Chez Serge

The Internet disruption

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After Mark Kingdon’s visit to Paris

Oct 3

Posted by serge in Strategie | 8 Comments

I had the opportunity to meet, amongst other people, Mark Kingdon, who came in Paris to update on the situation at Linden Lab.

Mark in Paris

He was with Catherine Smith VP marketing, Judy Wade VP Emerging business, and Frank Ambrose VP Global technology.

Mark started with some facts which, even thought they have been published, are worth repeating. Over one year, the number of active users has grown +24%, the number of hours spent have grown +33%, and the number of user to user transaction has grown +94%, and is now around 500 Million US dollars.

The main achievement Mark focused on are :

  • a new web presence
  • an emphasis on social tool aspects
  • emphasis on commerce through the acquisition of Xstreet SL and OnRez
  • back end integration and improved user experience

Linden Lab wants to put more strenght on the product itself, and has hired Tom Hale as product manager (Tom’s avatar is lovely).

In terms of the future :

  • A new viewer will appear beginning 2010. 50 people are working on it. It will be more comfortable and familiar, with a navigation closer to the web. As an exemple, there will be like a browser bar where people will type the name of the Sim they want to go ot. Bookmark facilities will be offered. After this viewer, linden Lab will work on a light one, i.e. a plugin inside the browser, something I never made my mind about. After all, iTunes is not browser based, and has been widely downloaded.
  • The distinction between consumer and professional market will be emphasised as well. There will be different entry pads, in order to differentiate between “those who come for fun, and those who come for a meeting”.
  • There will be more help to the content creator, including the media API, but also possibilities for the creator to sell its products trough a mecanism which will be inspired by iTunes appstore portal.
  • More emphasis will be on the international. As Mark pointed out, 65% of the users are outside the US, 50% of the billing is outside the US, but so far 100% of the technology is inside the US. Linden Lab will open an office in Amsterdam, is looking for an international business development manager, a European Marketing director, and different country managers. Linden Lab also intends to open a data center in Europe (all their data center are in the US so far), and may close an old one in the US to open one in Washington DC, “east of Missisipi” said Frank  (I agree that, for a Californian, east of Missisipi is already abroad). The next viewer will be translated in 15 languages.
  • Not only a new data center will be opened in Europe, but Linden Lab is evaluationg could computing technology, and will offer more flexibility and configuration management tools.
  • More emphasis will be on the economic aspects: 23 payment methods will be introduced, there will be localized cashiers in 20 languages. More important, they plan in the future to have cash out facility. This is something I am not sure to understand, because the paragraph 1.4 of the TOS explicitely says that the Linden dollar is not redeemable. I still believe that a Linden Dollar is, in its philosophy, much closer to a prepaid card than real money.

I was anxious to see how Linden Lab is going to adress the business market. There will actually be two possibilities for business to use the technology.

The first one is to be on the grid, as of now. However, more professional tools will be offered, like registration as an organization, dedicated enterprise registration pathways, entreprise orientation island, offering the possibility to use company’s name for the avatars, the possibility for a company to give (or not) linden dollars, and to welcome guest avatars. The next phase will offer entreprise hub. There will be community gateways, Judy quoted the education pathway made of 6 education commmunities gateways.

The second one is to buy their standalone tool, whose code name so far is Nebraska. 10 alpha customers are using it, including IBM (who will launch a collaborative product very soon, as I have learned in 3DTLC), Intel, Boose Allen, and the US military. The product will be annouced around november, with full technical specification, features, and pricing, and version 1.0 will be public Q1 next year (I know that IBM already did some integration with LDAP server). They did not mention the business model, but they are looking for channel partners to sell the platform. Inside Nebraska, there will be a market place (iTunes like) where users can buy existing content.

With Nebraska, Linden Lab enters a market where products like forterra, protonmedia, teleplace, opensim and vastpark are already existing. It is always difficult for a company to both sell a software, and a service. In any case, 2010 will be a big turn in Linden Lab’s life !

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Some thoughts about Internet and Innovation

Dec 2

Posted by serge in Strategie, innovation | No Comments

Some times ago, I was doing a conference for Lunch@Circle, a French think tank. And they interviewed me.

It is a condensed form of all my thoughts about the fact that innovation carried by Internet takes its sources on the way Internet was built. Looking at the governance of the Internet enlights the dramatic paradigm shift that we are just starting to experience.

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The four modes of codesign

Nov 20

Posted by serge in Strategie | No Comments

Upon the new forms of relationship which are impacted by the Internet, one for sure is the relationship between customers and corporate companies.

One of them is codesign. What is it about ?

Well, since a long time, the passionates have been always keen not only to comment about the product or services, but to participate in their design. As an example, Jellinek cooperating with Daimler-Benz to build the first Mercedes. But this was, somehow, reserved to an elite. However, from the customer side, the desire to participate in the design can be seen in many discussion forums. When Renault officially releases the first pictures of the Logan, it takes only one day to see other versions of the car, using photoshop.

Now, the company side : first was “techno-push”. Products were designed by technical people : from R&D department to design department, then manufacturing, then marketing, then sales. A pure linear process, very long (many years between the first idea and the product on the market), too long for our world. The customer is at the end of the process.

So, marketing has invented the “market-pull”. The customer is at the center, the process is shorter, and, a priori, the customer’s satisfaction is total. Well, not that much, because first the customer is passive, second the process does not take into account technical constraints (what if he wants a teleportation system ?). This process is no more innovative than the first one. Market-pull is no better than techno-push.

Let us have a look at how Internet was built: neither techno-push, nor market-pull, but a constant loop between technical proposition and transformation into usages. This becomes more interesting, an dmore innovative, because this is the standard way mankind has evolved. As shown by the great paleontologist Leroi-Ghouran, since human people have built tools, they always did it on a codesign mode, eliminating useless technology and keeping the one that helps to grow-up. His research allows us to eventually get rid of two bad ideas : technology is God and technology is Devil.

So, I propose to call “codesign” this cooperation between customers and companies, which is hugely helped by Internet. It has various other names, from crowdsourcing to customer as innovator, through user generated content, or pro-am. But let us call it “codesign” as a generic term.

I then started to find all possible ways to cooperate, and I propose four of them :

  • Mode one : the company creates a product, but the customer customizes this product. Well, automotive has extensivly used this since longtime, so no surprise that, in 2008, any respectful automotive web site proposes such an interface. But other sectors are doing this : of course, everybody customizes its computer dashbord, changing colors, etc… But shoes can now be customized; Timberland is a good example of this. Many parameters can be changed, till it comes to the final price (always the same) and delivery time (always the same).
  • Mode 2: the company creates “bricks”, and the customer assembles them. In computer industry, this is what we call widgets, or equivalent. Amazon is a great provider of widgets, and probably one of the most innovative company in terms of relationship between marketing and technology. But other industry as well : the IKEA kitchen planning tool, the Lego factory tool, or any other tool (by the way, IKEA will soon launch a virtual world, but I cannot say more).
  • Mode 3: the company and the customer create together. Open software is a good example, but the Dell idea storm is another beautiful one. The community launches idea, discuss about the ideas, vote for the ideas. So far, nothing unusual. But Dell implements some of those ideas. And this is a great move. Decathlon is doing this too: their R&D center are in some shops, but the use of Internet is limited.
  • Mode 4: the customer specifies, then finds a company to build the product. Of course, it is not one customer, but usually a whole community. There are very few exemple of this, freebeer is probably the most beautiful. Three students from a University in Denmark publish their own receipe of beer under Creative Common license; and they aggregate a community. They eventually find breweries to create their beer, and to sell it. After global breweries, after local breweries, this is a very interesting trend.

This last form is still a low level signal. But, for sure, the internet is reshaping the relationship between customers and companies. Passionates have always existed, but Internet brought them two big differences : 1) their number of friends has exploded, from a few friends to all people who read them on their blog, forums, etc.. and 2) they are now networked, thus forming a interesting innovative layer.

Innovative companies, wanting to enter into codesign mode, should now seriously considering this layer. Mass marketing, and one to one marketing, are gently dying under our amused eyes.

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