The Rezzable gamble on the myth of Free and reliance on the insolent Internet didn't pay off. A scene from the Greenies build.
Certainly the demise of a business or a non-profit operation on the Second Life, especially a very high profile one, is normally cause for sadness, or reflection on the vicissitudes of online life, or a prod to analyze the statistics once more, or any number of philosophical responses. Normally it would not be the cause for malicious glee, or any sort of celebration (unless, of course it's the end of an ad-farming extortionist scheme).
The exception would be, in my view, a situation like the departure of Rezzable, where the owner of the sims, RightasRain Rimbaud, discouraged critics by bullying and threats, spent a good deal of his time sneering at those with land or content sale based businesses, implying that he had a better mousetrap, banging on the Lindens over and over again for real and imagined sins, and generally behaving like an arrogant ass. That he compiled a list of adoring and sychophantic fangirlz and a lot of apparently well-paid builders who are apparently laid off now but very silent about the goings-on with Rezzable, shouldn't distract from a basic sharp analysis of what happened here because it's not just about one business, but about an insidious ideology that destroys values, and even takes down people's real life work and business in its wake (I have to wonder what will happen to all the builders who lost jobs -- and their content).
If Rezzable was, say, Desmond's Caledon announcing it was going out of business, despite my real dislike of Desmond and my only occasional interest in exploring Steampunk, I would consider it an authentic tragedy and cause for alarm. Because it would mean that a person who really tried hard in business and did everything possible the right way, and that groups of people knocking themselves out to make great content, were somehow discouraged in their mission and unable to achieve what they should achieve, given all the right recipes. That's because the formula for Caledon, as much as anyone can tell, is successful, and works like this:
o a scripter and competent graphic designer -- a California tekkie with his own RL software business and some cash -- earned his spurs and did his homework for a long time at first, creating a content store, selling high-class "antique" furniture and prefab Victorian houses, building up lists of friends and customers, attending events, popping into the forums but avoiding scandal, dressing conservatively and building up some cash *and never acquiring a tier burden while he made scads of cash*.
o a couple high-profile events to ensure widespread interest and popularity, the rare tulip hunt, the tulip mania concept from RL put on to the grid for an amusing and fun time that earned Desmond some cash and traffic too
o at a certain point when it appeared there was enough operating capital from the content business -- after more than a year of hard-working content production and customer-service hell, the taking of orders for a new continent. ONLY when there were firm, hard paid-for orders in hand, buying the sims -- and not buying 25 or 50 or 100, but...10 or something like that.
o creation of a founders' myth, insignia, flags, etc., creation of a simple DIY legend that anyone could join and add to, and the use of the prefab houses as basic stock to move in the first round of customers
o by ensuring that the first orders were paid-for and that sims were only opened *when* payment was anticipated, creating a sense of shortage and a buzz of anticipation
o moving in some top content-creators who would draw their own customers and traffic with them on to the themed continent; that meant attraction of those middle-aged males who like making gadgets and appearing everywhere as dandies, and some of the sort of middle-aged women willing to buy endless numbers of outfits to appear fabulously and hold all the events, the teas, the fund-raisers, the hen parties
o after filling the first set of sims and creating a buzz of traffic, press, interest and happy customers by round-the-clock customer service, the taking of the next list for rental sims
o letting customers build the look and content of the sims themselves, by selecting a theme/legend that attracts the better content creators, and subtly discouraging riff-raff by just not answering IMs
o allowing essentially anyone within theme to rent store space, but sort of steering the vendors by quietly filling the malls with existing lists so that the usual tacky collection of "business in a box" can't show up -- and not having any ad boards anywhere that the clientele would find tacky
o advertising with humorous negative advertising about the mainland to get people to move, but largely letting word-of-mouth and friends networks kick in, letting merchants advertise their own shops to build traffic, paying the cost of advertising so you don't have to
o trying out some advertising like "expeditions to the mainland," i.e. ships renting to have a visible presence in the mainland to drive people to the island empire
o playful interactions with other empires like "the war with Neualtenberg".
o lather, rinse, repeat, while avoiding the problem common to many island empire-builders, who cheerfully tell everyone they are "ploughing the profits back into the business because you don't want to turn anyone away" and getting in over your head with too many unrented sims, especially when Linden policy abruptly changes. ALWAYS making sure that FIRST there are orders THEN purchases for the sims and watching all the signs like a hawk -- occupancy rates, traffic rates, Linden policy insanities, etc.
o judiciously adding in a few public commons sims but also openspace rentals that are low in cost and prim but easy to flip for a profit
o when a competitor springs up and begins to fund-raise right under your nose doing...exactly nothing. Also not starting a blog, never commenting on the Herald, never appearing anywhere except in BlogHuds from somebody saying "Tea in Caledon with my exquisitely appointed furry Victorian lover!" or "Spotted the LochNess monster in Caledon!". Making sure every forums intervention has studied burgher-like commonplaces and bonhomie. Bashing Prokofy, which earns credits.
o keeping the list of trusted lieutenants with the ban hammer or sales figures very, very small.
o never using builders and scripters, never having these costs or headaches because you...are one yourself, and your *paying tenants* go and do this all on their own as a free add-on. And then gradually retiring your own content business to reduce CS headaches and also, prudently, not upstage the customers who build themselves
o events, events, events. More events. Still more events.
o content, content, content. FOR SALE. Very few freebies. Content that people need to keep up the role-play/theme, but also content that people will come elsewhere from the grid to get.
o while assiduously and even aggressively building up one's own continent, with a Trotskyian "steampunkism in one country", never attempting to impose a philosophy or ideology or way of life across the grid, and generally staying out of large public controversies with Lindens, other residents, etc. Ignoring blogs and press -- neither discouraging or encouraging.
o keeping a large chat group open in which people are told they MAY chat instead of barking at them to stop chatting in the group -- creating a spirit of community -- but spreading the world that when the inevitable horrible scandals of gender lies and partner cheating occur, that everyone agrees "to keep it in the family" and not let it get to the Herald
o eschewing in horror the concept of a "public sandbox" so that people get the idea that civilized sorts need land to create on, land which they pay for, which then motivates them to sell content, to pay for their land. *Thank you*.
Perhaps there are a dozen other techniques I haven't thought of, or didn't mention, but you get the idea -- the watchwords are prudence, saving costs by scripting and building yourself, getting others in to make all the content for you so that they have the cost, not you, and being a full-bodied, red-blooded, robust supporter of prudent but vigorous capitalism, whereby you rent out properties ONCE you have the orders in for them; you encourage SALE of content and not sandboxing and freebies; you sell, sell, sell.
The result, if you follow this formula that Desmond thought about for a long time, tweaked and perfected and recast several times, should be to make money. Money for yourself and your customers, and money for the Lindens. Not a HUGE amount of money, because there are some essential problems to trying to use land as a business model, but when it is themed/developed land with merchandised content sprinkled throughout, you can't lose. You shouldn't lose. And you don't lose, even when Linden sign-ups lag, or the Lindens throw you a huge curve-ball like the openspaces price jacking debacle or the adult continent.
Let me explain further why I think this model is fairly bullet-proof before getting to what is wrong with Rezzable.
Let's say the price of servers goes way down and Lindens crash the server price again. You will pass along the savings to your customers, and they should remain. After all, your business is on the margins of re-renting, not on the servers themselves. It really doesn't matter WHAT they cost. Your job is to flip them after putting a bit of stuff on them and linking it up to a community which is impermeable.
Let's say the price of servers goes way up. Ditto. You will lose some customers (like the openspaces thing) but basically, all the other factors of theme, atmosphere, friendship, events, etc. will hold it.
Let's say SL closes. Now that's a serious problem. But...you have a huge list of very loyal customers who will follow you anywhere. I tested this once myself by announcing I had land available to rent in the opensim and instantly had all these tenants, most of whom weren't friends, weren't partners in a theme, and whom I didn't even know, wanting to follow me. Just because -- it works that way, the network effect. So I, with my nothing-special profile and themelessness, can do this, so much more so someone like Desmond, who can count on a richly-endowed friendlist list to follow him into another setting.
Especially as many of them are designers and builders and scripters, and their designs, even if decoupled from SL and its specifics of prims and such, aren't somehow utterly unable to be transferred (a common tekkie claim). They adapt. They learn Blender. They go to Blue Mars. Or they head over to OpenSim. Or they even go to Metaplace because it's easy and their graphic designs pop right in.
Or let's say a better Steampunk sim comes along. One with even more fantastic Jules Verne like glory. But...it's not home. It's not "my friends". It's not "the store I'm used to shopping in that always has stuff I like" it's not "they know me here". So...it's not a serious threat. Place matters. Friends matter. And as we saw from transporting the SimArts community out of the Sims Online to Second Life, this stuff is actually more portable than you think.
BUT you do need a way to make money yourself, so pay for some of your time, and you need a way to make it so other people can make money, and you need to cut costs wherever possible. And you need not to be over-extended so that if something does change, you get out without a big tier bill or loss.
So, look at the Rezzable model, to see the opposite:
o the owner is not a builder or scripters, but has to hire builders and scripters -- and rather expensive ones, the best on the grid
o the attempt to create buzz and legend grates, as it is allowed to be initiated by the odious little snot Tenshe Vielle, who creates anger and confusion around the Starax legend rather than interest in the resurgence of a legend
o treating some builders badly, and worse, then bullying them into silence, along with the reporters who try to cover it
o making builds that in fact are derivative and not original and allowing only a select and closed list build -- not on the principle of liberal capitalism where basically most people with the price of a rental and a loose agreement to stay in theme can come in
o the owner, RightasRain, buys 10 sims at once, and eventually some 40 or so but has no pre-orders and no rentals system or vendors' systems to pay the tier -- he fronts it himself from reserves from past RL business
o some of the builders and some other designers are allowed to sell content, but in a very limited fashion -- content is not king *as a business model* but is a loss leader, devalued, for some...other media caper that never materializes.
o scattering of themes without cohesion, toxic apocalypse vying for sunny surfing beaches
o events are held, but they are of the kind that are corporate-produced, like art at the Cannery -- there isn't a way to hold an event here because there are no rentals, not even special events like weddings, live music, etc.
o without any rentals, no one can lay a prim in this continent, amateur or professional, and that means they can't have the kind of spontaneous events like "tea at my house" or "let me show you my new build" that makes up the core of "stickyness" for Second Life
o spending money by (presumably) paying Hamlet to become a partner blog positively about Rezzable and its occasional events or new sim openings, rather than *making* money by taking ads on blogs
o giantism in the builds that dwarfs the individual -- little to interact with and click on, nothing to buy, not even copyable freebies at the door in most cases
o only very selective advertising from outworld companies -- no ad boards, not even high-quality pre-selected vendors in theme allowed, only a few content creators very selectively and occasionally selling content
o setting up a virtual directory that makes a claim to somehow being some useful and valuable search outside the existing inworld search but which has no easy way to get populated because...there are no malls, or vendors, or content sellers with a vested interested.
o regularly commenting on very vitriolic and nasty blogs about Lindens, other residents, etc., making high-profile interviews with nasty jabs at reporters, Lindens etc. Keeping up a constant invective about the land model as a form of business, alienating the land development community, keeping up a steady flow of ideological posts about why the Linden business model "can't last" and "sucks" etc.
o making vast claims about a certain business model and through constant RL and SL media appearances attempting to insinuate it as a world view that should be followed
o having other figures like Pavig Lok and Thinkerer Melville and Vint Falken flog your continent along with very socialist or Free concepts
o relying on the Lindens to produce huge volumes of sign-ups and mass visitors arriving off the Showcase, to make the tiny amount of content sold escalate from micropayments to profits
This last point is the key flaw to the Himoff model, in my view: the belief that Free works, that if you just put out a lot of free high-quality content that you've paid, in real-life terms, relatively little for, on servers that, while a bit costly, are a rounding error for most firms, that you can then through the attention-economy and massive amounts of traffic that can be expected to come to Free, eventually tell advertisers that you have X number of viewers/visitors/hits so that they will buy ads that can float your empire.
NOT.
Desmond's model works because it involves burgher-like prudence and patience, Old-World artisan qualities of long, long hours spent at the lathe or forge or ovens making and selling a product to build up capital, then hiring other artisans, and everywhere taking rents, rents, rents. These are all real-life skills and values and qualities taken from centuries of human experience that say "you can't get something for nothing" and "there's no such thing as a free lunch" and "I need to get paid for what I do, and so do other people".
While I received a few prefabs from Desmond for free now and then, it was because I agreed to put them out on my parcels to give him free advertising, and put landmarks in cards for my tenants to recommend buying them. Going to his shop, I don't recall ever seeing a freebie dispensor, although there were lots of $250 chairs and tables that you felt you couldn't live without, or cunningly scripted hutches with intricate designs.
When I went to Greenies, I had to search for an hour before finally, up in the air somewhere after accidently finally clicking on something, I found some jetpacks. Completely stupid.
On Black Swan, I had to travel over a rocky path that looked like poured globs of tar (I'm not one of those people who thinks Starax made the transition to sculpties so well) only to arrive at...a couple of vendors of women's lingerie with the Swan motif and nothing for men, and no non-clothing object to buy as a souvenir of this, uh, memorable experience.
At Toxic Garden, I got this fabulous arm band that serves as a detoxification and prevention device which I still wear to Linden press conferences to good advantage, along with my steel-toe shit-kickers.
Er, wait, I don't go to those anymore because I think I'm boycotting them still. That was the rare exception.
At the Cannery art exhibit...nothing was for sale. When I went to the hobo dump, naturally, it was all free, copyable and...not transferable so I couldn't even give the dreck away to someone who might use it.
At the Carnival of Doom, I couldn't get anything to work. I tried the HUD -- scripting errors. OK, then, but...give me something to buy. A popcorn dispenser of horror -- anything. But...nothing.
If there's something I'm missing here, and there were all these content sales happening that I missed, please come and tell me about them. Oh, I realize that RaR even tried the classic technocommunist solution for the music business they destroyed with the idiotic Free notion, "go and sell t-shirts and mugs," they say. Which he tried. I doubt that brought home the bacon, because people in SL aren't terribly interested in RL cross-overs.
I don't recall seeing anywhere, ever, not anything resembling an ad board, vending space for outsiders, even on a select list, or anything resembling a condo, even though there'd be no shortage of people who would sign up to live either in a toxic garden or a cannery or a surfing beach. If the condo sales seemed like too much work, weddings and special events, magazine fashion shoots, etc. could have provided some income possibly. Ads taking on the blog that probably got some readership might have been an option.
Neither Desmond or RightAsRain are particularly nice people, neither of them are people I'd want to spend quality time with, and neither of them are stupid, although they aren't high intellects. But in the case of Desmond, he has chosen a path that works, that does not tear down other people's value for the most part to make his own, and that does not rely on the Lindens doing anything other than putting up the servers every morning like donuts. He's smart, and it works.
In the case of WrongAsWrath as I took to calling him, for his constant wrong-headed nastiness, his hatred of the land model was in fact his undoing. He is still spouting ridiculously about these numbers, implying, like the idiotic Hamlet, that if there are more people who are spending more money (as there are this month), that the fact that some of them spend less now means that something is going downhill. It doesn't. It means the opposite -- that more new people from poorer countries (Poland) are coming into SL and spending less but all of them together make up more money. Duh.
To me, the cardinal error of Jonathan Himoff is that he was so brilliant and special, and that the Free model of producing free content for the masses while paying off a select and special group of content providers was something he could get to work, although nobody ever has, really.
He combined this socialist Free concept, with its inevitable creator-fascism correlary (closed, elite content-creator list)_, with an unjustified critique of the Lindens, that usually went like this, as one of his blogs put it:
"So there is a lot of noise about SL Entreprenuers making money, there is some foggy notions of cool technology, but all is dispatched by Linden Lab to promote the wonder of buying prims from them on what they call a Region. But face it, there is no such thing as virtual land and as an estate "owner" you in fact own nothing and have no more rights than a free account user. All you are paying for is a monthly service--without a service level agreement or anything in writing from Linden Lab--not even an invoice (unless you really beg for it and pay 6 months fees in advance). More accurately you are getting access to your own prims while subsidizing the functioning and profits of LL--in all of its eccentric machinations. But what a great business if you can pull it off--selling server hosting for significantly higher rates than a hosting company with less commitment. Godaddy eat your heart out.
I would even suggest that the term "virtual land" is very misleading and confusing to people to convey the idea that they are getting something real. The SL website is littered with tempting invitations to "own land" and be a "land owner". In fact it doesn't even qualify anywhere that land in Second LIfe is not land at all. Hmmm, what is selling land that is isn't really land called...?"
The "fiction" of land is no more fictional than any blog or web space or server space you pay for monthly to keep content on and display it. You can't download your avatar from WoW and all his inventory outside of that world, either, but we never hear any tekkie complaints of that. You can't take everything created on Facebook and all your friends to some other service. No, you can't back up your SL inventory except with the dubious programs on OpenSim, but so what? It's an artificial problem that hasn't stopped thousands of people in fact from making money, such as to generate what can only be called an impressive number of resident sales and profits taken out of the grid -- even if they don't match something spectacular like selling your dorky little start-up to big IT for big money because they are afraid your idea will go to a competitor.
And significantly more expensive? But what rack space comes with interactivity, content, experience and friends?!
No service-level agreement? Well, sure, that's a bummer. But there isn't one for Facebook or Twitter or WoW or a 100 other things on the Internet, either. Even Amazon or Ebay with loads of commercial experience and millions of users don't commit to me that tomorrow, they will keep delivering lists of books I'd be interested and keep holding up to view all my stuff I'd like to auction. Service-level agreements? For the masses of users who have not yet wrested their rights from the game gods of the early Internet? Please.
I think aside from his personality or individual decisions, his slavish devotion to the technocommunist ideal of Free was an obvious reason for his downfall. He hated commerce if it was anyone else's but his own (he hated the Linden's being in the land business and anyone else that he didn't control or approve of). He scorned the idea of having divas open up shops around his sims or socializing blingtards renting condos. He thought he would simply produce High Art, but with a classic populist Disney touch (Greenies) or catering to modern anti-culture conformist culture like Post-Apocalypse or Grunge (Carnival of Doom, etc.) and that would be enough.
It was not. You couldn't click or buy or lay a prim.
Ultimately, the technocommunist recipe relies on the Google model -- massive amounts of traffic to view free content (search) produced by a few enthusiasts for free, against which you sell some ad space to much smaller number of paying customers (vendors) and which you let a few amateurs make money from, too -- with perhaps some very small closed list of producers you control (Google engineers).
That model is not one of classic values (old-world craftsmenship, savings, prudence in taking orders first, spending long hours at work, etc.) nor is it one of the new-world values we have come to find work -- engagement, community-building, stickyness through events, and most of all, user-generated-content for sale for micropayments, and UGC which isn't defined as merely someone making an object, but which is also the larger less "inventoriable" content of friendship networks and experiences.
Himoff thought he could sell experiences by keeping fierce control over land -- never letting anyone else buy it, rent it, be on it with prim powers -- except for a tiny, select group of people he paid -- until he was done paying them because he couldn't justify the expense. So he's left with...an even tinier group of people who no longer get paid by him who now...are either mad that they have no jobs or silenced into not wishing drama on their resume but who are...nowhere. They may not even own the rights to their content, as it was classic "work for hire". They can't sell some of that stuff, the way the Bedazzled people hawked their Neverland stuff long after the Linden-sponsored sim closed.
Hatred of commerce is ultimately at the heart of failures like this -- and hatred of commerce -- other people's commerce, the commerce of the amateur renter or vendor -- is why I call it technocommunism. The ideology is one that says technical competence of an avant garde (the Bolsheviks) coupled with the masses getting everything for free is enough to make a world, because you can just...sell a little rope to the capitalists to hang them (get ad buyers to believe that this is a viable platform to put a perfume ad in.)
Himoff probably goes around the clubs of London everywhere telling people how he did everything right in SL -- getting the best builders, putting out the best content, getting in the Zagat's guide (Showcase), getting RL press, having masses of traffic, even having some content and ad sales (he had some). He will then, like the proverbial male Russian ballet dancer who says he can't dance because his balls get in the way, tell everyone that it is all the Lindens' fault for not...driving even more masses of traffic so that he could tell ad buyers, as in the Googlian model, that he had X amount of eyeballs available. It just didn't work. It couldn't.
Dusan's write-up about all this gets all distracted in analyzing Hamlet's pet Maslov bullshit, as I've noted, and tries to mount a theory of how without scarcity, there is ultimately no model whatsoever to be had, because servers are always printed anew and get cheaper, land business isn't a model, and only content and currency sales will work.
Unless there is some huge losses I'm not seeing with the Desmond empire -- or any number of other much quieter and even larger and more lucrative empires out there with hundreds of sims -- I disagree. Land, when coupled with development AND SERVICE, works, just as it does in RL. And why not? It's where you live and put out stuff and meet your friends. You can't do that in a Carnival of Doom where you can't put out a prim or buy anything, or rent or vend, run by a sneering elitist who cynically caters to the masses with free content and keeps a set of other loyal elitists on a short leash.
I agree with you on Caledon. Desmond has done a great job and uses a conservative RL business model, not a free wheeling dot com era approach. No trash talking other efforts and no trying to poach staff or ideas, either. He's a class act and works hard.
I honestly don't think that most people starting up a venture in SL understand the concept of community and what it take to develop and sustain one. It's hard work, harder in many ways than building. People need to feel welcome and a part of something. Otherwise, they'll look around, admire your builds, pick up the freebies, and move on to the next place.
There's a circular relationship between community and land/parcel rentals. You need both. Tenants are drawn in large part from the community of people who like your atmosphere and your events. The rents from the parcels then underwrite the event and public areas that support the community. In the West of Ireland, this balance means that when we announce that a parcel is now available for rent, we fill that parcel within hours. We stay at capacity. It also means that we tend to have nice crowds of regulars and new folks at our concerts, storytelling, and gallery events. Most importantly, it means that we can send Project Children a healthy check each and every month.
In my mind, Rezzables followed more of a "build it and they will come" model. Sure, "they" will come once, but will "they" come back and rent from you or shop.
Posted by: Sioban McMahon | July 16, 2009 at 09:03 AM
SL works on the atmosphere formula pioneered by Disney in RL.
You create a "place" that people want to be a part of, work and live in. That is how Caledon works and its many other satellite partners. Truthfully, I wish Drowsy would take the next step and add in a lifestyle factor. They would be incredibly successful with that.
Rezzable did sell things but it was always hidden away like Easter Eggs in video games. I would stumble upon a small store in a few of their sims. But none of it was ever advertised widely.
They used to have this wonderful creator's fair called a sandbox event. Rezzable opened their sandbox to the public for about 6 to 8 hours and allowed a kind of flea market for their sponsored creators. I purchased wonderful, affordable houses from 500 to 2000L. I posted pics of this on my Flickr and would get loads of comments asking me about it. But of course, the event was long over by then. And it was never advertised except for maybe a notecard at the Greenies (how I found it) or strange cryptic notices at their blog.
Its just disappointing to see something incredibly popular fail for no good reason. I'm sure they would have had loads of people interested in living at Carnival of Doom. It could have had that "Road to Perdition" style town just on the outskirts.
Personally I'm not going to go through the hassle of creating another account on another opensim provider just to see their builds. I did the opensim, it doesn't work right and I don't have the patience to wait it out.
Posted by: melponeme_k | July 16, 2009 at 10:01 AM
Melponeme, I didn't know they had those "sandbox sales" -- but it was part of that elitism, hidden easter eggs concepts that you rightly point to.
RightasRain had this elitist attitude that if you fund a stable of designers and builders and pay for them to be creative, *they* will create the buzz and everyone else will just "show up" and "stick".
But I think the Desmond story (and a lot of lesser known stories, like the D'Alliez or Fairchangs or other stories that are not in the news) is about somebody serving as "the wheels". It's not just the prima dona builders, but there has to be a manager, a maestro, and not someone who just pays for it all like someone taking everybody out for a round on him, but somebody motivated to make a profit himself.
BTW, I don't follow these formulas myself really, except for the part of not expanding until you really, really think you have customers. I don't take pre-orders because I don't do islands.
I make and sell content myself, but to give you an idea where that's headed, I recently celebrated the $500 mark on XStreet after a year. Er, $500 Lindens that is ROFL.
If anything, I've shrunk in the last year because I've had to do more RL work and I want less SL work that doesn't pay me in hours, and can only pay me in rent.
Not being a builder or scripter myself, I'm forced to violate the cardinal rule I've set out for successful ventures, but I feel proud that I have supported builders and scripters in the community.
Being on the mainland, I'm forced to substitute a different concept than "let's have a theme" or "let's have everybody do all the work so I don't have to". Instead, I just make it "the rule of law" with rules for good neighbours and "freedom within some reasonable limits" so people in fact aren't trapped in a theme.
Then I try to make everything as intuitive and self-service as I can, and then add in as good service as I can.
I have all kinds of things I do like networked notecard givers and relentless updating of vacancies list and relentless advertising but -- it's never enough.
I doubt I could make the switch to islands simply because I think they'd be too boring.
Posted by: Prokofy Neva | July 16, 2009 at 11:04 AM
"Personally I'm not going to go through the hassle of creating another account on another opensim provider just to see their builds. I did the opensim, it doesn't work right and I don't have the patience to wait it out."
My thoughts, as well.
Additonally, for a charity looking to spread awareness and collect a few lindens, it also makes no sense to move to Opensim. Why put our efforts into a place where it will be more difficult for people to find us?
Posted by: Sioban McMahon | July 16, 2009 at 11:56 AM
I have many of the Greenie builds by Light Waves. They were freebies, as many things he made were.
Then suddenly one day, Rezzible came along, and was suddenly using these for marketing, and even selling them for ridiculously high prices. I've always wondered how they got away with this, and got Light Waves to go along with it. That set my first impression, and it was a negative one. Building *your* popularity off someone else's work, and profiting from free stuff just rubs me the wrong way.
Probably why I think paying for water in a bottle is silly. :)
I always remember this post Desmond made, it's very valid and probably gives some insight into his thinking and success:
http://forums.secondlife.com/showpost.php?p=1894842&postcount=26
For those who can't read this:
"I don't think we are looking at monopolies here.
I've got a business known for something, it's probably #1 in that something, but I've got a ton of competitors and near-competitors at least *trying* to do something similar.
So what I think you are seeing is not monopoly, but the 'rule of two' (I forget the fancy words for it - it's in the 21 Immutable Laws of Marketing book or whatever that was).
Basically in soda drinks there will be a Coke, a Pepsi, then all the rest. In US cars, a GM, a Ford, and then all the rest. A #1, a #2, and then tiny fractions balancing out the pie chart.
Of course this isn't true on an instant by instant basis, there are some strong #1's out there now, but the grid is an emerging market. Give it time to bake a little and you'll see shakeout after shakeout after shakeout devolving into what I've just described."
This one is too long to paste, but has 22 rules of marketing which I think overall are pretty valid. :)
http://forums.secondlife.com/showpost.php?p=1894985&postcount=30
Posted by: Darien Caldwell | July 16, 2009 at 12:22 PM
Prok -
Great post, although I'm slightly confused as to where we disagree, other than perhaps your interpretation that I subscribe to Maslow. I quite clearly said in my post that I have issues with Maslow's hierarchy.
But never mind that. Because basically much of your assessment is in line with my own. In my post I propose that successful business models in SL evolve, often from a grounding in an object economy, and then moving into the domains of management systems (vendors, land rental systems), environments (themed sims and events), branding ("Caledon" as a brand), and finally the extrapolation of content into other media (blogs, youTube machinima, etc).
What you describe reinforces my belief that it's not sufficient to be in the "Victorian Chair" business - you need to evolve past that into environments, community, branding etc.
I also fairly clearly made the point that land is a key driver of the SL economy because it provides a counterpoint to the lack of scarcity for virtual goods - because land is not infinite, and yet virtual goods CAN be infinite, you end up with a dynamic coupling of one thing which is scarce, and one thing which is less so.
I also make the point that even if virtual objects are NOT scarce, you still benefit through the use of distribution and management tools, environments, and branding.
So, I'm not sure I see the disagreement, other than I used that damned pyramid when I could have used concentric circles or something.
Where I strongly disagree, however, is in the comment you made on my blog about "attention". There's a lot of mindless clap trap out there by the pseudo-marketers about "attention" and I hate to advance their cause. They're trying to disguise business models that don't have any foundation and using the "attention" argument inadvertently supports what I believe Rezzable was after, or was the main basis of their "business model".
You commented:
"Attention is the greatest scarcity there is in a virtual world and online in general. In real life, attention to organic needs are more basic and there are more duties calling — indeed these are all the things that pull you “AFK” away from the online world."
You also said that I made the mistake of tekkie literalists.
Give me a break. There's nothing tekkie literalist about it - I'm an ad man, if you will, and like any ad man, I'd look at a world with more blue jeans than we know what to do with and I'd propose that you either put them in a nicer store, create a brand around them that's worth more than the literal product, or find distribution channels that no one else is tapping. What's so tekkie about that exactly?
In any case, the error in talking about "attention" as a driving factor in how we think about business models is that it subscribes to the drivel out there about an "attention economy". Frankly, it's a load of crap. It's the same thing as "aggregating eyeballs" just with different window dressing.
I mean really - what's advertising? Or selling products? You can't just MAKE the thing, you need to get someone to buy it. And sales and marketing is fairly simple and it goes like this:
Look at me!
Aren't I pretty!
Buy me!
Now, I subscribe to getting people's attention, but only within the "Dusan's Master Paradigm for Success" - yes, you need to get people attention, but it needs to then communicate a positive value, and it needs to end in a transaction.
All this noise about an attention economy is focused on the fact that it's harder and harder to get people to look at you. And so entire businesses are being built around the erroneous idea that what you REALLY need to solve is the "look at me" conundrum and somehow the "aren't I pretty/buy me" stuff will take care of itself.
And isn't that really what Rezzable tried to do? They tried to get your attention. They tried to look real pretty once they had it. But they forgot about the "buy me" thing, except in a half-hearted way...somehow, they had this idea if they could crack the first two parts, the 'buy me' part would follow.
Sounds a lot like Twitter. Or youTube. Or Facebook.
They all figure they can continue to generate lots of attention in this attention economy you're talking about. And yeah, maybe they'll be able to tack a business model on to the back end of it, but none of them were built with an actual, well, PLAN for how that would happen, and so the success in the "buy me" part of the equation isn't guaranteed.
Maybe Rezzable had a plan. Something like "look at me, aren't I pretty, now someone ELSE buy me (or fund me) and figure out how we could have made money at this."
So bottom line, I just don't subscribe to this "attention economy" meme - I subscribe to the idea of getting people's attention towards the goal of eliciting a transaction of some kind, and in my old school world, that's called advertising.
Everything else is just an excuse for people to spend lots of money trying to get your attention, with the faint hope that once they have it they'll be able to convert that into something more meaningful than your time.
Now, I believe I built this idea of attention into the constraining and enabling factors for SL business. Without better social tools, with audience limitations (sim limits), and with lack of access to channels (other than a select few, such as MOTD), there is a constraint on your ability to reach people and to get their attention.
The rest of the attention is built into the model itself - the tools for managing stuff, the environments for keeping people somewhere, and the brands for making sure your message is louder than the next guy. But again, none of it works unless you have some land to sell or some things to sell at the end of that long process, otherwise you're Black Swan with a tip jar.
Having said all that, I think this is an interesting discussion, because it strikes me that you propose something that's very much at the heart of SL - it takes careful craft....it's an artisan economy, and yet we're seeing a subtle shift towards mass market tools, and I wonder what that will mean in the long run, and how far the Lab plans to take us as they march in that direction.
Posted by: Dusan Writer | July 16, 2009 at 12:52 PM
Well... this has been a bit of a surprising read.
Rezzable and Caledon are apples and oranges, though. It's sort of like saying the bakery survived where the barber shop did not, during tough times.
Eating is a bit more primary than haircuts, but there's no joy in seeing the barbershop close. The sense I have, is that we are all lessened a bit with Rezzable's closing up shop here.
Since I don't get out much, I regrettably had little interaction with Rezzable's SL, save for casual conversations with Spiral and Ordinal. I admire the attempt, and wish everyone involved the very best in their future endeavors.
* * * * *
Dusan's comments about marketing and business ring true to me. And Prok is largely right about my strategies.
But the real people to learn from are Anshe, and Adam, and Alliez. Not me. I'm a speedbump, compared to their empires.
Of these, Anshe and Adam identified the market early, and didn't waste time (speaking in a business sense) with a lot of the things that I did. Anshe made her first million long ago. It will take Caledon in its present form *twenty years* to catch up to what she did in 2004/5, though to be honest it's not really a goal I'm chasing. I would have taken more pages from Anshe's playbook, in such case.
Adam was also faster, earlier, and had more guts and vision. The same with Alliez.
Honestly, by comparison I missed the boat.
Anshe came in with the strategy, vision and skill of a 19th century rail baron, and took over the West with stunning alacrity.
And yes, she broke some eggs in the process, but I'd bet a huge percentage of people would have done *far* worse to get 1/10th as far. Twenty years hence, Anshe will be the case to study, not me.
Don't count me out entirely, though... I am up to something ;)
* * * * *
Ultimately, nobody cares much about how the West was Won. Gravestones don't say "Best Salesman!" or "Produced really good Timber!" or "I got a big raise in 1894!"
Business is a fact of life, a necessity we do to sustain ourselves and free ourselves to do things that really matter.
This weekend is Relay for Life's main relay event, and I'll see many of you out there on the track, hopefully.
Posted by: Desmond Shang | July 16, 2009 at 02:23 PM
Dusan, you're paradoxical, to say the least. You claim not to put much stake in Maslow, and yet you saw fit to reprint this stupid, hackneyed chart in your blog -- you must get something out of it.
So I could say in the same way that I'm not deterred by some cheap SEO version of the "attention economy" or some notion of "grabbing eyeballs" and refuse to have the concept only captured by that perspective. The reality is, attention matters. It is a real factor. It *is* scarce. You get four hours of long on, and $1500 average spending, and that's it, and it will only go where it goes. Will you get a piece of it or not?
Each day I log on, see the concurrency, see that it is going up, and ask myself "How do I get a piece of that?" and then I scamper around. It has to be asked every day. Unfortunately, the answer to that question is that you have to live in the general store by the cracker barrel, holding people's hands and *giving* them attention, which is what they put their attention *on*. They want all kinds of stupid things that you would think they would not need. Why was I just terraforming and moving a step for somebody in a world where they can fly? Why do they want me to lock a door when anyone can sit through it in the group?
Why do they want a "tour" of an apartment building they can cam into? And so on. People want attention, and they have only so much they will give on this or that event or clothing or rental or activity for good or bad. You do have to think about how to get attention -- and how to give it.
I will go back and read your column again but I didn't think you put enough emphasis on land. You are a tekkie at heart even if an ad man, because you don't really believe land is a commodity, that it is merely shelf space for content. I think it's more of a commodity than most, because I don't disaggregated content, location, value, service associated with it as somehow shelf space or rack space and then the pixels on it. I take the metaphor "as is" and work with it.
People with the Google or Facebook notion believe that they can mass millions of eyeballs, deliver them YouTubes for a fraction of a cost that TV cost, or virtually free, and the get people to click on the YouTube ads. And they do. All the fancy talk about "engagement" and all these virtual worlds seminars about "what went wrong with companies" can't disguise that fact that in part you have to follow the rules of old media, and in part you have to follow even older rules of Tupperware sales or peach stands.
I'm not one of those people who says that the only thing preventing me from making a buck is some "tool" or somehow the ability to put more avatars on a sim. I don't need more of them on a sim.
People who serve mass markets in SL do it with chain stores and with various ways of advertising in such mass media as there is, which is basically the blogs, especially high-traffic fashion blogs.
It's pretty basic, Dusan, either you start with a capitalist point of view and work for free markets and make sense and sell it and recognize private property's value and sell it, or you start with a socialist point of view and scorn land value, collectivize it, and demand everybody make stuff for free. It's obvious to me which works, and the fact that Rezzable, with the technocommunist or classic Soviet socialist perspective, creation a Union of Artists who are more elite than the rest, giving them perks, paying them bunches, giving art for free to the masses, and hoping foreigners will buy a few icons -- it doesn't work.
Desmond is insufferable. I specifically didn't mention Relay for Life because -- it's insufferable. I hope Crap will add another dollar to his tip jar for other causes AWAY from Relay for Life if he happens to read this paragraph. I will too!
Adam didn't have any particular guts and vision. What arrant nonsense. Anshe had skills in building and terraforming and vision -- and boldness to go big and take bold actions like cornering markets. All Adam did was take money that he probably had from RL business or being a trustifarian in RL or something, and sink it into a big bunch of sims and getting a lot of people then to sublet them for him for commissions. It's a method no one else used -- not Desmond or Anshe or anybody. They couldn't justify it because they didn't have the capital. Adam did, so that he could find a crew of people to hustle his land on commission.
Don't forget Adam and Nexus had a huge telehub mall back in the day, one of the largest and busiest, and made a killing there of sorts -- but it failed because it was TOO big and it ran into a big scandal among the partners where the Lindens even seized land back from one of them in favour of Adam. It was quite the scene. Adam, as a top scripter, has always enjoyed ample favouritism from the Lindens. It came as no surprise to me that he was put in the splash screen ad thing recently first, even though there are more successful island empires with more buys from the Lindens. Azure has basically been left to go to seed. Desmond knows that perfectly well. Adam's attention has moved to opensim, where he hustles things like sims to IBM.
Darien, I had a quote about the Light Waves greenies build that provided their cover story. RightAsRain said that they followed Light Waves in the sandbox where he "dropped builds" and they "pulled them apart to learn from them". Um, right. That's tekkie talk for "copying". They always use that word "Learning" with a reverent roll of the "L" to cover up the fact that it is "Looting" because if it was dropped in the sandbox, then anything goes.
As for using that free thing and selling it later or using it for ads, that's what the open source shtick is all about. Hello.
I've given enough ink to Desmond now -- he's clearly merely goading me here in order to get me to discuss him more, so that he then has the opportunity to weave into some indignant retort the fact that a) he is helping cure cancer by having Rely for Life (and perhaps already discovered a cure for cancer by prims, who knows) and b) he is "up" to something that will be even more, um, fabulous.
So -- news blackout starts on Desmond now : )
Posted by: Prokofy Neva | July 16, 2009 at 07:01 PM
Seems like on some points we're in vigorous agreement, and on others it's an issue of emphasis or metaphor or something.
I'll concede one thing, which is that using Maslow was a quick and easy way out - to be honest, I did hesitate to use it and then got lazy and figured people would understand it was a lens to look at the question of business models and not meant to represent a world view.
I'm not a believer in Maslow's Hierarchy, but in this case it felt easier to appropriate it in the hopes it would quickly help to articulate a point.
On attention - this is where I think we're agreeing. Getting attention has value. It's why Superbowl ads sell for so much. It's why I rented the second plot of land I saw rather than the first - the owner was helpful, they explained what rent was versus owning, and their rental box was easy to use (or maybe it was because they had PayPal, actually. At the time I didn't understand how to get my hands on some Lindens, which still boggles my mind - how difficult it was in SL to actually be able to spend money for the first time).
But again, attention needs to be backed with an intention to conduct a transaction. Just look at all the leaked memos from Twitter - you have a bunch of very smart people talking to Google and fending off Microsoft and Facebook but in all those secret memos they seem just as confused as the rest of us as to how Twitter will REALLY make money, other than a grab bag of (to my mind) crappy ideas about corporate Twitter accounts and either charging the top users, or not charging them but giving them 'god status' or something.
They sit around talking about getting a billion users (attention) and generating search and doing deals and all kinds of things, but they still wonder "what do we want to be when we grow up" (i.e. how do we actually make money once we get a billion user's attention).
The question of land - it IS land, it's not rack space. However, that doesn't mean that the Lab treats it that way, and as I said in my column, they've further decoupled the interlinked "scarcity of land" and "plentiful content" paradigm when they institutionalized Web-side markets by purchasing XStreetSL or whatever it's called. So, I don't argue that land is land, and I don't think I ever have.
However, I'm highly aware that there is danger if the people who serve up all that land (the Lab) shift into treating it like rack space. Frankly, I think they were shifting in that direction but have shifted back under M....somehow, the land concept seems to have found firmer footing in the past 6 months say than in the previous year.
I might argue that they shouldn't do this, that they need to protect land as land. But I'll also try to look realistically at the impact if they do, and what it might mean to how economic value shifts.
The main thing I think about in this respect is they "grey market" - the economic transactions that happen outside SL. And I'd propose that in those transactions, land is a smaller and smaller portion of the transaction economy, and because that's the case, we need to be aware that this may shift the economic underpinnings and longer-term strategies that will work in SL.
Finally, I'm not sure about socialist versus capitalist. I'm Canadian, as I've often noted, so I'm sure I have many socialist tendencies that I'm not even aware I have.
But when it comes to business and business models, I'm of the belief that there is no such thing as free, that open source disguises closed economies and is therefore misleading, and that I'd like to make money and not lose it.
But I also believe in socialized medicine, think our Charter of Rights rocks because of its notion that groups often DO need to be protected as compared to basing everything on individual rights, and believe that the profit motive shouldn't be the ONLY thing driving enterprise.
Oh, and I think it's a form of treason that Tim Horton's opened up in New York, even though I still don't believe them when they say there's no MSG in their coffee.
Posted by: Dusan Writer | July 16, 2009 at 07:58 PM
I wasn't aware that Adam had put in seed capital, but hey, if he did, it sounds like he got good returns.
* * * * *
"So -- news blackout starts on Desmond now : )"
(x) formulate evil FIC conspiracy
(x) news blackout
(_) enact plan in secret
(_) Profit!
(_) victory dance on Metanomics
Ah, progress!
Posted by: Desmond Shang | July 16, 2009 at 08:40 PM
Adam himself could tell us the formula for how he, uh, made his first million (he claims, like Anshe does, that he made a million dollars, something I personally question as inflated for both of them). But given that his mall, which probably made *some* money, and the occasional scripting job, that made *some* money, just had to be supplemented by *some* cash to buy that many sims seems pretty obvious to me.
I don't see how the problems of Twitter obviate what I say -- they only prove it. They prove that like Himoff, these technocommunists think that by selling the rope to a few VC funders, giving away the collective farm for free and essentially letting everybody take what isn't nailed down but ALSO work like crazy producing content of value to data scrapers (their conversations), they can then sell that pouring from the empty into the void as some kind of value. They then find, like Google that they have to do this on a massive scale to make it pay off and then can't scale.
Selling something simple like land and stuff that goes on it is a much better model. It doesn't rely on the Free mania or the VCs. Why do I say the VCs are selling the rope? Because writ large, these VCs then helped to destroy newspapers, media, related businesses, etc. and harmed the overall economy for everybody -- they harmed capitalism.
I'd like to believe in socialized medicine more than I do, having experienced it first hand in Canada.
As for protecting groups, by identifying groups and insisting that certain people have a permanent identity within a group, you can just as easily set people up to be oppressed by them, or because of them. There's a reason why the UN treaties do not have group rights in this fashion, given everything. If Canada makes it work, it's because it has a context of 10 others things around it that put a check and balance on it.
Posted by: Prokofy Neva | July 16, 2009 at 08:57 PM
Even if you DO have a good community, you need exposure or advertising as SL has a fairly fast turn over. People cycle through SL almost like they do with gym memberships. Some come in for one day, then never come back. Others come in regularly for 3-4 months, then disappear. Others are in for the long haul. You need to keep recruiting new community members to keep your community viable.
I'd love to be able to get our charity mentioned on the MOTD and keep asking, but it always is time for a different sort of group to be covered there. Frustrating. Showcase is frustrating, too.
The SL press and blogs can give you some nice exposure, but they tend to be rather transient with just a few exceptions.
The only things that regularly work for us is SL event listings and notices to our in-house groups and those of the artists performing. Notices to those large event groups don't seem to bring in people for an event.
I find SL promotion more difficult than RL promotion.
Posted by: Sioban McMahon | July 16, 2009 at 11:00 PM
"I find SL promotion more difficult than RL promotion."
I think the reason is, There are far more promoters in SL than in RL.
In RL, promotions are regional so they don't overlap with promotions going on at the same time in other regions. This limits the options of people in that region.
But in SL, promotions can be thought of as global. Everyone in the world is promoting to everyone, and it's all going on simultaneous to everyone else promoting. So there are so many options available to a resident, that it's boggling.
I think it could be an argument for the theory of The Tyranny of Choice. (see link)
Posted by: Darien Caldwell | July 17, 2009 at 12:21 PM
I have coined a new saying:
"Give a man a blog post, you feed his ego for a day, Teach a man to blog, you feed his ego for life."
:)
Posted by: Darien Caldwell | July 17, 2009 at 12:24 PM
Desmond's tulip thing - fantastic!
Desmond, you sell yourself short. WAY short.
Starax - fabulous!
Rezzable - first, they got free promotion from the Lindens. But that wasn't enough, NOOOOOOOOOO.
Then they had to start charging an entry fee, which almost never works in an online game-type thing, anymore than charging for each ride separately would work at Disney World or Six Flags. It went over like a lead balloon with me, in any case.
I found a shop high in the sky over Greenies (and I loved Greenies), but the stuff was too expensive and not really desirable anyhow.
coco
Posted by: Cocoanut Koala | July 17, 2009 at 11:28 PM
Admission might work if there was more behind the paywall than what they offered.
I've always wondered why it doesn't work. and I think you hit upon it, it would be like charging you for each ride separately...except some carnivals work that way...
Posted by: Prokofy Neva | July 17, 2009 at 11:42 PM
Darien,
It's also because the nature of the news outlets is so different. In RL, the newspapers, radio stations, and blogs are fairly stable. I also can have a fair idea of what their reach is. In SL, "news sources" and blogs open and close regularly and you have to guess or do some informal surveying of your own to see if anyone is really reading them.
Once you find a stable blog/news source, it's more difficult to cultivate the connections there than it is in RL. Some are open mainly to certain venues, groups, or individuals. With others, the reporters or contacts change frequently.
All that said, over the last couple years, I've come to the conclusion that very few of the news sources or blogs have much of a reach. Placing an article or an ad in many of the blogs or magazines/papers makes NO difference in traffic at events, honestly.
We get our results from three places: SL Events, our own groups, and the fan groups of the performers/artists. The web pages or blogs that help us significantly are NWN, SL Enquirer, and a couple of the fashion blogs when we do an event such as a fashion show or auction.
Posted by: Sioban McMahon | July 18, 2009 at 08:15 AM
"We get our results from three places: SL Events, our own groups, and the fan groups of the performers/artists."
That matches my experience exactly. Although as a business rather than an event, you could replace SL events with SL Classifieds, and replace 'Fan Group of the performer' with 'groups with interest in the types of products I made'. :)
Posted by: Darien Caldwell | July 18, 2009 at 11:16 AM