In 1997, Apple had just completed a fiscal year where they lost about $1 billion on $7 billion in revenue. The company was worth about $4 billion. Rivals like HP and Dell were worth about $62 billion and $8 billion, respectively.
User dependence on desktop software meant that only the very loyal or the very strange used Apple’s products. Everyone else wanted a common desktop platform. This was the worm in Apple's vision. Apple, like many companies today, wanted a cornered, captive market; specifically the education and professional graphics markets, where they could sell 1000 computers at a time in big chunks. They weren't really concerned with the small desktop user.
We all saw how that went for them. Apple lost out to the ubiquitous desktop market at a time when people were tired of being under IBM's thumb, itching to escape it and Apple had a huge lead in product awareness that could have leveraged them onto the desktop, avoiding the Microsoft catastrophe. An inferior architecture and shady business practices became the norm because Apple had myopia. They also lost untold millions in revenue from this practice.
Apple is now the world's second-most valuable company, after Exxon Mobil Corp. On April 20, it reported net income of $5.99 billion for the January-to-March period. What Steve Jobs did for Apple in 1997 was restore vision and purpose.
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The real problem at Linden Lab
This series of posts are less about technological problems with Second Life then they are about the entire experience of SL. There's a real reason Google was once considered the Holy Graal to work at; the company was geared towards its employees and its vision.
From the material I have gathered and thought on from countless articles, blog posts and conversations with many people, I am convinced that nothing LL can do in the technological department will help them stem the tide of user attrition if they do not address the serious problem they have in their relationship to their product and their customers. No fancy tricks, no sparkly eye candy; not even datafarming is going to do more than delay the inevitable. That is, the inevitable if Linden Lab doesn't revitalize its vision.
The overwhelming "user experience" that LL covets so highly can be reduced to a simple statement: No one cares about a company that doesn't care about them. I only need point to the ongoing debacle of Sony, its stance towards its own failure to follow even nominal security procedures with its customer data and how this may destroy everything they built with the PS series as far as customer desire and loyalty. As I write this, Japan is refusing to let Sony restart the PlayStation Network due to revelations this week that not only did Sony know its network was horribly insecure months ago, the network can be still be hacked from a simple browser-and-google-search [google hacking]. Sony did not secure their network as they said they did and the word is out that Sony is untrustworthy. How much current and future revenue do you think Sony has lost and will lose over this episode that could have been avoided or staunched with a little conscientious action and foresight?
Many voices, one perception
From many points of the customer base the perception is widely-held: not only does LL not care about its customers but it doesn't seem to care about its world anymore. It's running on inertia. People who have been inworld for a combined total of thousands of hours are screaming "iceberg!" but the helm isn't listening.
From the hostility of the "Welcome" areas to the arrogance on the JIRAs and forums; from the cavalier stupidity of reducing edu discounts (clue: educationals bring new eyeballs; some of those eyeballs stay around; edus bring new users and great publicity/awareness) to the reneging of openspace use parameters and pricing; the stone deafness to the overwhelming feedback on Viewer 2.mistake; all of these problems reduce to one: bad management.
This is an image problem. When you have an image problem this big, you can't stonewall it. You won't fool investors and you won't fool customers. You must address such a problem directly. In the age of the Streisand Effect, you can't sweep your troubles under a rug, move on to another market segment and expect to avoid the consequences of your bad business decisions.
I do not see a concerted effort from Linden Lab to publicize the most positive and compelling justifications for Second Life. Why do LL's Marketing and Publicity departments seem to consistently push vapor-talk and abstractions when there are so many sterling examples of the importance and use of this technology?
Where are the articles about the groundbreaking arts scene? Where are articles about what UWA, UTSA and the rest of the universities are doing? Why did I have to go outside SL to find out about the FEMA Emergency Trailer training program in Second Life? How about the work being done by the Autism community? The monies raised for Relay for Life? The money raised for the relief of the Japanese people impacted by the Fukishima disaster? The efforts of the American Cancer Society in SL? Why are the logon screens the same stupid pics I have seen now for three years; outdated, uncompelling, boring? Why did Marketing not make more than a token effort to publicize Burning Life/Burn2 and other high-profile events? Why are they silent about Skye Galaxy's amazing use of SL to bootstrap a RL career? What about Pop Art Lab? What about Bryn Oh's recent RL grant based on her SL work?
SL seems to be being promoted as some Barbie-world now, where you can dress up your avatar! Have a virtual breedable bunny! Have sex with strangers! Play dollies! BUY STUFF!!!! You know, if I want to play Barbies, I go to Barbie Girls. If I only wanted raw cybersex I'd be sexting or hanging out in Red Light Center.
As one commenter stated on my blog, "I don't want SL to be Facebook. I already have Facebook. If I wanted to be on Facebook, I'd go there, and I do. But I'm in Second Life." That is the perfect capsule argument voicing the opinion of many. I think trying to make Second Life like Facebook, or Twitter (which, btw, survives on venture capital, not income) or MySpace or Google or whatever company-du-jour catches the "oo, squirrel!" attention of the Board is a mistake in many ways. There's already a Facebook; SL ain't gonna be Facebook. You're late. You shoulda been there. You can't catch a running train. You lag, you lose. Hasta la vista, baby.
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Vision
Clifford Stoll most famously opined in a post from 1995 "This internet thing is just a fad. It won't last." I guess 25+ years of existence and growth have proven Mr Stoll wrong.
"Visionaries see a future of telecommuting workers, interactive libraries and multimedia classrooms, but this is nonsense."
Wrong: we have all three now. You can get valid degrees from online universities. Many people telecommute. There are quite a few interactive libraries (pushing the definition, Google Sketchup is an architectural library)
"They say the freedom of digital networks will make government more democratic. I doubt this."
Wrong:
"The truth is no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works."
Wrong on three counts: ask the WSJ, NYTimes, etc. etc. See above.
"Try reading a book on disc. At best, it's an unpleasant chore: the myopic glow of a clunky computer replaces the friendly pages of a book. And you can't tote that laptop to the beach."
Wrong: Ipad, Kindle, etc.
So what was so far off in Stoll's 1995 assessment of "this internet thing"? Why were his predictions and observations so far off the mark a mere 10 years before the almost-essential digital world connectivity of 2005-2011? He was only seeing what was already extant and not thinking in the future. He suffered a lack of vision, judging the future potential of the medium on his past experience with computers and networking in a closed and hierarchical system, not understanding that the Internet was a total departure [game changer] from these types of systems.
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Assets
1. The most important asset LL has right now is their user base. Many intelligent, technically-competent and experienced people are in Second Life now. As a class, these people ooze potential. Many spend much of their free time in SL and have for years. They deal constantly with technical, political and creative problems endemic to their environment and solve problems. There isn't enough money in the world to pay "normal" people to work as hard as many of these people.
Someone like Jeri Rahja has put her own money where her mouth is by single-handedly supporting many virtual artists through sponsorship at her own expense. Volunteers like Wizard Gynoid help out at
2. The second asset that Linden Lab has at present is their workers. Reading the entries for Linden Lab at glassdoor.com is very disheartening. Some of the best technical workers in this growing field are frustrated in their inability to do the work they signed on for because of bad departmental decisions and petty interdepartmental politics. Some of the best work done on the infrastructure and architecture in this field is mothballed by managers who don't understand the technology making decisions about the technology.
Warnings of a technical nature (like overloading sims on cores being a severe problem down the road) are undercut by accounting types who do not understand anything beyond "we can squeeze 16 sims onto a dual-core machine and save moneh." These uninformed decisions and are the equivalent of a computer being sold with Windows 7 and 1GB of RAM: sure, it will boot up to an opening screen and will appear to function... until a typical user actually starts using the machine; adding programs, antivirus, active desktop widgets, open browsers, watching streaming content... in short, starts using the computer as advertised. It quickly becomes apparent that the promises made/selling points were either disingenuous or outright deception; a machine with 1GB RAM running Windows 7 (or even WinXP) will quickly become unusable for anything other than staring at a Windows logo. After such an experience, the consumer is liable to never go to that store or buy that brand of computer again. Penny-pinching can be the ultimate company sabotage.
If you are going to hire some of the brightest and best in the field, you can't hamstring them. When a techie explains a problem, they are envisioning the future consequences of that problem. They are trying to save you money and trouble in the long run. They are working for you. Viewing them as a drain on your bottom line is stupid.
3. The third huge asset that Linden Lab has is their experience in architecture. Despite their stumbling and fumbling, Linden Lab is still the pioneer in hanging together a true virtual world. They have reams and reams of information on technical challenges, sociodemographics, server load, distributed computing, programming and the rest of what it takes to develop and maintain such a huge platform.
LL could be the leader in this field. LL could understand that they are doing the initial pioneer/groundbreaking work that Google did from 1996 until its first IPO in 2004 [it's useful to remember now that Sergey Brin and Larry Page went to Excite CEO George Bell in 1999 and offered to sell their new search engine for $1 million USD (which Excite could have easily afforded at that time) because it was "taking up too much of their time from academic pursuits." He rejected that offer... history must make him gnash his teeth daily]. LL could have some faith not only in their own vision but in the vision of many people who have stayed with this field for over 30 years, have experienced the rise and fall of many companies and business strategies and have come to intimately understand this medium and its potential.
Linden Lab might not end up to the "the only VW" but surely it would be both respected and profitable as "The Progenitor" with the amount of talent, research and resources it can command today. It might become the Mercedes of VWs. It might, through licensing of server space, code and content, become the Google of tomorrow.
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The Answers Are There
Wikipedia entry for Excite:
"In the 1990s, it was one of the most recognized brands on the Internet"
"Excite continued to operate until the Excite Network was acquired by Ask Jeeves (now Ask.com) in March 2004. Ask Jeeves promised to rejuvenate iWon and Excite, but did not. Ask Jeeves management became distracted, according to the East Bay Business Times, first by a search feature arms race with Google and Yahoo!, and then by its merger with Barry Diller's InterActive Corporation, announced in March 2005."]
There are many grids operating now that would not be in existence except for
LL has lost some of the most innovative, experienced people in computing through their own worst-practices. They have squandered resources. They have alienated their customers, most of who should be considered as PR assets. They treat the best PR/Marketing aspects of their product like embarrassments and allow outside media to direct and control the perception of Second Life.
Virtual worlds have given birth to the art of machinima, which is widely-expected to be the next Hollywood Golden Plum, advancing the art of cinema in the same way sound recording, Panavision and camera dollies did. VWs show enormous potential in the fields of sociometrics, demographics, psychology, architecture and design, synergy, collaboration, visualization of concepts, disaster training, the arts & sciences... This could be an entire series of posts in itself. I needn't delineate all these possibilities; you can read them yourself from some of the leading bloggers and thinkers in Second Life/virtual worlds.
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Thy Rod, it comforts me
The recent presence of Rod Humble, new CEO of Linden Lab, is a hopeful sign. Mr Humble's experience in many online communities (Sims 2, Sims 3, Everquest), his hands-on experience in developing games ( The Marriage, Stars Over Half Moon Bay and Last Thoughts of the Aurochs) and his recent Twitter presence and willingness to engage customers of Second Life give me more confidence in his knowledge of this medium than did the previous CEO Mark Kingdon, whose experience was confined to marketing and accountancy [I worked for an accountant for 20 years, so I can safely say that in my experience, accountants are good at counting all the little beans, but they are very bad at seeing any horizon beyond a balance sheet. A balance sheet only shows you what you've gathered so far; it does not show you a road].
I am not a blind believer or fangirl; I am giving Rod some time to settle in, poke around and gather intelligence and information. It's a big job turning a company around and I am not OCD enough to demand a day-by-day state change in such a large endeavor; neither am I a fawning sycophant who will accept empty words without backing actions.
Rod's engagement on Twitter in asking honestly for suggestions from the customers of Linden Lab (Mentoring, Mentoring, Mentoring) and his involvement in the Elf Clan payment problem (only one instance of a real financial-flow problem inside the Lab that I think a good CEO would be very concerned about) show more potential in his short tenure as CEO than all of Mark Kingdon's lofty pronouncements and rule-by-fiat or the showboating "return" of Philip Rosedale.
I am not the only person who has taken this involvement as a Good Sign, worthy of watchful trust; taken this "hands-on" approach to company management as more hopeful than anything coming out of the Lab for the last 2-3 years; taken this as a much more compelling reason to remain in Second Life than any new viewer, dongle, jiggly bits or Achievement Systems offer to me.
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"The reports of my death have been greatly exaggerated." - Samuel Clemmons
The people rushing in now to declare "Second Life Dead" or "failed" are the same people who tried to throw up a web page in 1995 that was merely an electronic replica of a business card with no information, no use of the resources and no idea of the possibilities of the net.
They were the people that declared the Internet "a passing fad"; the people who blew multibillion-dollar deals because of myopia and miserliness; the people who waited for a gold rush from their 1-page non-informative, bland, dull, technically-challenged and ugly offerings and whined like babies when their pitiful excuses of a "web site" didn't bring them buttloads of ca$h in a year while the net proliferated because they wouldn't listen to web designers, who tried their best to explain that the WWW was not like The Yellow Pages and that they needed a little patience and follow-through. These are the people who cannot envision another system outside their own past experiences. These are tomorrow's buggy-whip makers.
These people have already moved on, sniffing at the new, unable to understand the fundamental sea-change coming but merely splash about in the shallows, disappointed that they hadn't caught a marlin or discovered sunken treasure in their 2-hour jaunt to the local beach. These are the Grazers, the Nomads moving constantly from here to there, stripping an area of its resources, plundering the treasures of other civilizations for their own ends, contributing nothing towards the future and making no lasting cities or monuments. They pass through
I've tried to stay away from a lot of blue-sky material in these posts, offering instead a pragmatic reality-check from a business standpoint. I am not ignorant; I know that even the most selfless endeavor on the part of people needs an income stream. I am not suggesting Linden Lab become a philanthropic organization (despite the yammering of Wolves who put words in other people's mouths). I believe the profitability of Second Life and virtual technology can be made to work.
I do not believe Second Life is dead. Nor do I believe its technology has failed; the proliferation of grids beyond Agni demonstrates the truth of that belief. I do believe that Linden Lab and Second Life are at a crux. I believe that Linden Lab and Second Life could, with some good management, attention to PR and the help of its many knowledgeable customers, turn around and become once again a leader in this technology. I believe the uses and potentials of the platform to be a fundamental part of the future architecture of communication. I believe that VWs and grid technology are at the same point that the early Web was in the late 90s.
It will take some vision on the part of LL's management to recognize what they have and how it could be put to use to further the Company's aims (profitability). It will take work to rectify the mistakes LL has made in their relationship with their customers (bad PR) and their employees (over-micromanagement). It will take the admission that fundamental architecture is not a thing of moods; to paraphrase Gurney Hallack in Dune, "Mood's a thing for cattle or making love or playing the baliset. It's not for business."
Business has moved into the next phase; the paradigm shift. Modern business is not chess, it is Go. Lateral, orthogonal thinking is needed for survival and profitability. This truth is readily-available in the business and financial sections of your daily newspaper (or daily news aggregator).
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Recalcitrant
We are the Recalcitrant, aye. We have stuck with this revolution in communication and technology for a quarter of a century and more. Along the way we have discovered, created and invented things that are now highly profitable. We have evangelized; we have encouraged. We have poured our time, talent and money into this continuing evolution of the next paradigm because we have vision.
I and the other Recalcitrant, who might also be labeled Adamant [unshakable in purpose or determination], Faithful, Visionary or plain old People Who Stick With Things Because They Believe In Them continue to work and play in virtual worlds as we have done for 14+ years; to offer suggestions based on observation and long use of the technology; to offer our creative visions of the possibilities for future growth. We are not at all averse to business but we think in terms of long-term stability (which means long-term profitability) and identifying problems and bottlenecks that prevent the smooth flow and growth of the Company, because the Company provides us with the platform we believe in. We have some chops and we think about the future.
The only thing we are really asking of Linden Lab is to reconceptualize the parameters of the problem.
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ok, I'm done ^_^
16 comments:
Goddam! That is some of the most real, honest writing about what is happening in SL that I've read in a while. And your views on the corporate chimps ruining anything worthwhile is spot on. And I love the crescendo of prose poetry like, "They pass through Ephesus or Alexandria chiseling off bits of gold and stealing mummies to be sold for profit..."
I only follow one other blog but will now follow urs.
Keep up the good work.
-Cecil Hirvi
Excellent blog Miso. Very long... but perhaps necessarily so.
Is Second Life dead? Well, the body isn't cold. Seems to still be breathing. But the pulse is getting weaker. Rod is a bright spark that everyone is pointing to, and who knows, he may have what it takes to bring things back to life. Or not. As you say, too early to tell.
Every point you've made in this article seems valid. Yes, Apple was nearly bankrupt when Steve Jobs came back in and turned it around. The iPod is an innovative and impressive device that will undoubtedly shift the way people compute in the future. Apple is nothing if not innovative. BUT... is Rod another Jobs? Is he the Iococca Linden Lab needs to turn them around from their self-destructive course?
Because make no mistake... their current course IS self-destructive. That's apparent in their own blogs, their own forums, in the thousands of people that are leaving Second Life. It's apparent in the growth of new grids-- grids that are booming despite the fact that they're still in infant-tech stage. People are dissatisfied with Second Life, with its iron curtain policies, with its absurdist pricing, with its abusive management.
Can Rod change that? I don't know; that iceberg is awfully close. Can he turn this lumbering ship sufficiently, and in time, to prevent its sinking?
The problem is that SL has been online for eight years, with three years of design prior to that... and it still runs like a rusty car engine. The lag is ridiculous, texture loading is inefficient... and they can't even get GROUP CHAT to work. I don't have much faith or hope in a company that can't get TEXT-BASED CHAT right. This company has never understood how important communications are to their grids.
All I know is this: my group is still on Second Life (barely, thanks to Rod himself), but we are well beyond putting all our eggs in one basket. We have ONE sim on SL. At one time we paid them some $15k a year; now we're paying them a little over $4k. That was directly their fault. Now, as a group we have some 16 sims on Inworldz... and we're growing there. As a group, we're paying Inworldz over $9,000 a year. That is money we WERE paying Linden Lab. No more.
Despite the technological inferiority, we're HAPPIER there. Linden Lab would do well to examine why that is... because most people I know haven't been happy with Linden Lab and Second Life for quite some time.
Do they still have time to turn things around? You ask some very valid and very pointed questions in your blog-- questions they would do well to consider. Unlike some, I don't believe Linden Lab has a magic rabbit to pull out of their... hat. Everything that I've seen of management reeks of ego and clueless. I don't say that to be mean-- I say that as clear observation. NO company with two working brain cells alienates its own customers and still thinks it's on the right path.
If Linden Lab is going to save itself from a headlong crash into concrete, they better do so soon. Because the ground approaches quickly, the ship is almost to the icerberg... and once it hits, it will be too late to save it.
@Cecil - ty for the VERY nice comment! ^_^
@Wayfinder - excellent comment...but long *laughing* I wish I knew how you do that; Blogger barfs on me if I go over 2 paragraphs in Comments :(
Yes, long, although this is the last Part of the original Reply From The Recalcitrant. Those 3 posts might have been one, but I had mercy. The post about EC, 'For Want of a Nail" also fits in with these posts.
I am only hoping a CEO knows his job. Rod's background at least is the closest match I have seen since I entered SL. I just hope they will let him do what he was hired for...
And as a veteran of the original VWs circa 1995-1999, I do find SL to be much more primitive than I'd expect given 10 years between such worlds :(
Long perhaps... but necessarily so.
While I too have branched out to another world... I hold onto the hope that Secondlife will turn its self around.
When I read what people like you say about Secondlife and the way it's run, I can remember my last working years when I would watch heavy equipment working a new jobsite and turning to a new construction superintendent I would tell them, "When I know stuff is wrong...it's really wrong".
Miso: "I am only hoping a CEO knows his job. Rod's background at least is the closest match I have seen since I entered SL. I just hope they will let him do what he was hired for..."
Yes, exactly. My fear at this time is that SL management is so set in its ways and resistant to changing their viewpoint, that even Rod won't be able to whip it in to shape. The Captain will have trouble steering the ship if the bridge crew don't follow his lead.
My other fear is that Rod really doesn't know SL well enough to see where the ship needs to go (I would hate to try to run such a company from ground zero, having no experience with building, scripting, merchanting or the society involved.) At least Rod seems to be listening to customers (ie Twitter) and taking his time to do some examining prior to taking necessary steps. Some folks seem to consider him slow to act; I consider that prudent information gathering.
We'll see what happens. Certainly we are living in "interesting times".
It aint over until the fat lady sings. I have hope for second life although i have abandoned it for inWordz. LL need to speak out their vision yes. But the main problem, I think, is that they lack of passion for these worlds. Its only money now....
Excellent post Miso *applause* <3
@Wayfinder - the thing about Rod's background convinces me that this is a CEO who understands that a MMORPG, or a world, is about the community of users (really, any business is).
A good CEO needn't know the fine nuts and bolts- his job is to look at the Big Picture and to identify the appropriate specialists/people and delegate authority. The gaming background, esp. community games like Sims and EQ, is at least in the ballpark.
As I have taken pains to point out, there are many good, rational and reasonable blogs out there detailing these problems; a whole community's observations and suggestions, not to mention the JIRAs, ready and willing to talk/assist if we can be heard.
It's a big job to restructure a company back to profitability, which is why I am allowing him some time. The deal as I see it now will be if LL is truly serious about turning this situation around.
@Mera - that's why I've been trying to cast my passion into business terms. I am suggesting that LL has a much more profitable beast in hand than perhaps they understand, and it is up to us to show them how our passion could make them money.
Brilliant.
Such a joy to read your eloquent summary of 'The Situation'.
Seen in a wider context, of course, Virtual Worlds are a great success and growing steadily, so the fact that LL's market share has dropped has to be the fault of the management.
Whether Rod has the balls and muscle to whip the fools into place has yet to be seen. The trouble with organisations, in general, is that when a certain 'behaviour' has been in place for a while it becomes authenticated by it's durability. It's difficult to shift those old barnacles stuck to the hull slowing down the ship... hope he's got a good chisel because, otherwise, it's institutionalised suicide.
Please write the story of my life. I have the feeling you would do a much better job than I ever could, and possibly make it almost sound like fun. ;)
nothin' but love for ya Miso.
xoxox
I've been saying it... Do not meddle in the affairs of misos, for they are subtle and quick to anger. Do not get miso started. I'm warning you.
I know I am repeating myself, but you take my breath away. Miso. How do you know so much about so many things? And then pull order out of the chaos? Hugs, Soup!
@Goldfishie- I read a lot of insightful, great blogs and articles by other people, then just try to feel the sense of it through my own writing and experience. Sorta like what artists do :D
Extremely insightful Miso - hope LL reads your blog - but the question is - Are they totally Clueless? Can Rod really do anything or is he a figurehead? That is a Big question !!! Cause if he has no power - then nothing will get done.... Oh and yes Miso - thank you for your kindness ...
Great post! I think the idea that I resonated the most with was the one about community members being the most valuable asset. It would be very interesting for LL to bring in a dozen or so of community thought-leaders (hate the term, but don't know a better one) and spend a couple days gamestorming (http://www.gogamestorm.com/).
@Jeri - I agree. It depends on what they let Rod do. So far he shows signs of being a good CEO.
@Botgirl - it's just crazy to me to have this huge resource of unpaid, technically-knowledgeable help going to waste. I did game testing before; I was PAID for it! Sure maybe not every user is at the level to help LL but according to what I've read in the JIRAs, the ones who would know how and have actually bugtracked many issues are pretty visible and obvious.
youve come to the wrong conclusions about cliff stoll.... its not that he was any "wronger" or "righter" about technology and peoples usage of it before or after his love of it 80-90s to his hate of it..90s on...
its that cliff was the born geek...perfect for the machine..a binary only thinker.. hate or love it, no ability to moderate his actions...
the irony is that his world of geeks who have "apple lifestyled" us into binary interface everything..are the current cutlure..LL a perfect example of it... and its delsuional and insane ways of working for real folks....the outcome.
cliff will be shown correct...but onyl after the binary pedulum has reveresed..and the machine breaks down by our own human hands...or we allow it, the machine to break-delete us....
we no longer allow for what the majaority of us were before "cliff"..moderates..
balance is gone... its not the way of the digit.
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