We’re now on the aftermath of the OpenSpace drama, as thousands of owners of OpenSpace sims, after weeping and moaning, are dropping their sims or consolidate them into “regular” sims. My friends report that almost a thousand sims were immediately discarded after the announcement (there is no market value for them), but I have no clue if that’s true: we’ll have to patiently wait for LL’s “official statistics” to see the results (most of these “sim counters” out there don’t take into account non-visible land, of course).
I think that dropping so many sims was a bit premature, though — after all, people will enjoy the same price until the end of the year, and OpenSpace owners could simply drop it at the end of December (timing it right so that they wouldn’t pay more monthly fees). But, alas, like the worldwide financial crisis, it’s the perception of a crisis that counts…
As usual, Linden Lab is counting on residents to calm down, bite the bullet, and focus on other things. They know that Second Life® residents have short memories: once a few thousands have left SL, nobody will remember any more what “OpenSpace simulators” are. As a proof, take a look at the vote count at the JIRA: after a huge exponential growth in votes in the first few days, it just got some extra hundred votes in the last week. People are forgetting.
In the mean time, I was looking for an answer for my own question on the last article on the subject — the question of why Linden Lab suddenly dropped the OpenSpace product and replaced it with something pretty useless. And by chance I have met Pavig Lok; we’re often together at the Thinker’s meetings (every Tuesday at 3 PM, in case you’re interested — it’s announced on the Linden Event list) and this was an opportunity to learn about his ideas.
The Three Types of Geeks
Let’s be clear here: Pavig Lok is one of the wisest persons I ever met in SL. Sadly, he hasn’t felt the urge to continue his well-thought blog for a while (“writer’s block”) but he’s always delightful to listen to. On this particular day he was quite inspired and very willing to share a bit of his vast wisdom to a tiny audience of two (LittleToe Bartlett being the other one!).
His first evaluation was discussing the changing population of Second Life. One thing that becomes clearer to me as I get older (in SL 🙂 ) is that “Second Life is not for the masses”. We’re sort of an elite of very special human beings, the ones that “get” SL, and we’re different because of it. LL’s purpose as established on their mission (“to improve the human condition through the use of virtual worlds”) will probably not work well — because SL is not a mass-market product. When you read people on Slashdot — many of which are expert computer programmers and system administrators — totally bashing SL, year after year, you start to think about the why. Why is a normal, intelligent, open-minded person so against SL? I asked this quite often when seeing my closest friends and former business associates to have such an aggressive anti-VW stance. But we worked together; we “understood” the Internet; we “got” the World-Wide Web. We shared the same ideals; we promoted open source software together; we were all for communities, social web sites, and reaching out for an audience where race, creed, nation, age, or gender were irrelevant; in many cases, we dreamed the same dreams and shared ideologies and beliefs. But I stood alone when embracing virtual worlds; they remained on the scornful side, laughing at me. Why?
I had no answer, but Pavig Lok has a very good one.
First and foremost, Second Life is, ultimately, GeekWorld — we might claim otherwise (I, for instance, am too old to be called a “geek” 🙂 ), but what we “special” human beings (a.k.a. “residents”) share is a certain amount of geekishness. It might not be too much. For some, it just means replacing Internet Explorer with Firefox on their desktops. Others use old CD cases to hold their jewelry but would never look at their faces on a mirror and admit they’re geeks too. Not all geeks are white male late-teenagers/young adults with glasses, living in basements and attics, getting sun tans from the glow of old CRTs. In fact, a certain geekishness is even a bit “fashionable” these days. You can fancy Prada or D&G and still be geek enough to text to your sweetheart. You might just watch soap operas with your friends, but when they go away, you secretely turn your Wii on — even if it’s just for the aerobics software.
But just the slightest touch of geekishness, even if surpressed, makes us log in to SL. As opposed to a “mainstream” product. And that’s why SL ultimately can only grow to fill a niche of “slightly geeky people” and not expand much further.
Having a product for a niche is not bad. After all, that’s what Apple (or Harley-Davidson) does. They still are profitable companies — and they make it quite clear that their products are “only for an elite”. An elite that buys the brands’ message and feels a certain belonging to the group of people that uses that brand, and behave accordingly (PC users refer to their computers as “their desktops” or “laptops”; Apple fans have Macs, MacBooks, iMacs, not “computers” or “machines”. It would just feel weird calling a Mac Pro a “desktop computer”. It’s a Mac Pro!). I refer you to Douglas Atkin’s The Culting of Brands, which was for me an eye-opener explaining how successful a certain brand can become if it appeals to a certain elite status of its users, which feel “different” from the mainstream, and how companies can so successful exploit niche markets without having a mainstream product. (Robin, if you’re reading this, pick that book!)
Now, the successful cases have, indeed, found their market. And this mostly means: addressing a product to a niche of people who are willing to pay (premium) for a service or product that makes them feel different from the rest of the masses.
Is Second Life such a product? Assuming that its niche market are geeks — computer geeks, designer geeks, architecture geeks, fashion geeks, social geeks, music geeks, you name it — the question is: are they willing to pay for this product, and, if so, how much?
Under Pavig’s model, geeks come in three flavours. I can’t remember the actual names (and my apologies for Pavig for forgetting so much so easily…), but the first type is the libertarian geek. These are the wild Californian types that embrace any kind of computer technology that will allow the world to become a better place (notice LL’s mission…). They obviously will flock to SL like moths are attracted to a flame — this is the place to be for libertarians, in a world they build with their own hands, with few laws, a lot of freedom (to create, to express yourself), and “a dream come true”. SL is the libertarian utopia, specially so when the client was released as open source, and there are open source servers available too. Nothing could be more perfect than SL — and that’s why these types are faithful until the bitter end and will never exchange SL for anything else, because there is nothing else like SL.
Unfortunately, these are also the type of geeks that are not willing to pay for such a service. They’ll eagerly become Basic accounts and use as many freebies as they can, and, of course, also create their own freebies to share. Sharing — not corporate economics — is one of their drives. SL is the ultimate sharing platform, so they live in it like fish in water. But they couldn’t care less about economics. If LL fails, that’s too bad, they’ll switch over to OpenSim-based grids and continue the sharing there.
The second type is the capitalistic geek. They certainly “get” SL, and totally understand the motives behind its existence, as well as being very good evangelists to promote the use of virtual worlds to their corporate bosses and clients. Unfortunately for LL, these are the types that will almost always just sell their bosses a different virtual world — one that is closed, proprietary, and far cheaper (and yes, it might mean Google Lively, or OpenSim). This basically means that LL won’t get a huge income from this group, since most will quickly leave and bring their business elsewhere.
And the third type is the clueless geek. They will come to SL because it’s the place to be. They’ll roam the world in search of that special thing that SL is supposed to be, but can’t find it. Nevertheless, they’ll still be good residents, always searching (in vain) what makes SL so special.
Unfortunately, while they search, they’re not going to spend much, until they’re sure they find out why SL is so special, which will be — never.
So this pretty much explains why SL can have 15.5 million registered users but only a handful — less than 1% — willing to pay for it. As a business model, it’s terrible. Searching for a “market” among a certain class of users (geeks) that is mostly unwilling to pay for it is not very scalable, unless, of course, LL figures out a way to extract from those 1% enough income to pay for the 15.5 million to have fun.
Which is exactly what LL does, of course.
And this is ultimately the reason why nobody else is using this business model. It’s too risky. For the “competition”, a less risky model is not making a simple “copy” of SL, but something entirely different.