Second Life for Businesses what is your company’s strategy for the virtual world? January 2007

Second Life level of expertise? Second Life I can do it novice expert

agenda understand execute explore design 1 2 3 4

UNDERSTAND what SL is?

Second Life (abbreviated to SL) is an Internet-based virtual or synthetic (3D) world in which everything is built by its residents.

SL is inhabited by residents , which is how the users of SL are called. They “live” in this virtual world in the form of an avatar .

AVATAR = USER

analogy: think marionette

" avatar " stands for a user's “virtual” representation (e.g. three-dimensional model). It is derived from the Sanskrit word Avatāra:incarnation.

your virtual marionette : your avatar socialize exchange trade

exploring identity

Second Life has most ingredients of a society sociology politics culture conversation entertainment no comment symbols economics property

user numbers accounts (curiosity): 4.1+ mio. logged last 60 days: 1.5+ mio. online simultaneously: 16k – 32k premium accounts ($): growing user hours: growing

Second Life actors coding authority represent collaborate engage hold events trade test « live » create/build socialize trade create govern sell land users companies

architecture & building activities entertainment selling fun selling relaxation

does SL have an economy?

basics of a market economy economics is usually defined as the study of choice under scarcity. [Scarcity] forces us to choose where to allocate our resources as to obtain the best mix of desires that we can. Castronova 2005 A market economy is an economic system in which the production and distribution of goods and services takes place through the mechanism of free markets guided by a free price system [...]. In a market economy businesses and consumers decide what they will produce and purchase. Wikipedia 2007

you retain copyright and intellectual property rights of all content you create in Second Life Linden Lab retains ownership of the account and related data, regardless of intellectual property rights [..] creating objects & property rights

you retain copyright and intellectual property rights of all content you create in Second Life

Linden Lab retains ownership of the account and related data, regardless of intellectual property rights [..]

owning land & building islands price: US$1,675 (65’536 m2) monthly land fee: US$295

trade in SL

Linden Dollar : L$ Second Life "currency" is a limited license right available for purchase or free distribution at Linden Lab's discretion, and is not redeemable for monetary value from Linden Lab.

currency exchange SL operates a currency exchange, the LindeX. Use and regulation of the exchange is at Linden Lab's sole discretion. Daily Volume: 200’000+ USD

banking in SL source: 239 New Accounts L$60’599’122 Total Volume 7 day Statistics 47.9 Avg. Transactions/hour 13’944 Total account L$117’745’637 Total deposits Ginko Financial Statistics, Feb 1, 2007

Greenspan vs. Rosedale source: Aggressively adding money to the currency supply as the overall size of the economy increases. Reducing the supply of money by aggressively raising interest rates when inflation begins to rise. Means of maintaining price stability Jeff Bezos, CEO of Amazon.com Four US presidents Powerful backer Ensures that the L$ doesn’t appreciate against the US$ by making it impractical and unattractive to keep Linden Dollars in savings accounts. Ensured low interest rates by making it impractical and unattractive to keep US$ in savings accounts. Technique to encourage maximum spending Second Life doesn’t really have regulations Youthful acolyte of objectivist Ayn Rand Libertarian tell Controls currency rate by manipulating money supply Controlled currency rate by manipulating money supply God-like power $7.7 million per month $1 trillion per month Size of economy supervised

EXPLORE the SL business space

RL company presence in SL represent/ advertise events trade collaborate engage/ build relations user/avatar (client) interaction business utility (future revenue) prototype and test

represent buy land or island build presence announce (press) wait for SL residence

buy land or island

build presence

announce (press)

wait for SL residence

advertise create billboards buy ad space advertise to SL residents

create billboards

buy ad space

advertise to SL residents

collaborate in-world enter SL with your employees find/build meeting space invite collaborate

enter SL with your employees

find/build meeting space

invite

collaborate

buy land or island build object or prototype to test announce (e.g. press/SL) wait for SL residence gather feedback and improve prototype & test

buy land or island

build object or prototype to test

announce (e.g. press/SL)

wait for SL residence

gather feedback and improve

buy land or island create playful experience announce (e.g.press/SL) (advertise to SL residents) wait for SL residents engage visitors engage

buy land or island

create playful experience

announce (e.g.press/SL)

(advertise to SL residents)

wait for SL residents

engage visitors

trade buy land or island build object to trade announce (e.g.press/SL) (advertise to SL residents) wait for SL residents trade

buy land or island

build object to trade

announce (e.g.press/SL)

(advertise to SL residents)

wait for SL residents

trade

events buy land or island organize event announce (e.g.press/SL) (advertise to SL residents) wait for SL residents hold event

buy land or island

organize event

announce (e.g.press/SL)

(advertise to SL residents)

wait for SL residents

hold event

build relations plan cross-channel relationship buy land or island announce (e.g.press/SL) cross-channel marketing build & maintain relationships

plan cross-channel relationship

buy land or island

announce (e.g.press/SL)

cross-channel marketing

build & maintain relationships

innovative projects brainstorm for innovative projects design & implement succeed

brainstorm for innovative projects

design & implement

succeed

what about the future?

which scenario is more likely? 2009: Second Life was nothing than a fad - nobody talks about it anymore 2009: Second Life is "business as usual" – the majority of big brands is present in SL

2009: Second Life was nothing than a fad - nobody talks about it anymore

2009: Second Life is "business as usual" – the majority of big brands is present in SL

LIFT’07 workshop virtual worlds will play an important role for Fortune Global 500 companies YES or NO

SL – condemned to fail (NO) 7 of 15 people believe that virtual worlds will NOT play a major role in Dec 2009 (5 of these persons believe that virtual worlds will eventually play an important role within an extended timeframe) 7 NO votes

SL – the party goes on? (YES) 8 of 15 people believe that virtual world will play an important role in Dec 2009 (of these 8 nobody believed SL would be this virtual world) 8 YES votes

DESIGN & IMPLEMENT a SL presence

do’s know your « customers » provide fun, sticky interaction don’ts don’t slow down things don’t do a one-shot Second Life lessons do’s / don’ts

know your « customers »

provide fun, sticky interaction

don’t slow down things

don’t do a one-shot

lack of interactivity / they got the SL concept wrong learn from BMW

understand execute explore design 1 2 3 4 develop a SL presence

http://nwn.blogs.com/nwn/2006/10/why_mixed_reali.html#more statistics

design studios

THE END http://www.slideshare.net/Alex.Osterwalder/arvetica-second-life-for-businesses-introduction

2 day Second Life immersion workshop 19-20 April 2007 Arvetica, Geneva

next arveticasts Improving the Strategy Process – what strategists can learn from architects Thu, April 12, 2007 Strategy Grand Tour Thu, April 26, 2007

Improving the Strategy Process – what strategists can learn from architects

Thu, April 12, 2007

Strategy Grand Tour

Thu, April 26, 2007

Arvetica. who we are.

We believe that superior economic performance comes from sharing knowledge and not from keeping it. Open Knowledge

We do not try usual formulas. We deliver unique solutions through multidisciplinary approaches, ad-hoc teams, visual thinking , and rigorous project management . We have high impact. Consulting

Arvetica is a management consulting company. We design strategies , develop business models and manage projects for private equity investors, start-ups and large organizations.

Arvetica is a management consulting company.

We design strategies , develop business models and manage projects for private equity investors, start-ups and large organizations.

arvetica.com