At A Crossroads: Where Does Second Life Go From Here?

July 2, 2010

Crossroads

June 2010 will mark an important month in the history of Linden Lab and Second Life.  On June 9th, the company announced a restructuring that included a 30% reduction of their staff.  On June 24th, the company announced that CEO Mark Kingdon was stepping down and named company founder Philip Rosedale its interim CEO.

Second Life is clearly at a crossroads – it will be crucial for Linden Lab to determine the best path forward.  To do so, they need to identify the right questions to ask and then determine the right answers to those questions.

What is your audience and customer segmentation?

Second Life takes quite a broad approach today – there are a wide assortment of communities [audience] (see their Destination Guide) and an equally wide assortment of land owners [customers].  Having cut 30% of staff, the question at this juncture is whether the company (and the platform) is well suited to cater to “anybody and everybody” or whether it’s better to narrow the focus.

One “focus area” may be in evolving the platform to cater to the hobbyists and loyalists who helped grow the Second Life community from the early days [consumer focus].  Another focus area, while unlikely, may be in catering to corporations for business use (I say “unlikely” because the Enterprise group was let go in the June staff reduction).

Yet another focus area may be in catering to particular categories (e.g. Music, Art, Education).  If Second Life focused their resources around building the #1 immersive music experience, would that have a larger impact than evolving the broader platform to meet everyone’s needs?

So the question really comes down to “narrow vs. broad” – by identifying narrower segments to target their service, can Second Life create a more rewarding and enjoyable experience for both residents and land owners?

What is the revenue model?

Today, the Second Life revenue model is based around a virtual economy, whose currency is the Linden Dollar.  Residents purchase Linden Dollars with real money (e.g. US Dollars) and can then buy land (in-world) or buy virtual goods from in-world merchants.  One of the challenges inherent in this model is its dependence on others to sustain a viable audience (community).

The model works when the audience is growing and the community is thriving; however, when the audience declines and becomes less active, purveyors of virtual land find the ROI less compelling and the audience decline snowballs (since users have fewer residents to interact with each time they login).

Are you a media company or technology platform?

Second Life can go one of two ways here – they can morph into a media company (and have direct influence over the audience) or they can move to a pure-play technology platform provider, which shifts the audience generation “burden” to licensees of the platform.  As a media company, they’d be similar to Facebook, Zynga, IMVU and Slide, with revenue being a mix of advertising, sponsorship and the sale of virtual goods.

Today, I’d say that Second Life is somewhere in between – they’re a technology platform that has no explicit and associated “force” to drive audience (like a media company does).  Resolving this “grey area” will be important.

Where do you take the technology?

To some degree, the technology vision was shared in the June 2010 restructuring announcement – the company will migrate Second Life to a web-based experience, with no software download – and, they’d look to integrate popular social networks to be more accessible and relevant.  Of course, there’s a delicate balance to manage here, since a core component of the Second Life community uses the service for the immersive experience that a downloaded client can deliver.

Here, Second Life can take a page out of OnLive’s book – if OnLive can deliver immersive, action-rich, multi-player video games from the cloud, then one would imagine that a 3D immersive virtual worlds can move to the cloud as well (though, of course, it’s not trivial to achieve).  Second Life needs to think beyond the web as well and determine the viability for apps running on iPad/iPhone, Android and related mobile operating systems.

My Answers (Recommendations)

These are obviously complex questions that require a lot of analysis – in addition, there may be other questions that need to be asked.  The answers to these questions are interrelated and need to be answered together, not individually.  Here are my high level answers / recommendations:

  1. Audience and customer segmentation: Go narrow – you’ll lose segments of your user base, but the core segments you choose to focus on will see solutions and experiences that are more targeted and relevant.  Build upon these small successes and grow outward again.
  2. Revenue model: Move to a SaaS licensing model (priced in US Dollars) – keep the Linden Dollar currency system in place for the purchase of in-world virtual goods.
  3. Media company or technology platform: Become a pure-play technology platform that partners with media companies as a sales channel.  Give media companies incentives and easy-to-use tools that foster growth in virtual real estate – encourage them to be your sales champions and bring their audiences into the community.
  4. Technology evolution: Complete the transition to a 100% web-based offering (no small task!) – and, on the journey there, have plans in place for iPad and Android apps.

Times of turmoil give companies the opportunity to throw convention out the window and reinvent themselves.  Consider another company whose original founder returned to transform them from a “has been” to the most valuable technology company on the planet:

Apple Computer.

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What I’ve Been Tweeting (Edition 1.0)

June 25, 2010

Because tweets are temporal, while blog postings are permalinked…

Selected musings and sharings, all done in 140 characters or less – for a full subscription (at absolutely no cost), follow me at @dshiao.

What I’ve Been Tweeting

Virtual Events

  1. #Telepresence In #Virtual Events With @G2Events: http://bit.ly/bcALWq #eventprofs
  2. Lots of #virtual events this month – see calendar: http://bit.ly/6IYdC5 | just added CSCO Summit & Retail Marketing events
  3. @VirtualEdge highlights @CiscoLive 2010, with thoughts from @dveale: http://bit.ly/bSjeJw
  4. Let’s collaborate on the evolution of #virtual events – info: http://bit.ly/brNUGE & wiki: http://bit.ly/9AF7JU #eventprofs
  5. 5 Tips For A Successful Virtual Trade Show by @funnelholic: http://bit.ly/ciApcx
  6. Maximizing the #ROI of #Virtual Trade Shows – Tips from the Trenches: http://bit.ly/9nBATP (by @ellehwoulfe) #eventprofs
  7. A @Focus discussion on #virtual events & what works: http://bit.ly/drin3W (via @funnelholic) #eventprofs
  8. Making Virtual Event Connections”: @dveale on Twitter/Facebook/LinkedIn integration into @CiscoLive Virtual: http://bit.ly/ao0Ibm

Social Media

  1. #socialmedia will shift from specialized machinery in hands of few to Swiss Army knife in hands of many (my take from #ragancisco)
  2. Just noticed: @Yelp now has “Follow This Reviewer”, a “Compliment” button on each review and a type of badge (“Elite ’10”)
  3. Expect @Groupon to ramp up on social: “Most people who use Groupon don’t realize it’s a group purchasing site” (said CEO in @NYTimes)
  4. RT @samueljsmith: Free Report: #SocialMedia in the New Event World http://ow.ly/1YOg4 #eventprofs #mpi RT @ericlukazewski
  5. YouTube Gets a Cloud-Based Video Editor: http://bit.ly/9z3BFS (from @RWW – good stuff, @YouTube)
  6. Fabulous: Inside @Gatorade’s Social Media Command Center from @Mashable: http://bit.ly/9Ma4d8
  7. “8 Interesting Media Offerings on LinkedIn”: http://www.clickz.com/3640716 (by @HarryJGold) – @LinkedIn has a white paper program

Cloudforce 2010

  1. Salesforce doing demo of Chatter app for iPad – planning to release later this year #Cloudforce #Cloud2
  2. Dell is on stage doing demo of Chatter running on the new Dell Streak (Android tablet) – 5 inch form factor #Cloudforce
  3. Neat things from #Cloudforce keynote: #Chatter demo on web, iPad; Jigsaw integration; Service Cloud 2 demo
  4. My learning from #Cloudforce: the cloud can move business “chatter” from a backchannel to an always-on channel
  5. Salesforce using 40-50 percent less email since they enabled #Chatter internally #Cloudforce
  6. #Chatter used to collaborate and share docs within a business – who’s thankful? The Exchange Administrator

Product Ideas

  1. Idea to promote businesses: design floor tiles with embedded QR codes – some patterns I see already look like them 😉
  2. Product idea: Twitter Funnel Server. Why? Because without one, companies would feel like they’re drinking from a firehose

General

  1. How iPhone 4 Could Change Augmented Reality: http://bit.ly/cbgxw8 (via @RWW) #AR
  2. RT @ojchiang: Watch The World Cup Through Your Video Game Console « Velocity – Forbes.com http://bit.ly/diu67X #worldcup
  3. A click is like a first date – it may be your only chance to make a first impression (via @ClickZ article)
  4. New term for startups who do not invest capital wisely: they operate at “broke-even” 😉
  5. Over breakfast, my first grader was talking about bloggers. Asked her to define “blogger” – her answer, “someone who blocks the road”

The Future Of Virtual Events

February 1, 2010

There’s no time like the present … to think about the future.  I previously wrote about predictions for the virtual event industry in 2010 – those predictions were based around a short-term outlook and have a reasonable chance of coming true.  Now, I’d like to weigh in on 2011 (and beyond) and discuss where the industry (and the technology behind it) may be heading.

Virtual Event technology moves “closer” to the end user

To spur increased adoption, the virtual event experience will move closer to the end user.  To move closer, the browser-based experience of today will be complemented by numerous apps that live outside of the browser.  A relevant analogy is Twitter, which could not have achieved its place in the world on twitter.com alone – its power is broadened with desktop clients such as TweetDeck and Seesmic.  Possibilities include:

  1. Browser toolbars that encapsulate a subset of virtual event functionality (OK, we’re still within a browser here – so consider this an initial step only).
  2. Desktop applications – initially, these apps may provide a real-time dashboard for attendees, exhibitor or show hosts.  You’ll get to keep tabs on activity within a virtual event without having to be logged into the event (from your browser).  Subsequently, the apps will become more sophisticated and take on more of the virtual event platform’s features.
  3. Asynchronous alerting services – attendees, exhibitors and show hosts will be able to configure alerts that inform them of important activities.  The alerts will have numerous transport mechanisms – email, SMS text message or social media notification (e.g. a direct message on Twitter).

Virtual Events Go Mobile

Related to “getting closer” to the end user, mobile is the “elephant in the room” for virtual events.  The mobile apps will start off quite simple – think again of the dashboard app, which provides a real-time view of what’s going on within the event.

Building onto the dashboard will be basic interactivity (e.g. text chat) – allowing attendees and exhibitors the ability to chat with others.  An exhibitor, for instance, can now staff her booth “on the go” from her iPhone.

As we look to 2011 and beyond, I see a clear shift in the computing landscape, whereby more and more “computing” moves from the desktop and laptop and on to mobile devices.  In this decade, the smartphone becomes the PC of the past decade.

The challenge for virtual event platform providers is to determine where to place their bets (investments) across iPhone, Android, BlackBerry, Symbian, Windows Mobile and Palm.

Tighter Integration Inside The Firewall

Virtual events see major adoption from multinational corporations, who leverage the events for internal-facing communication and collaboration (e.g. sales kick-off meetings, human resources programs, learning programs, executive briefings, team/departmental meetings, etc.).  Corporations will begin to request the following:

  1. Integration with other enterprise applications (which often sit inside the firewall)
  2. Tighter security measures

This drive from corporations will cause virtual event technology to morph a bit, shifting from a 100% software as a service (SaaS) model to a hybrid model that combines SaaS with on-premise software.

At first, integration points to a company’s enterprise apps may reside “on premise” on corporate servers – subsequently, corporations may require the underlying virtual event platform be hosted inside the firewall – a model that mirrors Linden Lab and their Second Life Enterprise.

Augmented Virtuality

Virtual events and in-person events meet augmented reality – resulting in “augmented virtuality”.  I previously wrote that 2010 is The Year of The Hybrid Event.  There will come a day when every in-person event has a virtual component.  With existing smartphone technology and the emergence of augmented reality – we’ll soon hit a sweet spot whereby in-person event attendees will wield enormous power in the palm of their hands.

Physical event attendees will begin to experience an event through the lens of their smartphone – holding up the smartphone at any location and seeing overlays of relevant information.

Augmented virtuality will blend augmented reality with the virtual event platform – elements of the virtual event appear as overlays on the smartphone (e.g. the virtual booth is layered on top of the smartphone’s view of the physical booth – and virtual staffers are displayed as being available [via the smarthphone] if the in-person staffers are busy).

Bye Bye, “Virtual Events”

Based on the trends I’ve outlined, by 2011 (if not sooner), we’ll no longer refer to “virtual events”.  Instead, they’ll have “grown up” and migrated into a broader category of business or collaboration application.  Virtual event technology becomes a toolset in a larger ecosystem – or, they’re integrated into a broader suite of tools (rather than being a standalone solution).

Conclusions

In a few years, these will no longer be your mother’s virtual events!  The industry and technology will change, morph and adapt to suit the needs of the market.  Let’s all be thankful that we’re along for the ride.

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What Virtual Events Can Learn From Twitter

October 13, 2009

Virtual Events - Twitter

Virtual Events - Twitter

In 2009, Twitter has taken the world by storm – in fact, it wouldn’t surprise me if Time magazine named Twitter their Person of the Year.  In my opinion, Twitter’s success hinges on its simplicity, celebrity (use by celebrities, that is) and portability (users stay connected to the service from nearly anywhere).

While virtual events have been around for a few years – they too took the world by storm in 2009 – mostly, the business-to-business world.  As we look forward into 2010, here’s what virtual events can learn from Twitter:

  1. 140 characters or less – I often find it a challenge to condense my thought into 140 characters – the usual trick is to lean on acronyms (or abridged versions of words) to get under the limit.  The better approach is to be more efficient, using less words to make the same point.  While I still get frustrated at times (having to distill my thought down to 140 characters) – other times, I find that my message comes across clearer and more elegant in the shorter form.  In virutal events, a lot of chatter (e.g. group chat in the Lounge) is long-winded.  It would be interesting to participate in a group chat in which each chat message was limited to 140 characters.  I get the feeling that the chat would be much more enjoyable and productive.
  2. Application Programming Interface (API) – Twitter was recently valued at $1B – it couldn’t have possibly reached that valuation without it’s excellent API and the rich ecosystem that’s been created by developers and start-ups.  The API has made possible desktop clients such as Tweetdeck and Seesmic Desktop, along with numerous third party services, such as Tweetbeep, Twimailer and many more.  Virtual event platform providers should look to “open up” their platform via API’s – allowing show hosts and exhibitors to tap into underlying registration data; customize the look and feel of their events; and develop functional mini-apps that ride on top of the platform.  As Twitter discovered, opening up the platform creates a “wealth” of opportunity.
  3. Mobile support – Twitter’s API allow for applications like TwitterBerry (for BlackBerry) and Tweetie (for iPhone).  Users are increasingly on the go these days – whereby less and less interaction with the web occurs from their desk and keyboard.  Virtual event platforms that can extend their reach to smartphones will stand to benefit greatly – adoption will increase, as will average session time and overall session counts.  Twitter also integrates with the Short Messaging Service (SMS) – making access nearly universal (e.g. from non-smartphone cell phones).  Perhaps there are capabilities in a virtual event that can also be triggered via “commands” transmitted via SMS.
  4. Connecting with others – Twitter’s growth in 2009 has resulted from (a) needing to connect with your friends, family and colleagues who are already on the service and (b) a desire to “follow” celebrities or sports figures.  In business-to-business virtual events, you won’t have this same sort of dynamic (wanting to follow others) – however, the platforms can do a better job of finding and recommending folks you should be following or connected to.  For instance, a CIO at a small-and-medium sized business (SMB) may want to know that a CIO from another SMB company is also in attendance.
  5. Self service / self starter – Many companies are now active on Twitter, to provide customer outreach, customer service, outbound marketing and even e-commerce sales.  Other than learning the basics of social media and Twitter etiquette, the process to get started with Twitter is very straightforward.  Virtual event platform providers ought to provide a means for curious/inquisitive users to set themselves up with a test event – some day, configuring your virtual event (a basic one, at least) should be analogous to creating a new blog in WordPress.

And there you have it – adopt these five principles and your virtual event platform may some day be worth $1B as well!


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