Lab Gab with Brad Oberwager & Philip Rosedale: a summary with video + audio

via Linden Lab

On Monday, January 31st, Linden Lab streamed a pre-recorded session of Lab Gab featuring the company’s Executive Chairman Brad Oberwager (Oberwolf Linden) and the Lab’s co-founder, Philip Rosedale, who recently re-joined Linden Lab in the capacity of a strategic advisor, having left in 2010 to work on a number of projects – most notably co-founding High Fidelity Incorporated in 2013.

The session was built around more than 300 questions submitted by users in the wake of the announcement that High Fidelity had invested in Linden Lab in terms of money, patents and personnel.

The following is a summary of the session, the full video of which is embedded at the end.

  • For ease of reference, I have broken this summary into heading based on the topics discussed through the session, and timestamps to the relevant start point in the video are provided for each.
  • Throughout the summary comments made by / questions directed towards Brad Oberwager are preceded by [BO] and those relating to or made by Philip Rosedale are preceded by [PR].
  • Note that audio extracts, where provided, have (as usual) been subject to some editing to remove pauses, repetition and the occasional aside that fall outside of the topic being discussed. This has been done with the aim of making it easier to follow the comments being made, and without changing the context or meaning of any of the statements made.

On the Investment by High Fidelity

[Video: 1:54-4:49 – PR]

  • After leaving Linden Lab in 2010, went on to establish Coffee And Power (2010-2012), prior to co-founding High Fidelity, a company initially focused on building a VR headset-centric virtual world.
  • In 2019, the company concluded the current generation(s) of VR headsets would not be commercially successful enough to sustain a virtual world environment. So the company pivoted away from this in 2019 – see: High Fidelity changes direction: the reality of VR worlds today (& tomorrow?), High Fidelity changes direction (2) and High Fidelity changes direction (3): layoffs & shuttering apps and access), eventually opting to focus of 3D spatial audio.
  • The Spatial audio side of the business – which already has the software licensed to a number of customers – will continue, However, the company retained a core set of skills based around building VW technologies, and with Brad Oberwager coming into Linden Research in a very hands-on capacity, he and Philip reached agreement that there is a synergy between the VW expertise at Hi-Fi and the work LL is doing with SL.
  • His personal view is the Second Life is the place to explore where virtual reality might go next, as it remains the cutting edge example of what a virtual is, and what might be achieved within one.

On What the Investment Means for Second Life / LL and for High Fidelity

[Video: 4:54-9:37]

  • [BO]
    • Looks at the relationship in three ways: personal, business and “meta”.
    • Personal: he and Philip have been friends for a long time. They share lot of personal time (e.g. travelling to and from Burning Man together, sharing walks and the occasional beer, etc.), and he has a lot of respect for Philip as well as liking him, and he is also a person he would like to emulate. Sees being able to connect with Philip within a business environment as “very gratifying”.
    • Business: running a platform like Second Life as a “great responsibility”, and fully acknowledges the platform is nothing without the users. So sees having someone with Philip’s vision to offer tactical and strategic input from outside of the company very beneficial.
    • “Meta”: believes that any / all consideration of “the metaverse” or of “metaverses” requires a moral compass. If it is left purely up to big corporations that generate their revenue through surveillance / behavioural monitoring (to deliver ads, content, etc.), could be “very dangerous”. In questioning of this approach and its associated technologies, he feels Philip has demonstrated he is that moral compass at this point in time, and is someone who continues to focus on serving and supporting users.
  • [PR]
    • In terms of Hi-Fi, the company retains a core team working on the spatial audio product, which is being licensed and will continue to be developed and licensed.
    • He will continue to run Hi Fi.

On the Role of Strategic Advisor

[Video: 9:39-11:17 – PR]

  • As an advisory role, is not responsible for day-to-day decision making with the Lab.
  • Meets with the various teams at Linden Lab as and when they specifically would like his input / ideas / perspective.
  • Very much appreciates being seen as a moral compass.
  • Also hopes that his experience as an engineer and product strategist can be put to practical use.
  • Personally enjoys becoming a voice at the table again in an environment where responsibility for the platform’s growth is shared between the company and the users.

On Their Friendship and Mutual Approach to SL / LL

[Video: 11:31-17:50]

  • [BO] Initially met around twelve years ago through mutual friends when taking a boat trip around San Francisco Bay. At the time Brad was trying to close his first major business deal and “acting like a goofball” and being “obnoxious” when he noticed Philip was watching him. Once on the trip, they started talking, which lead to dinner (with at least Philip’s wife – whom Brad has previously referred to as his “closest friend” – joining them).
  • [PR] notes that Brad had always shown an interest in Second Life, and when he happened to mention the Lab was looking to put itself up for sale, Brad was immediately interested in the opportunity presented.
  • [BO] On the subject of buying Linden Lab:
    • Understood that SL as a virtual world has different needs to those of LL as a company, so felt there was a real danger that had LL been purchased by an entity that didn’t understand the difference between the needs of the platform and the needs of a company, SL could have ended up being squeezed for revenue.
    • Took a much different view in acquiring the company, with a willingness to invest in a commitment to make the platform “better” – although he admits he is not that sure what “better” actually means.
    • As such, he acknowledges that running Linden Lab requires a “looseness” of approach and outlook that others might have missed.
  • [PR] Felt he left Linden Lab in 2010 without knowing whether or not he’d built a successful culture at the company whilst its CEO. However, believes that it has become apparent that it does take a special kind of company to steward Second Life. The fact that the culture within the company remains very similar to when he was CEO has both made him confident that the right choices were made and made returning to the company and the platform “easy”.

PR – On Returning to LL and His View on SL in 2022

[Video: 18:15-20:20 PR]

  • Felt the decision to invest in LL and make a return to SL was absolutely the right thing to do, and the decision was easy to make.
  • Believes Second Life is both “incredibly similar” to how it was when he left it, even though it obviously changed in terms of users and content, etc.
  • Has loved reacquainting himself with events and activities in-world, and once again participating in the “standing wave” the platform represents.

On Facebook and its Pivot to “Meta” and the “Metaverse”

[Video: 20:29-26:51]

  • [PR]
    • If he could provide advice to Facebook, it would be “don’t do it”.
    • Particularly believes that the temptation for companies such as Facebook to enter the metaverse environment and attempt to parlay their surveillance / behavioural business model (utilising data gathered on users for the purposes of generating revenue through targeted ads and content) would be extremely harmful.
    • In contrast, Second Life has clearly demonstrated a fully scalable business model that operates purely on a fees-driven model, one that generates more revenue dollars per user per year than You Tube through its model, and probably than Facebook.
    • As such, believes the approach taken by LL / SL is much less prone to the risk of abuse and is safer than those espoused by the likes of Facebook and Google.

  • [BO]
    • Would add that as well as generating more money per user, Linden Lab also spends more per user.
    • Believes this is critical because a platform like You Tube is scale based: it relies on building a larger and larger audience, which in turn drives the surveillance / behavioural business model (more users means more adverts can be served and more revenue generated from advertisers, etc.).
    • The Second Life model, however is not just about user acquisition but is more equivalent to the physical world consumer model of supply and demand (or perhaps more properly for SL – demand and supply). So, the more closely links LL’s ability to generate revenue to its ability to offer capabilities and services to users, the more attractive it is for users to spend money on the platform.
    • As such, the decisions made by the likes of Facebook with regards to its platform will be very different to those made by the Lab for Second Life and its users.

Philip Rosedale and Brad Oberwager. Credit Linden Lab

PR – On Being at the Centre of the New Wave of Metaverse Interest

[Video 26:53-29:44]

  • It is gratifying – but would point out that in 2005/6 SL had several hundred press articles (electronic and printed) being written about it per day, and so doesn’t feel that “the metaverse” is achieving the kind of brand awareness Second Life has enjoyed in the past.
  • For himself, feels the defining passion this time around is that things should be done “right”: trying to correct some of the inequalities technology has created or failed to correct.
  • Conversely is very aware the opportunities exist for it to be done “incorrectly” such as basing things on the surveillance / behavioural business models noted above.

BO – On Being at the Helm of LL for a Year: Thoughts on SL, Virtual Economies and “the Metaverse”

[Video: 29:44-34:03 – BO]

  • Second Life operates much closer to the physical world than people might think; as such he feels lucky in getting involved in such as unique company / business and also feels enormous responsibility for all that has been built.
  • Notes that much of what has been made possible is the result of foresight from Philip and others – he points particularly to Tilia the Lab’s highly regulated and properly licensed money transmitter and end-to-end payments platform, which now not only drives Second Life’s economy, but can be used to drive other economies as well.
  • Such is the complexity of SL and its associated services, he feels his view of his time at the company quickly moved from it being a “job” to a “responsibility” – one that is possibly the most fun he has had in running a business.
  • [PO] Adds that Brad is an incredibly intelligent individual and is clearly enjoying being challenged by the entire range of technical and social, etc., challenges involved in running Linden Lab.

On Second Life, NFTs Crypto-Currencies, “Web 3.0”

  • [Video 34:11-38:51 – PR]
    • SL was effectively the original crypto and the original NFT platform.
    • Whilst not blockchain based, the Linden Dollar was one of the first virtual currencies allowed to float again fiat currencies, and is now fully approved and regulated as a virtual currency.
    • Similarly, and again whilst not blockchain based (or requiring the energy consumption thereof) SL’s idea of virtual, transferable assets with unique metadata that identifies them. tracks their ownership and what might down with them, etc., very much encapsulates the core concept of the NFT.
    • As such, whether or not SL needs to “adopt” crypto or NFTs is debatable; the platform is, in its own way, already leading the way. However, once all the current noise about both has died down, and people start to agree on what it all means, then potentially, SL is the best placed platform to “play around with it”.
    • But that said, SL is a complex beast, and doesn’t always respond well to changes (e.g. content breakage), so it’s not as if a switch can be flicked to make SL suddenly embrace new ideas: change requires time and consideration, which is a good thing.

  • [Video 39:16-43:17 – BO]
    • Believes there is a technical reason why SL couldn’t easily adopt ideas like NFTs and also an emotional / societal reason why SL should not do so.
    • Technically, there is the “if it ain’t broke, don’t fix it” idea: SL has virtual currency and digital assets figured out, with 1.6 million transactions per day – something that simply isn’t going to be put on the blockchain.
    • Also these new technologies currently have no longevity in the manner SL has – and it can take years before a solid determination on whether a developing technology really is “good” or “bad”, and vice versa.
    • So right now, LL is “absolutely not” going to try to turn what it already has into NFTs / blockchain transactions, nor does the company hold any plans to do so “any time soon”, because a) SL technically isn’t geared for doing so, b) it would destroy much of what SL already has.
    • Recognises that crypto’s speculative basis is really the antithesis of the stability the Linden Dollar needs to maintain the consumer-driven economy of SL, so the L$ won’t be tradable on Coinbase.
    • However, notes that it would not be prudent to “blanket ignore everything”: just as there are people engaged in SL who are against the idea of NFTs, so to are there potential audiences outside of SL who might see the platform as more relevant to them if it offered some degree of support for NFTs – such as just being able to import an NFT object into SL and displaying it in their home.
    • Also indicated that LL is looking into carbon-offsetting the cost of running all of their servers, etc., on environmental grounds.

  • [Video: 44:23-46:53 – PR]
    • Notes that the current rate of transaction throughput in SL – around 20 transactions per second – would overwhelm both the Bitcoin and Ethereum networks put together if SL were to suddenly switch to using them.
    • Very much sees SL as the “right in-between” when it comes to wholly centralised, top-down approaches such as is being taken by Facebook / Meta, and the entirely de-centralised (and ecologically impactful) blockchain approach, in that is offers a balance of stakeholding between the company and the user base.
    • Points out the High Fidelity does have a lot of experience with blockchain, having built its commerce system around the  federated blockchain technology.

On Second Life Supporting VR Headsets

[Video: 46:55-49:02 – PR]

  • Acknowledges that some users have been able to integrate VR headset support into third-party viewers (via viewer self-compiling).
  • Points out that the nature of SL, both in the freedoms people have in creating / uploading content and in the broad spectrum of client-side hardware supported means that the platform cannot easily support VR headset use without encountering issues vis frame rates, etc.
  • However, maintains the view that the problem VR headsets is not whether a platform like SL can technically support them, but rather whether or not they are socially acceptable [to use my term] to a broad enough audience: the fact that they “blindfold” and cut the wearer off from people in the same physical space as them is both discomforting to the wearer and potentially anti-social towards others in the room.
  • As such, doesn’t believe anything should be done vis-à-vis VR headsets until they do reach a point where they are less intimidating to use and more socially acceptable – but also does not believe that is likely to happen within the next five years.
  • Rather, believes desktop and mobile access will remain key to accessing virtual spaces for at least that amount of time.

On Second Life, Identity and User Anonymity

[Video: 49:04-54:38]

  • [PR]
    • Sees the use of pseudonyms as absolutely essential to the safe use of Second Life and any virtual world.
    • Prefers to use the term “pseudonymity” rather than “anonymity” in that Second Life allows users to create a “different version” of themselves which may or many not represent the person behind the avatar, and through which users have the ability to determine how much / little of themselves they actually wish to reveal.
  • [BO]
    • Also believes “pseudonymity” as an essential element to virtual worlds, noting that models as espoused by Facebook / Meta amount to totalitarian regimes where the user has no choice about (and may not be aware of) the amount of personal data that is being gathered from them.
    • Believes that businesses require differentiators from, as much as similarities with, others operating within the same space, and notes that Second Life has some important differentiators, and will not lean into practices followed by others – such as “in your face advertising” paid-for [by those providing the ads] services.
    • Notes that outside of things like payment information, etc., LL has “no way” of knowing much about those who use the platform.

On the Risks of LL Being Sold to the Likes of Meta, etc.

[Video: 54:59-58:13]

  • [BO]
    • He and his fellow owners “will never sell to Meta under any circumstances, ever”, and “have no plans, not interested, don’t think it’s the right thing [to do]” and, “ultimately wouldn’t be the right monetary decision” on the grounds that Meta would not have the same long-term view for the future of LL / SL.
    • HOWEVER, that does not mean Meta could not effectively “absorb” Second Life by offering a better experience that naturally draws users to it in place of SL. As such, accepts that there are things that LL need to be cautious about outside of any transactional business decision.
    • As such, his current focus is on trying to understand what might be the “right ways” to operate alongside other metaverses, such as through partnerships, rather than mergers or similar, and to what degree of “inter-operability” – moving back and forth between different virtual spaces / worlds – might be possible in that scenario.

  • [PR]
    • Notes that given LL’s stability / success, there is no need for capital that would warrant the company being sold.
    • Also, such is the success of SL with its current user base, revenue, etc., there isn’t even the internal pressure to consider having conversations with others about buy-outs, mergers, etc.
    • Rather, the focus at LL is to observe the current “madness”, see what is going on and decide the best way for the company to move forward.

On the Use of Avatars and Avatar Expressiveness

[Video 58:15-1:02:25 – PR]

  • There is a “tremendous amount of hype” about avatars right now, with “everybody kind-of saying, ‘we’re all going to be avatars!'”, leading to many tech companies trying to work out how they can monetise this idea. Yet SL has probably done more than any other company to push the boundaries of what it means to be an avatar and to feel embodied within a virtual world.
  • However, the reality is that most people are not ready to embrace avatars. For example: if you take someone off the street and bring them into Second Life, they will likely express fascination with what they see, but also discomfort in “becoming” an avatar and having their interactions with others embodied / represented through an avatar operating within a virtual world.
  • Believes that part of this unease is directly related to avatar expressiveness, particularly when engaging with others through avatars for the first time.
  • There is still much to be done to “get it right” in this area and reach a point where people are “completely comfortable” with avatar-centric interactions, including things like understanding non-verbal communications, etc, and until it is reached, it will remain a reason why “we don’t have a billion people diving into the metaverse right now”.
  • Is sure that software development will reach a point of overcoming these shortfalls, and that SL can continue to “lead the way” in the development and acceptance of avatars.

On “What’s Next for Second Life” (and “the metaverse”)

[Video: 1:02:27-1:07:32]

  • [BO]
    • Doesn’t see SL’s future in terms of plot-points of announced of features, etc., but rather as a continuing effort to make the experience better for everyone, with more users and more engagement being the key metrics.
    • So wants to see consistent improvement in the experience people have with Second Life and an increase in engagement by those coming into the platform.
  • [PR]
    • Would speak more as an “outsider” than one currently involved in defining roadmaps for Second Life.
    • Re-iterates his belief in the need for greater avatar expressiveness is a key component in getting a wider adult populace to engage in virtual spaces.
    • There also needs to be the ability to get more people able to participate in a given space, be it a classroom, concert, etc., – which he believes is a real challenge for the industry as a whole, not just LL / SL.
    • The ability to provide a degree of accessibility and interaction via mobile devices that can satisfy a range of needs / uses is also a vital component in the acceptance and use of virtual spaces.



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