Mark Kingdon and team have been doing a European tour, and in their wake the major media are firing stories across the bow of Second Life, proclaiming it either dead, or highlighting how profitable it is in a down economy. But more intriguingly, Mark has been providing a few metrics and target dates for Second Life that almost feels like a road map of sorts - or at least a broad strategy, and in so doing is demonstrating that Linden Lab is doing a juggling act between enterprise and consumer adoption.
In Britain, Journalism as Impressionism
The UK Telegraph has picked up on the Eric Krangel “drying paint meme” and has declared Second Life “virtually over” in an article that is so weak and speculative it can’t even be called journalism. Consider quotes such as the following:
“Research for The Daily Telegraph shows just 580,000 people logged on to the game last week.”
““The gloss has gone off the whole virtual world segment,” he says. “It only appeals to a very specific mindset, most people don’t have the time to sit in front of their computers for hours on end playing a virtual game.””
“There are fears that as the cost of data storage rise the company is struggling to fund enough servers to run the site. Users complain that the website crashes frequently. ”
OK, well….last time I checked Second Life was not a game. And I don’t remember anyone complaining about the, um, website crashing frequently. Web site?
The article is picking up on a story that’s a year old: brands who came to Second Life, learned from it, and realized that it wasn’t a mass market platform. But to say that companies have left Second Life ignored all evidence to the contrary: they’re still there, but they’re using it for innovation, collaboration and training and not to set up virtual malls.
The Times Fires Back
The Times Online fires back:
“That’s really the problem. Once “the man” gatecrashes the party - and governments and corporate marketers are inevitably a long way down the adoption curve - the kudos rapidly evaporates.
No matter that Linden Labs, which operates Second Life, controls a virtual currency that appears more stable than that overseen by the Bank of England - for all its insistence that the game is highly profitable, the curve inevitably peters out long before such tech businesses can fulfil their financial expectations. ”
Their point is that adoption curves come and go: what’s cool one week, becomes yesterday’s news, as the “frontier” vanishes and the masses start to adopt.
As soon as Twitter makes the cover of Time Magazine, its days are numbered as the ’shining star’ of the fickle innovation/technology set. Heck, even Ugotrade has moved on from openSim to Spimes and end-to-end Internet or whatever it is, and as Tish goes we all shall follow. 
M Linden Goes to Europe
Meanwhile, M has hit the road. And one of the things that amazes me is how consistent he is. As much as I love Philip and his tangents, M sticks to the script. Well, mostly.
In an interview with the Guardian, M responds to the “Twitter is the new SL” thread, (one which was partly facilitated by the Greg Verdinos of the world, someone who frankly should kind of know better). Said Mark:
“”I see what a phenomenally brilliant business model Second Life has. If you’re a social media property today, your biggest challenge is figuring out how to monetise it. Because the experience and the economy are so closely linked, Second Life doesn’t have the problem that other social media properties have.” As a result, Linden Lab “is a company with an extraordinary balance sheet, a great and profitable revenue stream.”
The article continues the message that M has been pounding home since he took the helm at Linden Lab: stability is key, the first hour is everything, and yes, we’re making money.
But Mark also lets drop a few choice bits of information which help to put in context where he sees Second Life going.
6 Million Active Users
Now, I don’t know if I’m the only one, but way back when I remember a lot of lag. I remember wondering what would happen if we ever hit 50,000 concurrent users: surely, the Grid would slow to a crawl and moving would be like walking through syrup.
Over the past week or so, however, Second Life has topped 90,000 concurrent users and seems well on its way to hitting the 100k mark. Kingdon agrees, but more interestingly, he’s also targeting a much higher “active user” base than I had imagined:
“Engineering improvements have also led to a growth in the number of concurrent users. When Kingdon joined last May, the maximum was 60,000. “It’s 86,000 now,” he says, “and we’re projecting that it will be 100,000 concurrent by the end of the year.” He also has ambitious plans for the total number of active users - defined as those who spend more than an hour a month using the service: “I’d like to see a Second Life that, instead of 640,000 active users” - today’s figure - “has 6 million active users.”"
That’s a pretty astonishing growth target, and the first time I’ve heard it. Kingdon is targeting a 10-fold growth in active users, which won’t happen on the back of enterprise alone.
The Enterprise/Consumer Balancing Act
Coupled with M’s tour is that the Lab has gone public with its plans to sell firewall solutions to enterprise. The solution, which will run in the 10s of thousand of dollars for a deploy, will allow companies to run Linden Lab technology completely separate from the consumer-facing virtual world.
Says Kingdon:
“Linden Lab is now aiming to build on this enthusiasm for communications: “There’s been a huge amount of interest in Second Life as a collaboration and learning tool, to the extent that we’ve created a new product that’s a behind-the-firewall product.” This allows companies to run a Second Life server on their own intranet: they can still connect to the main Second Life world, but it provides them with a virtual space where confidential discussions can take place.”
New Viewer by Year End
Finally, Kingdon also outlined plans for a significant overhaul of the Second Life viewer while in Paris. A few highlights of his talk:
“For 2009, it’s the same story: we’re working on the new user experience to make SL more accessible to more people…When we talk about the new user experience, it’s comprised of a couple of elements. You saw that in December we launched a new home page for our website…We’re completely reworking the entire web presence.
We’re trying to create an experience that’s engaging and shows the promise of Second Life so that we can grow. We’re trying to add new features to the website so that it’s more useful to people. Which is why we purchased the two e-commerce companies because we want to extend the goodness of the Second Life experience to the Web. And we’ll be doing that more and more.
We’re also reworking the viewer, which is an enormous task. But we’ve brought some of the best minds in interface design into Linden Lab to help us. Over the past month we’ve had some really important design breakthroughs….By the end of the year, we’ll have our first release of the new viewer. This is a very big redesign effort, and we’re putting a lot of time and money behind the viewer.
We’re also going to be working on the first hour experience in world…We could triple the existing traffic flow if we could simply improve the web site, the viewer and the first hour experience.”
On stability: “In the second half of last year, we cut the time lost to stability by half.And I think we’ll do that again in the first half of this year.”
Listen to his full talk here.
Well, all nice and shiny, but while I agree that SL is far from the death scenario the Telegraph and others come up with once every few weeks, I still have a big problem with the direction I read out of these statements.
I always read “first hour experience”, “new users”, “more users” and so on - it would be nice if LL would do something for the *existing users*, too! Yeah, sure, stability nowadays is better than a year before, downtime cut to half of the old status. Sadly, at the same time, trust in the company and their caring for those who pay their wages during the same time was cut to half, too.
I didn’t see M adressing the problem of users who - as soon as they are in the “net” of Second Life - suddenly are not worth that much anymore. The new blog is a step into the right direction - but a tiny one.
Daniel: the problem of focusing on the acquisition of customers versus retaining existing customers is not just a Second Life problem. Technology companies *rarely* seem to think in terms of retention. I license libraries for our development, and one I renewed recently caught me off guard.
Last year, they sent a notice that my annual subscription was up for renewal. So, a month before the subscription expired I renewed. This year, I got a notice my subscription was expiring… 12 months after I renewed. Apparently the system they use is so primitive that it just uses a flat 12 months from the date you repurchased, effectively wiping out a month of subscription for being a good customer that renewed early.
Because of the surprise missing month, I now have the option to repurchase at full price or walk away from the libraries. Guess which option my company will take?
I dunno about the future of SL…and no one else does either as far as I can tell. But where’s something from Kingdon/LL about what the company is committing to doing for its customers–er the ones who pay for sims like Rezzable.
Questions that remain unanswered (and most likely will never be answered):
* who is buying new islands? (why isn’t there an owner directory?)
* how many islands are there really now?
* how big a proportion of the grid is the porno grid?
* What is plan for allowing under 18s in?
* what is the technology roadmap? There are tons of issues and what is LL prioritizing?
* when will there be a standard mesh object?
* will there be web services for SL? What about integration to other communities??
I think that LL has wasted a huge amount of goodwill with the content creators that give life to the SL offering. Providing 16,000 prims for $2,000 to $4,000 per year is very expensive. There are some virtual online alternatives on the horizon and LL should be ready to face a more serious exodus once they are more stable.
[…] metrics and targets for 2009 Posted on April 2, 2009 by Daniel Voyager My Keynotes from Dusan Writer’s blog post on Accenting the Positive: Mark Kingdon Reveals Growth Targets for Second […]
RaR/Daniel -
Lots of good points. An interesting highlight from the Kingdon presentation in France which I didn’t transcribe was his discussion of the three main “prongs” of development and how those assist both new users and current ones. One of his points Web-side that the Lab has taken half a step of 100. I think this responds to RaR’s comments about Web-side things.
I’m a firm believer that the Lab is indicating that Web-side improvements will help facilitate group, commerce, and connection.
As far as statistics, the first quarter is now over. As I understand it, the Lab is releasing Q1 stats, based on comments made on the Linden blog. I was quite vocal about the need for these statistics to be useful for business planning and to get a better read of where the in-world economy is at. I’ve also been extremely vocal about a road map, and Kingdon has said that it is their intention to release road maps - and that the reality is, they didn’t have any. A road map would go a very long way to help current content creators plan their businesses.
Regarding the <18 comment - I think they’ve been fairly clear that this isn’t something they’re attaching to the adult content issue, but that until the adult content issue is managed they won’t look at it. (Yeah, paradox). I think they’ve also hinted that other things like 3D mesh and HTML on a prim are on the horizon, but like other ‘road map’ items they’re opaque about it.
Finally, I agree about tier pricing. I’m on no authority in this area, I’ve heard nothing, and this is total speculation - but I’m expecting a new tier option or pricing change by June. Again - total out of the wild guess.
Daniel - I’m wondering specifically what things you think the Lab should do for residents that its not doing? I’ll say that my major beefs are the following:
- Lack of a road map
- Lack of a road map
- Tier too expensive against current competition and other options
- Lack of progress on group, friends list and other in-world social and noticing functions
- Search still sucks (big time)
- Lack of a really good channel or senior executive advocating for the interests of land owners and content creators
My wish list includes:
- Early discussions on the policy implications of importable 3D meshes towards developing a community-backed road map
- Clickable HTML on a prim and desktop sharing
- A road map
- A road map
Having said all that, the number one things I would have asked for a year ago would have been stability, stability and stability. And I believe good progress has been made on these three fronts.
I also would have asked for an improved UI for the client (which it’s good to hear is coming) and a better Web site (which is getting there).
Did I miss anything?
Um, can we add editable megaprims?
Ohhh - yessss….editable megas! Let’s admit that they’re not going anywhere and build them in!
Very, very good points, Dusan. You know, I have this strange feeling that Second Life is something we’re pretty much “used to”. It’s like… well, Amazon, eBay, PayPal, or even Google — with just a fraction of the user base, granted, but there is this uncanny feeling of a “thing to stay”. I mean, mmmh, we don’t get many articles about “the problems of email in the workplace”. Sure, a new feature of email gets attention from a very tiny group of Slashdotters. A new spam trojan might make the headlines here and there. But, overall, email doesn’t feature on major magazines any more. It’s… “a fact of life”.
SL is “almost” at that point (which is bad, in the sense that it doesn’t have “billions of users” yet). Media reporting on it really have to work hard to publish something that is interesting — even if it’s just repeating “everybody is running away from SL” or “SL has been long dead”, which is, frankly, the kind of story that I wonder how editors are still willing to pay for: The point is, there aren’t many interesting stories about SL that appeal to a wider audience — exactly like there aren’t any interesting stories about email. Or, well, eBay or Amazon (unless Amazon launches something new on their cloud computing arena).
Instead, we just get swamped with stories about Facebook and Twitter. *sigh* It will be a hard blow for the media when they finally burn out their venture capital and have to say “oops, we have no business model, sorry about that”. On the other hand, we have Linden Lab with a business model that is rock solid (even if their technology is not… yet), but that kind of news is… boring. LL are too open about some statistics but…. yes, no roadmaps
However, is there a roadmap for Twitter? For Facebook? For MySpace? I gather not. (Amazon, at least, says what they’re doing outside their core business… and so does Google). The lack of a roadmap doesn’t prevent “social media experts” to drool over companies that we really don’t know anything about. That doesn’t stop them from continue to drool
But at the end of the day, when you remove the drool, what will remain…?
You’re right about techies jumping over to “the next best, shiny, new thing”. Wellllll… at least some of them
When those techies evolve to become IT consultants, they become conservative. That’s why 40-year-Unix and 40-year-Internet is still around, although sooooo many “shiny new things” have been popping up in the past decades — and quickly forgotten after a few years of “shining”. The old metaphor of burning like a meteor comes to mind. Just 4 years ago people were drooling about Friendster and intrigued if MySpace would ever catch up!… now it’s the war between Facebook and Twitter… and what will come next? Nobody can predict it… but… I can predict I’ll be still paying close attention to Second Life in 2013, even if I might have long dropped my Twitter and Facebook accounts! (The other day I was surprised I still had a Friendster account… somewhere 
)
It’s interesting that you mention Ugotrade. You’re SO right! I was wondering why I hadn’t read anything from Tish recently — and the answer is simple. She writes now about all sort of things that glitter and shine and catch her attention, but… Ugotrade is not interesting any more. It lacks focus. It lacks vision. When you start looking around for everything shiny and glittery, you lose consistence — a trait you admire so much on M Linden, and which I absolutely agree with you. Even Prokofy has lost his thread, and is now way more happy dissing cloud computing or OpenID than writing about Second Life
How long will it take for him to become irrelevant?
A very good friend of mine came to a very interesting observation, which will not be a surprise to you (and to most of your regular readers). Tag something with Second Life, and the SLogosphere will pick it up and amplify it tremendously — waaaay beyond any other environment. And the reason for that? Second Life’s “offworld” interconnection is incredibly powerful because of its consistence. And at this age and day where everything else is too fragmented, that counts a lot. This “magic” of Second Life’s consistency and relationship interconnection is what makes, say, live musicians that have had a MySpace for ages suddenly “pop into existence” after just a few live concerts in SL. They didn’t suddenly become better musicians — or started doing better PR. It’s just the amplifying phenomenon that SL has. Let me try a different example: run a survey to see who still remembers the Sheep and compare it to Rezzable (*bows to RaR*). I’m pretty sure the results will be interesting to follow.
So, of course, everybody knows I’m a SL fan and thus impossibly biased, but for the social media experts, SL is “unexplored territory”. Why does it have this “amplification”, if we just read nonsense and garbage on the media?
The answer is quite subtle. The world is full of people on Twitter and Facebook, but on SL, it’s a different world of quite different people
And before my head explodes with the gloat, I’ll leave you in peace…
Hugs,
- Gwyn
Thanks Gwyn for the response - great points all.
A few minor points: I think Prok is observing Lent, thus the focus is in different areas. I anticipate the return of focus after Easter.
Something interesting about Twitter - I read somewhere recently that they have so much venture money that they are profitable solely from the interest they earn on banking it - they don’t have much to spend it on (other than servers maybe) because they don’t particularly have a business model to support.
And as for Facebook - well, talk about LACK of consistency. They seem to waffle and change their minds every other week. I can’t help thinking that this lack of consistency and the apparent hubris of their management is a far more troubling sign for a technology ‘darling’ than anything else.
Hugs back.
Hi Dusan
What to do to help existing users/customers? You named the road map, that would help already. On the other hand: looking at history, how trustworthy would that be? The open space debacle was a disaster in the field of customer trust. Actually, it wasn’t one, it still *is* one, with some Lindens sending half-signals about the next step in July not happening and no official words at all. The whole LL approach of “we made a mistake - and our customers will suffer for it” doesn’t go well with me (and many others) - and it will be very hard to gain trust again. A good start would be some honesty about own mistakes, instead of all the bright and shiny PR action and blatant lying.
Prices in general are too high, options to only pay what you really use are (at least on the estate sector) next to non-existent. Example how it can be done (from k-grid): you pay a basis price for a region with only 750 prims - and can buy additional prims in packs of 500. Why pay for 15,000 prims when you only need 10,000?
Service fees are a total rippoff, too. $150 for moving a region, and $50 for a rename? How much work is that, 5 minutes? With those 5 minutes including a coffee break. Totally out of line, especially when the need for these actions was triggered by LLs own messup with open space regions.
You are right about the in-world functions. I can’t believe that there still is a 50 percent chance of group chat not working. I can’t believe that we still have only 25 groups available, when on the other hand groups are needed for many inworld settings.
With some exceptions, customer service is bad on many levels. This starts with tickets not being worked on not only for days, but for weeks. Then closing the performance ticket with “everything looks fine” - while the region still is hiccuping all the time. Taking out useful viewer features (Logitech LCD keyboard support) with a “deal with it” attitude.
As Alberik mentioned: editable megaprims! Simply allow creating bigger prims. Again from k-grid: 256 is the limit there, a very useful and reasonable one. And, another nice point: I didn’t run into a “prims are too far away from each other to be linked” message yet.
Very important: work on the amok running g-team members and the policy of “Shoot first, never ask questions later!” when handling ARs. For example underage ARs: it’s unbelievable that accounts of people who successfully (even manually) verified their age already are suspended just because someone sent a fraudulant underage AR against them?. And it becomes totally nuts when that person is asked to send in exactly the same proof of age he already DID sent in months ago. Same kind of problem: returning kids skin vendors with the pictures of topless 4yo girls. At least some members of the g-team need a reality check - right now their actions are more or less cyber terrorism.
LL has to wake up and realize that it aren’t the few big companies who are responsible for the major part of the income - it is the thousands and thousands of little guys. What do they want SL to be: a meeting room for CEOs - or still a world of their customers creativity and imagination?
I’m still in SL, and will be for the foreseeable future. But now I also have a basis in k-grid, as small and shaky and technically behind it still is. The general feeling there is much better than in SL, I feel like I’m really welcome and appreciated there - instead of feeling like being just a paying nuisance in the eyes of LL. LL better wakes up.
It seems to me that many of the Lindens are just out of touch with what goes on in SL, that they themselves don’t even use their own platform?
What does that say that the general communication from Linden Labs to its use base takes place on the web and not on their platform (which they say fosters communication)
They want SL to be the 3d Web, but yet we can’t interact with web pages, and we can only view videos in Quicktime (can someone wake up over there and finally implement flash?)
And do objects farther away from you load first?
And forget 6 million users, when we can barely get 60 people in one place.