Second Life Business: Advice to the Avatars

March 30th, 2008  |  Published in SL Business

Cheyenne Palisades Answers Your Second Life Business Questions

I’m a partner in a successful artisan cheese (yes, there are artisan cheeses!) importing and distributing business with a successful website. I know large multinational corporations are investing in Second Life, but what can virtual worlds like SL offer my small company?

— Gruyere

I’ll talk about direct benefits in a second—but first, let me say it seems certain that three-dimensional environments like Second Life are the future of the World Wide Web. Experience in virtual worlds, even simply walking around and learning the interface and social mores, will give you an understanding of how this emerging technology can work. Soon enough you’ll be wishing you could alt-drag-zoom on web pages or rotate that book on to look at the back cover. Just as having an internet account in 1992 might have hastened your company’s debut on the web, experience in virtual worlds will give you a leg up on the 3-D web technology that will eventually and inevitably develop. So it’s a good idea to at least look around at the future that will soon be arriving.

As for the direct benefits, Second Life can offer your company a little or a lot. It depends entirely on the creativity and cleverness of your approach. Let me explain with an example. A number of big companies—I’ll use American Apparel as an example here, because I guess I’ve got to pick on somebody—brought their first life merchandise and merchandising techniques to this world. Lock, stock, and barrel, they created a Second Life store that was the virtual mirror of any real-life American Apparel outlet. But as it turned out, no one really wanted to buy virtual analogues of their real world clothing. American Apparel had no real advantage over Second Life’s thousands of small clothing makers or any idea of the needs and desires of the customer base. Consequently, the sim was often empty and sales were rare. And it didn’t help when activists A-bombed the store. Now American Apparel is gone and not really missed. In its corporate arrogance, the company expected to automatically be a big success by replicating its real-life presence in world. Instead, it failed.

By way of contrast, let me tell you about the Museum of Robots on the (appropriately-named) Kubrick sim.

With a name like Museum of Robots, who wouldn’t want to visit?

The museum features oversized builds of famous robots from movies and television and short film clips featuring various mechanical characters from Robby the Robot to Klaatu to HAL 5000 to C3PO and R2D2—and there’s an entire floor devoted to mass-produced toy robots sold from the 1930s to the present.

 Robby and the Robot

The Museum of Robots is a delight for those reasons alone—but on my visit I learned the remarkable story of a 16-year-old boy who saw the dilapidated original Robby the Robot at the Movie Wonder museum in Los Angeles and swore he would one day own him. That boy— Fred Barton was his name— drove 70 miles to that museum every Saturday for a year to study Robbie as he handcrafted a full-size wearable robot in his garage. His Robbie replica earned him, at age 17, a contract to restore the original Robbie, which he took home in the back seat of his car, fulfilling his childhood dream. Now Fred owns a company that sells replica robots—and guess what? They can be ordered at his Kubrick sim.

It’s a fascinating story, and the Museum of Robots is the perfect setting in which to tell it. For an initial investment of $1675 and a monthly expense of only $295, Fred has constructed a little world in which customers can visit, be entertained and educated about robots, and, if they are so inclined, order their very own life-size Robbie.

From the parentheses in your question, I would hazard to guess that many people aren’t educated about artisan cheeses. You could devote part of your Second Life space to teaching potential consumers about small cheese makers and pointing them to your website so they could order your fromage. Perhaps you could build a virtual cheese factory which your visitors could tour, and stuff them with virtual wine and cheese afterwards. And perhaps you could devote a portion of your land to tax-deductible good works and charitable giving. Really, it’s all up to you!

What do you think about high finance in Second Life?

— Wheeler the Would-Be Dealer

I try NOT to think about it!

When friends told me a year ago about the astounding interest they were making on their deposits at Second Life banks, I cringed, for I knew the fall would soon come.

And come it did, first with the default of Gingko Bank, and then others, and finally, with the ban on unregulated banks by the Lindens and the demise, for all practical purposes, of the World Stock Exchange. Lots of people, some of them my friends, lost money— in some cases Lindens in the equivalents of hundreds and thousands of real dollars.

I admire Linden Lab for their attempts to stay out of the affairs of avatars, but I think the company made a good move by banning unregulated banking in world. Second Life banks were pyramid schemes run out of basements by college students and housewives and schemers who took advantage of the naivety and trust of their fellow virtual citizens and decamped with the deposits.

That said, real money changes hands in Second Life. Some people own dozens or hundreds of sims holding virtual land worth hundreds of thousands of real-life dollars. Perhaps 400 people make a comfortable real-life living from in-world activities. There’s money to be made in world, and that does require financing. If you want to launch a business but lack the resources, my advice would be to develop a business plan and seek private financing, either in-world or out. And if you have a surplus of Lindens, I suggest you turn them into first-world currency and put them into a real-life bank or stock market.

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