Chicken One Day, Feathers the Next

cc image courtesy flickr.com//photos/jungle_boy

Recently, Hamlet Au posted a blog entitled "Avian Fever: Virtual Chickens (Briefly) Added 60K Paying Users To Second Life's Economy!" in which he highlighted an interesting footnote to the latest Linden Lab economic report as he quotes:

The June 2009 spike is correlated to the dramatic rise in popularity of the Sion Chicken in that month. 

I couldn't see a spike in June but rather in July, thanks to the on-going and heroic efforts of Tyche Sheperd and the "Total Customers Spending Money In-World" graph, there was clearly a jump in July followed by an almost equal decline in August. So, indeed something "blipped" on the Second Life economy and I suppose only Linden Lab has the data insider advantage to note the distinction between chicken-induced correlation or causation.

Economics aside, the story of the sionChickens developed by the enterprising Second Life Resident Sion Zaius is equally fascinating when viewed through the lens of collision between Sion's new technology and that of the Second Life socio-cultural norms.

I was a chicken-owner and I was crushed by a few of these collisions myself. When I became a bunny owner recently, I recounted the myriad of issues I experienced with the sionChickens.  Can they die? Can someone else kill them? How long do they live? Are they lagtastic? Do they breed? How much does it cost to feed them? These questions might seem strange to someone who missed the sionChicken era.

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The Search for A Second Life Culture - Part 0

cc image courtesy flickr.com/photos/xerones

"Culture consists of patterns, explicit and implicit, of and for behavior acquired and transmitted by symbols, constituting the distinctive achievement of human groups, including their embodiment artifacts; the essential core of culture consists of tradition (i.e., historically derived and selected) ideas and especially their attached values; cultural systems may on the one hand, be considered as products of action, on the other as conditioning elements of further action." [1]

In 1952, Kroeber and Kluckhohn [1] compiled a list of no less than 164 definitions of culture; it's not surprising that the question "If Second Life® has a culture, what is it?" becomes as unwieldy as a broadsword.

Kluckhohn suggested that "culture is to society what memory is to individuals" which leads me to believe that culture is not absolute but rather like a collective hunch, or a recollection based on certain characteristics. Culture is then, as Eric Champion explains, "impossible to clearly demarcate" and is not a single thing but a "connection and rejection of threads over space and time". [2]

I really liked Tateru Nino's perspective: "Culture is an aggregate appearance of many entities, just as your skin is an aggregate of many types of cells." To which I'd add: And therefore, there are no right or wrong answers, just shared insights.

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Is There A Culture in the Virtual World Second Life?

cc image courtesy flickr.com/photos/jontintinjordan

My fourth rez day was February 6th, and I feel like I've spent the entire time getting ready to write this next series of posts. In some ways I am no more ready to start than the day I found my way off that dreaded little island in a purple t-shirt, faded jeans and really bad auburn hair, but now is certainly the right time to take the first step.

I recently wrote I am convinced that Second Life® is facing a Tipping Point and some people have asked me how I know. There is no way to articulate precisely how I know, I just do. What I cannot say is if tipping in this case is a good thing or a bad thing; good and bad are relative to your point of view. However, I do know that this type of event can result in a seismic shift in what one might call a cultural base - a commonly held set of beliefs, a set of rules and practice, forms of governance, etc. This assumes that there is a "culture" upon which these systems were built.

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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.”
Share Some Grace:

Virtual Identity and Real Value

(photo credit: flickr.com/photos/wakingtiger/3157622308/)

I'm going to open with a disclaimer: this may be a rambling, personal post in the way I imagined "Phasing Grace" would always be - a summary of what's phasing Grace - were it not for my simple insecurities and tendency toward "perfectionism" and some self imposed rule that posts should be deep, well thought out and structured as if they were going to be graded by Mrs. Jones - my 9th grade AP English teacher.

Those things have weighted me down long enough to where I have gone weeks without posting even a salient point that is otherwise lost, all for want of approval or correctness. So if a glimpse into my here and now mind scares you (and by all accounts, it should) then have a look elsewhere for now, although my suspicions are that henceforth, Phasing Grace will rediscover and embrace its original intentions so if you can, please stick around.

So today, the things that phasing Grace are largely but not surprisingly about identity.

Let's start with the first thing that caught my eye, a newly minted Wallace Linden's "conversation starter" post entitled "Will the Real You Please Stand Up". Provocative headline notwithstanding, the post tries to state a seemingly straightforward question: What are the issues attendant to virtual identity management? People have spent entire lifetimes researching this question; I'm sure Wallace didn't expect to work it out in his inaugural post but he certainly touched a nerve of the Second Life Residents, at the time of this post, it has 375 comments and few are of the "nice post, thanks buddy" variety.

Wallace's post appears to place a high value on name spaces as a means by which to traverse a person's digital droppings, and avoids exploring a more meaningful identity construct that extends beyond a mere user name. This is actually somewhat ironic as a precursor to a major Linden Lab announcement just nine days later, the acquisition of Avatars United.

Avatars United is described by M Linden as a Web-based community site designed especially for avatars. My personal Avatars United account was over a year old and primarily inactive because the service afforded very little outside of what established services such as flickr, twitter, plurk, and Facebook provided but the acquisition may prove to be a means to broaden the reach of Second Life on the whole by raising awareness across gaming and virtual world platforms.

But why is it ironic you ask?

Well primarily because for all the goodness Avatars United might bring the to the Second Life ecosphere, it failed to protect one tiny thing that Wallace lauded: your Second Life name space. Avatars United, now prominently promoted as part of Second Life, has no means to verify your valuable Second Life name.

I cannot be anyone other than Grace McDunnough on XStreetSL and there can be only one Grace McDunnough in Second Life, but on Avatars United anyone and everyone can be Grace McDunnough anywhere and everywhere. Consequently, on Avatars United the virtual identity name space Grace McDunnough has been devalued.

Ordinal Malaprop was the first person that made this clearly obvious. Let me state my short opinion: this is bad ju-ju.

Why does this make me crazy?

For Second Life, I selected my name very carefully. Using the clumsy interface that the Lab affords new registrants, I picked Grace first, then looked for something vaguely Scottish or Irish. I wanted Grace to be a uniquely named person with traces of me; I diligently searched Grace McDunnough to see if there were any potential identity collisions. I found two: J. McDunnough, a Canadian Entomologist fascinated with classifying butterflies, and H.I. and Edwina McDunnough in the Coen brother's film Raising Arizona, both of which sort of sealed the deal for me in some weird way.

On February 6, 2006 Grace McDunnough became little more than 15 identity characters on a screen wandering aimlessly down the Orientation path, wearing a purple t-shirt and jeans, talking to a parrot and picking up a torch to light the way to the new world.

Since then, the user name Grace McDunnough has become my digital fingerprint in every virtual space I reside and my identity has real value outside of those 15 characters. I made a steadfast decision that I would not use my "real life" identity in any way to alter, shape, drive, etc. my eventual identity as Grace. I wanted Grace to develop her own street cred. I also chose not to gender bend or role play, but rather simply be the person I could not be in my day-to-day existence - more of an artist than a technologist - more of a philosopher than a executioner - more of an ENTJ than an INTJ.

Every instance, every action, every aspect of the virtual identity Grace McDunnough are important to me and as we move closer to the reality of the networked society they hold immeasurable value. Do not devalue them with a clumsy deployment.

Finally, this week my schedule allowed me time to participate in a great conversation with The Thinkers group in Second Life about identity and reputation. The discussion came on the heels of a post by Extropia DaSilva on Gwyn's blog entitled "Digital People and Anonymous Avatars". The discussion was to be pivoted on Scope Cleaver and his work in Second Life as a builder and what it takes to develop an online reputation. This strikes a deep chord for me because if it were not for Second Life, the music of Grace McDunnough would never be heard.

The most interesting and perhaps the most troubling part of the discussion was about how the work of a person that does not provide offline credentials holds little to no value. So beyond trust, which is another ongoing debate among scholars, a person's work in a virtual space may actually be of less value than someone who holds real life credentials.

To me, this will stifle any hope of realizing any of the new economic potential outlined in Yochai Benkler's book "The Wealth of Networks" simply because the opportunities for people to participate are cut off by the very limitations we are trying to supersede.

As a 4th year rez day approaches I am even more keenly aware and appreciative of the power, the nature and the delicate intricacies of digital identity. In fact, I may blurred in my thinking because this topic is so passionately appealing to me but I might go so far as to suggest the following:

The single most unappreciated element of Second Life is identity because in the end, a virtual identity is a commodity with tangible value.

That perspective, which may be solely my own, is the lens through which I have viewed my entire existence within Second Life. It's how I evaluate what Linden Lab does or doesn't do, it's how I process the events that occur and to some extent it is how I (and maybe others) start evaluate my self worth.

What do you think?
Is the fluff over Avatars United without merit?
Does your identity have value?
Do real life credentials increase the value of your work online?


Share Some Grace:

Virtual World Business Licenses - We Need Them

The latest thing phasing Grace is the virtual marketplace.

I've maintained that a successfully managed virtual world engenders essentially three elements:

1) Socialization - adequate means by which people socialize, form and maintain affinity groups, communities and even develop whole new societies.

2) An Immersive and Participatory Environment and/or a likewise Culture - an environment (and culture) that encourages creative participation but in a way such that there is equal part to play in the consumption of other's works. Mediated or otherwise, creation and consumption is not one-way, but rather it embraces both the immersiveness and synchronicity of the platform.

3) A Vibrant Marketplace - the ability for people to define value and to transact on items of value on many levels, RMT being one of them, but not the only. This includes instances where there were two forms of virtual currency - one that is only usable in world, and the other that can be traded in RMT.

As I have spent considerable time traveling about the myriad of virtual worlds, I've been focusing some attention on #3, the marketplace. I am active participant in the Second Life economy. I still own my first land from Linden Lab and own parcels on private estates that are maintained by someone to whom I pay a monthly tier. I have the right to resell my parcels, but the only true land owner is the estate owner, I am more like a time share owner.

I shop routinely around the grid and I pay for overhead items such as streaming services. I've had several occasions of which goods I purchased were not delivered due to grid instabilities, outages or random glitches. I'm happy to report that on every account, the business owner replied to my request, was courteous and made the transaction whole. I've heard accounts of the opposite, but rarely and they are sometimes confounded with some added factor such as a language barrier.

As a large scale event planner and live musician, I've been on the receiving end of two shaky business agreements with well known organizations within the virtual world of Second Life. The first was a complete loss. This was an agreement with an organization priding itself on grokking business and virtual worlds, but a few weeks before our agreement was to be executed informed me that they were leaving Second Life and would not uphold their obligations. Unfortunately, we had no "legal" agreement. We had chat logs, note cards and email, most of which I presume would hold up in court as evidence but alas we had no master service agreement, or other recognizable business agreement. The second is on-going agreement dispute that I hope to have resolved soon. I have chat logs and a note card outlining the terms of the agreement, however in this case the party with which I am dealing seems intent to make amends. This is based on my simple request, not at the behest of any legal entity.

I also am a supporter of not for profit organizations operating in Second Life. I have given large portions of my personal time, resources as well as funds to a variety of non-profits from the well-known American Cancer Society's Relay for Life to smaller international organizations. I have had my share of curious transactions with these groups as well, and while I can verify that the organization that they claim to represent is actually registered, I cannot confirm that the avatars and organizations within Second Life are indeed affiliated - unless the real world entity verifies it for me.

All of these transactions are being conducted between entities who for the most part maintain a virtual and anonymous identity. I have no access to them from real world legal action, except in cases of DMCA violations and serious harassment claims that are mediated through Linden Lab. The virtual economy has become such a natural extension of my experience, that it was not until recently that I even stopped to think it odd that I would surrender monies to people, charities, or businesses that were not verifiable in some way.

I would not surrender the equivalent of $100USD to an online retail storefront without ensuring that I had a way to contact them. More often than not, I whois before I purchase from an unknown online entity. (yes, I just made whois a verb) However, I have handed over the equivalent of that to purchase a parcel in a virtual world. I am not alone. In Aug2008 alone, there were 10,406 transactions valued at over $50USD between two (or more) largely anonymous entities just in Second Life. What happens if you hand over a sizable chunk of your virtual currency to an entity and don't receive in return what you thought you were purchasing?

I don't know, and I hope I don't have to find out. But just thinking about this led me to a simple conclusion:

We need virtual world business licenses.

I want people to be able to maintain their privacy, and manage their online identities in ways that best suit them, but with provisions for equal access to the virtual marketplace. I don't know if this was the intent of the infamous "identity verification" movement, but if it was, I may have to rethink my position in that context.

I want to know that there is some way for me to whois a virtual business entity, and better yet I want the equivalent of a Better Business Bureau, but on an scale that covers the virtual world space.

I want there to be governance over the execution of transactions for real and virtual currrencies.

South Korea took proactive steps toward business licensing in 2007. The Korea National Tax Service(NTS), equivalent to IRS in the US, announced they would impose VAT (value added tax) on RMT from 1 July2007.

• Sellers who do between 6 and 12 million won/half year in business will have VAT auto applied by transaction's middle-man
• Sellers who do more than 12 million won/half year in business will need a business license and will pay the tax by themselves
  

An official from NTS, Mr Choi is quoted,

NTS would be able to track all transactions for taxation of virtual items – RMT. This is not about defining RMT legal/illegal; we don’t see any contradictory facts to Amendment for Game Industry Promoting Law - we are not about to judge if RMT is legal or not.

Should we wait until every country enacts its own set of policies? I know, it's complicated. The thought of how one might even start the discussion makes my head hurt, but we need to start that dialogue.

We have seen but the tip of the virtual goods marketplace. It is pre-embryonic, yet growing quickly and it will become an enormously profitable space for many bright, entrepreneurial people and if it continues in the manner in which it is headed may in fact be a giant disaster.

What do you think?

Where are the pitfalls?

Where are the upsides?

How might it work?

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