An Open Letter to Chip and Dan Heath about Second Life

The following is a guest post by Pooky Amsterdam.

Dear Chip and Dan,

I read, with interest, your article at titled “Why Second Life Failed.” Me? I run a successful media enterprise in Second Life and produce award winning videos using the very cost and time effective 360 degree views of this graphical engine. I meet people from all over the globe, work, converse and laugh with them while doing incredible things. I do not have a blue tail (Though some of my best friends have tails) but I have a Chanel style wardrobe to die for.

I’d like to respond to a number of points that you made in your piece. You wrote:

“You—sitting right there, reading this article—you’re an avatar in Second Life. You work a Second Life job, earning Linden dollars. You have blue hair and a serpentine tail, and you’re dating an androgynous digital skateboarder named Rikki. Also, you are a ninja. Life is great.”

So far so good. Next, you wrote:

“At least, that’s the way things were supposed to unfold. In 2006, the future was Second Life. Business Week put Second Life on the cover. American Apparel, Dell, and Reebok, among many others, rushed to build virtual storefronts.”

That a company would build a store and not put anyone in it is bad planning. No company in their right mind would build a store in the physical world and leave it unstaffed. Just as in the physical world, this is a space and location. It’s virtual yes, but to succeed you still must know where and to whom you are selling. That there are businesses which make over a million dollars in Second Life is a testimony to what happens when you know your customers. Stiletto Moody made over a million USD last year selling virtual shoes.

Did Second Life fail – or did the business fail? There is a difference. Failure of the platform this is not, this is a failure of the business to understand their customers, and therefore their business. It was also a fault of consultants who overcharged and  gave an incomplete picture of the business model.  For in truth, it is how you handle your business after your location is built, no matter where it is, that determines your success or failure.

Let’s say, you went to China,  did not speak the language,  hired experts who said they would get you a store somewhere and you would make money, but actually no one bought anything (okay you had no Chinese speaking sales help in the store, but these experts said you didn’t need anyone there!) The shop is a failure – is it China’s fault? Did China just fail your business? Or did you have lousy advice and a translator who didn’t really know the language? Oh go ahead and blame China, it will make you feel better.

Knowing your customers and how to service them is critical. Customer support and marketing is the basis of all business.

“Reuters even created a full-time Second Life bureau chief. People rushed to sign up and create their own avatars. Blue hair and Linden dollars were the future.”

Yes there was a lot of hype almost 6 years ago – for good reason, the press and a lot of businesses jumped on the bandwagon, and without the necessary depth of either journalism or market research, were left with some egg on their faces. I guess this still hurts because for some reason, reporters writing about Second Life actually go to lists like “Help A Reporter Out” and ask for people’s negative reactions only, from Second Life, and then write articles. This actually happened two years ago, because I was on this list, saw the post, and read the subsequent BBC article written by Lauren Hansen.

“Looking back, the future didn’t last long. By the end of 2007, Second Life was already losing its fizz. “Businesses are shuttering in Second Life, it seems, because no one is using them,” wrote Morgan Clendaniel in a brutal piece in GOOD magazine.”

Oh for heavens sake, this article is about how the reporter couldn’t find his penis. No wonder the man couldn’t take his head out of his pants. Sex! Penis! 2007! and did I say penis??? All adult and x – rated activity has been moved to an Adult age – verified region called Zindra.

“There were never any employees at stores like Dell and Reebok when I visited, nor were there any customers. But that wasn’t that shocking because, for the most part, there seems to be no one in Second Life at all.”

Is it shocking that the press would feed into a hype cycle?

Below I quote from a January 2007 article written by David Kirkpatrick:

“Linden Lab claimed 2.5 million ‘residents,’ meaning people who have registered for Second Life. But the service has only around 250,000 active members who still sign in more than 30 days after registering. Nonetheless, that group of active users is currently growing at about 15 percent per month.”

Please don’t get all excited about the “10% of registered users.” 10% is pretty much par for the course for virtual worlds. This is a rule of thumb, not gospel like the  (sarcasm alert) milk shake test. In 2007 a quarter of a million people was hardly “no one.”

Below is a Linden Lab chart which details information about the Second Life economy.

In 2009 the total size of the Second Life economy grew 65% to US$567 million, about 25% of the entire U.S. virtual goods market. Gross Resident Earnings are $55 million US Dollars in 2009 – 11% growth over 2008.

Second Life provides a brilliant platform for those who take the time (which granted not everyone has, but clearly – which some folk have and benefit greatly from.)

Your purporting of fallacies is self serving, and so I really wonder what is behind this. I am truly surprised most every time I read a reporter or analyst’s overview of  Second Life. (Exception of note is Vizworld as the reporter spent time in the field at a variety of places, recently) Most reportage is just bad, a retread of 2006/7. The authors are using a voice of authority, when they really are going after a target for easy pickings.

Hookers! Sex! Blue tailed Avatars! 2006!! Read what I’m writing! Buy my free book! Please!

“Today, Second Life limps along. In the first half of 2011, the company reported that an average of about 1 million users logged in every month—which, you have to admit, is about 999,990 more than you expected.”

I hope that you didn’t have your heart broken in Second Life, for I cannot imagine why you would say something like that. Is part of the milkshake test telling someone they shouldn’t like strawberry? Why would you not expect it? Who made you a platform god? Second Life has been around for almost 10 years. That is an achievement. Almost a million visits a month is impressive, so I don’t know what you mean by limps along.

The platform continues to enthuse and nourish many. I can give you a few first hand examples of a kind of experience very hard to find elsewhere. At a mixed reality event in 2009, I saw veteran journalists  Helen Thomas and Bob Schieffer, in Second Life.  They were  receiving the  Edward R. Murrow Lifetime Achievement award. She took questions from the virtual audience and I was able through my avatar, to ask Ms. Thomas a question. She responded with an amazing answer about the press, 9/11 and  the Bush administration. I really don’t think that is going to happen at IMVU.

When I interviewed Holocaust Survivor Fanny Starr, for the documentary “Why Now?“, a Catholic High School many miles away brought her class of 14 – 16 year olds also into Second Girls. In real time, these young girls talked with  this 87 year old woman who had survived 6 years in ghettos and concentration camps. They asked and learned what her life was like at their age. These stunning examples of what is happening on the Second Life grid are not going to happen on Facebook.

More? I interviewed a cancer survivor for who started Relay For Life in Second Life. This year over $330,000USD was raised. It went directly to the American Cancer Society, and ACS put the live weekend’s events from Second Life on their home page while it was running inworld. The commitment  and the amount of money raised is phenomenal. Even more importantly, those in our extended virtual community who have experience with this life threatening disease are literally helping to save the lives of others, as they communicate with each other in real time. This isn’t going to happen on Twitter.

Under the brand Virtually Speaking, Jay Ackroyd and Widget Whiteberry produce 5 weekly public affairs programs in Second Life and on the web.

One of my favorites is Virtually Speaking Science, hosted by the Meta Institute for Computational Astrophysics (MICA) whose Scientists work at premier  institution like CalTech.   VS Science hosts are’s Science editor Alan Boyle – author of The Case for Pluto – and Thomas Levenson, who, in addition to being the author of Newton and the Counterfeiter and Einstein in Berlin heads up MIT’s Program in Writing and Humanistic Studies and the Graduate Program in Science Writing.

I have been part of the listening, commenting and questioning studio audience for Jay’s interviews with Daniel Ellsberg, Gloria Feldt, and Dahlia Lithwick.

This might not be for all, but it is incredible activity by anyone’s standards. Nourishing beyond belief, if this is your interest, and indicative of what can be.

This has enabled bright and even brilliant people to keep advancing their intelligence while looking better than they ever have before.

There is, additionally, an incredibly vibrant artistic and powerful performance community who raise their voice every time something like this comes out.  I don’t have time to list all the incredible artists, musicians, performers, comics (Okay, Lauren Weyland) and others who play nightly to an international audience that assembles very locally – at their computers. Your arrow sorely misses the target. In fact you are wrong to set your sights on Second Life for anything but a remarkable phenomenon, one that people are truly a part of, yes admittedly in ways you have no idea about.  Because of the wide variety of activity from advanced topics to just hanging out and listening to some amazing music, it does have something for everyone.

And Will Wright of The Sims, (yes The Will Wright) just joined the board. I would say the future looks incredibly exciting here. Is Second Life a bit of a challenge? Yes, it is, and so it isn’t for everyone. It is for a better educated number of people who have disposable income and spend an ARPU greater than other virtual world sites (some estimates, like Nick Yee, have it at almost 10 times other VW ARPU, the population is older as well. It’s a great demographic). Virtual goods are a huge and growing market and some estimates reach $12 billion by 2015. The recent introduction on Second Life of building mesh makes for greater graphics (and lower lag). This is a profound platform for virtual asset creation

“But during this same period, Facebook averaged roughly 500 million logins per month.”

Please compare ANYTHING to Facebook – I think you would find many businesses, social networks, video companies, traditional media offerings such as Television shows, etc. fall a lot short of Facebook monthly logins.  Oh let’s use your favorite term – FAIL. What TV show has 500 monthly views? Does the Superbowl even get 500 million people watching it? The Oscars? And these are events judged by viewership. Second Life is certainly a form of social network – but it is really not the same as Facebook. What is?

“How did we misread the future so badly? Mind you, this Second Life hype didn’t involve distant, sci-fi predictions about the future. (“Someday we’ll all commute to the moon using unisex RocketCrocs!”) This was just five years ago. We were just months away from the iPhone.”

And don’t forget $580 million for MySpace!

“After enduring a lifetime of mega-fads that flame out—Apple Newton and PointCast and the  Segway—why are we so quick to extrapolate a few data points into a Dramatic New Future? Well, here’s the frustrating part: Sometimes the Dramatic New Future arrives, exactly as promised. The mega-hyped Internet? Yep, worked out OK. Ditto Google and Facebook and iPods and iPhones.”

Blue Mars did not really survive. And let’s be realistic, though valuation is intense on companies such as Twitter, YouTube and LinkedIn, what are the real numbers behind their profitability?  How many years did it take YouTube to finally begin to turn a profit? Second Life is profitable for Linden Lab, and for many who understand the platform. It has a clear business model, and does not survive on advertising alone.

And now, let’ go to this video – which I think is a good example of hubris, and true irresponsibility because the video while salacious does very little if nothing to prove any point at all.

Second Life Vice Capades: Virtual Hooker (VIDEO)

I can not stop laughing at this video from I think 2007 or 2006 (again?) – it’s priceless – Did it take this woman three weeks to fail at becoming a prostitute?  She was not able despite her best efforts at tarting herself up and trying her best, to find someone to pay for sex. Despite Second Life’s reputation for sex, often presumed, then highlighted, by the media, (sex sells?) it’s not easy to find random people for sex. In the entire film there was one place that people went to – yes that happens with people – there is porn on the Internet (it was in fact a driver for The Internet).  It depends where you go and what you look for, yes?

Of course she was looking to be a hooker, yet couldn’t find a client.  She bought into the hype that you could just go and start any kind of a business, anywhere. Even being a successful hooker might entail some business planning.

Also please note the adult region has been separated in an area known as Zindra for over a year. Now a fledgling prostitute would have to go there to ply her trade. The main grid has severe restrictions on X–rated businesses. These exist only in Zindra, in an age-verified region removed from the general population. So this video is quite outdated.

And sex might not be that easy to find, as that people develop relationships in Second Life with like minded people. You find others with common interests. Second Life racks up over a billion voice minutes a month, which is what former CEO Mark Kingdon told Robert Scoble when the Scobleizer interviewed him last year.

Would this woman possibly, if she found an outlet for herself and her creativity find someone who also was interested and interesting, and might they start becoming romantically involved? Possibly yes. She had 3 weeks to turn in a sex tape…… It’s very cute though, and not scary, hard-core or really well much of anything. I think she was brave and it was kind of funny. It tried a bit too hard, as did she. And maybe people go to Second Life to look for sex because they are lonely or horny or both, but come out with a whole lot more. I know this is true, and I also know many stories about Marriage 3.0 where Second Life has saved couples.

I will grant that the learning curve is tough, it is. It takes some dedication to master it, believe me I still move like a noob, and it takes that thing we just don’t have much of, time. It also takes patience and being able to laugh at yourself, which are not bad qualities to possess. And it takes a kind of humanity to reach out to others in this world, a curiosity. You kind of have to be a special person to really get it. Second Life offers the kind of premier experience you can’t get anywhere else. You must be able to understand it though, and when you do, you feel incredibly empowered and connected. Yes, it takes time and is not easy, it is worthwhile. And let me say this again – it isn’t for everyone, yet.

I don’t like cheeseburgers, but I don’t spend my time writing about why no one else should like them. I would never presume to dictate to someone else what to like, or what to do. I can’t imagine being Mayor on FourSquare, but obviously others enjoy this. Good on them.

“Christensen asks us to imagine a group of marketers at a fast-food restaurant who want to sell more shakes. As they comb the customer data for insight, they discover something interesting: Most milkshakes are sold to early-morning commuters who buy a single milkshake and nothing else. Why milkshakes?”

That inworld businesses generate millions of dollars, reflects the wealth of the Second Nation. Second Life provides great opportunities for business, virtual enterprise, shopping, social engagement and much more.  It is a great platform for prototyping, there are inworld TV stations, there are Film Festivals, and  real time discussion amongst groups or individuals who can chose how they wish to present themselves. What can be done on Second Life has only just been scratched. There isn’t much that can’t be done – except eat – no one has really invented virtual food you can eat yet. Whoever does wins, I’m convinced of this. My money is on the 3D Printer.

These commuters, according to Christensen, are “hiring” milkshakes to do a job for them: to supply a breakfast that is filling and non-messy and cupholder-compatible. So to sell more milkshakes, the marketers don’t need to create a more delicious milkshake. Deliciousness isn’t really in the job description”

Second Life is affordable, easy to get to, filled with interesting things to do and people to talk to. It is pretty cool home entertainment.

“So when you evaluate the next big thing, ask the Christensen question: What job is it designed to do? Most successful innovations perform a clear duty. When we craved on-the-go access to our music collections, we hired the iPod. When we needed quick and effective searches, we hired Google.”

And it became apparent that there was gold in them there searches, and now we have Bing. That it isn’t as big as Google does not mean it is irrelevant. I don’t know if it passes your Facebook test of 500 million hits a month. No industry that is successful has zero competition.

“And looking ahead, it’s easy to see the job that Square will perform: giving people an easy, inexpensive way to collect money in the offline world.”

Square takes a 2.75 percentage of the sale price for its service. At 800,000 merchants, they were wise to drop user limits from $1,000 / week, and should see business grow. That is until someone charges a 2.25% on a similar service, which if it is successful, will happen.

“But what “job” did Second Life perform? It was like a job candidate with a fascinating résumé—fluent in Finnish, with stints in spelunking and trapeze—but no actual labor skills. The same was true with the Segway. No one was interested in employing a $5,000 walk-accelerator. (Though, to be fair, Segway eventually got a part-time job saving tourists from exercise.)”

Actually it is like a job candidate with fluency in all major and most minor world languages, and expertise in everything from Rocket Science to fashion design. In other words, smarter than most employers and here is the rub, also somewhat intimidating. The Labor Skills though have created a platform which is robust and dynamic while turning a profit for it’s parent company. Labor also delivered Open Source code which is the basis of new grids forming all the time. Labor is creating right this moment.

Second Life has performed the job of building the most exciting user created content platform in the world. You can make virtually anything, any place, any time, broadcast events, stream productions and find a remarkable wealth of opportunities. I am sorry that you couldn’t find the chunky bits in this milkshake – others have.

One complaint is “everyone is beautiful,” but do you know what that really means? We are not judged, as we are in the physical world by how we look, and the sometimes shallow reactions that affect our confidence and therefore our abilities.  Here, in Second Life, the way you look doesn’t matter. There is no better looking member of the family so to speak. What defines you is your character, and what you do inworld, what you say and what you really represent.  Again not for everyone….

“What about the Apple Newton, the first widely hyped PDA back in the 1990s? It was clearly applying for the right job—to give us mobile access to our calendars and to-do lists and such. But it was a lousy employee, with notoriously poor handwriting recognition and a limited attention span (from low battery life). PalmPilot got the job a few years later.”

What about Prodigy? Prodigy was far ahead of it’s time.

Second Life hasn’t failed anything as it serves its user base well, and turns a profit for it’s parent company. The limitations as I see are that it was so far ahead of the curve. The rest of the universe needs to catch up, and I am confident that it is doing so as I type. Second Life will be here 20 years from now.

“If the Christensen test alone could predict the future, then the two of us (along with Christensen) would be the richest venture capitalists of all time. It’s not a perfect predictor. But by our count, Christensen’s test calls correctly about a half-dozen of the big technology hype cycles of the last 20 years.”

Hmmmm……that is true! However it isn’t, but let’s just talk about the successful parts of the 6 technologies they called correctly, because it serves your purpose, as your writing similarly picks out the “flaws” of Second Life to support your case. If the Christensen test looked at 10 cases and predicted 6 right that is a huge difference than if 120 or even 1200 technologies were tested. You do not give an adequate frame of reference to judge your proclamation of victory.  Any more than you give relevant data in your prediction of failure. (“….which is 999,990 more than you would expect” whoa can I pay you to come up with an analytic like that?)

“At a minimum, it provides some protection against over-optimism. Think of it as a tinfoil hat to insulate you from the nuttiest predictions.”

I need tinfoil glasses to protect me from the erroneous and self aggrandizing reportage of those who can’t even be bothered to use a video or figures from this decade.

New user logins went to over 20,000 a day this week. This week……November 2011, not 2006. Why must the press bring up the questionable business practices of American Apparel from 2006 every time there is an article on Second Life? Please find something new, it is almost 2012. I beg you, I can’t keep stopping everything I’m doing from my incredibly vibrant and productive work inworld, to keep writing these wake up and dress your avatar replies.

For excellent reporting on Second Life, I would suggest Tateru Nino. She has a tremendous grasp of what is happening.

The Author: Pooky Amsterdam

Please feel free to contact Pooky Amsterdam at

29 Responses to An Open Letter to Chip and Dan Heath about Second Life

  1. Second Life hasn’t failed anything. May have not lived up to the hype, but hype is just lofty ideas. I’m still waiting for the flying cars were all going to be driving by the year 2000. Second Life is a success. Note I didn’t say it is perfect, but even reality has its flaws.

  2. Lap Liberty says:

    Second Life has become a legitimate, alternative life style for a lot of people. At a time when jobs are number one on the demand list, I find there are plenty of jobs in Second Life. True, the honeymoon is over and now I have settled down in the marriage of Second Life and Working on my own organic venture. You certainly won’t find people saying Second Life failed from the film making community, which thrives on new technology and cost saving production. Kudos to ya Pook, for calling it like it is.

  3. I’m with Cisop. Second Life is still a great place to teach, play, get together with like-minded folks and learn. I’ve been taking Spanish once a week for two years inworld, and it’s been very convenient and very helpful, and I love the dedication of the folks at the Instituto de Espanol sim who provide us with lots of culture as well. The Chilbo Community on the mainland just celebrated its fifth anniversary having grown from four people to the better part of 9 sims, and no stress.

    Thanks Pooky for setting this guys straight!

  4. While some of the comments were informative and interesting, I found the original Heath post lazy, shallow and sloppy and wondered more than once about the editor who passed on it. So, I’m delighted to read Pooky’s response here.

    I too don’t fit the Heath boy’s stereotype of their readers who use the SL platform. Although I did briefly play with blue hair as a metaphorical nod to the blue rinses popular among greying women in the ’50s, my SL hair is grey.

    As Pooky generously mentions, I produce Virtually Speaking, along with Jay Ackroyd. We’ve been using the Second Life platform since 2007, when Jay first interviewed investigative blogger Marcy Wheeler. (

    As I first explored some of its many facets, several things stood out for me about Second Life. First was the steep learning curve countered by the presence, 24/7 of a community of users willing to help a new user gain enough proficiency to function. Second, it’s fun! There is the fun of learning, of playing with others, of gaining new, real skills, of seeing your creations persist. There is the joy of getting to know people whose paths are time zones and nations away from yours. And the joy of self-discovery.

    Third was how, as in any major city one could, with a little persistence, find anything. My favorites are live music, good conversation, intelligent builds, and opportunities for reflexion and networking.

    Fourth were the companies, who seemed to have misapprehended virtuality, confusing it for a 3-D web presence. I must have visited a dozen builds created for companies selling products and services. In all cases I could click through to a website and buy a product. In rare cases I could click on an information link or pick up a digital sample of whatever the product. I don’t recall ever finding an ‘online indicator,’ let alone a staff person to talk with.

    In later years, I visited several university builds. They were resource heavy recreations of physical world campuses; or fantasies of campuses that might yet come to be. While charming, they represented what I consider to be a real failure: a focus on ‘bricks and mortar’ over staff and training. That focus on ‘bricks and mortar’ costs time and money, but resource heavy installations make the digital environment more difficult to navigate. They sabotage goals that require interaction with colleagues, clients, customers, constituents, or alumni.

    People are the real presence. Pooky Media, while personified by Pooky Amsterdam, is built on the persistent energies of a team of people. The built environment has both utility and charm (as a creation, I love Virtually Speaking), but it is the people and their relationships that make it sing.

    Like the game shows of PookyMedia, we are enlivened by a digitally present studio audience. While listening live to the streamed in audio content – a conversation – studio audience members use local text to comment, add links, and pose questions to our guests. Guests in turn, are reading those comments or hear them read into the audio record by the host.

    Sometimes our audience tweets a question or comment. Two on-stage Twitter feed sign-boards search on and display an account name or #subject. On the day when Tom Levenson or Alan Boyle is hosting Virtually Speaking Science, two twitter boards are feeding in their tweets and those of their guests. On Nov 16, a playful exchange between @TomLevenson and @SethMnookin led to deliberations about social media and large scale social problems created by junk science.

    Audio files and chat logs are preserved for future access. So, as a form, it is both immediate and asynchronous. For every person who finds us in Second Life (I could go on about how overly difficult it is to find public affairs programming) vastly more listen later. They access podcasts free from iTunes or as downloads from BlogTalkRadio. Which raises another important point: Second Life is not a stand-alone platform. We, as PookyMedia and others, are on the web as well as ‘in world.’

    Could we continue to create public affairs content without Second Life or another of the developing grids? Probably. I believe it would change our relationship with our studio audience, who overlap with our web audience. The playful element would be gone.

  5. Fogwoman Gray says:

    Well said.
    I am, in fact, most often blue (since 2006). Also occasionally tailed, or avian, or a bucket. Because I can be. I also met my amazing husband in SL, along with many wonderful friends. I have captained a Relay for Life team, and utilized my knowledge as a hospice nurse to provide cancer prevention and early detection education.
    I am not on the platform to make money, but I have been the customer of a lot of incredibly talented people who do mske money. These folks actually use the grid and know what people want to buy. They also have the very specialized skills to do it well. I also know a number of folks who work for national companies and universities. They succeed because they have employees who know the grid well and the services they provide are well suited to a virtual environment. Not surprisingly, milkshakes do not sell well.

  6. Nods. Yes. Except for the blue hair. I’ve (mostly) been a brunette humanoid.

    Thanks for this wonderful post.

  7. Tateru Nino says:

    Thanks for tackling this, Pooky. I found Chip and Dan’s piece to be so erroneous and poorly-researched that I passed on touching it.

  8. Donald Seavey says:

    Pooky, Thank You for saying what needed to be said. The media is lazy, I know I worked in TV News for years. Second Life is what you (We) are willing to work at, discover, connect.

    Thanks for your comments Widget Too!

    aka Hadron

  9. Dear Ms. Amsterdam, On the subject of yourself I have heretofore been neutral. To me you were “that machinima pro.” Just now, however, that changed. Brava for an informed and articulate retort to this balderdash.

    On the subject of “media experts” I generally ignore them because they are just opinion whores, selling what they spew to whoever will pay the highest price. It’s very easy for any schmo to dis what they don’t understand (or don’t personally like) and we all know it’s much easier to destroy than to create. Destroyers are never held in high regard, creators, such as yourself, always are.

    Now, If you will excuse me, I’ll go back and read your response again. 🙂

  10. Thank you so much for these comments. We discover treasure of all kinds in the virtual fields. The greatest wealth we find are with one another though. I appreciate how being part of the grid has enriched my life in all ways, and on both sides of the screen. After reading these comments I am more sure than ever we are in this as one, and the solid friendships and support we have found as part of Second Life are truly undeniable, and something this Holiday Season I am again truly grateful for.

  11. You go girl ! That was an EXCELLENT rebuttal to nonsensical crap from lazy journalists.

  12. Pamala Clift says:

    Hugs Pooky…That is exactly right. If the company can not recognize it’s target market who is failing? One needs to understand the culture before one can be successful in it. The three types of users, disassociative, immersive, & augmentative are not all being addressed by the company, so they are not maximizing their market as Second Life. But we are trying to fight the uphill battle of showing them their niche market. Being successful is finding that niche and growing it.

  13. ricky grove says:

    thanks for slapping all of that lazy journalism down to where it belongs – in the mud. I’ve learned more from your responses, Pooky, than anything in the original article.

  14. Pooky, thanks for taking on these Fail Whales. Another example (there are so many) of pundits trying to either predict the future instantaneously or retrospect without research and set themselves up as some kind of wizard prognosticators.

    It’s people like Dan & Chip who, despite their obvious longing to “be with it” (probably to monetize it), don’t do enough research to actually write intelligibly about anything.

    I am sure they would have dismissed the WWW in 1993-1995 also, just as Bill Gates and a host of other “thinkers” did.

  15. darianknight says:

    Did Second Life fail or did the businesses that came in early fail? The answer isn’t what you think. It was a failure both of Linden Lab *and* the businesses that adopted early.

    First and foremost, Linden Lab at the time was actively marketing the benefits of business involvement without any actual understanding to the in-world dynamics. As a result of this misunderstanding which continues today (and continues to eat the virtual environment like a plague), the businesses were essentially bound to fail. If Linden Lab didn’t understand the dynamics, then they could not put in place a proper marketing and business channel to foster business involvement successfully.

    I’m sorry to say, Pooky, but your reasoning concerning real world business failing as a result of creating venues and having no staff on hand is flawed at best – especially when paired with Stiletto Moody as a counterpoint. Countless of the biggest names in Second Life today are automated, self-serve shops and yet they continue to flourish despite this. [Hoorenbeek], Alphamale, Gothicatz, SEY, and yes, even Stiletto Moody are guilty of the self-serve model.

    In the context of business failure and success, there is a distinction to be made – a third element we continually miss. Second Life continues on *despite* their failures and *despite* the epic failures of real-world businesses who came in and left. The continuing “success” of Second Life isn’t accounted by the leadership and vision of Linden Lab, and hasn’t claimed that notion since 2008.

    The only reason today that Second Life remains marginally successful is because of that third element we always forget when rushing to the defense of the indefensible.

    It is you, the creators and the dreamers that are successful.

    Never forget that, and never convince yourself that without Linden Lab you are nothing. You and the community created the entire virtual world, and brought it to life. You and the community brought us a vision of the future, even when Linden Lab runs in fear from it or tries to sabotage it. You and the community dare to dream bigger in Open Source, to come together and fix a broken platform, raise the money and outgrow reliance on those who wish to stifle that innovation. It is you and the community who carry the spirit and torch of the vision that once was Philip Rosedale – forced out of Linden Lab, and away from his tribe, his dream, his passion.

    You and the community are the success story. Not Linden Lab.

    • I agree. I know many educators in SL who are surviving against all odds and in spite of Linden Labs not thanks to them. Those educators have a dream, a vision of how the world can learn together in the future.

  16. Lenni Foxtrot says:

    You have really nailed it here Pooky! Your inteligent, gentle, perfect rebuttle is well appreciated by this avatar:)

  17. The User-To-User Transaction graph shows growth as more and more criminals see the benefit of an anonymous method of moving money across national borders.

    Pep (agrees that Second Life hasn’t failed; Linden Lab has.)

  18. skylarsmythe says:

    After four years in Second Life I am earning about 50% of the amount of my salaried net income freelancing utilizing skills and business networks I acquired in Second Life.

    Many enterprising organizations and individuals continue to earn and launch themselves subcontract through social media (Second Life being one offering in a variety of different forums).

    Define fail?

    I see people providing ESL courses to better other individuals around the world. I see global culture represented in a variety of events coming together to raise over $1million since 2006 for Relay For Life. These are virtual world users. This is the Community of Second Life.

    While the lighthouse or enterprise users find themselves frustrated at the lack of communication between Linden Lab and the community (Mr. Humble please bring back in-world Linden representatives) it continues to evolve. It continues to be an amazing platform for social networking, commerce, entertainment and global collaboration.

    And it is still here. It seeds other communities on Open Grid. We haven’t seen the tip of the full potential that I believe Second Life will realize.

    I suspect the Second Life in-world economy performs far better than the global economy at present [wink]. Define fail in real terms not in comparison to not living up to wild speculation and disproportionate introductory hype.

    And do not presume to write sweeping generalizations and pass them off as fact finding technological reporting. You are writing about a thriving digital community which has (and will) step up to set you straight with facts, not sensational conjecture.

  19. Celestiall Nightfire says:

    Pooky, you put WAY more effort into your response, than the Heath guys put into their poorly researched and thinly disguised, attempt at guerrilla marketing marketing their book.

    That the Heath guys used a “slamming Second Life” Slate article, as a lead-in to hyping their book, is pretty damn funny. I guess they felt they needed a big name like Second Life to draw some attention to themselves? *laughing*

  20. […] In her balanced and articulate approach, Pooky Amsterdam takes apart each item of Dan and Chip Health’s evaluation and measurement of the “success” of Second Life, hinged on an analogy in Clay Christensen’s “The Innovators Solution” (anyone else smell publisher product placement?), called “The Milkshake Effect.” Her brilliant rebuttal to the article can be read here, in her “An Open Letter to Chip and Dan Health About Second Life.” […]

  21. Congratulations for the excellent answer, Ms. Amsterdam. The term “Failure” has been used too many times to raise sensationalism and to make some people feel better by pointing their finger at someone. Defining “failure” implies necessarily a pre-existent strategy and plan and only when all results, at the end of a given period of time, are the opposite as expected, we may call it a failure or a defeat.
    After Napoleon regained the throne, his aim was to stay a Monarch and let France be treated as a peer amongst the other European superpowers. We may say the battle of Waterloo was a sound defeat for Napoleon, not only because it put an end to his reign, but also because all the battle plans he made didn’t achieve the task: Chateau Hougumont wasn’t taken at the start of the battle, Grouchy didn’t engage in a battle with Blucher’s Corps, Ney’s Cavalry attack crushed on British Infantry square formations and so on. Now, this is a defeat. And, conversely, it’s a failure whenever in a situation which requires a decision which would adjust the balance, you don’t get any result or you get the situation to be worsened.
    That said, may we deem Second Life as a failure? Certainly not! Apart from the raw data which are handed out by Linden Lab at every quarter, Second Life definitely brought a new dimension to Online Communities. You may call it an animated chat room, but I’m sure you would agree that doesn’t summarize entirely what Second Life is and what it could be.
    Let’s forget for a moment the money business (which anyway, plays an important part in Second Life). People mostly interact with each other and get exposed more quickly to things they didn’t know of before. One example is sharing knowledge about photography and graphic design software which is used to retouch portraits. The so-called Machinima is also one of the most intrigueing aspects of Second Life. Imagine in a near future, Companies like NIKE, BMW or Giorgio Armani making short animated advertising movies using Avatars or a mix between Second Life and Real Life ambients (remember the movie Tron, back in 1982?). Is it science fiction? No, it’s just one of the many possible outcomes Second Life might have and this belief is also reinforced by the fact that a master movie Director like Sir Peter Greenaway appears to be an endorser and an enthusiast of this virtual world (check one of his related columns here ).
    Is it all so good? Of course not. Apart from the ever-going “room for improvement” thing, I would say that Second Life appeals mainly to highly technological societies where bandwidth is not an issue and doesn’t come at a premium price. Also, the purchase parity of the Linden Dollar with the US Dollar, inevitably leaves out many Countries where wages are low and who would probably have to spend the equivalent of a 2-month average salary to run a SIM.
    There are many challenges for sure that Second Life and Linden Lab have to undertake still, but I would also say that much has been done and it shouldn’t be absolutely discarded, but rather treasured.

    • Tateru Nino says:

      I think basically they’re defining ‘failure’ as a failure to live up to some artificial goals or expectations that they’ve simply invented. If you do that, you can pretty much call anything a failure.

  22. Sicily Zapatero says:

    As always….Pookie rocks !

    Couldn’t agree more that Second Life has merit as an extremely cost – effective video platform in terms of both time and money. The films, webseries, commercials and viewer-log in entertainment we have won awards for attest to this. Story-boarding with real – time animation is a brilliant application as well for any big budget enterprise.

    Virtual World television is also in it’s nascent stages, and as ConnectedTV become ubiquitous, it will be what you do on TV tonight, not what are you watching. Recent technological development in HTML 5 and other tech, means virtual reality will increasingly be a means for communication and entertainment. A few years ago I wrote on topic in my blog –

  24. Skate Foss says:

    Pooky, it didn’t take long reading your letter for my eyes to well up with tears. It’s so easy for the media to grab attention with little to no background information or in this case ‘inworld’ experience. In Second Life I have two friends, two women I met years ago. They are always together, and I always thought about their relationship. Then one day I learned one was a special nurse in the real world, and her patient was a paraplegic woman confined to a bed. With tears, I asked who her patient was? She said, please don’t tell her you know. In this world, she’s free, she dances and walks and lives the life she dreams of.
    Second Life has not failed, if it has given one bed ridden girl the ability to feel free and beautiful, then it succeeded wonderfully.

  25. JesseM says:

    You call secondlife NOT a failure? ……. look at all the people that have left the game.look at allthe creators that nolonger in the game. look at al the griefers and hacks using to loging in to the game with hacker programs. Look how badly the GUI is buildt……Look stolen items people are using after they been ripped with hacker GUI. Now tell me how can SL be anythingbut a failure. There are so many madeup stories of people,dieing, having metlan problems etc BUT SL has made their lives better .Now really how many of these stories are made up to boost SL image……How many times have SL lied about how the game is good for people with special needs.But infact the game can causes MORE emotional stress for those that have social-behavior problems.IF secondlife make it throught this rough econmic times it wil be lucky. Nobody is willing to pay as much money for this piece of trash as they did years ago.

    • Jesse, once again, don’t look just at the effect but try to understand the cause. Many SL Designers who topped the bill years ago failed to innovate and were gradually overtaken by new Designers who brought something new in term of design or price. I don’t want to sound offensive with regard to your assertions, but your knowledge seems to be a bit outdated. Linden Lab took a strong stand more than one year ago against content theft and not only all unlawful Clients have been banned, but their users have been prevented from joining SL back again. I have personal knowledge of some people who were blacklisted and even if you might say “too late”, I would probably say “never too late”. The new Client might not be the best in terms of user friendliness, true, but it provides a fine job in terms of a visual experience, as long as you have a HW which is good enough to handle it.
      However, I partially agree with your statement when you say “it’s expensive”. Sure, the banning of Camping brought a fair picture as for traffic figures, however, Camping was sometimes a very nice source for newcomers to gain some money and let it flow around with purchases, tips and so on. This also might prevent a lot of new people to join in as a permanent SL Resident and no doubt, the issue needs to be addressed.

  26. One thing many “journalists” and other people seem to miss is that the SL grid has grown enormously since 2006. Back in the old days, you would teleport to a place, and have to move off the landing point ASAP, or a lot of other people would land on you. These days it often seems like much of SL is a ghost town. You can go to a lot of sims and never see anyone else.

    But, back in those days, concurrent logins were under 20,000, with many people making dire predictions about what would happen if logins exceeded this number. Now concurrent logins are usually double that, often triple. But the grid has expanded so much that today a lot of it seems devoid of inhabitants.

    Here is a map of the main grid in 06:

    Here is a map of the main grid today:

    And one must realize, this does not show the thousands upon thousands of private regions; this map only shows the mainland.

    People who looked at SL in 2006, and are comparing it to the way it is today should realize that the residence base has not decreased, but has in fact increased by quite a lot. It only seems like there are less people in SL because there is far more land in which to lose them.

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