The Myth of Second Life's Failure to Go Big: It Wasn't Lack of Practical Applications, But Poor Execution & Market Timing

The new business book The Myth of the Garage by the Heath Brothers, authors of the excellent Made to Stick, contains an unfortunate and inaccurate analysis of why Second Life failed to live up to the hype wave it experienced from 2006-2007. You can read the passage on Slate here; according to the Heaths, Second Life failed due to a lack of practical applications:

[W]hen you evaluate the next big thing, ask... What job is it designed to do? Most successful innovations perform a clear duty. When we craved on-the-go access to our music collections, we hired the iPod. When we needed quick and effective searches, we hired Google. And looking ahead, it’s easy to see the job that Square will perform: giving people an easy, inexpensive way to collect money in the offline world. But what “job” did Second Life perform? It was like a job candidate with a fascinating résumé—fluent in Finnish, with stints in spelunking and trapeze — but no actual labor skills.

This is factually wrong, but at least it's wrong in interesting ways. (And I agree with the Heaths on the general principle.) It's quite easy to find numerous "jobs" that Second Life has been used for, in ways that other platforms couldn't provide as well. Here's just a few:

• Second Life has been used by many filmmakers as a low-cost, resource-rich platform for making 3D animation -- i.e. machinima.
• Second Life has been used by therapists and veterans as a high value therapy platform for treatment of PTSD, which is "Working when nothing else has.”
• Second Life has been used by architects as a low-cost, resource-rich prototyping platform.

Many more such examples abound. In Myth of the Garage, the Heaths only mention the failed attempts to use Second Life as a marketing tool, but don't seem to be aware of these more robust and meaningful applications.

So why did Second Life fail to go mass market and become the next generation of the Internet, as was suggested by many (including, for a time, well, um, me)? If I had to summarize the explanation in five words, I'd say this: Poor execution and market timing. Here's what I mean:

Execution: That's a big broad concept, and consciously so, because Second Life's shortcomings in that regard were myriad: A high barrier to entry on creating an account and downloading a heavy client, a steep learning curve for learning how to use the software, and on top of that, little or no hooks to connect new users to all the many fun and useful applications of SL. All this is steadily beginning to improve with recent improvements to the software, but given these hurdles, it's a fricking miracle a million people still manage to log into SL every month. Execution also refers to marketing and messaging: In the hype years, Second Life developer Linden Lab allowed third parties to frame SL primarily as a platform for real world marketing, which was and is one of its least useful functions. (Unless it is directed at a specific market segment already in SL, or if the marketing campaign leverages SL in a way that doesn't require installation of the software, such as screenshots or machinima.) While individual developers were coming up with really powerful applications of SL, the company did not clearly and conscipuously explain what these were, nor sufficiently show the outside world how to access them. (Which, alas, is still the case.)

Market timing: Second Life was originally developed in 2002-2003 on two reasonable but ultimately wrong assumptions: That the desktop computer market would continue growing, and that dedicated broadband lines would be the main way people would access the Internet. Instead, the market largely shifted to laptops, and now to tablets, and also to smartphones, all of which depend on wireless Internet connectivity. The most popular platforms for accessing the Internet now are the least conducive to using Second Life, which performs poorly on wireless laptops, and can't fully perform on smartphones or tablets at all. At the same time, social networks, especially Facebook, provided many of the features that Second Life offered, but in a way that was much less resource and time-consuming. Why spend hours becoming an avatar on Second Life when you could avatarize yourself on Facebook, and still enjoy virtual content and entertainment with your friends on all the many Facebook games, almost all of which were free?

So it wasn't Second Life's failure to do a job that was the underlying problem. It was much more about Second Life failing to perform its many jobs effectively, clearly, and easily. In that regard, SL fits a pattern the Heaths describe in the failure of the Apple Newton PDA:

What about the Apple Newton, the first widely hyped PDA back in the 1990s? It was clearly applying for the right job—to give us mobile access to our calendars and to-do lists and such. But it was a lousy employee, with notoriously poor handwriting recognition and a limited attention span (from low battery life). PalmPilot got the job a few years later.

And since Second Life is still superior in many ways to competing platforms for machinima, architecture prototyping, and many more uses, it may still get a chance to do those jobs in future years.

Comments

[Emperor Norton]

Gaming isn't a service people pay for? Gee, color Blizzard surprised to learn that.

[Mitch Wagner]

Good post. My $0.02 on Google+ and on Facebook.

[shockwave yareach]

SL could become THE standard for remote work and telepresence. All it needs is the addition of a P2P so that one computer tied into the company's network creates a VPN to whoever is in that person's "land". One scripted person is on the land, and all the employees elsewhere have the same access to the company network as if they were right there. (Security is a simple matter of a pass list for employees authorized on that land.)

With the price of gas and costs to make buildings going ever higher, being able to have employees work from home, rain or shine, sick or healthy, and even be able to work overtime during unexpected surges with only a phone call is quite a powerful incentive to implement telepresence. And SL would be able to have that operational in mere weeks if they put their mind to it.

There is your killer app -- people being able to work without having to drive hours to get to work. But will LL step up to the plate and consider it? Or will they ignore the good ideas (and free code fixes) that their userbase has given them for oh so many years now?

[Arbit Delacroix]

Why would you need SL to pull that off Shockwave when a computer with a webcam would suffice in most instances?

[Rowan Derryth]

"So it wasn't Second Life's failure to do a job that was the underlying problem. It was much more about Second Life failing to perform its many jobs effectively, clearly, and easily."

Actually, I think the failure, if there is one, is in not recognising from the start the things it would be BEST at - creative and educational projects - and the powers that be never striving to put those at the front of their agenda. Because, you know, when did the arts or education ever make money?

[Missy Restless]

Replace "2011" with "1994" and "Second Life" with "Internet". Re-read.

[Ziki Questi]

Interesting post. I don't get your Second Life and Facebook comparison *at all*, and I use both of them constantly. ("Social networks, especially Facebook, provided many of the features that Second Life offered.") That's so apples and oranges to me that ... I don't even know where to start. I don't see where Facebook offers me *any* of the features that Second Life offers, but maybe you use Second Life as a social network and chat room.

I think one of the biggest challenges with Second Life is time. You can't just jump in for 30 seconds or two minutes and expect to have a fulfilling experience. Just to log on, see who's around, take care of immediate stuff, etc., might take a few minutes, and then you're just getting started. In our hyper-paced society that's hard—but it's exactly why, as you cite, it works so well for therapy. On the other hand, you can jump on and off of Twitter, Facebook or maybe games in a few minutes, feel refreshed or informed, and move on. I love to play quick games of backgammon on my iPhone, but for Second Life I need to set aside some concrete time.

Sometimes I wonder if Second Life isn't a little like Apple back in the late 80s or early 90s, with a small but avid customer base that potentially serves as its best marketing tool. But I'm not sure the Lab has ever embraced that perspective.

[Metacam Oh]

Exactly Missy. Trying to market Second Life is trying to market the internet. Everyone uses it for their own purposes, and in SL that is just as true. Ive written about this in the past but they need to make it so the users themselves can introduce new people to SL via their web site. Allow users to tap into the SL Api registry and register through these portals. Currently there is no incentive for users to market SL. They all get herded through secondlife.com and get lost in the fray.

we say it all the time but the best thing SL has going for them is their dedicated user base. They need to enable them. If I didn't know what SL was, I'd see the ads on youtube or wherever and think it was a 3d chatroom to roleplay for vampires.

[Hamlet Au]

"roleplay for vampires"

That IS actually a major way SL is used; at one point, Bloodlines alone had 60K users, and there's other vampire RPGs in SL.

"I don't see where Facebook offers me *any* of the features that Second Life offers"

Ziki, what besides dynamic shared 3D content creation (which most people in Second Life don't engage in anyway) does SL have that Facebook and its many apps can't offer in some similar variation?

[Emma]

Where to begin... Second Life is a fantasy world for most, and for most includes a rich virtual sex life. SL residents do not want anyone to know what they are doing, so they don't need a portal to invite people they know in real life. That's just a fact.

[Hamlet Au]

Emma, Habbo Hotel (to name one example) is integrated into Facebook, has quite a lot of flirting and virtual hooking up, and while you're using it, no one knows your real life name. It's more popular in Facebook alone than Second Life. (It's even bigger on the broader web.)

[Ziki Questi]

> Ziki, what besides dynamic shared 3D content
> creation (which most people in Second Life don't
> engage in anyway) does SL have that Facebook and
> its many apps can't offer in some similar variation?

Really? That's a serious question?

If you can point me toward a Facebook app that can replicate the experience of sims like AM Radio's installations at IDIA, or Rose Borchovski's Two Fish, or Cutea Benelli and blotto Epsilon's petrovsky flux (Spencer Museum), or Wendy Xeno's HuMaNoiD, or Sextan Shepherd's work, or the many artwork sims that have been exhibited through UWA, and on and on ... I'd sure like to know what it is. (Or, for that matter, the recent and brilliant time-based media work of Jo Ellsmere, Pyewacket Kazyanenko and Kai Steamer.)

[Ziki Questi]

LOL Ham, Sulka Haro acknowledges that the predominant age group on Habbo is 13-17 years old. "Habbo Hotel's core audience is a relatively narrow teen demographic segment: according to Facebook Insights statistics, 51% of our users are 13-17 years old, with a further 30% falling into 18-24 segment."

The graphics and immersive environment are pathetic compared to Second Life.

(I'm not quibbling with the number of users.)

[Hamlet Au]

Ziki, there's a number of Facebook apps that render beautiful full 3D scenes. Most of them are shooters, but they are immersive and they do have 3D graphics. And Facebook the company is working on making these apps even more robust with graphics and immersive capabilities. A project that's headed up by... former Linden Lab CEO Cory Ondrejka.

[Chip Midnight]

Hamlet, I disagree with you that most people don't engage in SL's content creation. All SL users do indirectly every time they change outfits, get a new hairstyle, ride a vehicle, and on and on. You can't swing a cat in SL without hitting a dozen pieces of user generated content.

I always thought the press and people carried away with Snow Crash analogies were jumping the gun, imagining what SL unrealistically "could" be instead of appreciating what it was, and still is. Certainly there are a lot of things that could be improved, but it isn't facebook and it was silly to ever expect it to be. It's not the internet. It's not where people want to go to buy Nikes. The corporations all got that idea from the press, not from SL users. Its appeal has always been niche and that appeal is strong, evidenced by the fact that it's still in business.

SL appeals to the same kind of people who make and market content for Poser and Daz. It appeals to roleplayers and provides them a great sandbox. It's great for machinima. It's great for artists. It's great for people addicted to shopping for their avatar. Etc. Etc. It's great for people who want to socialize in a 3d virtual space. Why isn't that enough?

I think LL lost the thread for a long time chasing after enterprise users and trying to sell it as a marketing platform instead of concentrating on, expanding, and improving those things at which it already excelled. They seem to finally be getting back on track now.

To repeat an analogy I used on SLU about this, it's like the press declared that meat would revolutionize the ice cream topping market. More press saw that faulty declaration and thought "that's crazy and amazing!" and repeated it ad nauseum. LL was only too happy to play along. People rushed in to try it on their ice cream and realized it actually tastes pretty awful on ice cream. The press then declares that meat is a failure. It doesn't seem to occur to them that the failure was theirs.

SL failed to live up to the hype because the hype was way off base to begin with. No one really stopped to ask SL's users what they wanted. It wasn't to be marketed to. It was to see SL get better at what they were already using it for.

[Vanadis Falconer]

First today November 9:th 2011 Second Life got a proper working viewer in combination with enough powerful computers to work without lag, at least on my brand new iMac.
Second Life was on its way do die the "lag-death".
The marketing of SL has been very mutch "US-style" for the US market but the big customgroups and potential to grow is in Europe and Asia.

[Aeonix Aeon]

SecondLife, in its basic premise *is* a fantastic marketing platform and by all means should be used as one. The problem isn't the initial hype, it was the fact that Linden Lab squandered that opportunity by mishandling exactly how best to apply their own technology despite clear and blatant signposts they put in place themselves.

Right application(s) but completely incorrect execution. A clear cut example of snatching defeat from the jaws of victory, as I often characterize companies that literally have every incentive and means to excel with what they have at their disposal, short of somebody coming in and actually doing it for them, and still managing to shoot themselves in the foot.

[Orca Flotta]

I just wish all those wrong analogies would stop once and for all. I wonder how the press and websites come up with such wrong assumptions about SL.
Most of the comments by clued up SL residents here made me go yes, yes, yes! There were some really useful definitions of SL, more than I've ever seen in any publication.

- SL is a Virtual World first and foremost. Of course, to live in such a world you need comunication tools. You need to socialise. But that is a side effect and doesn't set SL in comparison with social networks. You can't play SL in the metro on your way to work, you can't expect to get all your SL business done in 20 minutes. Doesn't matter. SL isn't designed for the ADHD, multitasking person.

- A steep learning curve is not a fault, it is to be expected in a "game" as complex as SL. Most my friends want more functionality, not less. They want SL to be more clever, not dumbed down. So we users must aquire additional skillsets. Sorry newbies, you have to suffer the consequences of not having joined SL a few years ago.

- SL is a niche product by design. There is no way around it. It is for a special sort of people with a keen interest in virtual worlds and immersion. That niche is big enough. It's not as big as internet 2.0, it's not an all-in-one killer application, but it's big enough and still have growing potential. It would even grow more and stronger and bigger if LL would finally face these simple facts.
Hey labbers, don't listen to clueless magazines and websites and their useless analogies and assumptions. Instead read your own forums, read resident's blogs, listen to your customers! We're the ones with the money, we're the content creators (physical and social), we're the ones paying your wages. Don't try to get every last potatoe farmer and their grandma into SL while your long-term customers are leaving in exodus style.

[Ignatius Onomatopoeia]

Hamlet, you need one more item on your list. While I don't see SL as a telepresence app for business, it remains the best platform for educators and nonprofits to build simulations, if they want a large audience. Consider the late, lamented Frank Lloyd Wright Virtual Museum.

Many of these folks support content creators. While spending a thousand dollars US in-world seems like a lot for social users, for someone with a grant, it's reasonable because the purchased UGC is a durable good. It can be used many times with different groups of students or colleagues (as long as they are willing to go to a lab with robust desktop systems and a hard-wired connection).

Tier remains the sticking point. You don't get anything durable with it.

I prefer OpenSim for my current work, but I don't need a large audience and can cobble together or turn to CC-licensed items when I cannot do it myself.

For educators who are not able or don't wish to make content and scripts, SL is still worth its bloated tier price. I say that despite being ticked off--royally--when LL raised tier.

The edu/nonprofit market is not enough to keep LL's lights going, but it's still a niche market that has done interesting work in-world.

[Arcadia Codesmith]

Everybody here has their own opinion of the killer app for Second Life: sex, business, sex business, art, music, education, gaming, prototyping, animal husbandry, gambling, goth furry lesbian vampires with big guns...

And THAT is Second Life's strength. Second Life is an Everything Machine. In SL, virtual porn producers can walk down the street with church founders and indie musicians building a fan base.

I think the biggest obstacle to mass adoption has been performance. Other virtual worlds achieve smoother operation by limiting character customization and interaction, and storing the world on the client machine. SL can't... so SL has to push the tech further, or perish.

The UI is also important. I think the mobile trend will plateau soon as users get fed up with the myriad limitations of tiny-screen gaming.

But whether they do or not, they won't be pulled into Second Life unless the platform performs as smoothly or more smoothly than World of Warcraft and other virtual world experiences with which they're familiar, even on sub-optimal systems.

[foneco zuzu]

Hamlet Facebook agenda on again, lol.
Just say it, You dont use Sl for more then a few min or even less:)
Well written, Arcadia, Orca and so many others that i beleave really are in Sl for more then a few min.
Overall useless post but that brings up valid reasons and why LL should really be paying attention to Jira and its own foruns.

[shockwave yareach]

@arbit: turning on my computer and a webcam doesn't give me access to my company's network. And trying to get people who cannot set the clock on their microwaves to setup a VPN is a hopeless task.

But if the atHome employee can be "at work" just by walking into their virtual office in SL, and they have the VPN simply by setting virtual foot there, you have solved the biggest problem of the virtual officespace -- getting employees onto the business network from their homes. All they have to do then is call their work phone and forward the calls to their home, and only the people who are in the building won't know she's not at her real desk.

[Mitch Wagner]

Pretty much the only way SL can be considered a failure is that it failed to reach a mass-market audience, as Philip Rosedale and I and others loudly predicted it would.

But that's actually not a big deal. Second Life is a success on many other criteria, as a business and technology: It's innovative, it has changed people's lives, it's made people money.

I *wish* I had founded a business that was as big a failure as Second Life.

And for Second Life to have achieved what it did, it *needed* the big, outrageous goal. It needed to reach for that goal, even if it fell far short of it.

[Rowan Derryth]

Rosedale's new venture in the news, somewhat related to this: http://www.nytimes.com/2011/11/07/technology/coffee-and-power-site-aims-to-get-jobs-done-bit-by-bit.html

[Arbit Delacroix]

@shockwave: Thanks for the reply. While I do agree that getting people to be able to set up a VPN might be no easy task, in the same vein, I'd argue that getting people up to speed in SL would be no small feat as well. And while I do believe that there are some great cases to be made for remote working in SL (prototyping, training within replicated environments, etc...), it seems that for most instances it would be adding a layer that is wholly unnecessary. Again, I'm not trying to dismiss the potential here but I find it difficult to see it being able to become any sort of a standard. If someone developed a viewer that had a very tight focus on that particular functionality and cut off most of the standard features including the ability to travel elsewhere on the grid, then it might be a different story. I suppose that's a plausible scenario. It's interesting to think about either way.

Debates on what SL's best purpose is aside (does it have to have one?), I truly believe that one of the greatest hindrances to Second Life's success lies in it's name. Even if someone has never heard of SL before or any of the associated negative stereotypes, I think there's an almost immediate gut reaction in many people when they first hear about it... as in there must be something wrong with your first life for you to want to build a second one. I admit this was my first reaction too when I heard about it. None of this is groundbreaking insight on my part of course but it is a real and persistent issue.

I can't help but wonder how much better off the platform would or potentially could be if it wasn't saddled with this stigma. I'm not saying that it's fair but it is there and I think it's enough of a deterrent to keep millions from ever considering ever giving it a try.

[Ignatius Onomatopoeia]

@Arbit, SL's name has long been an albatross.

Maybe our former-EA game-gods, who know a good deal about marketing, can toss out that prim-baby and save the bathwater!

[Johnny alt]

There are 3 reasons why SecondLife Failed to Go Big

1. High tier costs
2. High tier costs
3. High tier costs

LL behave like they have a niche product when in reality they are MAKING SL a niche product by pricing it out of the range of most people's pockets.

How can SL ever be a mass market product or even grow at all when it's 300 bucks for a full sim per month

[Jo yardley]

Well said Arbit.
The name isn't very good although it is fitting.
LL should have a contest to find a new name.

[bongo]

All your 3 reasons showing SL usage are nonsense. All are hobbys, not jobs.... or at best, delusions from the young to the professions listed...animation, architecture, etc...

SL could never be used to those professions needs on mass. Those professions are bought services based on specific/ expensive/ tools that are that way for one reason...they placate to insecure clients.

next.

SLs big fail was its technical requirements and its attitude to its customers service...er. "community" which is always a give away youre dealing with a cult.. not a business.

cults either die when the leader goes away to get a coffee.. or they grown into religions centuries later.

[Kimberly Rufer-Bach]

Sell the client on what they're getting and don't mention the platform until they're well hooked, bongo. Offer OpenSim as an alternative if the SL rep gets in the way, and then they often loosen back up ... And they almost always still end up going with SL once the pros and cons are laid out for them.

A bigger issue lately, for me anyway, is the constant huge changes and additions Linden is making lately. Can't plan any months-long, let alone years-long projects very easily when you have no idea what the UI and feature set will look like by the end of it. It's great that LL is working so diligently on improvements, but while they're at it it's a much less plausible platform for a project of any serious duration. While it's clear LL's target market these days is consumers, rather than developers, I sure hope they give us a breather at some point or there aren't going to be any developers.

[Mitch Wagner]

Arbit, that which you call a "stigma" is a leading part of the draw for many SL users. It's an opportunity to be free of the constraints of their RL identities and play with being other people.

It's a problem faced by any niche product. I well remember back in the Second Life boom when Clay Shirky was a lone voice of skepticism. He said SL would NOT take over the world; it was and always would be a niche product -- and there was nothing wrong with that.

He compared it to the restaurant in town that serves five-alarm spicy food, the kind that makes you sweat and cry and your face turn red. People who love that kind of food REALLY REALLY love it. But it's only ever going to be a tiny slice of the consumer population.

So what does that restaurant owner do? Does he start serving a lot of milder food, and de-emphasizing the spiciness in his marketing? In that case, he's likely to find that he's alienated his core customer base that WANT hyper-spicy food, and he's not drawing the mainstream customers he wanted.

Furthermore: Nowadays, with display names, it's super-easy to link your RL identity with your SL avatar. I remember when *I* started in SL (*wheeze* *shakes cane*) you had to fill out an application to show why you DESERVED to have an avatar with your RL name. And it was tough to even FIND the application. And you had to pay a $50 one-time fee plus $50/yr. Uphill. Snow. Both ways. Barefoot.

[catnapkitty]

The very first example that write gives shows how uninformed she was.

"We hired the iPod."

Um... the iPod came after mp3 players had already been around for 10 years, meeting a very practical need of a very large base of mp3 downloaders... But they all failed to take off before the iPod.

Why?

There was a need, there was a product meeting the need. Why did the two fail to meet?

Poor marketing and design.

Then enter Steve Jobs with a slick looking MP3 player that had a cool name, and came with a TV commercial of sexy hipters in black and white shadow effects dancing with the thing in their hands.

- Instant win.

Has nobody learned anything yet, from the legacy of Steve Jobs?
- He was just another snake oil salesman. And people for centuries have been failing to realize that its not the snake oil, but the slicked-back haired salesman, that moves your product.

SL could have been Facebook, or at the least as big as WoW, but it had a leader who had no clue about salesmanship, and lacked the foresight to hire someone who did to do it for him.