Category: Opinion

Phil’s passages

Posted on by Inara Pey

Philip Rosedale helped kick-off the SL7B celebrations with an address to residents. In it, he touched just what an incredibly complex achievement Second Life is – and listed some of the well-known and not-so-well known accomplishments Linden Lab have made around the product – including the major efforts into improving the reliability of the supporting hardware and infrastructure, into making the SL experience more intuitive for non-English speakers etc.

Of course, some of the achievements he listed are going to be viewed differently by different people – things like the TPVP and Linden Homes are going to be a source of grumbles, upsets and annoyance for some time to come – and some of it may well be justified.

What interested me however, was his frank admission around the recently layoffs: essentially confirming, as I’ve previously mentioned, that Linden Lab has come to far to fast, and the restructuring was a vital precursor to the company putting itself back on a solid financial footing:

I wanted to speak for a couple of minutes and touch a little bit — obviously — on the layoffs we just did. We sadly reduced the size of the company by about a third — by about 100 people a week ago, and that’s a big deal and a huge change. But I wanted to say that standing here today in the midst of such a rich world and such continued creative — and for some people, financial — success that’s here makes me realize that, that choice is the right choice and one that though it is hard to make, is definitely correct and obvious. We’re never going to — as a company — risk the world and the businesses and the livelihoods of the thousands of people who make money working here by growing too quickly ahead of profits. By doing the difficult process of restructuring the company and making layoffs, we’ll return ourselves to solid, very solid levels of profitability.

The interesting word in this statement is return. While Linden Lab may not have been losing money hand-over-fist as some have implied in the forum discussion on Phil’s talk, “return” does tend to indicate – again, despite those graced with Hubble vision among us who seem to think Linden Lab is invulnerable to fault – that the company has been in some financial difficulty.

In many respects this is unsurprising: we’re in a global economic recession; it would be pretty amazing if a company the size of LL and with the same reliance on consumer spending hasn’t experienced financial hardships. In LL’s case the situation is somewhat worse because  – as many of us are only too aware through our own practical experience – the in-world economy has been stagnating for a goodly while now.

However, the use of “return” in Philip’s comment does, to a degree, shine a different light on the recent spin of quarterly performance reports from LL, in which we’ve tended to be given (and have openly questioned) the by-line that LL is doing “great” and is “avoiding” downturn. It also tends to confirm suspicions that LL have been “papering over” some of the cracks around the situation by re-introducing things like user-to-user transactions as a measure of economic “growth” (given the sheer diversity of such transactions, and the fact that there can be a chain of several such transactions that actually represent a single dollar amount, but which have each individual transaction counted as a “dollar amount”, user–to-user is a far from accurate measure).

Philip’s follow-on comments are equally revealing – and demonstrate that someone is evaluating recent trends and trying to determine a sensible way forward for Second Life:

We’re safe, the world is safe. As smart as we may think we are, we are not always going to be able to predict Second Life’s rate of growth and hiring is something that you tend to do something in a linear way, but the growth that company goes through — especially something as amazing and phenomenal as Second Life — tends to be punctuated, that is, you’re gonna have periods. And we’ve been in one of those periods now for the last year or so, where the world grows very little because we’re trying figure out together — you and us — what to do next, how to make it better. The growth, when it comes, is typically non-linear. Growth happens very fast. A company, of course — and we’ve been through these days as well — reels as it tries to provide a solid service offering for everybody as that growth occurs. And then in other times, you know, you have to hire with the anticipation that there are things you can do that are gonna drive growth. And sometimes that doesn’t happen. So I think this combat between linear company growth and sort of non-linear world growth is, again, one of the big problems that we face. And so, to be safe, we have stepped back — reduced the size of the company — and kept everything safe

The first part of this comment pretty much confirms what Tateru Nino speculated in her comments on this blog the other day – that LL themselves don’t actually understand what fuels SL’s growth. It is also a tacit admission that traditional means of projecting growth (which I fear are the mechanisms by which the LL’s Executive Team have tended to operate over the last couple of years) break down when applied to something as unique as Second Life.

As Philip states, SL is marked not by a linear, market-driven / predictable growth, but rather by peaks and troughs. When this happens, identifying what creates the peaks – the sudden bursts of expansion & increased revenue – and what causes the troughs – a sudden reduction in growth or a fall-back to previous levels of turnover – is as much about alchemy or pinning the tail on the donkey as it is about good business sense. Get it right, and you’re a business genius. Get it wrong and everybody hates you.

Given the plethora of things that go into Second Life – not the least of which are the most unpredictable elements of all – you and me and every woman and man on the street, all of us driven by a myriad of desires, needs and wants, some of which are congruent, others of which sit in direct opposition to one another – it is all to easy to get things wrong; to see some events in entirely the wrong light and as a result base your business strategy on suspect data. You’ve effectively pinned the tail not so much on end of the donkey’s spine, just above its rear end, but rather in the empty space a foot behind the donkey….

This is perhaps the most tacit admission from anyone in LL that they have gotten things wrong – and certainly for me, it demonstrates that Rosedale still cares enough about the platform to be open and honest in matters where others will continue to try and paper over the cracks.

So, what of the future? Here Rosedale is a little more reticent; a lot of positive-sounding words are used, but the detail is scant. Certainly, some among us will be upset at his use of metaphors relating to the tearing-down of walls and filling-in of moats as they will see it as a further move towards “opensource technocommunism”  (although I’m personally of the opinion that is not what Rosedale is alluding to). There is also a hint that the various messages about LL needing to play its part in keeping SL compelling in order to help drive user retention may well be falling on ears that are no longer deaf. It is important that, in getting back to basics, LL don’t lose sight of this once more.

It is equally important that in getting back to basics, LL start taking the time to listen to and actively engage with its resident users. Whether they like it or not, we are the people who are potentially best placed to help shape and develop the tactical needs that are faced within Second Life, with LL demonstrating it can weave such tactical needs into a cohesive, reality-based strategic plan that will potentially get us out of the rinse-dry-repeat cycle that has in so many ways marked the first 7 years of SL’s commercial existence.

Tateru published a considered argument on the subject of faith over on Massively last week. As she points out, LL came through a very rough period not so long after it’s formal launch, with wholesale lay-offs in 2003. They survived then largely because of the faith their resident users demonstrated towards them.

Faith in Linden lab is something that is in very short supply right now. The track record of blunders and ill-considered actions on LL’s part over the last three years have not only eroded our faith – they have in many ways built walls and moats that leave many of us somewhat unwilling to trust Linden Lab further than next week’s tier.

If things are going to improve, and leaving aside all of the glossy words, it is our faith in Linden Lab that really needs to be restored; it is the walls and moats that LL have themselves created and which now limit our ability to trust them with our faith and belief that really need to be torn down and filled in. I get the impression that Philip realises this, and that, as much as he openly talk about reaching out to people beyond Second Life, his words at the opening of SL7B are also about reaching in to those of us already here. That in itself is a sign of hope.

What remains to be seen is whether the rest of the executive management team and the board are as equally contrite, as equally positive and as equally willing to hold out a hand to their resident users.

Flirting with disaster…?

Posted on by Inara Pey

Colossus Linden resurfaces as the dust of the lay-off settles, to announce that the Marketplace Beta is apparently on-track.

Given the amount of speculation that followed the news that Pink had gone, any news on the new Marketplace is worth flagging. However, the information is scarce and merely announces that the Marketplace will be entering “beta” at the end of the month.

Now, “beta”, when used in conjunction with a Linden blog post,  is a word that is liable to have people reaching for tin hats, crawling under desks or looking to their basements for comfort. Viewer 2 and the entire Search mess are still very fresh in people’s minds; so much so that the idea that the Lab will (to quote Grant Linden in the follow-up discussion) continue to interate and improve the Marketplace after launch is hardly a solid foundation for confidence in the new system (Marketplace 1.0.1, anyone? Marketplace 2.0?).

Nor is the fact that, once again, it would seem that Linden Lab have determined a course of action, and nothing, but nothing, will sway them from their chosen path, no matter how rational or considered the concerns raised may be – or the fact that said concerns are being raised by those who potentially have far greater understanding of how to gain the best from the current XStreet environment than possibly anyone within Linden lab as a whole – let alone the commerce team.

This is most clearly demonstrated by the refusal to reconsider what amount to punitive limitations being placed on new listings – specifically the banning of animated gifs, the removal of BB code and the limit of 2,000 characters per description.

While LL may well consider such restrictions will make the new Marketplace more “professional” in its looks, all three demonstrate that, once again, LL simply have no idea of just how damaging these restrictions could be.

Let’s take the 2,000 character limit for a start: this is fine when you are describing an item of apparel, or perhaps a simple chair or light or a basic road vehicle.  2,000 characters, spaces included, tops-out at several hundred words. BUT when it comes to describing a more complex product, it is barely enough. Many products within SL are feature-rich nowadays, and limiting the description of them to just 2,000 characters is crippling. It encourages the use of lists. But wait! BB code is to be eliminated, so any lists stand a good risk of appearing somewhat less than pleasing to the eye – and a good several paces away from “professional” in looks.

And what of those creators who specialise in the creation of animated textures? The banning of animated gifs potentially eliminates their ability to use the new marketplace effectively.

Time and again, these three issues have be raised as points of concern among merchants  – and LL have simply chosen to ignore them. Even now, in the discussion thread, the same three concerns go completely unaddressed by Grant, for want of having to “go check”.

Now, granted (no pun intended), it is unreasonable to expect someone to have all the answers at their fingertips – but for heaven’s sake! Pulling together the basic information and preparing oneself to deal with the likely questions that could crop up in a discussion thread is hardly rocket science!

So why it is that the poor sod thrown into the firing line once again appears to have been ill-briefed and either hasn’t (or hasn’t been given the time to) consult with those working on the project ahead of time and checked the JIRA for anything related to the project in order to at least get a feel for the history to date in the matter?

It just doesn’t bode well for the Marketplace roll-out.

Nor does the level of confusion prevalent in the blog post and Grant’s comments in the discussion thread. On the one hand, we’re being told the beta will be the period in which merchants can get a look at their migrated listings and confirm everything is in good order before the Marketplace goes live, implying the beta will be “open” to all merchants; then in the same breath we’re told it will effectively be a “closed” beta, only available to those that apply via e-mail…

We’re also told that the beta will be for merchants “only” – but both the blog post and the associated e-mail go out to the community as a whole; on top of this, we’re told that the “beta” will co-exist with XStreet until such time as it goes “live” and XStreet will be switched off.  Both of these latter statements would suggest that more than just merchants will be accessing the “beta” Marketplace from the off…

Like so much else that goes on, it appears that, having extracted their left foot from the smelly morass surrounding the premature release of Viewer 2 and the epic brokenness of the new search,  there are those within LL fully content to immediately slam their right foot down in more-or-less the same pongy mess when it comes to the Marketplace.

Mind, you, that said, I do admire Grant Linden for actually inviting people to e-mail him personally to be a part of the Marketplace beta. With something like 10,000 merchants on XStreet as it stands, there is a chance he’ll not tunnel his way out from under the mountain of e-mails much before June 30th, poor sod.

To far to fast?

Posted on by Inara Pey

More theories as to what has prompted the recent “restructuring” at LL are popping up.

While Hamlet offers a concise argument, I still don’t buy his “Viewer 2 has failed to increase adoption” line, for reasons already stated. Viewer 2 doesn’t exist in a vacuum, to “increase adoption” it needs support – advertising and promotion well beyond the walls of the Second Life garden, and this has yet to happen in any real way.

Similarly, it is hard to judge what impact the SL Enterprise issue has had on LL’s fortunes – if any. In terms of straightforward revenue generation, I’m inclined to agree with Gwyn Llewelyn (to a point) and say, not a lot. SLE was, from the start flawed, again, for reasons I’ve gone into at length … several times … previously. However, I can see the Hamlet is potentially hitting the mark here in that there has been a negative outcome in so far as possible projections of cashflow into the LL coffers as a result of the SLE launch not achieving any significant levels are concerned.

Again, products don’t exist in a vacuum: some projections as to the potential take-up of SLE and the possible partnering of its use with the renting of SL Workspace sims must have been carried out at some point in Linden Lab. And having a company internally translate a projected income into something that influences their entire bottom-line financial structuring is not a rarity. Even big companies can get it wrong, issuing profitability warnings when sales fail to meet expectations / forecasts…

In both Viewer 2, the New User Experience, and SLE, I think it is more a case that those running Linden Lab simply took a gamble – risking stability and steady-state growth in order to re-invent the Second Life wheel and spin it up into a rapid revenue earning machine that could draw in the trendy and the shiny in terms of casual and business users.

In short, in the drive to make Second Life “profitable” in a very real sense and break free from the constraints of being considered a “gamble” for new investors, or still sporting the buffed-up shine of a “start-up”, Mark Kingdon and his fellow executives simply tried to drive LL to far to fast. The gamble required large-scale expenditure, it required personnel expansions that were perhaps not the wisest. Linden Lab simply over-extended itself.

This doesn’t mean that the management team themselves have massively failed; companies can and do get it wrong.  When they do, the wise ones take similar steps to LL: they retrench, they lay-off staff, they reduce overheads. And while some may see the laying-off of some 30% of staff as “massive” – the reality is, LL are in fact bringing staffing levels back to the “pre-expansion” levels of last October when, as Hamlet points out, Kingdon was talking about recruiting some 70 staff.

If anything at all, the fact that someone within LL has reacted so swiftly to the situation could be seen as completely positive: the errors have been realised, the need to retrench to firmer ground agreed to and the necessary action taken. While it has hurt a lot of people within LL in the process – surely it is better the hard steps are taken now, than the company wallow on in the face of potential waning income streams and increasingly upset investors edging ever closer to pulling the plug once and for all?

The flipside to this is, of course, that if the above is true – that those at the top misjudged their market and their platform – then the blame for this rests in one place and one place only. And it is not among the departed souls, so to speak.

As others have said, and I’ve analysed, and Grace McDunnough oh so eloquently phrased it, in careering in the direction of the shiny and new, Mark Kingdon and the executive management team again demonstrated that they simply don’t grok what they have. Rather than embracing the community already on their doorstep  – the community that has shown a dedication to their platform that has translated into hard dollars for the company, Linden Lab has time and again demonstrated everything from lip service through indifference to outright hostility towards its customer base since the end of 2006.

Under Mark Kingdon’s leadership these mixed attitudes towards the existing user base reached new heights; first came the OpenSpace / Homestead debacle; while not the blatant bait-and-switch many claim, it did hurt and upset a very large number of SL “residents”; then came the increasingly vocal and anti-resident demands of people LL chose as strategic partners  – people like Justin Bovington of Rivers Run Red, who gained somewhat tacit support from the likes of Amanda Linden; then came the entire Adult Change fiasco, in which Linden Lab blatantly demonstrated its lack of concern for the well-being of a sizeable portion of its community that represented a major influx of funds to LL in terms of land and overall in-world revenue transactions through the sale of goods.

This in turn gives rise to another, and very fundamental reason as to what “went wrong” at Linden Lab – and in fairness, it pre-dates Mark Kingdon’s tenure at Battery Street as well as cutting through a lot of Hamlet’s more corporate-perspective speculations. It is simply this:

Linden Lab lost sight of what their platform really is.

When all is said and done, all the debates held, the navel-gazing done with and with all the cows home, milked and safely in their stalls, Second Life is at its heart a recreational activity. True, it is a highly unusual one in that a) it doesn’t have any quantifiable goals in the same way that other “games” do – but then, I didn’t call it a “game”; and b) it enables those participating in it to not only spend “real money”, but also earn it as well.

Instead of focusing on the ability for Second Life to engage, inspire and ensuring it remained an “open” and balanced environment in which the words your world, you imagination had genuine meaning to whoever came into SL; Linden Lab chose to start tinkering with the fundamentals of the platform – not so much the technology – but the manner in which SL could be used. They started slanting it this way and that, trying to capture real and imagined markets, chasing illusive (and sometimes imaginary) goals. In doing so, they fell victim to their own  – dare I use the term – propaganda as to the potential of the platform, with the result that when things didn’t turn out “right” the first time (the ’06-’07 “boom”), they started tinkering and tipping things more aggressively, further losing sight of the potential before them, and thus created a downward spiral that has done much to alienate those who have most supported the platform and within whom, LL had perhaps the strongest allies who might have otherwise helped spur on the growth of the platform.

It may well be that the end of the road is now in sight and that, as Hamlet speculates, the company is quietly being prepared for outright acquisition; it may also be that the management team are attempting one last-ditch effort to make LL work by switching tracks and going the SAAS route, as I and others have speculated.

In looking at the ToS, it is easy to see that in its restructured form, it supports either of these eventualities. So does the restructuring. Were either to occur, one would have to say that, in purely business terms, the management team have “succeeded” in “keeping Second Life alive”.

In terms of the current user base and the potential that it once – and still – represents the truth is very much otherwise.

Restructures, ToS and licences

Posted on by Inara Pey

Gwyn Llewelyn replied to my post on the restructuring at LL, and while we differed in some views, she nevertheless raised a point that has taken a while to percolate through the grey fluff between my ears and mingle with something I posted regarding the sudden launch of the heavily revised ToS.

At the time the new Terms of Service came out, I asked if LL might not be putting the paperwork in order, suggesting that they might be moving towards a hiving-off and licencing of the server-side software.

Despite all the soft assurances from Mark Kingdon about the health and vitality of Linden Lab, as circulated in his recent e-mail, could it be that the announcement of the restructuring be a further step in that direction?

If I’m honest, Prokofy Neva spotted the parallel before me; although she takes a slightly different angle.

In the ToS, LL have pretty much redefined SL as software as a service (SAAS). This helps make the platform itself suitable for licencing – letting other companies come in a take on the task of hosting the platform, as I’ve previously mentioned. This benefits LL from the need to invest massively in additional hosting efforts elsewhere (such as in Europe) with the aim of reducing latency. It also relieves them of the burden of supplying customer support services, since this would fall under the remit of the licensees. At the ame time, LL generate income through a licence structure (based on the server count? the number of actual sims?) that also enables them to retain the IP on the software and thus control its development.

Certainly it is doubtful a purely “land sales” model is sufficient to keep LL afloat, and licensing deals have traditionally been far more lucrative to software companies, so I’d be very surprised if a shift towards such a model hasn’t been considered by some at the top of the LL tree.

They could even hive-off the operations they currently have into a holding company, as Prok suggests, which in turn could operate a number of sub-leasing deals.

Again, moving towards browser-based accessibility for the platform (or possibly offering as an option alongside the Viewer) fits this scenario, again for reasons I’ve stated: it encourages those who would otherwise fight shy of “trying” SL to do so, simply because it no longer necessarily requires them to download and maintain software.

The browser approach also increases the potential attraction business and education may have towards SL as a platform. A shiny new toy delivered direct to the desktop within an browser’s existing functionality is far more attractive than buying a “virtual world modelling tool” which requires you to install and maintain a clunky client front-end on every single desktop PC in your office / classroom environment.

Licencing the platform also offers potential benefits for LL’s business hopes: a couple of strategic “partnerships” with suitably focused hosting services could see the development of Justin Bovington’s longed-for “business oriented Mainland”: a secure environment to which companies using Second Life on the business front can meet and intermingle via “shop fronts”, as an example. Again, LL win in that they lose the overhead of running the service, but gain on the licensing of the platform and in the potential consultancy spin-offs.

Turning as well, for a moment, to Mark Kingdon’s e-mail to residents on the structuring, and risking going off-topic from the above speculation.

I’ve previously-suggested that the structuring PR may have been poorly-worded, giving people the impression that LL were going to overthrow the Viewer in favour of a purely browser-based method of access SL when in fact they may have meant the browser option might be in addition to the Viewer.

Mark Kingdon’s letter to users suggests this may well be the case, as he states: By bringing new people to Second Life, and by increasing the ways in which people can interact with the world and with the people, places, and things within it. Note the emphasis. Not “changing the way in which people can interact”, but “increasing the ways” – this really does suggest to me that the browser approach is intended to be in addition to the Viewer.

No chicken supreme

Posted on by Inara Pey

Well, the winner is announced. The Tech Virtual Museum Workshop has won the 2010 Linden Prize. Reading about the Workshop suggests it certainly ticks all the required boxes for the Prize, and so congratulations to those behind the project. It’ll be interesting to see what the $10,000 US yields within the project in the future.

Beyond this, I’m amazed and mystified at the number of people who have leapt to the defence over the inclusion of Sion chickens as a finalist. From many of the reasons cited for their inclusion, it seems apparent that quite a few of those leaping to the chickens’ defence actually haven’t grasped – or have chosen to ignore  – the criteria of the Prize. It’s not about in-world activities, nor is it about commercial endeavour, enterprise or success – all of which seem to be the rallying cry of many who have defended the chickens’ inclusion in the first place.

More puzzling still is the attitude of others, such as my dear friend, Ciaran Laval, that it is “OK” for things like the chickens to be included so long as they don’t win. This is something I simply cannot get my head around – together with attitudes that amount to people supporting the chickens just so long as they don’t win – and indicating that they’d have a change of tune were the chickens to actually win.

The only way I can describe such view is, well, as being two-faced. If it is OK for something like the chickens to reach the finals then sorry – it should be accepted that it is OK for it to go on and win. To support a nomination (that has probably come at the expensive of other entrants that more properly fulfilled the criteria of the prize in the first place) and then threaten to protest long and loud should it actually win strikes me as being as baffling as the chicken’s inclusion in the finalist list in the first place.

It matters not whether the chickens actually won or not. Their inclusion simply undermines the reasons for which the Prize was originally set-up. I wonder how many people will be so accommodating next year if we see the likes of a latter-day Anshe Chung or United Sailing Sims listed as finalists. After all, there is little commercial difference between the likes of an Anshe Chung and a Sion Zaius, while something like USS-SL offers the same kind of “immersive experience” that has been used in the defence of the chickens’ nomination as a finalist. I rather suspect that were this to be the case, those leaping so readily to defend the chickens would be the first to howl long and loud.

Chicken little for the big time?

Posted on by Inara Pey

Colour me gobsmacked.

Is the grid so laggy that April 1st has JUST arrived at Linden Lab’s offices? I’ve just read this, and I’m utterly floored.

Don’t get me wrong….I think the Linden Prize is a great thing. For those of you perhaps not familiar with it, the Prize is an annual award LL give (to the tune of $10,000 USD which is given to the “Second Life Resident or team for an innovative inworld project that improves the way people work, learn and communicate in their daily lives outside of the virtual world” [emphasis mine, for reasons that will become clear].

The listed finalists include very worthy projects such as AIDS / HIV awareness; NASA’s Colab educational facility; the Open University (potentially the world’s foremost distance-learning university, with a global student intake of over 200,000), Virtual Helping Hands, that links volunteers who help individuals with disabilities, various education-based projects…

…and Sion Chickens….

You read that correctly. Sion Chickens. Yes. Those chickens. The ones people (allegedly) love to kill – or more particularly, the ones that eat up sim resources faster than a politician can simultaneously kiss a baby and steal its lollypop.

Now, it may well be that “raising”, “feeding” and “breeding” virtual chickens could well be a fun thing to do (even if it does see your estate “owner” suddenly ignoring you entreaties for help, or your neighbours looking at you peculiarly while holding knives or handguns or large blunt object-shaped prims….). But come on!!! Are we really supposed to believe that this sim-screwing, resource-gobbling, lag-spewing pyramid scheme actually, improves the way people work, learn and communicate in their daily lives outside of the virtual world??

Well…yes, if by “improve” Linden Lab means the potential for those suffering from the impact of said chickens conspiring via real life to locate those owning them, pay them a visit and casually persuade them as to the error of their ways*- then I suppose there might be some logic to including Sion Chickens in the list.

However, the only reason I can find for the inclusion of the Chickens among the finalists is because they apparently stimulated the SL economy in 2009, encouraging an alleged 60K of “new users” to participate in the economy by buying the chickens and their associated, um, goods.

Again, I’m not against stimulating the economy (I’m a content creator, after all). It’s a good thing; it’s healthy to see more people get involved in SL: and if they buy chickens, what else might they buy / rent? Land (they’re going to need somewhere to put their chickens); a house (where they can sit and watch over their chickens); furniture (so they can have something to sit on while watching their chickens)….

But this isn’t the (alleged reason the Linden Prize was founded. Period. End of discussion. As such, for the Lindens to place it in the final 10 is nothing short of cynical, promoting as it does the view that making money (for yourself and LL) is as merited improving the way people work, learn and communicate in their daily lives outside of the virtual world. What is worse is that if, but some godforsaken chance  M and his gang actually declare the chickens their winner (or even a joint winner), then they will have undermined any credibility the Prize currently holds among residents.

If not actually reduce it to outright farce.

*aka “beat seven bells out of them”