Linden Lab Leaping the Chasm?

cc photo courtesy: globevisions

This last week I read the Harvard Business School case study entitled: Linden Lab: Crossing the Chasm Rev. August 3, 2009.  If you'd like to follow along, the pdf will cost you $6.95 USD and if you have anything more than a passing fancy about the virtual world of Second Life and/or start ups in this space it's almost worth it.  I say almost because despite the report page count of 26, there are 14 pages of endnotes and poorly formed exhibits of incomplete data extracted from sources such as blog posts. That leaves you with about 6 pages of historical stage setting and 6 pages of useful information and insights into the new Linden leadership and their dilemma.

M is for Marketing

The phrase "crossing the chasm" in the HBS case study is in reference to the marketing strategy set forth by Geoffrey Moore in his book "Crossing the Chasm" published in 1991. Moore's strategy is closely tied to a technology adoption model wherein a chasm appears as a discontinuity in adoption between the early adopters (visionaries) and the early majority (pragmatists) on the way to mainstream.  

This is the same chasm that Mitch Kapor described in his 2006 SLCC address when he said:

“In particular, in the short term, right now there’s still a chasm between the power users and the clueless newbies. Those are slightly provcative terms, they’re not the best, it is just a fact, there’s still a significant number of people who come in, try it and leave. It’s not ready for prime time. I don’t believe it’s going to change overnight. It’s going to change in stages. It’s hard to know how long it’s going to take, and how long before it’s mainstream. It’s not tomorrow, it’s not next year, but it’s coming.”

This chasm as described by Mitch is the point of departure for the case study.  I decided to see if I could use it to develop a better understanding of what Linden Lab might be doing under the leadership of a long standing member of the digital marketing industry Mark Kingdon, aka M Linden.

M is for Markets
Let's go back to Moore for a minute and his marketing strategy. Moore lays out a prescribed formula for crossing the chasm that is relatively straightforward:

1. Target a specific niche market within the early majority
2. Develop a whole-product solution that addresses that market segment's specific needs 
3. Flood the market segment with an intensive marketing campaign. 

So the challenge for the Lab was/is to find that target market and hit them with everything, or they could at most hit two markets if they managed resources and priorities religiously. According to the HBS case study, the markets available to Linden Lab are: enterprise customers, educators, adult consumers or teens.

The release of Second Life Viewer 2.0 seems to fit the Moore model - it's being sold as an entirely new solution and we are certainly in the midst of a wholesale marketing campaign.  The question is, which niche target market(s) have they selected?

In mid 2009, Kingdon sounded convinced that Second Life was the killer app for business meetings, and in May the Lab rolled out Second Life Enterprise Beta, a full service behind the firewall solution for enterprise customers.  As a market segment, it's clear that a hand full of large companies have sufficient discretionary funding (solutions start at $55,000 USD) to at least sample, but I don't have details on the success of the SL Enterprise Beta to date.  The initial release was undoubtedly crippled by the lack of Shared Media recently introduced in Viewer 2.0. As an "embedded practitioner" I know first hand how difficult it is to get people to download and install simple plugins for WebEx or AdobeConnect, much less go through the standard Second Life download and orientation so it's really hard for me to imagine that this is the "beachhead" Moore suggested.

I ruled out the educators, even after the VWPBE conference and the collective "hooray" about Shared Media. I'm convinced the education market is saturated (a @fleep tweet indicated there were currently over 600 institutions in world), and the introduction of land pricing model changes combined the recent departure of John Lester / Pathfinder Linden seem to indicate that the Lab's past love affair with the edurati is in that "old married couple" stage - safe, secure, not really growing wildly and with a lot less sex.

Speaking of sex, the Lab has bent over backwards (so to speak) to isolate, cordon off and squelch any inferences that Second Life is "all about the sex" so I'm confident that the "adult -adult" niche market is out of the question.

That leaves the non- adult adult market, and teens.  I think, for now, we can rule out teens.  When asked about merging the teen grid at the VWBPE conference M Linden confirmed that a combined adult/teen was a distant future dream, but would emerge slowly through "thoughtful evolution".

We've ruled out three of the four, leaving us this ill-formed "adult market" at which Viewer 2.0 is aimed. Who, then, is that?  I like the process of elimination, so let's go there again.

The new viewer does not appear optimized for anyone wanting to host, perform or attend events of any kind.  Part of this is tied to the delay(s) of improving the overall Search experience, but that aside there is nothing in the shape of Viewer 2.0 that lends itself to finding or promoting things to do.

Viewer 2.0 brings nothing to the revenue support base, land owners and the new Linden Homes are a shot in the arm to the rental owners. Currently, land sales and ownership contributes 79% of the LL revenue - which is enormously unbalanced, ripe with risk and likely the largest motivation to find new markets.

An opportunity for growth might be the $L conversion which means new content but the new viewer does not appear to be for content creators, arguably the second most important Second Life resident behind land owners. Content creators are feeling particularly unloved these days due to continuing challenges with copyright and content theft.  Perhaps that's why we saw the heavy promotion of the SL Pro conference, with backing from Linden Lab that far exceeded any previously expressed interest in SLCC.

Is 3D Chat and Shopping Our Future?
So if Viewer 2.0 is not for finding things to do and it's not for content creators or land owners, then what's left?  Maybe I'm using the Moore model too rigidly, but is there a niche adult market out there that would serve as a suitable beachhead and give the Lab a leg up for the next wave?

My best guess is what a friend of mine likes to call "playing house with paper dolls".

This is the 3D chat or IMVU model of virtual worlds (at this moment, IMVU has 83,819 people online).  IMVU is nothing to scoff at - according to a Virtual World News post IMVU has over 35 million registered users and 100,000 registered developers - so about twice the size of Second Life and a comparable concurrency.  I even noticed the strange similarities between the IMVU and Second Life landing pages, and oddly enough the viewers.

Could "3D chat with super easy shopping" be the new beachhead to serve adult and teen markets?  If you've tried Viewer 2.0, what's your guess?

If so, it's a far cry from “connect everyone to an online world that advances the human condition.”
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Second Life Killer Apps and Weak Ties

When I was in school we used to sneak out, drive down to the coast and go surfing. (yes Dad, I know I never told you) When we got back our friends would almost always ask "How was the surf?" and most of the time it was "Alright". But there were those rare times that the surf was really, really good - take your breath away good - and we'd answer: "It was -------- killer."

Fast forward to my land-locked career life and the word killer reappears, this time as a modifier, ala "killer app" or "killer application". This phrase means very little to most people; I could not find a standard definition so I lifted this from The Jargon File:

The application that actually makes a sustaining market for a promising but under-utilized technology. First used in the mid-1980s to describe Lotus 1-2-3 once it became evident that demand for that product had been the major driver of the early business market for IBM PCs.

For those of you new to Second Life, you should note that the founder of Lotus Development and the developer of Lotus 1-2-3 is Mitch Kapor. Mitch Kapor is also the co-founder of the EFF, founding Board Chair of the Mozilla Foundation and is a founding investor in Linden Lab.

Mitch is no stranger to "killer apps" so it's not unusual to me that Mark Kingdon / M Linden, now CEO of Linden Lab, has found fascination with the phrase.

But, like that killer wave that you catch once in your life, it seems that Mark's having a hard time really nailing down what constitutes the "killer app" for Second Life. I've seen/heard him use the word several times in the past year or so as follows.

M Linden quoted from his posts on the Second Life blog:

Apr 2008: Second Life has many magical properties, but one killer app is Second Life for work. It can’t be beat. 

May 2008: Inworld collaboration is going to be a killer application. 

Jul 2008: I’ve come to see a couple of use cases as future killer apps – namely virtual meetings and education. 

Jul 2008: Even though the initial novelty has worn off for me, I am blown away by how effective Second Life is for meetings. I am fully convinced this will be a killer app. 

Jul 2008: Using the virtual meeting environment for education is an even more exciting killer app. Dozens of universities are buying land from us or working with other inworld providers every week and the pace is accelerating. Seventeen of the top twenty universities in the US have land in Second Life.

M Linden quoted in interview with Second Places:

Oct 2008: Mr Kingdon says his company is still looking for the “killer application” that will draw in the casual consumer. He suggests “it could be live music, learning a new language, visiting a virtual landmark. It could be connecting with friends to go out for a night of dancing.” But arguably, those things will always be available in a richer form in the real world.

M Linden quoted, Agence France-Presse"

Mar 2009: The array of things people do in Second Life has blossomed. One thing that has popped out as a killer application is business meetings.

What I hear Mark saying for the past year is that somewhere there is a breakout, ass-kicking application of Second life for work, and mostly for meetings - meetings for business, meetings for education, meetings for collaborating.

Take all the imaginative power, creativity, persuasion, immersion, community and passion that is Second Life, do you think the transformational application for Second Life will be about meetings?

For me that answer is just a "meh", not because I don't appreciate a good meeting, but because I think Mark is missing something more fundamental about the strength of weak ties.

We have meetings primarily to sustain or maintain our strong ties, not our weak ties. And because they are strong ties, our preferred choice for interaction is "in person" and secondarily via phone, VOIP or video conferencing but not virtual worlds. Mark et al hold meetings in Second Life because it is their job - drinking their own bathwater - but you, Mark, are not your audience.

Strong ties reinforce homogeneity and don't spurn organic growth. The leverage toward mass adoption and transformation within virtual worlds and social spaces resides within the weak ties and the ability to navigate the paths of our connectedness over which we would normally be stymied in the real world. Weak ties help us build bridges that help us solve problems, find information and unfamiliar ideas. Weak ties further innovation - that is the target of a killer app. NOTE: For a lesson in weak ties, please read Mark Granovetter: 1973. "The Strength of Weak Ties." American Journal of Sociology, 78 (May): 1360-1380.

The killer app within Second Life is that which allows for rich fields of weak ties, that which affords relatively easy access to other people, other art forms, other spaces, ideas, cultures, music, and all within the context and dynamic immersiveness of Second Life.

More recently, Mark spoke of another "killer app". M Linden follow up to Metanomics talk:

May 2009: We absolutely have to make it easier for musicians and other performers to perform meaningfully in Second Life. We’ve looked at the challenges extensively and have a good idea of what we need to do but we won’t be able to get to it in 2009. We see live performance as a “killer app” in Second Life.

Furthermore, at the opening of the MacArthur sim yesterday, Cory Ondrejka indicated that it was watching live music emerge in Second Life that "led directly" to him to taking the position he holds at EMI. He even says:

Music became this killer app in Second Life years ago.

As a live musician in Second Life, I might be standing on a chair applauding - but I'm not.

Why? Because live performance cannot be a killer app unless it can adequately leverage the strength of weak ties and currently the infrastructure, poor performance and design limitations of Second Life social systems - groups, chat, messaging, and events - does not provide us the ability to do so.

How many groups can you join? 25
How many live musicians are there in Second Life? Hundreds

How many group notices fail to deliver? Too many.
How often does group chat fail? Too often.

Where is the messaging system that allows for casual conversation that doesn't result in social harassment, banning or group expulsion because you were chatting in the group IM?

Where is an event system that has a robust search capability, one that you can put on a calendar, one where you can see who else is attending, or one that allows comments, that allows you to share with others?

I could go on and on, but I'd like to hear your ideas about how Second Life might change so that weak ties become the killer app.

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