ignores it.
Can you please answer the point about VAT
When if ever , will you level the playing field so that ALL of your users pay the same ammount.
July 24th, 2008 at 8:41 PM
[...] Linden Lab’s CEO, Mark Kingdon , has detailed his perceptions of his first two months at the helm on the official Linden Lab blog. [...]
July 24th, 2008 at 8:57 PM
Some thoughts on “Land”
SL land is NOT land in the RL sense. It is just server space and clock cycles being rented out. Computer prices fall and power goes up. Therefore, you cannot expect “Virtual land” to be an investment like RL land. In RL, land can’t be “made” ..it is a finite resource, virtual land is not. Look at how much it cost to have a webpage on a server run by someone 10 years ago and compare it to now.. SL “land” is just a 3D webpage, to put it in simplistic terms. I’m afraid anyone that bought into “virtual land” as an “investment” paradigm, were duped by semantics.
July 24th, 2008 at 9:02 PM
M -
I appreciate the post with your assessment of SL after two months on board. It’s nice to have some insight into your thoughts, and I encourage you to continue to post on a regular basis.
As someone who is one of your “profitable” content creators, I am encouraged that you specifically mentioned a focus on improving the first-time user experience in SL. I see this as one of THE primary keys to achieving your goal of bringing more RL businesses into SL for communication and collaboration. I see many opportunities to leverage SL once the “effort of entry” becomes less cumbersome for new residents and business users…we have only touched the tip of the iceberg in terms of what is possible. I think of new ways to use SL every day.
It is, however, also my hope that LL plans on leveraging their current residents’ experience and abilities to assist those new residents and businesses as well, and that you will allow us to benefit from the research and effort we put in on a daily basis. In other words, please stay to your business model, and leave us to content creation…but help us help make SL successful. Give us the stability to create content reliably, and, in a fair and unbiased way, give us the tools and the exposure that will allow us to reach the customer base.
I look forward to hearing more about the company roadmap you alluded to, and to more posts about how we can work together as a team to continue to make SL and virtual worlds the next logical step in the evolution of the Web.
July 24th, 2008 at 9:08 PM
@44
I think it fair to say that LL might have been more graceful in the way it produced additional ’server space’ after marketing it as a limited and expensive resource
July 24th, 2008 at 9:08 PM
What happened to the LL Trademark ultimatum? You know, the one where those who were not in compliance would be on the bad end of LL legal action?
On March 24, 2008 Catherine Linden wrote a blog post which said:
“If, after reading the Trademark Guidelines, you realize you’re using a Linden Lab trademark incorrectly, please use the next 90 days to change your use to comply with the Guidelines.”
(http://blog.secondlife.com/2008/03/24/introducing-the-second-life-brand-center/)
WE’RE ON DAY 122!
If LL is going to grant amnesty to certain websites because the website owner and his friends are on a buddy system with LL then please say so. Many other website owners had to make modifications and some just shut down to comply with your new guidelines but the biggest culprit of all still remains. Why do some have to make changes and some get cake and punch when they are clearly in the wrong too? (pfft at least get an inSL logo for prims sake!)
Follow through Linden Lab FOLLOW THROUGH!
July 24th, 2008 at 9:10 PM
Thank you M, for taking some time to talk to us, we appreciate it. So many new ideas and ways to use SL will pop up daily as the client base becomes broader, I am looking forward to new exciting days ahead.
July 24th, 2008 at 9:27 PM
I for one have now issues with the prices on land since I did not purchase it to make money. I have, however, learned to atleast break even. Some here have thought only of their own self interests and not of the experience as a whole. I run my land as a co-op. Those players that wish not to make the investment can “rent” at a reduced rate in return for their tier donation to the Co-op. As for the VAT, I would like to point out that the folks in the EU still have an unfair advantage over those of us in the US since the exchange rate is 1:1.5. So you 25% only levels the playing field from my point of view.
July 24th, 2008 at 9:34 PM
@49, have you looked at prices recently? our cost of living is FAR higher than yours, one small example, you complain at $4 a gallon for gas, we pay $12, and all other prices are proportionately high, so NO, we do NOT have an advantage.
July 24th, 2008 at 10:01 PM
[...] been the CEO of Linden Lab for two months now. He has shared his impressions and experiences in a very interesting blog entry. Great post! I agree with just about everything that he says, including the fact that LL is doing [...]
July 24th, 2008 at 10:24 PM
“Other virtual worlds talk about being open – we are aggressively pursuing open standards and demonstrating results.”
So I guess copybot issue is not going to be resolved?
July 24th, 2008 at 10:41 PM
@49 - C’mon Hecaeta, unfair advantage for the exchange rate? How can the exchange rate be an unfair advantage? It’s an advantage, period. There is nothing unfair about it. And, may I remind you that the US dollar used to be a far stronger currency in the recent past and Europeans for many years had to pay US goods at a higher price? If you want to blame someone for the low exchange rate of the US$ lead that to the US Federal Reserve and the US government, blame it on the huge public debt of the US, etc. The low dollar boosts US export. Should we call that an unfair advantage?
July 24th, 2008 at 10:47 PM
hmmm this is great and all, though a lot of people are getting worked up over interop permissions, which i somehow dont understand (ummm if you can take it to another world, its perms stay the same?).
and thats the end of the related but
and the unrelated part >.<
for some reason, SL (and SL ALONE) makes my router stop sending packets when i log on….. anyone else having this kind of problem and using RoadRunner? its been going on a week now and id love to hurt whoever made it borked
July 24th, 2008 at 10:47 PM
… forgot one thing. Hecaeta, you do have a point on which I agree with. We European users have little to complain about VAT. First of all, LL is required by international treaties to apply VAT. Second, we the Euro being so strong, the loss caused by VAT is largely compensated by the exchange rate. Everything costs less to us.
July 24th, 2008 at 10:52 PM
I appreciate you post M. Of course it is rosey and gung ho. But some issues…
No one would argue that the “land business” in SL is an extremely important component of the SL economy..if THEY most important. Everything requires land. Now if LL wants to place the central importance of the SL economy on creation and sales to users, and have land free or lost cost to all…all serviced by and tier paid to LL, that would be fine. Just please LL, make statements regarding where you want the “land business” to go. Please state what you feel its importance in the SL economy as a whole! Prices first went up. Then open spaces were sold singly and could be standalone. Then 6 weeks or so later, prices were slashed. All of this came w/o warning or break in period. This leaves me to wonder is LL 1. Incompentent and didn’t know they were slashing prices in 6 weeks and didn’t plan that whole fiasco better or 2. Experimented on us, enticing people to buy, assessing the market then making another fast change.
M, if you truly believe SL isn’t a game. If you truly believe and strive for it to be an “economy” we need more communication about what management’s vision is for the different arms of the economy.
I have also asked Jack Linden directly on several occassions to address publicly the issue of grandfathered sim tier. Why do we not know the policy on this? Again is this incompentence, lack of planning or just stringing us alone waiting to drop the next bomb.
Publicly state what Linden Labs view of the “land market.” This way we can make more informed decisions about input into this economy. And if you answer is that virtual land is just the canvas for other things to occur and you plan to make it low cost and accessible to all, say it. No one would begrudge you that choice. I just think many of us feel the tides change too fast and our input in this is to simply fill the coffers. Speak! Inform! Be clear! We have earned that right to know what the plan is.
July 24th, 2008 at 10:55 PM
[... Our growth in Q2 was due to a change in our land product and pricing strategy to make the purchase of land more accessible to first time buyers. The strategy worked. ...]
Frankly M, that is a half-baked strategy. The big problem with owning land is tier! Current tier fees are a killer! LL is profitable, we can only be happy about it but it’s about time that LL takes into serious consideration sharing a bit of that wealth with the users who contributes so much to that wealth: cut tier fees, please. They are unreasonably high!
July 24th, 2008 at 10:55 PM
Greetings M,
If and when big boxes stores enter into the SL community who will make Wal-marts items?
Will all the work be sub-contracted to outside developers?
If a large box store opens how might this effect sales of resident created objects?
I don’t believe in going backwards but it is important to understand prior misjudgments.
The failure of the Wells Fargo endeavor is very distressing and warrants further study.
I first discover SL while watching a television show called Market Watch. The Lindex was the topic of discussion.
Second Life’s business applications need greater transparency. The degree of anonymity in SL leaves many residents short-handed. Residents have no way to confirm another member’s claims of affiliation or association with RL industries or educational services.
IP rights to Resident created objects are still an unresolved issue. Residents need to have a greater understanding of common attributes and characteristic that are used to define an object as “new” or “unique”. Residents should not be miss-lead to believe that they have rights to every object they create.
LL could post some of the basic information on obtaining a design or utility patent from the United States Patent Office. Any resident who does not have a “developers version” of the paint or modeling or text programs they choose to use do not have “Commercial Rights” to the features those programs add to their objects.
24-hour community? I have be a resident for well over a year and have seen ONE Linden.
You’re the boss M; these are my experiences, do with them as you will.
July 24th, 2008 at 10:58 PM
… Our growth in Q2 was due to a change in our land product and pricing strategy to make the purchase of land more accessible to first time buyers. The strategy worked. …]
OK..sorry….missed this the first time around….
M, if you really think that the planned “worked” you don’t hear a thing from an extremely large section of SL business owners. You don’t see that people will be abandoning their sims in droves shortly. You don’t get that your income from tier when those abandonments occur will plummet. Honestly, and I really am not one to speak like in general, I’m embarrassed for you. It just devalued anything that you type here on in like an SL sim. Wow.
July 24th, 2008 at 11:01 PM
I’m probably going to be accused of being a LL fanboy again with this post, and if so then so be it… but I’m really tired of all the talk about VAT. No, I’m not affected by it as I’m not in Europe. Yes, I know you guys are upset about the additional cost. But you keep forgetting TWO THINGS: 1.) Linden Labs did not *choose* to impose VAT, they absorbed the cost as long as they could and then - *at the advice of their corporate lawyers* - started charging for it. Which brings me to 2.) The whole reason VAT is charged in the first place is because Linden Labs is legally REQUIRED to do so. You can tell them to reserve it ’till you get blue in the face, it simply won’t happen. If you hate it so much, leave your country and settle somewhere outside of Europe.
Yes, I know that sounds arrogant, but I can afford this particular arrogance as I’ve moved around the world myself (though this has nothing to do with SL).
On an unrelated note, “We monetize unique users at many multiples of advertising based models.” Yeah, I got hung up on that one too LOL
but I guess it means “We are able to run a business based on our user base that is vastly more profitable than a simple advertising business (based on targeting end-users) would be.” Corrections welcome, especially from Mr. M. 
July 24th, 2008 at 11:01 PM
Ack. I wrote “You can tell them to reserve it ’till you get blue in the face”, that’s supposed to be “reverse.”
July 24th, 2008 at 11:24 PM
A very touching and thoughtful post M.
When Second Life wins, we all win, and by that I mean people that have not even heard of it yet.
Thank you for standing up with a voice that can lead the Metaverse pioneers!
- MRO
July 24th, 2008 at 11:25 PM
I am glad to see so many good news. Some comments on my own, a 1.5 years user:
-We must not think as business as the only or main involvement in SL. This is one involvement among others. My main activities in SL is about the on going building of a better world in RL (oh yeah, there are some people doing that, you may not hear much about it in the mainstream medias, but there is some need for this, I guess). This uses mostly social interaction, such as meetings, groups, etc. It also uses the ability of buildng nice things in SL.
-there is still a need to inprove the quality of SL grid and viewer (chat errors, memory leaks in the viewer leading to freezes when the memory is full).
-there are interesting features to add, such as importing full 3D meshes (not prims, even not sculpties). See http://jira.secondlife.com/browse/VWR-8145 Such a mesh can be created with softs like blender, 3DSmax, Gmax, etc. They allow for much more freedom in shapes, and they are much more lag-efficient (One mesh could replace 50 prims and lag like only 5). Especially we could create curved buildings nearby impossible to make from prims.
yes the variety of uses of SL are nind boggling. Add to the list: building a dream world, meeting with like-minded people we would never meet otherwise, etc
and the good new too is that LL is financially healthy.
interoperability is a very important paradigm. The 2D interned worked because there is one protocol (HTTP://) whic is so important that it was not changed since its inception. It also relies on a language, HTML, which changes brought more havoc than freedom. Similarly the 3D internet will really take up whe there will be a standardized protocol and adressing system: VRTP://world.domain.tld/path/resource
where VRTP stands for Virtual Reality Transfer Protocol, and “world” for a grid.
so your asociation with IBM is very interesting
About competitors, they could use the weak point of SL (lack of technical quality, non optimized building). But this did not happened yet, even a “great company” made a flop recently with a very poor imitation of SL. It seems that nobody understood what made the success of SL, which are a small set of features: building in world, making groups, etc.
July 24th, 2008 at 11:31 PM
George Jay Says: “Sorry, but I’m on my way out of the game. There are several reasons.
(1) The addition of all that new land has devalued my own land to virtually nothing. I cannot even give it away, and I paid L$12,000 for it. I’m lucky that I’m losing only $50 here, but I feel sorry for the land owners who paid thousands only to see the value of that investment drop by half. Remember: “don’t bite the hand that feeds you”.
(2) The estate owner or LL can reposess my land if I don’t pay the tier without any returned benefit to me. This means the land has no intrinsic value. Any price I pay to “own” the land has no real meaning, because I don’t really “own” it.”
Well I call BS on not being able too give your land away, unless it is estate land then price it a $1/m and it will be gone in seconds, that doesn’t work ask any of your mainland neighbours if they want it for free. And if it is Estate land, I fing it hard to believe the Estate owner won’t take it back for free as it’s really his land anyway, you’re just renting but coughed up a lump sum to earn the illusion you own it.
July 24th, 2008 at 11:37 PM
One more comments about SL users.
I too noted a slow but steady move from geek/gamer/griefer/BDSM users to more mainstream users. This makes of SL a much more pleasant and nice place, where people can be much more confident with each others.
One of the reasons for this are good steps like banning casinos, illegal sex, and reinforcement of TOS rules about respecting other residents. This makes a much better ambiance into SL.
But I think the main reason for this is the SL experience itself. For instance simple building and socializing make SL available for non-geek people. Also, the ability for social interaction first attracted a number of amateurs of violence or ugly things. But more slowly mainstream people are coming in, to build a large variety of things, and advanced people are getting in to make nice things.
July 24th, 2008 at 11:37 PM
For those complaining that their businesses are not doing well or are failing.
That’s life
Most small businesses in RL fail as well.
Start small, and grow when you can afford it. remember the lesson from the dot bombs that started to big and went boom.
July 24th, 2008 at 11:40 PM
We don’t complain about paying VAT crimson, we complain about an unfair and uneven playing field biased to financial favor for one sector of the market.
ie, Some users, (usa based) have a distinct financial advantage over other players, (non usa based). The correct implementation of VAT would mean that we all pay the same for , say, Land, tier, (295USD), however, the Lindens would get more of that from an America’s Based user, than they would a EU based user. The market would present a level playing field and eu people could fairly complete with USA people. As your not an a European, i doubt you will imagine it possible that your concept of fairness is the same as ours.
M Linden raises some good points, 1, incredible diversity of buzzwords, 2 Ability to crow over failures as though they were successes. 3, ability not to see irreparable damage being doe to island owners by the massive influx of cheap worthless mainland.4. The tier difference of 100 USD between mainland sims and estate sim is a bias that is killing off investors daily. We are actually asking Lindens to switch off our sims as they are no longer a financially attractive proposition and we cannot sell them. I have tried to sell one of my islands recently and the usa based buyer wanted me to pay the tier, pay the transfer fee and give them 300 USD to take it off my hands, Guess what, that aint gonna happen Crimson. Sorry M Linden, your 2 months have generate for many a loss of confidence and a lower state of moral with a greatly reduced income generation.
July 24th, 2008 at 11:49 PM
Hi Mark
Thanks for everything you are doing, and the well thought out and laid out comments, it was a lot to read, and digest.
I am looking forward to what will happen with Second Life and where it will lead
hopefully you will take us somewhere nice
July 24th, 2008 at 11:51 PM
@67 Spot on !!
July 24th, 2008 at 11:54 PM
I personally think you have done more in 2 months than the other one did in how long? Things are running alot better, inventory issues (once my biggest complaint) have been reduced to an adequate (albeit, sometimes annoying issue, but I see you are working the issue), communications always seem to get better and better. My issue, as many other land owners in here, is that your organization (prior to you assuming the reins) changed land pricing (i.e. initial buying fees) with no notice, after some of us (namely me hehehe) bought land. I think that even though your organization stated that they would reimburse people who had bought land after a certain period from when you “decided” to change pricing, it should be extended to the ones who bought new islands a week before the “cut off date” since I know, from dealing with Corporate America (Which is what I deal with, and have dealt with for 20+ years) that those decisions are not made on a whim nor made a week in advance. We, the residents make SL, not the programmers nor the management there, for without us, you all would be programming for a defunct unknown company or asking “Do you want Fries with that Shake?”.
To sum this post up, quit making off the cuff decisions about stuff, if you make a decision, look at the cost to benefit analysis of it (I am sure you have alot of folks sitting there looking at charts) and make this place better to work with. I am not “making” a living with it, nor am I paying for the land usage fees (which I will not get into now) with it, but it is a hobby and I and my friends enjoy it.
We all, and I am not speaking for all in SL, enjoy it and you have done a remarkable job in the past two months as things have gotten SO MUCH better, and I personally thank you!!, but we ALL still have a long way to go.
You guys rock and I still enjoying my almost year long stay with you and hope to have a few more with you as well.
Bless
Dirk
July 25th, 2008 at 12:05 AM
Thanks M Linden.. long and thoughtful post but I wonder how many of those women that you mentioned inworld are really women, not that it matters.
First of all, the reason we send you so many general messages at once is because we love our virtual community in SL .. you are something like it’s president so to speak and this blog could be akin to a meet the press kinda thing.. anyway… here are my thoughts for the day:
When you have time, please read the defamatory comments made by “Electric Sheep Company” and “Rivers Run Red” has to say about SL in this recent article about google’s new “Lively” program and also Second Life. http://www.technologyreview.com/Infotech/21100/page2/ They seem to have forgotten that they were once a “user” and now want to burn us all at the SL stakes of purgatory.
They have milked all they could from Second Life and it’s users and client base and now move on to the next victim, “Google”. Please do us a huge favor and permamently exile them from our midst since they have publicly and deliberately denounced and stabbed us all in the back and will not stop until they drag us into the virtual mud of betrayal.
Once again thanks for your words.. please do read the article. Seriously consider on reducing tier fees for islands. They really are entirely too high with all of the other competition out there. Have a nice day. .. if you need textures, please visit my inworld store 3′D Concepts*
PS Couldn’t resist the plug.. ok here’s one more.. I do custom building.
.. one more thing.. please send our regards to Phillip Linden.. some of us miss him as in the position he had. He seems to be a good guy who sincerely cares about the users of SL. Hopefully you are too.. Take care.
July 25th, 2008 at 12:06 AM
I see you have found the Rotation script M
Everything looks good with a spin on it.
I’m sure there’s one there for Stop All Promotions there too. Seriously though, it reads like a sales pitch to non-players more than a “we’re-all-in-this-together” moment for existing, ‘monetized’ residents.
Anyone that’s been here a while knows how diverse and mind-boggling we and our creations are.
You talk of a business plan to die for as we watch in-world business die and land values drop due to LL interventions.
You talk of killer apps yet to be created by LL or third parties. I call that vaporware. Hyping that which is not while fudging the current state of affairs.
Any new virtual world could come along with a killer app that sucks the SL population away with cheaper land, better viewer, better scripting or any number of improvements. What then?
Can we have some detail on what the Lab intends to do to retain its user base in light of interoperability?
What will be the incentives to stay in SL?
How will this affect the value of my creations or land?
There are many questions and this blog post uses very large brush strokes to paint a warm and pleasant picture but it is fine detail we want so we can indeed move forward together with some sense of certainty and community. That may be our saving grace.