The Second Life Tipping Point

cc image courtesy flickr.com/photos/atomicity

Have you read The Tipping Point:  How Little Things Can Make a Big Difference by Malcolm Gladwell? If not, I do recommend it if you can tolerate Gladwellianisms, and if so I'd ask that you think about the release of the Second Life® Terms of Service as a tipping point.

Yes, I know it's audacious to predict a tipping point but I think it's safe to assume that we've already toppled over the crest, we just haven't recognized it yet. The world we used to know as  "Your World. Your Imagination." is about to undergo a transition as radical as when Linden Lab announced in a 2003 Press Release:

Linden Lab, creator of online world Second Life , today announced a significant breakthrough in digital property rights for its customers and for users of online worlds. Changes to Second Life's Terms of Service now recognize the ownership of in-world content by the subscribers who make it. The revised TOS allows subscribers to retain full intellectual property protection for the digital content they create, including characters, clothing, scripts, textures, objects and designs. ... "Until now, any content created by users for persistent state worlds, such as EverQuest® or Star Wars Galaxies™, has essentially become the property of the company developing and hosting the world," said Rosedale. "We believe our new policy recognizes the fact that persistent world users are making significant contributions to building these worlds and should be able to both own the content they create and share in the value that is created. The preservation of users' property rights is a necessary step toward the emergence of genuinely real online worlds."

I'm going to leave this as an open-ended post, and share just two points that have helped frame my prediction. I'd appreciate your thoughts and insights.

Please note that I am neither judging nor evaluating these elements as good or bad, they are merely informing my perspective that we are witnessing the "tip". This is also not a "ZOMG the sky is falling" pronouncement; it's just my thoughts out loud and without warranty.


Volunteer's Dilemma and the Policy on Third Party Viewers (TPV)

"Facing Major Major Major Major's rebuke for not wishing to fly any more bombing missions over Italy, Yossarian contends that the bombs he could drop would make little or no difference to his eventual well-being, while the risks involved in dropping them might make an enormous difference to him."  - Russell Hardin commenting on Heller's Catch-22 in his book, Collective Action

I think that there is genuine and shared concern within the development community regarding the potential of theft, violation of social contracts, and security holes that third party viewers may present.

However, the new TPV policy is sufficiently ambiguous to a non-lawyer that there is an overwhelming perception that developers of TPV now assume an unbearable weight of risk.  The intentions of Linden Lab or the policy is immaterial because what has been framed is essentially a Volunteer's Dilemma.  A developer "could" produce a TPV for the "good of everyone", however in doing so there is a non-zero chance that they could face huge personal risk.

The Volunteer's dilemma hinges on an individual's perception of their personal risk; nothing short of removing the risk unequivocally will change that perception. This means that the TPV as conceived cannot meet the intended goal unless someone (in this case several) falls on the grenade - hence, the dilemma.

One might argue that in this case, a policy approach - regardless of intent or language -  cannot succeed.


From Place to Permits

Is this just a special show in a box, or this a real place where people really care about stuff?  - Law Professor Joshua Fairfield speaking to Metanomics April 15, 2010

If you read M Linden's post announcing most of the changes to the Terms of Service, you noticed a large graphic outlining a raft of new "licensing" clauses. 


At first I was confused by the emphasis placed here, but then it struck me between the eyes - Second Life is no longer a "place" with attendant property rights it is a "service" with permits of use, or licenses.  In my "Choices and Viewer 2.0 Assimilation" post I described the changes as "exercising your license of the services afforded to you by the virtual world of Second Life" this was echoed by Joshua Fairfield as he spoke this week to the Metanomics group.  


The discussion with Law Professor Joshua Fairfield is a much watch and I also encourage you to download the text transcript so that you can pour over the wealth of information and insights.

So what's so important about a simple legal change from "property" to "permits"?

Really, it's just one thing: human emotional connection - to our creations, to the content we acquire and to the places that we live.  This bond transgresses the bounds of rational thought.  Technically, we know "it's just a bunch of pixels" but that does not weaken the emotional attachment and investment that Second Life heretofore has provided so many.  Perhaps the licensing change will go unnoticed and we will continue to pursue our passionate connections.

One thing is for certain to me. It's this passionate connection; it's this perceived individual and collective power that fuels the livelihood of the world that was once a place, soon to be a permit, and soon to tip.


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Linden Lab - Please Raise Your Grok Factor

In October 2008 I wrote a post about the Linden Lab changes to the Open Space sim policies and pricing.  At that time there was JIRA fury (this remains the most-voted issue on JIRA by an order of magnitude), blog posts, open letters, flickr groups, berets, protests and micro-hysteria about the changes to the Second Life Ecosystem.  The post was about how closely Linden Lab was emulating John Sutter and his fateful demise.

Based on my observations at the time, I was convinced that the highest risk to Second Life was a rampant and deep misunderstanding of the cultural tenants of Second Life and a wholesale disregard for the gifts the Lab had been bestowed - a healthy, passionate, engaged consumer base the likes of which most "beta" companies only dream about.

Since then, my time in Second Life has moved from blissful experiential to ethnographic in nature.  I find myself acutely aware of things such as policy changes, customer support, as well as search and affiliate marketing.  There are nuggets of insight buried within each of these.

I think a lot about strategy and entertain my gray matter with Gedanken exercises to see if I can understand what Linden Lab might be thinking but I also pay equal attention to their direct actions and interactions with current Residents.

Based on recent observations - the development of Viewer 2.0 with its epically failed search, the events unfolding with the open source community and third party developers, the poor customer support,  the unannounced release of a new Terms of Service combined with the Policy on Third-Party Viewers and the recently outspoken T Linden, I am equally convinced of what I wrote over a year ago.

This in fact, is the crux of Linden's on-going problem. They are grokless, generally lacking so much of an inkling of their resident base, their passions, their normally predictably irrational behavior. They continue to miss the obvious, launching missiles at unarmed nations, killing off their own tin soldiers in an on-going series of blundering friendly fire.

This general lack of awareness will be the demise of the virtual world of Second Life, not some up-and-comer in the virtual world space, but Linden Lab will in fact run themselves out of business because they have not, or can not, tap into the richness of their standing army of residents.

The challenge of crossing the chasm and cashing in on a gold rush is having actionable insights.

Actionable insight has two parts:
1) tangible data of which I believe the Lab has more than plenty,
and what's equally if not more important:
2) the SL Resident "Grok Factor" (from Oxford grok: "to understand intuitively or by empathy; to establish rapport with" ) of which they appear to have so little.

I emphasized the word appear because of all people I would have guessed that Mark Kingdon, (M Linden) might understand this very notion because in 2005 he wrote this for ClickZ:

When a company thinks about how to present its brand online (whatever interactive medium it chooses), it must start with a clear understanding of the problem it's solving. Then it needs to dig into its target user's needs, wants, desires, and behaviors. They'll move beyond understanding the customer to having empathy for her.

Dictionary.com defines empathy as the "identification with and understanding of another's situation, feelings, and motives." Understanding is a rational activity; empathy is an emotional one. It's not just about listening or seeing, it's about touching, feeling, and experiencing. With empathy, an experience designer can create something truly exceptional. True empathy is what separates ordinary experiences from exceptional ones.

The $17 billion spent globally on getting smart about customers doesn't buy empathy. Sure, it provides critical facts, figures, and insights about the target. It's a very necessary starting point. But true empathy is earned. How can you build empathy for your target?

• Live their lives. Visit their homes, read their magazines, eat their food, and drive their cars.
  
• Feel their feelings. Imagine their challenges in life; figure out what gives them joy.
  
• Find their motives. Understand their online behaviors and actions: What motivates them? What are they looking for in the experience?

Let me repeat and emphasize one part of that extract.

But true empathy is earned.

Mark, I agree with you completely.  But this is precisely where I am stuck with the Lab. You seem to have no grok factor; your earnings are low.

You don't grok by analyzing numbers, or from an academic treatment, or from exchanging rafts of email.  You grok by living, feeling and finding via appreciative inquiry.   Appreciative Inquiry is a particular way of asking questions and envisioning the future that fosters positive relationships and builds on the basic goodness in a person, a situation, or an organization. In so doing, it enhances a system's capacity for collaboration and change.  Appreciative inquiry would have been a great way to pursue the recent Terms of Service and Third Party Viewer Policy changes.

I believe Residents of your Second Life ecosystem are ready for change despite the "no one likes change" mantra, but critical collaboration and change requires understanding where you are (data) as well as understanding and appreciating who and how you are (the Grok Factor) in order to move forward.

John Sutter, despite being a brilliant business man, didn't understand this and his fate is well documented. You know it; right now is the time to start living it.

Please raise your Grok Factor. 


The following is the rest of my initial 2008 post about John Sutter, much of which stands today.

Linden has (had?) captured that which most fledgling businesses only dream. No, it's not Electric Sheep. I'm referring to a passionate consumer base that is willing to pay shockingly large sums of real cash on a regular basis. We used to call those "subscriptions" but since that's become a forbidden word in the new media vernacular, we pretend like paying tier for virtual land is somehow akin to an investment. In some cases it is an investment, but for the most part it's a payment for the privilege of access to content.

So let's review what Linden has at their disposal: paying, passionate and prolific content consumers and creators. Isn't that the equivalent of Social Media Nirvana?

What is that you say? Linden Lab is a virtual world builder, not a Social Media company! Oh, that would explain it. Everyone knows there are few easy and vibrant Social Media business models; there's far more gold in those virtual hills!

But we know the end-game here, it is the very same that plagued the California gold rushers intent to find fortune among limited resources. But who profited from the gold rush? Anyone that could leverage the irrationality of those seeking fortune profited mightily. Prostitutes made a healthy wage, as did general store owners, saloons and bankers. However, very few of the one(s) that discovered gold.

I liken Linden Lab to John Sutter. You remember Sutter, right? John Sutter was a wealthy land developer and it was at his mill where James Marshall first discovered gold in 1848. Now Sutter could not immediately profit from the discovery, since he didn't own the mineral rights on the land on which the gold was found. Those rights still belonged to the Culluma Indians and while Sutter fought a losing battle to keep interloping miners off his mill site and obtain the mineral rights, the gold rush boomed and busted and the once wealthy land developer died a poor man. To summarize:

Instead of becoming a wealthy man from the precious gold that was discovered at his mill, Sutter's domain was ruined when the Gold Rush hit. His employees deserted the Fort for riches in the foothills, leaving crops to rot in the field and abandoning businesses. He was swindled by unscrupulous partners. His cattle wandered off or were slaughtered by hungry miners, and squatters took over much of his land. He went broke and ended up near Washington, D.C., trying to convince the government to reimburse him for his losses caused by the Gold Rush. His attempts for compensation failed, and he ironically died a poor man in Pennsylvania. Source

Does this sound vaguely familiar? John Sutter - a man of resources, wealth and business savvy - missed the largest opportunity afforded to him because he lost sight of what was right in front of him. Why? Because he tried to protect his current thinking, his ownership, his existing business model instead of adapting to the situation that was rather difficult to ignore.

Sutter was a real estate developer. Did he erect the boom towns? No.
He had farms, cattle and labor. Did he feed or supply the miners? No.

John Sutter put his time, attention and wealth of resources into that which he was comfortable, and as a result he missed the gold rush, quite possibly the largest financial opportunity for which he was uniquely qualified to leverage.

Ironic, isn't it?

M Linden, meet John Sutter.
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Upholding Social Norms - Part 2

I didn't intend for Upholding Social Norms to be a multi-part post, but the conversation has become compelling and widespread. It's a subject that has reached a certain resonance around the Second Life resident blogs, and the comments on this blog alone have been thought provoking and highlight the complexity of the topic.

Here are a few other perspectives from the personal blogs of fellow Second Life residents:

• Chestnut Rau's "TOS - privacy and RL"
• Prokofy Neva's "Invalid Interlocutors"
• Otenth Paderborn's "Social norms, privacy, and community"
• Zha Ewry's "Congruence -- Words and Actions"
• Mera Pixel's "The Decline of Society in Second Life"
• Crap Mariner's "Erosion"

There may be more, if so please let us know in the comments.

Coincidentally, the Berkman Center for Internet and Society launched the Publius Project today. From the announcement :

Publius brings together a distinguished collection of Internet observers, scholars, innovators, entrepreneurs, activists, technologists, and still other experts to write short essays, foster a public dialogue, and create a durable record of how the rules of cyberspace are being formed -- with a view to affecting their future incarnations.

The first essays are now live:

• John Palfrey, Preface
• David Weinberger, Tacit Governance
• Esther Dyson, Governance - Tacit or Explicit?
• Kevin Werbach, Steering to the Edge of Trust

We take our inspiration and mode from the Federalist Papers, but our goal is to highlight a variety of perspectives on the evolutionary process of rule-making in cyberspace. The early American context and perspective is supplanted by our modern, global, and diverse experience. The notion of a singular constitutional moment is replaced by a vision of multiple forces shaping the structures that both open and constrict online spaces. Participants will reflect on the various elements of this loosely-joined architecture and consider how traditional understandings of regulation, control, and governance are manifested and constructed anew in cyberspace.

Berkman can tap industry leaders across a wide display of disciplines. The first three articles are worthy reads, but I noticed the one important element. They are touching on the same points as the rest of us "non subject matter experts".

John Palfrey, Executive Director of the Berkman Center for Internet and Society sets the context for the discussion:

The ability to govern activities online is not the exclusive province of the state, and the line between public and private action is getting blurrier, not clearer, as more of life moves into the networked public sphere.

Lines are indeed blurring, but how those lines blur do matter and I believe that without conscious and deliberate discourse, things will merely evolve to a point of the lowest common denominator. How else can we positively shape social norms in spaces in which there is a permeable membrane between the real and the virtual?

Some (removed ref to Chestnut Rau based on clarification in comments) argue that the Second Life Terms of Service are necessary and sufficient means by which we can regulate, but Prokofy Neva argues strongly that the Terms of Service are arbitrary, abusive and over broad and in turn residents cede too much power to the private corporations that sponsor them.

One might argue that *any* rules in the form of a Terms of Service or otherwise could be interpreted as too stringent and therefore stifle social interaction and the subsequent norms that emerge out of it. Quoting from David Weinberger's article:

The fuzziness of norms is their strength. We need the looseness of norms to enable us to be with one another in surprising ways. The narrower, more explicit, and less ambiguous the norms, often the deader the social interaction: “Come now, Marjorie, you know that we raise our hands before speaking.” Norms are not rules that have yet to mature. Rules are norms that have failed.

If you believe Weinberger, then the Terms of Service will fail us, just as Prokofy claims. However, that does mean that there must exist some tacit governance to keep the community healthy and alive. How then, does tacit governance evolve, thrive and be effective in a large, growing, and diverse community like that of Second Life?

Esther Dyson provides an interesting perspective on that issue as she provides the following illustration of her experience at a seminar with a group of Russians.

In Russia, there’s a proliferation of laws, but the overall system of governance is mostly tacit in practice. (That’s not to say that there is not a lot of excruciatingly explicit paperwork, but most of it is irrelevant.) This tacit system – of connections, unspoken rules, shadowy powers - leads to all kinds of maladies. Those in power can act as they like almost with impunity. Those without power but with an understanding of the rules can mostly stay out of trouble.

But those who don’t understand the rules, or who question them, can lose their freedom or even their lives. (As Russian politician Boris Nemtsov once pointed out [in paraphrase], “Yes, there is freedom of speech. But that does not necessarily mean freedom after speech.”

Tacit laws are difficult to understand, to share with newcomers and to spread across a large population. Tacit laws are also more prone to unfair balances in power and influence, which serve as particularly bad influences on new and emerging markets as those afforded by virtual worlds.

Now I don't know about you, but I feel stuck. Outright written rules fail us, and tacit governance is nearly impossible if not unbalanced at scale. Where does that leave us?

I think it leaves us at the root, the elephant in the room, with that which is so ill defined that while we write laws around it, socially we embrace a tacit governance that allow us to rationalize our circumvention of legality in a case by case way.

That root, is trust.

I thought Kevin Werbach may have nailed it with his article entitled "Steering to the Edge of Trust", but sadly he presents a largely technocentric "Abundance trumps governance" argument which is a necessary part of the discussion but leaves me cold. I personally keep coming back to simple human trust which is often mediated (at least partially) by well designed technology.

Like many fellow residents, I don't have answers. I have still more questions.

Do the Second Life Community Standards and Terms of Service establish some baseline for defining the expectations of a "trusted" environment in the world of Second Life?

What makes the Terms of Service, as Prokofy suggests, over broad?

The Terms of Service and Community Standards are written rules to which we all agreed to abide; are they failing us?

Are there more powerful tacit governance structures within Second Life?

If so, what are they and how are they adopted, reinforced, spread, and modified?

What else am I missing in this discussion?

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