Philip Rosedale's Coffee & Power Can Succeed on a Massive Scale in Ways Second Life Could Not -- Here's Why

Philip Rosedale's new startup Coffee & Power, which connects real work to virtual currency, just received a slew of media coverage (like on TechCrunch here, and on The Economist here), but New World Notes readers got all the main details last September, in this interview here. I've been thinking about it quite a bit since then, and my strong sense is that it has a far greater chance to succeed on a massive scale, in ways that Second Life could not. Fundamentally, this is because Coffee & Power has debuted at a time when faith in our traditional economic structures is at an all-time low, and we are searching for sustainable alternatives, especially via social media and our smart phones.

Here's how:

• Far lower barrier to entry: To operate well, Second Life requires a computer with a high end graphics card and a dedicated broadband line. Coffee & Power, by contrast, just requires a smartphone. And smartphones are expected to become a 1.5 billion person market by 2015.
• Real money for real interesting work: By now, I have spoken about Second Life to thousands of people, most of whom were not SLers or even 3D gamers. Consistently, the thing about SL that excited them most is the chance to earn real money from doing interesting, non-traditional work (creative, social, etc.) Most of them only lost interest when they learned that making this money would also require creating an avatar and learning to use a complex 3D client. By creating an economy around non-standard work, mainly based in the real world, or on the standard web, Coffee & Power can capture a similar excitement, without the additional hurdles.
• Mass market acceptance of virtual goods: When Second Life launched in 2003, the concept of virtual goods and currency was strange and exotic. Thanks in great part to SL's inspiration, and even more to the Facebook and iOS games which came after it, virtual goods have become a concept hundreds of millions of people are familiar with. No long explanation of why people should buy and spend "Coffee Dollars" required.
• A broader Internet-driven move away from traditional economic structures toward grassroots exchanges and bartering: This is the most exciting factor for me, and it goes far beyond what Philip is doing. We are now experiencing a large and pervasive rejection of the economy as we knew it for the last hundred years, thanks in great part to the growth of social media, and the near collapse of systems we have trusted for so long. "You can take it to the bank" used to be a common phrase; now, in the age of Occupy Wall Street and "too big to fail", we are searching for better structures to invest our resources, and they are often person-to-person and grassoots. Social media has made this possible. Crowdfunding is one great example of this; Kiva is another, as is NeighborGoods, founded by my friend Micki Krimmel. AllThis, which I just wrote about, is just the latest iteration of the same broader trend. Many more examples aboud. To see how this is all connected, read this great new Salon essay by my friend Andrew Leonard: "A Declaration of Independence from Wall Street".

For this reason above all, I think something like Coffee & Power, if not Coffee & Power itself, is destined to succeed in a big way. As with Philip's first startup, Second Life, implementation and user experience is all: If C&P does not gain the seamlessness we've come to expect in the iPhone era, it may become like SL, a relatively successful and interesting niche. But do not doubt that it is tapping into a broader trend that is about to remake the global economy.

Comments

[Recka Wuyts]

Compare apples and oranges; Second Life and Coffee&Power. One is a social media site for the exchange of goods and services.. What is SL again?
If all we are talking about is the 'money' as a meter of success then you could be right, but I don't come to SL to find someone to take out my garbage in exchange for a token.
So why compare the two, unless we are looking at Philip Rosedale's tax returns?

[Ignatius Onomatopoeia]

Perhaps young digerati can make this happen. Perhaps they don't need health insurance, don't pay a mortgage, and don't have to save for their kids' college tuition.

As any freelancer knows, one has to run hard even to mark time.

But I'll wait to see. This utopian idea may turn out any better than prior ones. People planned to retire from income from their BBS clusters in the early 90s, then by the early 00s, they were going to become eBay millionaires. Some did, just as a few SLers paid the RL bills with Linden Dollars cashed out.

Hope springs eternal...often face-first into the brick wall of technological and social changes.

[Pathfinder]

No health insurance + no social security investment + no unemployment insurance coverage + no benefits + no retirement = The Future?

I'm afraid I see the future of human labor and social good as a bit more complex than "let's all be guns for hire."

[Raz]

but more than a few come to SL looking for tokens in exchange for taking out other people's garbage. my giggle is that the answer to SL newbies who ask how to make money will be "go to Coffee&Power"

my other flash/fantasy just now was to organize a local C&P group to invade Whole Foods or somewhere to set up "shop". that would be so fun.

[shockwave yareach]

Paying my mortgage with virtual currency!! Why didn't I think of doing that before? Where do I sign to make the bank take this fake money instead of US tender? They won't accept Phillips space bucks as money? Awww, shoot. Guess I not so interested in it anymore then.

Not even remotely interested. He cannot even run his virtual world without ruining it -- why should I trust him with my wallet too?

[Hamlet Au]

"No health insurance + no social security investment + no unemployment insurance coverage + no benefits + no retirement"

These are all valid issues, and many of them are also probably resolvable with similar social media/smartphone platforms. For example, how about a retirement plan that's transparently run by 1000s of contract workers pooling their resources and voting for their investments online? Has to beat giving my retirement to some nameless corporate idiots who then put it into mortgage derivatives without even really telling me.

[Mark C]

"Most of them only lost interest when they learned that making this money would also require creating an avatar and learning to use a complex 3D client."

Again, how is being lazy and stupid going to form the basis for a significant income, regardless of social networking advances? Work that can be done by anyone is going to pay accordingly.

[Hamlet Au]

Mark, can you rephrase your question in a way that doesn't make uncivil and not very accurate assumptions?

[Melponeme_k]

It's still trying to hustle people into working for bouncy, rubber bucks, I see.

[JubJub]

We have a similar system in NZ called Bartercard.
This system seems to have the same basic flaws...
You'll be expected to pay tax on such transactions in RL currency.
People will swap services for physical items.
It can only survive by the company 'creating' currency to match enrolments - a licence to print money.

[Dartagan Shepherd]

New to the concept of elancing? It's been around a long time. And companies like elance dot com manage to do it without fake currency.

Agree with Pathfinder above.

A jobless benefit less future that doesn't contribute to the overall economy is doubtful.

Waiting to see much more legislation on this if it starts bypassing too many labor and tax laws.

Doubtful you're going to see masses of people supporting their families on elancing, it hasn't happened in the last 15 years.

Show me a company that knows how to provide jobs in this economy and I'll be impressed.

Yet another startup trying to make bank on a large volume of couch change and micro-jobs, relatively speaking against those companies in every city moving millions worth of goods in a single day.

Focusing on internet startups seems to make people forget where the real money and movers and shakers are. The world according to Facebook.

[Kala Bijoux]

I agree that Coffee&Power has the potential to succeed on a larger/more people level than Second Life, mostly because of the technical limitations of accessing SL that you mentioned. But I don't think Coffee&Power is the unique product that SL was/is. Fiverr.com and Elance come to mind as very similar to this idea. As well as Etsy since Etsy has a service where you can ask for artists to bid on your project. While C&P is a bit different, it's not different enough.

[Ignatius Onomatopoeia]

Okay, I'll bite, Hamlet. Consider this: what is the "real" economy doing now, other than monetizing illusion?

What the heck is a "derivative" anyhow?

"Coffee & Power" makes at least as much sense as that rat-circus. And the name beats the heck out of "Lehman Bros."

[Hamlet Au]

"But I don't think Coffee&Power is the unique product that SL was/is."

Well, when SL launched it was up against Active Worlds and There and even to a certain extent Sims Online, which all had a fair amount of overlap. But that's why I say "something like C&P" could be big -- it could just as easily be any of the several systems similar to it that succeeds. We'll probably find out in the next year.

[Jo yardley]

I don't have a mobile phone and don't like coffee!

[Johnny alt]

My Coffee and power listing ..

I will teach Philip Rosedale how to make Secondlife Succeed on a Massive Scale for $0 USD

(Just lower tier mate ! )

[Carol]

"when faith in our traditional economic structures is at an all-time low, and we are searching for sustainable alternatives" ...
here is your answer to SL mass grow demands ... SL, don't grow, but search for sustainable alternatives !!!!!

[foneco zuzu]

And still only a few realize that Sl is not a game anymore!

[EileenK]

As it looks right now, Coffee and Power is a dud. Some of this could just be because it is small and West Coast based, and I am three thousand miles away, but the service competes against:

Craigslist
eBay
Amazon.com
Freecycle

And here in Atlanta, it competes against FrumAtlanta, an email list in Toco Hills whose members swap or sell goods and services all the time.

One of the most common services in demand is babysitting. I could NOT find a babysitter (not even in California) on Coffee and Power. Another commonly requested service is house cleaning. No one will clean my basement at Coffee and Power, and that's no one period, not just no one in the Atlanta metro area.

If a person wanted to do babysitting or housecleaning, I'm not sure where he or she would advertise his/her services. There is no category for childcare or personal services.

Similarly if I have useful junk to sell/give away/swap, there is no category for such merchandise. There are Little Luxuries and Artists and Artisans, but no place for me to sell or give away an extra box of size 4 diapers (Something someone on FrumAtlanta is currently trying to sell for cost.) or an old book case.

There is also no category for pets and livestock. I don't think Phil Rosedale understands the small time market for goods and services.

[Orca Flotta]

Anyone tried a product called "Milk" yet?

It's nutritious and yummy, gives you energy and is heavily subsidised in most countries so you can purchase a liter of this "Milk" product for less than production cost.
Perfect.

Now beat that, SL!

[shockwave yareach]

Foneco - SL is a virtual world. One can use it for games, socialization, business, anything (and more) that you'd use the real world for. But that doesn't change the fact that nothing in SL is real. Yes, real people are running the avatars who are populating the virtual world. Real people are acting out the characters in your movies also, but that doesn't make Star Wars real, now does it?

[Carol]

I bought this "Milk" once in SL. There it cost far more than its 30L$ production costs. At coffee&power i didn't find any "Milk" at all. And at www.milk.com they say "Not for sale" ...
I think you made that argument up ...

[Dizzy Banjo]

I think C&P is a great optimistic idea, but its in a very crowded marketplace and is far less unique and 'wow' than SL was in 2003.

In order to grow to the critical mass it needs to have a chance of being viable, the implementation will need to be extremely slick and easy to use.

In its development so far, I think this implementation is ok on the web, but very bad on mobile.

Currently, from what I can see, the iOS app is a poorly implemented, limited functionality web view ( which is practically the same as just using safari ). I think to really compete in the app store the polish of a native app is essential. I would think that mobile would be a very important channel for this project.

I have been trying to use C&P to explore its possibilities. But I have to log in manually every time in the app right now.. I hope things improve.

I think there have been some unusual decisions made about missions expiring for no reason too.. I haven't been able to get any feedback on why they do.