Chez Serge

Second Life has recently generated a lot of buzz. It all starts with a post on their web site : restructuring. More precisely, 30% of employees are fired, and their Singapore office closes.

I have seen many analysis of this, talking about too much business orientation, or a step back to B2C.

It is a serious issue for all people who, like me, believe in the business of virtual worlds. We need to remind the history of Second Life. At first, Linden Lab was created by Philippe Rosedale with the aim to build a software that would be sold. Second Life was created as a showcase, a proof of concept of the capacity of the platform. However, Philippe is more and more interested in the social aspect of Second Life, to a point that he may have forgotten the business issue. Not a good thing to do when you have Mitch Kapor, Pierre Omidyar, and Jeff Bezos at your board. Well, facebook is in the same mood, but facebook is over 400M accounts, while Second Life is around 16M, which is low, even though the peer to peer transactions amount for 567MUS$ in 2009, a very nice result in my view. So Philippe was replaced by Mark Kingdon, who decided to go back to the basics, and create an enterprise solution. Well, he created two enterprise solutions : the first one is just owning islands in the main grid, with specific features such as more flexible avatar naming, the second one, “second life enterprise beta”, being beyond the firewall.

This is, in my view, the main issue: it is not possible for a company to have both a B2C offering, and a B2B one. Amongst all issues, two are huge. The first one is about culture; sales process are not the same, sales people are not the same, pitch are not the same, eventualy it means having two different teams, which is costly. Let us remember the excellent words from crossing the chasm: “better have three customers who talk together than ten who don’t”. The second issue is about product roadmap; obviously, the requierment from a social network are not the same as the one from companies, specially the corporate ones. This leads to tension on the product. Moreover, social networks are not that much the friends of CIOs… Consequences are dramatic: the residents are more and more disapointed by SL; the B2B inworld offer seems to offer a low level of reactivity (friends of mine talk about many weeks before having an answer), and Second Life enterprise beta business model, 55k$ per year for 16 islands but only 8 simultaneous, looks outrageous, specially compared to other collaborative tools.

What is emerging now looks like a willingness from resident to step back from SL. For those close to the original spirit of Rosedale, opensim seems a good candidate. However, remains a big problem: what about all assets inworld? Everybody has in mind the closure of metaplace, and the resulting loss of assets. Maybe this is why VenueGen has offered to migrate enterprise assets into its own world?

Shall we assist to a Second life crash ?

Whether it happens or not, I still believe in virtual worlds. This excellent post made after Thinkbalm decision to widen its scope (we must all thank Thinkbalm for their constant support to Virtual Worlds), shows many positive coming aspects. In the hype curve, Virtual Worlds are clearly at the Trough of Disillusionment. Time is now on for technology to show its real potential.

What are the positiv aspects?

• The most important is the vgov initiative, lauched by US administration, whose aim is to manage virtual worlds for all US administrations. The Internet exist mostly because of the important role played by US administration, the same story may happen with Virtual Worlds. Four platforms have been selected : Web.alive; Forterra (acquired by SAIC); teleplace; and Vastpark, a very innovative opensource platform. Second Life has not been slected.
• Education already makes a huge use of virtual worlds. The special issue of the journal of virtual worlds research shows interesting results.
• Healthcare sector is also a place where virtual worlds have had big success, in SL, but not only. A study performed by doctors showed the great advantage of virtual world as a training tool.
• The enterprises are more and more interested in serious games. I can’t imagine serious games without a virtual world. With this respect, the openness of the technology becomes a key success factor…
• Tradeshows, conferences, are more and more moving to virtual worlds, with big success. Not only cost of travel is lowered, but the quality of interaction is superior to 2D tools, as shows IBM case study. Robots have now their virtual conference; and even wine producers go for it !
• On the social side, Kids and teens are massively in virtual worlds. Almost 400 millions users in the range 8-15 years old are in virtual worlds, comparable to the number of facebook users, but who has a larger scope in terms of age.

I would like to add a personal touch. Many times, I have met people very reluctant to the internet, people who did not understand the importance of social networks, forum, for whom the web was no more than an online content tool. I was always able to change their perception by showing them machinimas realized in corporate situations. Their reaction was always the same : “at last I understand what it is all about”. Well, let us be honest : facebook interface is amongst the most complicated we can imagine. At least, a 3D interface is easy to understand.

The immersive web is now entering a time of obvious concrete realizations. On the technological side, tools are diversified, some close to games or social networks, some close to corporate intranet tools. The biggest improvment is their availability through the browser. I It is now obvious thet the browser is the entry point to the Internet, and 3D plugins are the preferred solution to clients download. WebGL norm, when available, will be a huge step.

Virtual worlds are now entering their mature phase, and we shall all thank SL to have shown its potential value.

Yesterday I was at a conference with Frédéric Lippi, one of the two managers of Lippi, the 300-employee company that moved to an Enterprise 2.0 model, as I described here.

Amongst the managerial decisions they took, was one to abandon any individual incentives. What Frédéric said is, “You can’t tell people to work in a collaborative way, and give them individual incentives; there is a contradiction in there”.

Some people reacted in the audience, (Frédéric confessed that some people even considered him Marxist), saying that this was too radical, and that there were surely some be cases where individual incentives were appropriate. When I asked them for examples, one mentioned rewards for traders, but for obvious reasons everybody said that it was not a good example…

Then someone said “sales people”. I still believe than even sales people should no longer have individual incentives.

I am working with big French retailers. Retail culture is based on internal competition, and each company love to compare every month which store did better than another, like “oh, Marseille came before Rennes this month, great job!”. But it may happen in some future that they abandon this…

The shift in approach actually comes via the Internet. When e-commerce web sites were first opened, they were considered as another store, and were compared as such. There were many drawbacks to this, let me quote two.

The first one is pricing.

It is usual that each store is responsible for its pricing policy; the same product can have, therefore, different prices according to the city the shop is located. But then, how to price the product on a web site?

The second one is that the Internet is the enemy of sales people, because the web site is a competitor to sale in store.

Unfortunately for them, more and more customers do a lot of online research before buying in the shop. It is shocking to then hear a sales person saying bad things about the Internet.

Then came this practice: any online transaction allocates the money to a physical store.

One interesting result is that, suddenly, the Internet becomes the salesperson’s friend, and sales people become more open to customers who surf on the web.

So, the web site becomes a friend. Then, why not another store from the same brand?

Customers are more and more mobile, and what they see is a brand, not a store. It may happen than a person shops in a store for heavy products, and asks to pick-up in another one. If sales people are individually incentivised, they will lose out.

The Internet is reshaping enterprises into a collaborative mode. I bet that individual incentives will vanish, because it will become counter-productive to achieving sales.

Interestingly, I found a video which explains this even better.

Many things has been said about wikipedia, good ones, and bad ones. The fight is huge, between those who still believe in content written by experts, and those who say that the quality of wikipedia is at the same level as any other encyclopedia. The comparison made by Nature between wikipedia and encyclopaedia Brittanica, which said that levels were equivalent, has not calmed down the battle between pros and cons of the user generated model of wikipedia.

Many other interesting analysis can be made about wikipedia. It is not true that anyone can contribute: there are teams of people, who are usually experts in one field, who control any change on many articles, and prevent a lot of changes to happen. Wikipedia is not a place where everyone is free to do whatever he wants. There is a strong, albeit secret, governance.

However, wikipedia is a very innovative encyclopeadia, not because it is user generated content, but for at least four other reasons.

The first innovation in wikipedia is the “view history” tab (link is on the article about wikipedia). All changes made to an article are kept. This tab allows not only to see how many changes were performed, and when, but also to compare two different versions of the article. It also allows to roll back to a previous version of an article, a very interesting feature if any deliquency activity was performed on any article. But the innovation is there: it is possible to understand the history of the article.

The second innovation is another very important tab : “discussion“. Very often, specially in any collaborative work, shared intentions are not obvious. There always a need for a space where people can discuss about the result, before taking any decision. This is the place where it can be done. It id also the place where apprentice writers should start, before changing the core article itself.

The third innovation is about meta sentences, to be found at the beginning or inside any article, such as : “This article does not cite any references or sources.”, “Please help improve this article by expanding it“, “This article may require copy editing for grammar, style, cohesion, tone or spelling“, or, much more fundamental “The neutrality of this article is disputed“.

The fourth one is about different languages. On most articles, on the left side, one can find the same article in other wikipedia. It is not a translation, it is the same topic. The first side effect is that wikipedia can be used as a tranlation tool. I was doing a conference in front of Italian people, and I had to explain the long tail principle. I started from the entry in the English wikipedia, and fortunatly Italian was on the the languages, and by clicking on the link, I was able to explain what long tail was in Italian.

As of june 2009, there are 272 different wikipedia. It is the very first time in mankind that regional, or local languages have their own encyclopaedia in their own language which is not a translation from an occidental one. I think we see only the beginning of the impact it may have on local cultures.

Wikipedia is an encyclopeadia where the history and the creation process of any article is visible, where articles contain information about their quality, which is available in 272 languages.

There lays its innovation.