Wired Gets Second Life Wrong
When I read Frank Rose’s recent article in Wired, “How Madison Avenue is Wasting Millions on a Deserted Second Life,” I felt a distinct sense of déjà vu. I’ve been wandering around in Second Life for the past three months, and what I read in Wired took me back a dozen years ago.
There are many parallels with virtual worlds and the early days of the commercial Web. Back in 1994, when the Web was still embarrassingly known as the “Information Superhighway,” Donna Hoffman and I wrote a short article about future commercial prospects for the Web. We noted that the Web was very different from what marketers had seen before, and that mindless application of traditional business models and current best practice was just not going to work. The conclusion of our 1994 article applies to virtual worlds in 2007, just as much as it did to the nascent Web in 1994:
“This suggests that there will be pitfalls to developing interactive multimedia products and services… [on the Web | in virtual worlds] … A large mass market, deep pockets, and previous mass-media experience alone will not guarantee success. Understanding what customers want, are willing to pay for, and what satisfies them remains deeply misunderstood or understood too little by many marketers.”
Unfortunately, Rose’s Wired article abounds with examples promoting such misunderstandings. Rose is not alone, of course, we see these misunderstandings about virtual worlds all over the business press. For now, I’m going to focus on just three: 1) the deserted world, 2) nothing to do there, and 3) puzzlement over the failure of deadly dull business builds.
Nobody home. First among the misunderstandings is the “deserted world” lament. Rose laboriously grinds down the 7 million Second Life registrations as of June 2007 into 4 million distinct individuals, then further down to 1 million log-ins in the past 30 days, and then down to “100,000 Americans per week to be targeted by US marketers.” One thing that is amusing about this quote is that Second Life residents are just as unlikely to want to be “targeted” by US marketers as Tivo owners are to want to watch commercials. Targeting implies a passive consumer, and we should all have learned the lesson by now that Web-based consumers are active, in control, and if anyone is doing the targeting, it is the consumers who are targeting the marketers they are interested in establishing relationships with. There was a lot of misdirected focus on numbers in the early days of the commercial Web, and from those lessons we should expect that virtual world growth will happen rapidly, but will then be followed by the more important policy concerns about equality of access and the emergence of a new digital divide.
There is quite a bit of hand-wringing about “ghost towns” and “deserted sims” in Second Life. But, the Web as a whole has a much longer tail than Second Life. If you think about the fact that 10 Web sites control 40% of page views, and there are tens of billions of Web pages, the Web is a far more empty place than Second Life. True, there are no crowds in Second Life – the in-world population is widely dispersed throughout the virtual world at any one point in time. But why is this a bad thing, and why would we want to cram avatars into a handful of locations? The marketing obsession with crowds reflects a death-grip on the broadcast metaphor. The problem with Second Life isn’t the emptiness, but the lack of good navigational tools and decision aids. It’s pretty hard to find things in Second Life. There isn’t a good search engine, nor established systems for rating and recommendation. You can ask your friends, but there is no automated social networking yet, so search costs are high.
Nothing to do. The second misunderstanding is a pretty serious one. Rose says, “Once you put in several hours flailing around learning how to function in Second Life, there isn’t much to do.” Well, yes, and after you’ve spend two hours learning a few words of Japanese you aren’t going to be well-equipped to handle an interesting conversation when you visit Tokyo! Second Life has a learning curve; an extremely steep learning curve. It is a self contained and consumer-built world with its own economy, its own sub-cultures and social norms, an ever-present tension between real and virtual identity, and mental maps of how the physical world operates have to be completely revised when you visit Second Life. But just because you don’t have the skill to do it all doesn’t imply “there isn’t much to do.”
There are an amazing amount of things to do in Second Life (for starters, see Mitch Wagner’s list). The real story is not that there is nothing to do in SL, but that there is too much to do, and that it takes considerable skill to become fully engaged in SL. This makes SL a perfect environment to study the concepts of play, skill and flow. The learning process, and the role of play and experimentation in the learning process, is itself a fascinating topic that companies should be studying.
Simulated stores. The third misunderstanding is epitomized by Wired’s quote from Rishad Tobaccowala, “Second Life is not that hard to understand. … I have a store in the real world; I have a store in the virtual world.” Wrong! What is the evidence that consumers want to walk their avatars around inside little toy mockups of physical stores and play “let’s go shopping”? There are way too many mockups of physical stores in “corporate pavilions” in Second Life – they are all devoid of visitors, and this should come as no surprise. There is no demonstrated consumer need for these types of stores. Virtual replica stores are an awkward and tedious navigational interface, and we avatars aren’t going to virtual worlds to simulate a trip to the mall.
What would work instead? One clue is Wired’s observation that Money Island is the top Second Life destination. But you have to think a bit about why that might be the case. Rose’s answer is that people want free money. Think deeper - why do people want free money? So they can do things! But why pay when you do things for free? Because it cuts the learning curve; instead of making virtual clothes or a house, you buy them from someone else, so money saves time and makes life easier. While I’m happy pumping in $10 from time to time to fuel my Second Life Linden Dollar balance, it seems that other residents feel it is worth their time to earn SL currency by doing things they would never do in the real world, like sitting in camping chairs for starvation wages. Companies have a tremendous opportunity to engage SL residents by providing meaningful opportunities for residents to earn SL currency, or by subsidizing SL purchases, or by providing virtual products that actually meet in-world needs (i.e. not a virtual can of coke, but perhaps a virtual iPod that lets me stream my music in-world). There is very little of this today, but eventually companies will figure this out.
So…we’ve learned these lessons before, and we’ll learn them again. Right now, the consulting companies who are building the corporate in-world presences appear to be earning handsomely. The companies paying for the services, however, won’t begin to profit until they begin to understand what motivates people to spend time in virtual worlds.
There are many parallels with virtual worlds and the early days of the commercial Web. Back in 1994, when the Web was still embarrassingly known as the “Information Superhighway,” Donna Hoffman and I wrote a short article about future commercial prospects for the Web. We noted that the Web was very different from what marketers had seen before, and that mindless application of traditional business models and current best practice was just not going to work. The conclusion of our 1994 article applies to virtual worlds in 2007, just as much as it did to the nascent Web in 1994:
“This suggests that there will be pitfalls to developing interactive multimedia products and services… [on the Web | in virtual worlds] … A large mass market, deep pockets, and previous mass-media experience alone will not guarantee success. Understanding what customers want, are willing to pay for, and what satisfies them remains deeply misunderstood or understood too little by many marketers.”
Unfortunately, Rose’s Wired article abounds with examples promoting such misunderstandings. Rose is not alone, of course, we see these misunderstandings about virtual worlds all over the business press. For now, I’m going to focus on just three: 1) the deserted world, 2) nothing to do there, and 3) puzzlement over the failure of deadly dull business builds.
Nobody home. First among the misunderstandings is the “deserted world” lament. Rose laboriously grinds down the 7 million Second Life registrations as of June 2007 into 4 million distinct individuals, then further down to 1 million log-ins in the past 30 days, and then down to “100,000 Americans per week to be targeted by US marketers.” One thing that is amusing about this quote is that Second Life residents are just as unlikely to want to be “targeted” by US marketers as Tivo owners are to want to watch commercials. Targeting implies a passive consumer, and we should all have learned the lesson by now that Web-based consumers are active, in control, and if anyone is doing the targeting, it is the consumers who are targeting the marketers they are interested in establishing relationships with. There was a lot of misdirected focus on numbers in the early days of the commercial Web, and from those lessons we should expect that virtual world growth will happen rapidly, but will then be followed by the more important policy concerns about equality of access and the emergence of a new digital divide.
There is quite a bit of hand-wringing about “ghost towns” and “deserted sims” in Second Life. But, the Web as a whole has a much longer tail than Second Life. If you think about the fact that 10 Web sites control 40% of page views, and there are tens of billions of Web pages, the Web is a far more empty place than Second Life. True, there are no crowds in Second Life – the in-world population is widely dispersed throughout the virtual world at any one point in time. But why is this a bad thing, and why would we want to cram avatars into a handful of locations? The marketing obsession with crowds reflects a death-grip on the broadcast metaphor. The problem with Second Life isn’t the emptiness, but the lack of good navigational tools and decision aids. It’s pretty hard to find things in Second Life. There isn’t a good search engine, nor established systems for rating and recommendation. You can ask your friends, but there is no automated social networking yet, so search costs are high.
Nothing to do. The second misunderstanding is a pretty serious one. Rose says, “Once you put in several hours flailing around learning how to function in Second Life, there isn’t much to do.” Well, yes, and after you’ve spend two hours learning a few words of Japanese you aren’t going to be well-equipped to handle an interesting conversation when you visit Tokyo! Second Life has a learning curve; an extremely steep learning curve. It is a self contained and consumer-built world with its own economy, its own sub-cultures and social norms, an ever-present tension between real and virtual identity, and mental maps of how the physical world operates have to be completely revised when you visit Second Life. But just because you don’t have the skill to do it all doesn’t imply “there isn’t much to do.”
There are an amazing amount of things to do in Second Life (for starters, see Mitch Wagner’s list). The real story is not that there is nothing to do in SL, but that there is too much to do, and that it takes considerable skill to become fully engaged in SL. This makes SL a perfect environment to study the concepts of play, skill and flow. The learning process, and the role of play and experimentation in the learning process, is itself a fascinating topic that companies should be studying.
Simulated stores. The third misunderstanding is epitomized by Wired’s quote from Rishad Tobaccowala, “Second Life is not that hard to understand. … I have a store in the real world; I have a store in the virtual world.” Wrong! What is the evidence that consumers want to walk their avatars around inside little toy mockups of physical stores and play “let’s go shopping”? There are way too many mockups of physical stores in “corporate pavilions” in Second Life – they are all devoid of visitors, and this should come as no surprise. There is no demonstrated consumer need for these types of stores. Virtual replica stores are an awkward and tedious navigational interface, and we avatars aren’t going to virtual worlds to simulate a trip to the mall.
What would work instead? One clue is Wired’s observation that Money Island is the top Second Life destination. But you have to think a bit about why that might be the case. Rose’s answer is that people want free money. Think deeper - why do people want free money? So they can do things! But why pay when you do things for free? Because it cuts the learning curve; instead of making virtual clothes or a house, you buy them from someone else, so money saves time and makes life easier. While I’m happy pumping in $10 from time to time to fuel my Second Life Linden Dollar balance, it seems that other residents feel it is worth their time to earn SL currency by doing things they would never do in the real world, like sitting in camping chairs for starvation wages. Companies have a tremendous opportunity to engage SL residents by providing meaningful opportunities for residents to earn SL currency, or by subsidizing SL purchases, or by providing virtual products that actually meet in-world needs (i.e. not a virtual can of coke, but perhaps a virtual iPod that lets me stream my music in-world). There is very little of this today, but eventually companies will figure this out.
So…we’ve learned these lessons before, and we’ll learn them again. Right now, the consulting companies who are building the corporate in-world presences appear to be earning handsomely. The companies paying for the services, however, won’t begin to profit until they begin to understand what motivates people to spend time in virtual worlds.
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