The Business Benefits Of Second Life

March 23, 2010

Veronica Butler-Borrer

The following is a guest post by Veronica Butler-Borrer, known in-world as Pooky Amsterdam (@PookyMedia).

AVATAR started off being the word of the new decade, and for good reason.  The blockbuster movie, which allows a man to take on a completely new form through a kind of mental transfer, has made hundreds of millions of dollars. It also speaks to the new decade in terms of new possibilities.

While Second Life has been part of the Internet for a while, recent changes and upgrades have made it more compelling as a business and media platform.  Recent economic conditions have also required new strategy to save money on travel costs.  And increased attention to environmental changes has required us to look more closely at green alternatives to business.  Facts and figures plus improved opportunities are now encouraging us as a business community to re-examine Second Life.

Pooky Amsterdam's Second Life avatar

What makes doing business as an avatar in Second Life a good choice?

  1. You can virtually meet people from anywhere in the world easily and inexpensively
  2. Your Avatar can be an extension of yourself and increase personal investment for you and the business community you are addressing
  3. VoIP puts you in the same room with those you need to speak with
  4. You can share any documents you need to
  5. You can work in real time on those shared documents
  6. Any 3D product or place can be re-created cost-effectively and to scale for business decision making
  7. You save on time and travel expense by just logging in from your computer
  8. You can establish a secure environment by restricting access to your location
  9. Training and Education done in virtual worlds returns great results
  10. Video created in Virtual Worlds (known as Machinima) or cinema done on machine will get your message to the public through regular distribution channels (e.g. YouTube).  In addition, it will be available as video content on your web site, plus be something you can include in your video emails

These are the main reasons to think about doing business virtually.  Let’s look into this a bit further.

Analysis: Benefits of Doing Business Virtually

That’s right, once you download the free client which is Second Life, you can enter a 3D world where you can meet by prearrangement, those whom you would like to, from anywhere in the world.  Of course this will take some organization, but that is easy to facilitate.

Your Avatar is an identity that you construct to carry out your work in a virtual world.  Allowing this creation to personify you means you invest yourself in it, and interact as well.  This is also not a bad thing, as in creating an other self which is “better, faster, stronger” will also result in your being able to transfer some of those properties to your real world person.  If you saw a digital image of yourself running on a virtual treadmill, would you feel like going to the gym? Probably so, according to a Stanford study showing that personalized avatars can motivate people to exercise and eat right.

It doesn’t yet beat Skype for number of chat minutes a month, but the VoIP technology in Second Life is excellent, and has served over a billion minutes of voice chat a month.  That means you can speak to people anywhere in the world, in the same virtual room, sharing important documents or any 3D representation for absolutely free.

Second Life Viewer 2

The latest viewer for Second Life (Viewer 2) also allows for shared media within this Virtual World and that means you can view ANY content on the web in real time with people from (or outside of) your organization.

This includes of course, Google Docs and Etherpad.  So you can make decisions together from your office, or home, without having to fly anywhere.  This is a remarkable opportunity that is afforded people who are on this site.  Plus, being able to recreate objects in 3 Dimensions means you can build anything to scale, whether it be a building or an engine, and have your people discuss this matter, again in real time and vocally.

When you have your own location, you can also set permissions to that landing point and area so you are the only ones who have access to it. This will not compromise your security at all, when you are discussing matters of confidentiality.

Second Life Case Study

Consider the case study entitled, “Virtual World Simulation Training Prepares Real Guards on the US-Canadian Border: Loyalist College in Second Life,”

The executive summary reads:

Before September 11, 2001, Customs and Immigration students at Loyalist College spent three weeks closely tailing professional border guards to experience the daily routine of their future job. In a post-911 environment however, this was no longer allowed. Training suffered until the Director of Educational Technology at Loyalist College catalyzed a virtual border crossing simulation in Second Life for Loyalist students.

The amazing results of the training and simulation program have led to significantly improved grades on students’ critical skills tests, taking scores from a 56% success in 2007, to 95% at the end of 2008 after the simulation was instituted.

This is proof positive that training in a Virtual World environment has documented benefits.

I present a video which my company made to show you some of the amazing opportunities that the Virtual World of Second Life can afford.  Video is a hallmark of professionalism, and being able to have content on your website, and/or through video email is an important way to integrate your customer base.

Before embarking on a Second Life journey, you may want to seek expert help; it will save you time and ultimately money if you begin your investment with those who are knowledgeable about the world you are about to enter for business.  Just of course if you wanted to have a meeting in Paris, you would need concierge services there.  Pookymedia can help you get started.

Please feel free to contact Pooky Amsterdam at

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How 3D Virtual Worlds Can Be More Like Twitter And Facebook

February 8, 2010

3D Virtual Worlds Diagram

Facebook and Twitter have taught us that people of all ages love to utilize the web for self-expression, connecting and staying in touch.  3D virtual worlds have similar characteristics: the ability for self-expression via customized avatars and the creation of your own ‘island’; the ability to connect with friends (or meet people you’d never get a chance to meet in the real world); and the ability to be part of a vibrant community.

In addition, 3D virtual worlds offer a fully immersive environment, that allows you to escape from the real world – and, experience virtual representations of real-world locations. For virtual worlds experiencing declining usage, however, “community” becomes a challenge to maintain (i.e. imagine using Facebook when none of your friends or family are using it).

Mark Kingdon (in-world: “M Linden“), the CEO of Linden Lab, laid out his vision of Second Life’s evolution, tying it in with the recent acquisition of Avatars United.

M. Linden on Community:

“When we talk to the users who sign up but then decide not to stay, they say they left, in part, because they had a hard time finding people to hang out with. Either their friends weren’t there, or they have a hard time meeting new ones inworld, or sometimes both.  We need to fix this.”

M. Linden on Social Sharing:

“Another part of the “social glue” of any community is the concept of sharing.  Inworld, it’s easy to share and we’ll make it even easier.  But sharing between Second Life and the larger social Web is not as easy.  As an avid photographer (well, aspiring to be avid), I’d love to be able to easily share my snapshots from Second Life with my friends on other Web services, and be able to watch a feed of the people I’m interested in.”


Kingdon’s blog posting generated a wealth of comments from the Second Life community – I’d characterize the comments as mixed to fairly positive.  My own reaction to the blog posting was very positive – my use of Second Life (and other virtual worlds) would increase based on my knowledge of in-world events/happenings attended by members of my social graph.

Here are my thoughts on how to increase community engagement and social sharing in a 3D virtual world.

Facebook and Twitter

Direct Integration with Twitter, Facebook

With Avatars United, according to Kingdon, “you’ll start to build an activity feed (similar to Facebook or Twitter) that keeps you in closer touch with the people you’re connected to in Second Life.” While I see value in a single feed that aggregates content from multiple social networks, I see equal (if not more) value in direct integration of Twitter, Facebook, etc., into the virtual world.

The Twitter API and Facebook Connect make doing so fairly straightforward.  A B2B company with an island in Second Life may want to integrate a Twitter stream that displays tweets related to the company.  Similarly, the company could prompt visitors to tweet about their visit and have that message be distributed to all of the visitor’s followers on Twitter.

By enabling this, the owner of the island generates “free” promotion to the social web – and, the underlying platform gains wider reach as well.  A relevant analogy is Ustream’s Social Stream, which allows viewers to “chat with your friends over Twitter” while they’re viewing a live video.

On the Facebook front, imagine if the virtual world platform enabled Facebook Connect, thus allowing residents to sign in to Facebook and find a list of their Facebook friends who are also residents.  Then, imagine showing users a real-time list of their Facebook friends who are in-world right now, with “links” to teleport to the friends’ locations.

Borrowing from another popular service (Foursquare or Gowalla), the virtual world platform could enable residents to “check in” at different locations (islands).  Broadcasting their whereabouts to their social graph may result in more “planned encounters” within the virtual world.  If my friends just checked in to “virtual island”, I may choose to teleport and join them there if I happen to be free.

“I Like It!”

Virtual worlds could create a stronger “shared experience” by allowing visitors to leave a trail of breadcrumbs reflecting their visited locations.  If I “friend” someone in-world – or, if an in-world resident is a Facebook friend of mine, then I might want to follow the path they took during their last session.  Additionally, the platform could support location endorsements, in the same way Facebook allows me to “like” a friend’s wall posting.

As I enter a location in the virtual world, I can see whether members of my social graph previously visited – and, what their comments were.  Alternatively, I could see a list of all past visitors – with a link to view their in-world avatar and profile.  If a past visitor panned a location, but I enjoyed it, allow me to send an offline message to that user, who can read my message the next time she logs in.  This allows me to connect with other users even when they’re not online (a form of virtual world email).

Source: flickr (User: Indiewench)

Virtual World Closed-Circuit TV

Business owners leverage closed-circuit TV technology to perform surveillance of their store front or office.  Wouldn’t a similar service be useful for virtual world residents, especially those who “own” an island?  While we tend to be online during our waking hours, it may not be practical to be in-world all the time.  How about a virtual world thin client – it provides a read-only “view” of a given location, similar to closed-circuit TV.

Since it doesn’t allow you to navigate, teleport, interact with others, etc. – the client is entirely lightweight and can sit in a corner of your desktop with only a portion of the CPU/RAM consumed by the full-blown client.  So if you’re interested in a given location, the closed-circuit TV can alert you to visitors – and with one click, the thin client can launch the full client and teleport you to the location.

Services (like this one) that can instantaneously connect users are a win-win – they generate more logins to the platform and enable more connections, upon which a stronger sense of community develops.  Alternatively, the virtual world platform can provide even more lightweight notification mechanisms: it can generate an email, Twitter direct message or Facebook email whenever a user enters a designated space.  The notification could contain a link that teleports the recipient into that space to connect with the current visitor(s).

Embed Web Content In-World

As Twitter and Facebook have demonstrated, users of social services are inclined to share interesting content, often in the form of web links.  Within a virtual world, “sharing” often results in the launching of a web browser to render the shared page.  Why not provide sharing capabilities that render the shared content on an in-world wall or projection screen?  This keeps users engaged, while retaining their attention in-world.  Building upon this, I may want to look up Facebook friends and be taken to all locations in which they shared content in-world (as I have an interest in what my friends are reading and sharing).

On Demand TV (for Virtual Worlds)

Facebook has a great utility that allows me to record a video on my laptop’s webcam, upload it to Facebook and share it on Facebook.  Virtual world platforms should enable users to press a “record” button and have their current session saved for later playback.  Perhaps I’m attending an in-world concert or watching a keynote presentation – capturing a recording of the session allows me to share it with members of my social graph who weren’t able to attend.  Treet TV provides similar services (with professional quality) – this capability empowers end users to create on-demand programming with the click of a mouse.


3D virtual worlds have a lot to offer already – by adopting useful social sharing services, they can tap into the phenomenon (social media) that’s the force behind many of today’s most popular web sites.

Related Links

  1. Wagner James Au in New World Notes, “How To Make Second Life Truly Mass Market, Part 1: Deep Integration With Facebook

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Virtual Worlds: Where We Were, Where We’re Going, What Does It Mean to YOU?

September 30, 2009

On September 25, 2009, FountainBlue held a conference at Sun Microsystems’ Santa Clara (California) campus.  The title of the conference, “Virtual Worlds: Where We Were, Where We’re Going, What Does It Mean to YOU?”.

What follows is an event summary and guest post by Linda Holroyd – CEO, FountainBlue

Introductory remarks, framing the discussion were provided by:

  1. Michael Gialis, New Business Development for Sun Microsystem’s Lab and Chief Technology Office, Founder of Virtual Worlds Roadmap Group
  2. Barry Holroyd, CTO, Masher Media

An Overview of the History of Virtual Worlds – What is it, Where Has it Been was provided by Benjamin Duranske, Associate, Pillsbury Winthrop.

Our first Panel Discussion: Virtual World Business Trends featured:

  1. Moderator Sibley Verbeck, CEO, The Electric Sheep Company
  2. Panelist Joshua Bell, Director, Technology Integration, Linden Lab
  3. Panelist Tim Chang, Principal, Norwest Venture Partners
  4. Panelist Benjamin Duranske, Associate, Pillsbury Winthrop
  5. Panelist Michael Gold, CEO, Electrotank

Our Second Panel Discussion: Virtual World Case Studies featured:

  1. Moderator Jeffrey Pope, Founder of Virtual Worlds Roadmap Group, Former Virtual Worlds VC and Virtual Worlds Entrepreneur
  2. Panelist Jack Buser, Director of Sony Playstation Home
  3. Panelist David Helgason, CEO, Unity
  4. Panelist Damon Hernandez, Lead, Web3D Outreach, Web3d Consortium
  5. Panelist Greg Nuyens, CEO, Qwaq

Below are notes from our conversation, along with resource links from our presenters.

Virtual Worlds offer a dynamic, ever-changing landscape of technology, community, interaction. Although Virtual Worlds have evolved over the past few decades, it is now coming to the mainstream, and its impact is deep and broad. It affects many facets of the way we do business from the financial, economic, technology and legal aspects, as well as HOW business is done, leveraging software the enables creative and dynamic interaction between people with virtual presences and online communities overall.

Virtual worlds are evolving from the walled gardens of the 1990s to more and more dynamic, interactive and creative sites that incorporate user content and creativity. This seems to be following the familiar evolution of the web itself; America Online and Prodigy became supplanted by more open browser standards from Mosaic.

Indeed, Virtual Worlds are evolving from a fad and a toy to a valuable business tool, serving and connecting various stakeholders. The graphics abilities introduced in the 80s and 90s brought in the era of avatars and games which were wildly popular, with some running still today. Now these graphics are being harnessed in virtual environments to effect value in a variety of non-game related use cases.

As more people got more deeply engaged, user communities arose and questions on policies, procedures and how users can interact and communities can grow arose. In addition, a business model evolution is now occurring where we are redefining who developers, publishers and retailers are and how they work together, as well as who is funding, marketing, and servicing these individual users and user communities. Users continue to raise the bar for what they can do and how they can do it, increasingly demanding more customized solutions and experiences tailored to themselves personally, and to the communities they join.

Adoption has not reached explosive double-digits figures yet for most virtual world communities, but with that said, in general the virtual worlds for kids sub-industry has benefited from the fastest and broadest adoption rate and continues to grow, showing that this is not a transient fad, but a real opportunity. Indeed, savvy publishers, manufacturers, producers and others selling to the kids market are factoring in web sites, books, toys, and virtual world communities as part of their marketing and outreach efforts. Successful examples of this maturing mass market segment include Webkins and Club Penguin.

Both panels remarked on the huge opportunities available in the media and entertainment industry. According to latest PriceWaterhouseCoopers Q2 2009 report, media and entertainment investments, totaled $115B, averaged $2 million per deal and totaled 52 deals, mostly from Silicon Valley (19), but also 10 from New York, and 6 from LA/Orange County.

The panelists and presenters had the following advice for virtual worlds entrepreneurs and intrapreneurs:

  1. The growth of an individual virtual world, and the industry altogether might grow in fits and starts, depending on technology availability, user communities, adoption of standards, bandwidth constraints and other factors. Awareness of these challenges and addressing them headlong, in collaboration with other stakeholders will help drive the growth of the industry.
  2. Minimize the barrier to adoption and drive the user base for your community: making adoption friction-less a critical factor for success. Make sure that there are no technology hassles (installing separate plug-ins and technologies), process hurdles (logging in, taking surveys, confusing steps), or marketing/branding confusion (they have to know where to go and that their trusted colleagues have recommended the experience), for example.
  3. Take advantage of the ‘Hybrid Tiered Solution’, where general users (about 85%) get in free, and a certain percentage (around 15%) pays through micro transactions for premium services and a smaller percentage (1-3% for example) pays for ongoing subscription levels. The successful organization will offer a solution which would serve the individual needs of all three types of users, treating them all as valuable members.
  4. Leverage the social communities (FaceBook, Twitter, iPhone, etc.) of the audience to leverage the growth of your community.
  5. Content is king. Everyone wants more content, richer interaction, more activities, more engagement, etc. The successful company offers solutions which engages users while also setting appropriate controls and boundaries.
  6. Focus on the needs of your target audience, whether they are frequent texters, or users of Twitter or FaceBook, creating a virtual world that lets them interact the way THEY want to will attract the audience you’re targeting.
  7. Research patents in your space, and consider IP issues associated with user-generated content. Find the edge of the law to remain competitive, but stay on the right side of the law to avoid litigation and other problems.
  8. Policies, regulations and enforcements in the virtual worlds space are rapidly evolving. Leverage resources to stay informed and be prepared to help shape, respond to these changes.
  9. Adoption of hardware such as headsets and webcams etc. will continue to occur, but not nearly at the pace of the evolution of software. Therefore, if your virtual world incorporates hardware components, create games which work with existing hardware, and leverage existing markets.
  10. Create a simple communication device to share information to the whole community, like a leader board, as it would generate discussion, invite more engagement, and help with the viral growth of the community.
  11. Ease of use can be defined as the first 30 seconds, the first 30 minutes, the first 30 hours, and the first 30 days. Strategies for retaining and securing users for each of the ‘first 30s’ may vary, but they are also inter-dependent, and must always focus on the needs of the customers.
  12. When designing a virtual worlds solution, speak to the people who would use it, like nurses or service station attendees rather than doctors (if they are not the ones who will use the solution) and managers (if they are not the ones serving the customer).

The panel raised some questions which could lead to hot virtual world business opportunities:

  1. What are the challenges and opportunities in synchronist and asynchornistic communication? How can solutions bring more people from more places together and more richly interact?
  2. How can virtual worlds assist with visualizing and modeling to support the innovation process and more cost-effectively make real technology- based solutions?
  3. What opportunities can data analytics and data visualization provide?
  4. Solutions across sectors offer opportunities. What might work for the education market, for example, might also serve a life science market. In addition, the technology for conducting a quest for a game might be adapted to organizational and productivity tools for businesses. What could this mean for YOUR company?
  5. What are the intersections of where gaming meets music or education or homework and what solution could you create to serve the needs of that market?

In summary, our panelists and presenters have shown and told us that Virtual Worlds:

  1. Are not only becoming more and more useful, they are also engaging and fun and potentially profitable.
  2. Are being adopted in different ways to create and serve communities for personal and business benefit.
  3. Are being increasingly more integrated into everyday business functions from training to education to service, branding and outreach. As such, challenges such as IP, security, privacy, and other factors will arise.
  4. Are mature enough that metaphors and examples exist, making it easier for potential customers and partners to understand new technology and business model solutions. Second Life, early games, Mosaic, Silicon Graphics, Tivo, Qwaq and other others have forged the business, technology and cultural grounds and helped grow the industry. They have been around long enough so tools and technologies and solutions are available, and the technology adoption curve is not as steep.
  5. Is not dominated by the US, as adoption of virtual goods and mobile platforms for example is 4-5x faster in Asia and Europe.

Additional information and resources:

  1. Presenting Entrepreneur Brian Bauer, OnTrack Health, winners in the Enterprise, Other Category (Collaboration in Health Care):
  2. Panelist Joshua Bell, Director, Technology Integration, Linden Lab
  3. Linden Lab: Second Life enters the realm of the enterprise. Joe Miller, VP of Platforms and Technology Development, at Linden Lab talks to CNET’s Dan Farber about the challenges in developing dynamic and reliable backend operations for the 3D virtual world of Second Life. Miller also discusses how they’re incorporating new hi-tech conferencing tools for business users such as VoIP solutions and video streaming technologies.
  4. Linden Lab’s Blog on the Economy–first-quarter-2009-in-detail
  5. Second Life Starts To Grow Again, Wagner James Au, Wednesday, April 15, 2009
  6. Panelist Jack Buser, Director of Sony Playstation Home:
  7. Panelist Tim Chang, Principal, Norwest Venture Partners
  8. Presenting Entrepreneur Dustin Clingman, Immediate Mode Interactive LLC, winners in the Enterprise, Virtual Meetings Category:
  9. Presenter, Sponsor and Panelist Benjamin Duranske, Associate, Pillsbury Winthrop
  10. Entrepreneur with display booth, Andrew Filev, CloudMach,
  11. Emcee and Sponsor, Michael Gialis, New Business Development for Sun Microsystem’s Lab and Chief Technology Office, Virtual Worlds Roadmap Group and Survey:
  12. Panelist Michael Gold, CEO, Electrotank
  13. Presenting Entrepreneur Sherry Gunther, CEO, Masher Media, winners in the Consumer, Six to Twelve Category:
  14. Panelist David Helgason, CEO, Unity:
  15. Panelist Damon Hernandez, Lead, Web3D Outreach, Web3d Consortium
  16. Presenting Entrepreneur Troy Hipolito, CTO and Owner, ISO Interactive, winners in the Consumer, Teenagers to Adult Category:
  17. Presenter Barry Holroyd, CTO, Masher Media,
  18. Presenting Entrepreneur Stevan Lieberman, SpotON3D, winners in the Enterprise, Other Category (Virtual Real Estate and Office Tools):
  19. Entrepreneur with display booth, Greg Howes, IdeaBuilder,
  20. Panelist Greg Nuyens, CEO, Teleplace, formerly Qwaq
  21. Demo presentation by Chris Platz, Creative Director, Sirikata, Stanford Humanities Lab and Computer Science, projects: Virtual Museum and Virtual Live Music Performance: and
  22. Panel Moderator Jeffrey Pope, Founder of Virtual Worlds Roadmap Group, Former Virtual Worlds VC and Virtual Worlds Entrepreneur, and Founding Partner, Spark Sky Ventures:
  23. Presenting Entrepreneur Terry Thorpe, Chairman, KohdSpace, winners in the Enterprise, Virtual Events and Tradeshows Category:
  24. Panel Moderator Sibley Verbeck, CEO, The Electric Sheep Company
  25. Demo presentation by Nicole Yankelovich, Principal Investigator, Collaborative Environments program including Wonderland v0.5, Sun Labs will demo the new features / functionality and capability of our re-architected platform:

In conclusion, the opportunities in the virtual worlds space are massive, with the convergence of technologies and markets and solutions. And it will take basic business principals, including strategic leadership and superior execution, constant education, lots of hard work, and a network of influential contacts to remain competitive in this rapidly growing and evolving space.

At FountainBlue, we support transformative leadership, one conversation, one leader, one organization at a time. We therefore hope that you have enjoyed the meeting, and that the meeting and these follow-up notes, along with the attached updated list of attendees, and the attached bios, provide you with both food for thought and great connections. We will also post our notes to our community on both BigTent and LinkedIn and invite interactive conversations around these notes through those communities. Although we welcome you to share our notes, with proper acknowledgment to FountainBlue and our sponsors and speakers, we ask that you DO NOT forward the contact list as it is intended to be shared with fellow attendees only.

A Second Look At Second Life

June 3, 2009

Source: San Francsisco Business Times

Source: San Francsisco Business Times

“A lot of Silicon Valley has written Second Life off.  The tech world will have to revisit Second Life as a phenomenon in the next six months or so.”

Thus spoke Wagner James Au, noted virtual worlds author and blogger in a San Francisco  Business Times article on Second Life (note: the full article is available to paid subscribers only).  Au, who blogs at New World Notes about Second Life, notes in the article that Linden Lab CEO Mark Kingdon has renewed the Second Life brand that was created by founder Philip Rosedale.

While the revenue model for Twitter is slowly coming clearer (judging by the accounts in the business media), Linden Labs’ strategy under Kingdon is becoming quickly self-evident with the announcements of the past few months.  From my perspective, Kingdon’s growth strategy is around a few core pillars:

  1. Enterprise use of Second Life – makes sense, as enterprises and corporations can be monetized at a higher clip than individuals, artists, hobbyists, etc.  Enterprises (in the former of marketers) were a big portion of Second Life during its initial peak – and it seems the current focus is to bring marketers back into the fold, along with complementary uses in non-marketing disciplines (e.g. training, enablement, collaboration, etc.).  In the past 6 months, Linden Lab has hired 25 marketing and product people as part of their push for enterprise clients.  In addition, the company recently hired Amanda Van Nuys as Executive Director of Enterprise Marketing, signaling a further endorsement of the opportunity in the enterprise.
  2. Nebraska – an on-premises software version of Second Life  (compared to their Software as a Service model), which enterprises can run on their own servers behind the firewall.  IBM has been an active partner with Linden Lab on behind-the-firewall integration – the telltale sign will be how many other large enterprises opt for the Nebraska model.  For “behind the firewall” use, I have to think that we’re talking less about marketing and more about collaboration.
  3. Voice – not mentioned in the Business Times article, but Virtual Worlds News covered it well – Linden Lab is poised to go after the Skype market with capabilities to bridge voice calls and SMS messages between the real world and Second Life.  In the Virtual Worlds News article, Linden Lab Vice President of Platform and Technology Development Joe Miller notes, “The opportunity to monetize at a significant added value for our business is there”, regarding the opportunity in Voice.

IBM marrketing executive Karen Keeter notes in the San Francisco Business Times article that nearly 100 IBM’ers are “working on virtual world tools for commercial sale in Second Life and on other platforms”.  As such, IBM stands to achieve commercial gain from increased use (by enterpises) of Second Life and related virtual worlds.

In fact, it wouldn’t surprise me to see IBM leverage virtual worlds to generate services revenue.  Two things come to mind – IBM Global Services and IBM’s Smarter Planet initiative.  IBM Global Services could assist enterprises on their virtual worlds strategy (e.g. build me a virtual world representation of my data center, so that I can run heating and cooling simulations) – or, IBM could go in-world to enterprise’s private virtual worlds to provide traditional consulting services within the virtual world.

So a manufacturer who’s replicated their factory in a 3D world can have Global Services visit (in-world) to optimize their factory floor workflow.  Then, of course, Global Services could help facilitate the parallel action in the real world.  On the Smarter Planet project, IBM might create 3D models of the next generation power plant to show utilities how to become more energy efficient.  In a virutal world, I’m sure the possibilites are limitless.

Finally, Dan Parks of Virtualis is featured in the article.  Virtualis created a compound in Second Life with 34,000 square yards of meeting rooms.  Quite an interesting model – an event producer that leverages a re-usable area (virtually) to host meetings for corporate clients.  Companies who have done events with Virtualis include Deloitte, Oracle and Trend Micro.

I’d be interested in your thoughts – what do you think about the potential of Second Life for enterprises?

Related Links:

  1. Blog posting on Virtual Offices, with reference to Amanda Van Nuys’ use of Second Life
  2. Blog Posting: Virtualis and Trend Micro Put On Quite A Show
  3. Blog Posting: Philip Rosedale On Building A Business: Practice Extreme Transparency
  4. Blog Posting: IBM’s Second Life ROI: The Headline Beneath The Headline

Philip Rosedale On Building A Business: Practice Extreme Transparency

April 2, 2009

Source: Linden Lab

Source: Linden Lab

At the Web 2.0 Expo in San Francisco, Philip Rosedale (Founder and Chairman of Linden Lab) gave a fascinating presentation titled “Extreme Transparency: Virtual Worlds, the Love Machine, and Other Practical Things That Actually Work in a 300 Person Company“.  Rosedale spoke of his methodology for growing Linden Lab (creators of the virtual world Second Life) from a small team working out of a warehouse on Linden Alley (in San Francisco) to a 320-person, profitable company with multiple locations across the globe.

Instead of a top-down approach to building the business – which starts with a grand vision and then trickles down to all the details that allow that vision to unfold – Rosedale decided to take a bottom-up approach.  An Engineer (and physicist) by trade, Rosedale was very hands-on during the early days – code that he wrote back then still resides in the Second Life software today.

Rosedale’s concept of extreme transparency means that each individual knows what every other individual is working on, accomplishing, doing, etc.  His analogy is one of a sports team (where transparency comes in the form of player statistics).  That’s not to say that Rosedale believes employees should be represented by numerical scores – rather, information should flow freely regarding each and everyone.  When that occurs, Rosedale belives that traditional management (of people) is simplified – and you end up spending much less time managing and more time doing.

Rosedale spoke of an interesting internal application called The Love Machine – an internally developed web site that allows employees to send a message of thanks to another employee.  The web site lists “Sender”, “Recipient”, “Description”, “Time Posted” and scrolls in real-time as new Love is posted.  A posting of Love autogenerates an email, such that if Rosedale entered a posting, the recipient would receive an email with a Subject heading of “Love from Philip”.

I think the point here is that “thanks” is such an easy thing to say, but how often is it really done in a business setting?  Not enough – that is, unless you have a tool (like Love Machine) to foster and facilitate it.  Rosedale noted that transparency needs to be granular – and these love posts are as granular as it gets.  Linden Lab has a data and metrics-driven culture – so of course, Rosedale presented a slide that plotted average love received per employee – to show that the trend line goes up (as more people use the tool to give thanks).

Rosedale next spoke about a Linden profit sharing plan – a certain amount of the company’s profits are divided equally among all employees – everyone from Rosedale down to individual contributors receives the same amount.  But then, employees are asked to distribute their shares to colleagues whom they feel deserving of it.  Rosedale found that profits were shared equally across functional roles (so as an example, Development did not receive an unfair share of the profits compared to another department).  This goes against conventional wisdom, which might say that certain groups would receive more favor than others.

A neat side effect of this plan is that executives get to uncover the hidden heroes of your business – those who did not have full exposure to senior management, but are highly appreciated by the masses.  The result is that their visibility in the organization is heightened – and those heroes become better appreciated.

With regard to data – Rosedale suggests that companies define the metrics that are important to the business.  Then, visualize them and keep them constantly updated.  Linden Lab leverages flat panel displays in many of their offices to display key metrics (via real-time charts).  Total simultaneous users is an important chart – if the count suddenly drops, everyone stops what they’re doing!  Linden Lab provides each employee with a personalized dashboard tool, where metrics can be dragged and dropped in – so, each employee watches (in real-time) data that’s important to them.

On measuring engagement within Second Life, metrics of importance to Linden Lab include average session length, number of Linden dollars spent and retention (since 85% of new sign-ups are gone within the first month).  Of course, a natural platform for transparency within Linden Lab is Second Life itself – and Rosedale spoke of its use for internal meetings.  Rosedale did a demo of the famed Virtual Isabel conference room, which is an in-world representation of a physical conference room at Linden’s headquarters.  A video stream of the physical conference is piped in-world and in the physical conference room, folks can go in-world from their laptops.

One audience member asked how Rosedale handles the media hype cycle – with media coverage today not as positive regarding Second Life compared to a year or two ago.  Rosedale pointed back to his key metrics – and noted that those metrics (e.g. total hours, total Linden dollars spent, etc.) continue to maintain a steady and healthy trend upward.  And that’s what matters most to him (and not what the media thinks).  Rosedale then made a casual reference to the open source movement, in which he’s become more involved of late.

For more info on the culture of Linden, their web site has a page focused on The Tao of Linden.

Insights And Experiences From Virtual Worlds Experts

March 9, 2009

On Monday evening, I attended FountainBlue’s High Tech Entrepreneurs’ Forum at Microsoft’s Mountain View (CA) campus – the event was titled Virtual Worlds: The Hype, The Reality, The In-Between and was sponsored by Microsoft and TIPS Group.  FountainBlue, a “membership-based, for-profit, collaborative organization designed to positively impact the way people, businesses and organizations work,” has organized a new sub-group around virtual worlds, which officially launched coincident with Monday evening’s event.

FountainBlue landed a true All-Star panel of Virtual Worlds visionaries and experts.  Each panel member provided thoughts on virtual worlds and then took questions from the audience.  A summary of each panelist’s thoughts follows.

UPDATE: FountainBlue has posted a summary of this event on their blog.

Steve Nelson – EVP, Chief Strategy Officer, Clear Ink

Steve is EVP and Co-Founder of Clear Ink, an interactive agency based in Berkeley, CA, who has many “claims to fame” in Second Life development. Among their Second Life projects was a simulcast of the 2008 TED Conference (in Monterey), an appearance by Newt Gingrich in-world, the development of a virtual headquarters for Linden Labs and an in-world island in conjunction with the popular sitcom The Office.

Steve started with his definition of “virtual world” – a social platform that’s immediate and immersive – quite a relevant and apt definition, if you ask me.  Steve stressed the immersiveness of 3D virtual worlds by comparing a webinar viewed “standalone” with one viewed in-world.  Steve noted higher retention and recall rates of the in-world viewing – as viewers of traditional webinars are far from immersed – instead, they’re checking their email and multitasking with other apps on their workstation.

Steve noted that Clear Ink assists companies in virtual worlds via three e’s:

  1. Expectations
  2. Experience
  3. Experimentation

In closing, Steve noted five business models for generating revenue with virtual worlds:

  1. Own the virtual world platform
  2. Sell virtual goods
  3. Create virtual worlds tools and utilities
  4. Be an agency – design, consulting, etc.
  5. Use virtual worlds effectively as an enterprise – save money and be a more effective company

Robin Harper – Former VP of Marketing and Community Development, Linden Labs

Robin took us back to the very early days of Second Life and noted that in the initial development stage, Linden Labs thought the platform was about facilitating entertainment.  Fast forward to today and Robin believes that virtual worlds are so much more than entertainment.  In the past 18 months alone, Robin notes that growth in Second Life has been driven by education and enterprise (which each have grown by 2x in that period).  There is an increased use for simulation, prototyping, design and experiential learning.  60,000 residents are profitable (meaning they generate revenue that exceeds their land costs) and the top resident grossed over $1.7MM in US dollars (real money) by selling virtual shoes.

Robin notes that the power of virtual worlds lies in the collaborative tools that are provided with minimal constraints. She compared the development of virtual worlds to the development of third world countries – growth is facilitated by allowing residents to own their own land, own the intellectual property (of their land assets) and participate in an economy that fuels commerce.  Important areas of development today are “behind the firewall” applications, as well as interoperability across worlds.

UPDATE from Robin Harper: I’d like to clarify the statement attributed to me above. The figures I reported were originally estimates based on one quarter of data, so should not be taken as more than an annualized estimate. In addition, my reference to the sale of virtual shoes was in the context of the types of industries that are generating return in Second Life. In the top group of earners based on the estimates, most were involved in the land business, and a couple were in other businesses like events management and retail/virtual goods, including shoes. For more information, please see my blog:

Michael Gialis – New Business Development, Sun Microsystems

Michael works in Sun Labs, with a focus on online gaming and virtual worlds.  Sun’s technologies in this space are Project Darkstar, Project Wonderland and Project Sun SPOT.  Michael notes that the #1 barrier to virtual worlds adoption is the non-intuitive nature of the client application.  Michael’s comments stirred some discussion among the panel regarding enhanced client capabilities, such as the use of sensors in lieu of keystrokes.  Robin noted that Mitch Kapor is experimenting with a 3D camera – when you smile, your avatar smiles. Some panelists, however, noted that some contexts may require separation between your true feelings and your avatar’s expressions – for instance, in a learning environment, you may not always want your true emotions to be on display.

Anne-Marie Roussel – Business Development Director, Microsoft

Anne-Marie manages Microsoft’s digital media portfolio, which includes Xbox, Zune and MediaRoom.  Anne-Marie noted Microsoft’s early efforts in the virtual world with its Flight Simulator game – which in turn led to the development of a product called Microsoft ESP (for 3D visualization).  Anne-Marie gave the interesting example of leveraging virtual worlds for training sales staff – if you sell Ferraris, then your clientele are much different from those buying Fords, so a virtual world can train sales staff on how to interact with prospective customers and face the sorts of questions/issues that Ferrari buyers are sure to present you with.  Anne-Marie spoke of Microsoft Virtual Earth and noted work being done to marry its 3D visual maps with crime scene data (to assist local law enforcement).

Susan Stucky – Manager, Service System Design, IBM Almaden Research Center

Susan noted that IBM’s involvement in virtual worlds is not to be a platform provider – instead, IBM is platform agnostic.  Susan’s interest in the virtual world is to achieve results that would be harder to accomplish in the real world.  One example noted was the practicing of negotiations of complex deals – reviewers (of the deal maker) could provide a virtual thumbs up or thumbs down.  Trainees could then replay the segment and view the feedback as it occurred.  Susan spoke of the need to capture data to better understand in-world behavior.  IBM Researchers developed technology to take audio chat, utilize voice-to-text to transcribe it and then perform unstructured text analysis to decipher patterns of behavior.  Susan also spoke of IBM’s Sametime 3D initiative and referenced the use of Second Life to facilitate a virtual meeting for IBM’s Academy of Technology.

If you’re interested in related events from FountainBlue, have a look at their events calendar.

IBM’s Second Life ROI: The Headline Beneath The Headline

March 4, 2009

Source: Linden Lab Case  Study

Source: Linden Lab Case Study

A Case Study published by Linden Lab (the company behind Second Life), documents IBM’s use of Second Life to hold a Virtual World Conference and Annual Meeting.  The meeting, organized by IBM’s Academy of Technology, brought together 200+ participants from across the globe (virtually) and had an ROI estimated (by IBM) to be $320K.

The $320K is derived from taking initial hard costs of $80K, then factoring in $250K in savings from travel and venue costs and $150K from productivity gains (since attendees participated from their desks – and could presumably do on-the-job tasks while in-world).  So that’s ($80K – $250K – $150K) = $320K in total savings.

So that’s the headline story – and what a great story it is.  I can understand why the Case Study led with this angle – in this economic environment, any talk of significant cost savings is going to score points with the CMO, CFO, CEO and Board.  And while I’m not one to diminish cost savings that’s simultaneously eco-friendly, what excites me most about the ROI equation here is the value add that virtual provides – the headline beneath the headline.

If IBM had convened this meeting at a physical location, I’m sure the event would have been equally valuable – but, at the event’s conclusion, the walls come down and participants leave with some photographs, business cards and memories – and may never be incented to re-gather and collaborate again, aside from the next scheduled (and organized) gathering.

With virtual, however, what IBM discovered was a build it once and reap the continued benefits phenomenon.  The island(s) built for this virtual event remain available on an ongoing, 7×24 basis.  So, participants who met and collaborated with specific colleagues may want to arrange for follow-on in-world meetings to further brainstorm their ideas together.

Additionally, IBM found a way to leverage the event to support an unrelated gathering – the Academy of Technology’s Annual General Meeting, originally scheduled in Florida.  The general meeting moved virtual and included live webcasting and videoconferencing – while leveraging the pre-built island in Second Life to support 120 poster sessions.  The beauty with the ROI equation here is that the more IBM can leverage what they’ve already built, the more “R” they generate in “ROI”.  And of course, this sort of re-use is eco-friendly.

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