Innovation, yes, but wrong turn

No, the biggest problem — one that is crucial for LL — is that they’re not capitalising on the existing user base, but dreaming about a user base that doesn’t exist yet. Instead of thinking “what should we offer land managers more, so that they buy extra services from us?” Linden Lab is just thinking “how do we attract more users and make them stay?” Instead of improving the services they offer to paying customers, they want to make the experience for free accounts better. To a degree, that is not completely silly: a free account that is happy with the service is more likely to move to a paid service. But only if it’s worth the extra cost. Let me give you an example: voice morphing. LL launched that service in 2009. I have no idea if it’s popular or not — or if it pays for itself — but I found it very strange that, for example, Premium accounts don’t even get at least a discount. Voice morphing is subscription-based and is the perfect example of an “add-on” that would make sense as an “upselling feature”, but it has to be something that makes sense. Most people don’t need voice morphing anyway, and it’s so much cheaper to buy an external tool. If you have a Mac and GarageBand installed you don’t even need LL’s voice morphing, you can assemble it on your own using Soundflower. So there is really not much interest in that solution, except for residents with little technical experience or causal users.

A better solution would be to have a pack of extra features for special accounts, and allow residents to upgrade if they felt the need for more services. We have a bit of that in Premium accounts. Supposedly we have access to technical support, while regular users don’t. We get — hooray! — 512 m2 of “free” space every month. We get a weekly stipend in L$, which is way less than simply exchanging a few US$ every month. There is this strange feature that allows Premium users to log in to a congested grid will free accounts remain out — to the best of my knowledge, this was only put into practice once. Premium users, because they pay so little — and LL is still after the heavy sim setup fees which made them wealthy during the days of exponential growth — don’t get barely nothing in return.

All this requires serious rethinking. What Linden Lab needs is not more users, which log in one day and disappear forever. Instead, they need to persuade existing accounts to upgrade. But that requires giving them what they need and want. And first of all that means asking them what they wish. It’s obvious that the target is to squeeze land owners dry with the US$295/month. But between that and paying zero is a huge gap. There should be a tiered approach, leading to different price structures depending on the set of features that people actually require. Prokofy Neva has suggested long ago that one possibility was to give rezzing rights just to Premium users; LL somehow captured that idea with meshes, i.e. you need to have bought something from LL first to be allowed to upload meshes. The idea that having “payment info on file” is a class of users should really be taken into account by LL. These are LL’s customers: the ones that pay directly to LL. It doesn’t matter if they’re buying land, L$, or classifieds, or even just shopping through the SL Marketplace. What matters is that these are truly LL’s customers. And, as such, they should be their more valuable assets.

Of course I’m fully aware that some of the best artists and community managers are actually free accounts, and that SL would be so much poorer without them. I fully agree. This requires to be addressed by the next level: encouraging volunteers. So who cares if you’re not spending money in SL and making LL wealthier — but are instead updating wiki pages, answering support questions, filing bugs, or running whole in-world communities? That is crowdsourced labour and very valuable. LL’s task is to capitalise on that as well, because it’s as important as directly getting a revenue from them. Some might say it’s even more important (since it builds a community, and some users, thanks to a solid community, might be willing to upgrade their payment level).

Now I’m not saying that LL — specially in the recent months — is not supporting all these ideas and projects. Surprisingly, and thanks to Rod Humble, they actually are back in supporting community projects and encouraging more volunteers to “officially” contribute their work for the benefit of all (a change of policy). The issue for me is that this is not their main objective, but it should be. They are still dreaming about new users.

Well, let go of that dream. Those “new users” don’t exist, they’re just smoke and mirrors. I’m sure that a few will obviously come if everything is simpler, faster, and easier — and more fun. There are possibly a few more millions around the real world which haven’t yet found Second Life, and, when they find it, will immediately be part of it — so I’m not saying that the efforts to reach out to them are wasted. It’s just that bringing them in to SL requires a lot of effort, a lot of time, and, ultimately costs a lot — for little return, specially because almost all will be free accounts that will hardly upgrade.

Instead, all the time spent in pursuing those inexistent users should be invested in making the current users more willing to spend money with LL. And that means increasing the quality of the service and offer more services that residents are truly willing to pay for them.

Alas, at this stage, even sim owners think that the service is overpriced (and so do Premium users!). Even before Linden Lab starts to explore other avenues of income, they will have to “catch up” to make the current services worth the money we spend on them.

So my wish is that Rod Humble quickly gives up on the focus on new users and starts really thinking about his existing customers instead. Let’s give the “new user experience” a try for, say, six months. That’s good enough for some serious evaluation. In the mean time, content creators will have a lot of fun with meshes, and programmers might do amazing things with the forthcoming API for SL Marketplace and the social streaming feature on profiles. And in 2012, hopefully Rod finally realises that he already has all the customers he needs, and it’s very unlikely that he will be able to get much more. Instead, he should focus on increasing LL’s revenues with the existing user base.

After all, we have been around for eight years or so, and will not leave so soon. Few companies can boast of having customers waiting for almost a decade until some of their needs are actually fulfilled 🙂 We’re all very, very patient,

Specially because in a niche market there is nowhere else to go.

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