Day: August 16, 2011

Speakers

• Jeff Vogt (Vogt Linden) – Senior Director, Business Product, responsible for strategies, plans, initiatives – economy & platform
• Brooke Linden – Marketing Team
• Thor Linden – strategic initiative and “economic aspects of the company”
• Colossus Linden – Lindex, payment system
• Delby Linden – Land and partnerships

Session Summary

Sitearm Madonna introduced the session as a discussion of “the visions and practical steps to grow the Second Life economy, enable businesses and service providers to flourish on the Second Life platform.”

• Vogt Linden: focus for the last six months has been on a progressive approach to “funnel” users through from new joiners to engaged users within the SL community through progressive changes to the new sign-up process, new avatar selections, etc., coupled with usability enhancement (new user experience, improvements to the Viewer, etc.) to get users engaged “early on”
• Service and performance improvements, for existing users seen as part of the process to encourage user retention to further stimulate the economy, including land acquisitions
• 2011 Q2 economic figures (released over the conference weekend), describing as showing “some pretty compelling growth statistics in certain areas” which present “A really good story of stability, growth in certain areas and a vibrant in-world economy, if you will.”
  • Sign-ups: upswing in sign-ups following the release of the new sign-up process as a “radical improvement” compared to historical data and re-iterated they are running at an average of 16K per day, and “speaks to the number of new users who are making it all the way through registration, with all the improvements we’ve made, coming in and sampling the service and…based on the usability improvements we’re making…staying.”
  • Averaging monthly users: “An improvement over the last four quarters, with users taken up by a nominal percent, but its directionally a positive trend..that the numbers of users coming in each month are on the uptake.”
  • User hours: “We’re fairly flat to slightly declining by around a percent, a little less than a percent, over the last quarter. This is obviously what we’re trying to solve for us.”; “As we’re making these usability improvement and trying to engage users on the front end, the expectation is that we’re going to start to reverse this trend and folks will stay longer, they’ll interact more and ultimately they’ll transact, and I think that’s what we’re striving for.” 
  • Average monthly economic participants: “Again, this is flat, relative to the last quarter, and this represents all of the L$ that flow between users where they’re either gifting, buying, selling, acquiring, L$…..A flat story; expect that will change as more users come in and participate in the transaction economy.” 
  • Average exchange rate: “I think we’re seen a steady strengthening of the exchange rate over the last year plus, a nominal improvement over the last quarter. This just really speaks to the stability of the Lindex, of the exchange, and the stability of the economy… Its a positive story and we expect this to continue and we’ll continue to report on this quarterly going forward.”
  • L$ supply: “A positive trend over the last five quarters, it grew a little bit over the last three months and it continues to grow in terms of the overall volume of Linden Dollars that are available in the economy and kind-of highlighting the purchasing power of the community.”
  • Lindex volume: “A slight dip from the prior quarter…but that’s more due to seasonality than anything else. If you look back to the second quarter of last year, we’re actually up about 4.4 percent…So generally a good story for year-over-year, with a slight dip for seasonality.” 
  • Web merchandise sales volume: “You see a nice trend over the last year-and-a-half of overall volume of merchandise being sold on the marketplace steadily improving.”
  •  World size: “It’s been relatively flat to slightly down over the past year and that’s just consistent with what we’ve been seeing over the last several quarters.”
• Brooke Linden: Highlighted that despite issues, there has been market growth:
  • 11% growth in unique economic (i.e. not freebies) sellers
  • 7% growth in unique economic buyers
  • 9% GMV growth overall
• Linden lab is now “Trying improve some of the things we know are impeding those numbers from growing more quickly.”
• Direct Delivery: “To streamline the purchase experience for users.” With the goal of making it “A simpler process with a simpler user interface.”
  • Marketplace will support both Magic Boxes and Direct Delivery for a time
  • New, clearer notification interface for users in-world when a delivery occurs & API provided for TPV developers if they wish to use it
  • Capability for “other alerts” will be provided for TPVs that don’t support new interface (toast notifications)
  • Some limitations on merchant’s outbox (e.g. no more than 200 items in a folder)
  •  Marketplace UI being revised to make listing / inventory management easier & provide additional information for merchants
  • “Very close to the end”, but not giving any dates, other than expecting Direct Delivery roll-out to happen in the next 2-3 months; goal is stability first because, “Inventory and money? Those are things we want to be sure we get right!”
• Thor Linden:
  • Search has moved from a web-based approach to something more tailored to SL (less reliance on page rank / updates, etc., as per traditional GSA approach). Improvements have improved usability; fewer clicks, better results relevancy, etc.
  • Classifieds seen as a tool for everyone in terms of advertising, and keyword capping seen as helping to increase relevancy
  • Advertising Beta discontinued due to limited appeal to niche, large-scale SL businesses and it didn’t provide a real opportunity for people to grow their businesses
  • Premium accounts seen as an important means of getting people into currency transactions, land, etc. LL looking at how Premium Accounts can be attractive from the perspective of both consumers and merchants. Changes to be announced soon
• Colussus Linden: looking at means to streamline the process by which more people can have access to more money & can purchase things more simply.
  • Reworking the payment system: LL have hit hurdles but still on track to allow more people in countries outside the US to be able to use more local payment methods and allowing people to put money into SL in ways “that are comfortable to them.”
  • Highlighted work being undertaken to simplify the Lindex pages and make them more user-friendly for those not familiar with using them & to ease the process for those just wishing to buy L$
  • Also looking to improve how users can add new payment methods both reducing the number of steps in the process & providing better guidance
  • Viewer the principal means for new users buy L$. LL looking to giver users an experience that “Makes them feel interested, happy, excited, fun about buying L$…We want to make it something where they feel confident they know what they’re getting, how much they need…and really streamline that as well.”
  • Overall goal in streamlining processes in ‘time to L$’, encouraging people to participate in the economy a lot sooner than at present
• Vogt Linden: summarised:
  • Time spent on front-end improvements in the belief it will drive more people into the economy & increase their participation in the economy
  • Looking towards better enablement – how to bring users to businesses and communities in a more focused and deliberate way
  • Going to be looking at promotional tools, more marketing-type activities, more partnering-type activities
  • Reconsidering some of the core economics of how LL has operated and explore new ways of trying to encourage repeat log-ins not only from the perspective of what people enjoy in SL but also from a commerce perspective
  • As the Marketplace delivery system is cleaned-up, will start to look at in-world transactions

Session Q&A

• Vogt Linden on land sales: “We know that the land-buying experience is in need of re-visiting. It’s not good…..We’re going back and trying to fix some of the foundational flows so that we can make payment easier and people can purchase land and they can put a payment method on file; all sort-of infrastructure-style improvements that ultimately impact usability. We’re also going to be doing a lot to see if we can re-investigate things that we can do to raise the visibility of certain opportunities, like land sales, like marketplace sales, like our premium offering….so it’s not lost on us that we need some foundational improvement to be made.”
• Vogt Linden clarifying ‘economic participation’: how many users acquire and spend L$ by putting them in context: why should new users acquire L$, what can be done with them, etc.
• Colossus Linden of freebies and policy: LL are monitoring through Marketplace search (could not speak for in-world activities around freebies), but the issue is difficult to rule on; there are positives and negatives to the matter, and the commerce community should perhaps consider forming groups to discuss.
• Vogt Linden on providing detailed data & analytics for developers: aware of the opportunity to package data around usage (incl. at the parcel / sim levels) as a value-add; but becomes an issue of focus. As usability issues are addressed, issues including data-gathering and partnering opportunities will be looked at going forward
• Vogt Linden on what has been the impact of Linden Homes on user retention & the economy: has been good for retention, but the product has grown stale after initial rush & is being re-visited; would not be drawn on specifics, as still being defined.