Interesting Quora Question on Second Life's "Failure"

"What is the reason for Second Life's failure?" is an interesting question I just noticed on Quora, the popular query-based social network that's sort of Reddit-meets-Wikipedia-meets-Facebook. The answer with the most votes so far is from Treet.TV founder Gary Wisniewski, who wisely re-frames the answer to, "What is the main reason that Second Life failed to meet growth expectations anticipated in 2007?", then follows up with a long and cogent analysis, ending with this passage:

A respected VC friend of mine referred to companies such as Linden Lab as the "living dead", having enough profit to survive and maintain their niche market, but not having enough revenue potential or strong enough management to take the daring moves needed to reinvent themselves and move to the next level.

On this part, I don't quite agree. I'm more than willing to see what daring pivots Rod Humble and his advisor Will Wright are planning for the next year. But I do agree the need to be daring is needed now more than ever.

Comments

[Pussycat Catnap]

I think what should be taken from that is that such living dead companies lack the resources to reinvent themselves without significant risk. Taking such gambles are needed to grow, but making the wrong bet could spell the end of the entire thing.

There's no safety cushion.

[foneco zuzu]

I can hardly stop laughing, a living dead, is a company that makes enough profit to be alive after so many years, without giving a damn about it's user base needs?
No that's not a living dead, that's a very healthy vampire that feeds and still breaths on this days of Doom!

[Ignatius Onomatopoeia]

I cannot speak for the general user, or the living dead. Well, some faculty are a bit comatose.

Educators would probably cite some combination of learning curve for the UI, tier-prices, and "image" associated with SL during the hype era.

All those tales of divorces, etc. hurt, as did the very name "Second Life." One of our emerging tech specialists got a short demo of our OpenSim project recently, and he quipped "no one talks about Second Life any more."

I hope the EA alums can "game it up" enough to keep things vital. I will soon write about how SL's unique combo of "good enough" game engine + sandbox for amateurs offers something unique. Add to that the in-world content made cheap (Raven Rezzers...600L !) and I'm sold.

But if I hadn't recently gotten a university to sponsor an SL redo of my OpenSim project, I'd never have come back. Not enough ROI for tier, when you teach a class that might employ SL every other year.

I hope LL does a rebrand as "Linden Realms." Not my favorite name, but better than "Second (I got no first) Life."

[Metacam Oh]

its just a major disconnect between the people who work for the Lab and the customers. An even greater disconnect between the people who call the shots ("The Board") and the customers. The people who call the shots don't use Second Life and have no idea what they have.

[Melissa Yeuxdoux]

Applause to James Reichert for his commentary, which starts out with the observation

"I wasn't aware that Second Life failed, unless you consider 'unintended use' a failure. If you do consider unintended use a failure, you probably consider dynamite a failure as well. Nobel certainly did."

[Missy Restless]

Not only is Linden Lab a profitable privately held company that enjoys continued success but, as you point out, bold moves from the new leadership may be in store. Add to this the fact that LL has enabled the creation and sustenance of many thousands of content creators operating successful businesses inworld and it's just laughable that someone would ask how they have failed. The proper answer to the original Quora question would be "Have you stopped beating your wife?".

Gary Wisniewski's rephrased question is much better and his response articulate and insightful.

I like James Reichert's answer on this Quora question.

[qarl]

guys - don't be fooled - quora is just trying to draw attention to itself. (so that no one writes a "what is the main reason quora failed?" story.)

as they say - don't feel the trolls.

[Ezra]

Very thorough answer by Gary. A great read.

I'd argue though maybe the 2007 expectations were entirely too inflated if anyone was expecting Second Life to stand adjacent to Facebook. I wouldn't want those expectations rekindled.

Twitter is a great example of why Linden Lab chasing profit over growth was a better move even if it wasn't intended. Twitter has 600+ employees, is 6 years old with over a billion dollars invested, and its not profitable.

I agree Linden Lab needs some "daring" to shake off the stagnation in some way and that can't come soon enough, but it doesn't really need the daring of a typical boom and bust Silicon Valley story that it's thus far escaped. Rather than dare do something with Second Life that makes it unprofitable again, they're much better off sinking money into a successor, or as they're doing now, a second project.

[Hamlet Au]

Qarl, Quora is a user-generated content creation platform, so I doubt the company itself posed the question. It even has virtual currency and you can use pseudonyms, and answer questions anonymously!

[Pussycat Catnap]

"as they say - don't feel the trolls."

If we didn't feed the trolls, where would the internet be?

Not even a dancing hamster, let alone lolcat, would survive. We'd just have the genuine article; http://www.ikissyou.org/

[Hamlet Au]

BTW, I just proposed rephrasing the question to, "What is the main reason for Second Life's failure to meet industry and media expectations made during its 2006-2007 hype era?" A bit like Wikipedia, you can propose changes to Quora's answers *and* questions.

[Riisu]

The only daring move a lot of people hope Linden Lab would do is also the one which is the most unlikely to happen: A radical change of the tier system.
LL cut their server costs in 4 and their staff costs by a third but the Second Life Pricing List PDF from 2007 is still accurate --for the most part. From where I stand, the tier prices look really full of hot air.
If LL really want people to fill SL with mesh games, these people will need reasonably large land areas to deploy such games. We, the people, aren't LL. We can't create land out of thin air whenever and wherever we want. We have to pay for it. Land prices haven't been a problem for quite some time but who would buy land when acquiring a useless 16 sqm ad-farm means doubling your tier from ridiculous to outrageous?
I can live with all the bugs and short-comings of SL, I will eventually adapt to some client that I hate passionately to be able to see meshes, but the tier looks more and more like an inflatable version of the proverbial elephant in the room which is pushing me and a lot of people out.

[Ann Otoole InSL]

Congress has been bought off for SOPA which is going to shutter the internet in the USA so it doesn't really matter.

[Ann Otoole InSL]

Oh, and SOPA is something venture capitalists and internet companies should have pooled resources to stop since so many are going to loose all their money real soon now. I see pro SOPA propaganda commercials. I see no truth about SOPA commercials. Oh well.

[Amanda Dallin]

Venture Capitalist and internet companies like government regulation such as SOPA because it keeps new people from being successful and competing with the current VC and internet companies.

I don't think we'll see tier drop until SL is more stable and can handle growth. Growth on the scale of 2007 would destroy the current grid.

[Myf McMahon]

Quora has a userbase? Based on a quick Google Trends comparison, looks to me like they'd kill to have Second Life's profile...

http://trends.google.com/trends?q=quora%2C+second+life&ctab=0&geo=all&date=2011&sort=1

http://trends.google.com/trends?q=quora%2C+second+life&ctab=0&geo=all&date=2010&sort=1

[SarahAndrea Royce]

Uhm, "living dead". OK, I'm honestly happy to free some burdened owners from such a zombie for lets say, a symbolic L$.

[Arcadia Codesmith]

So.

Second Life is not a failure by any objective measure.

Second Life failed to live up to (inflated) industry expectations. Welcome to a very large club.

If Second Life wants to return to and retain relevency, it has to do... something. Probably not one big something, but a lot of little somethings -- like what they're doing with the auto-huds and continuing to mainstream mesh (and basic real-time vertex modeling tools built into the client should be a no-brainer there).

And if Second Life wants developers to flock to the platform and create the level of compelling content that will draw hordes of users, then they're going to have to cut us a better deal on hosting that content. Right now, they're pricing themselves out of the market.

When they can offer a continent (or world) for the price they're currently charging for a sim, then it becomes more viable to develop MMOs and VWs within SL. Combined with the ability to preload texture and terrain packs, and certain interface refinements, SL could start to realize its potential.

It will happen, but it won't happen here unless Linden Lab becomes a lot more agile and responsive to the developer community than it has been of late.

[Emperor Norton]

VCs opinions are pretty useless on discussion long term corporate health. A VC's entire interest is in getting a big pay off within five years so that's like asking a gambling addict to plan your retirement. One can make a convincing argument that the VC's vampirish demand for short term profit destroyed Second Life chance at the big time since it forced Linden Lab to take short cuts and actively antagonize it's customer base in a futile attempt to make Second Life Wall Street Friendly.

But considering that kind of out of control, thoughtless greed has caused a lingering, world wide recession it's kind of cool the game I play for amusement makes some Wall Street John Galt wannbe Superman weep at night over his money. You know?

[Penny Patton]

The ONLY way to answer the question of "why Second Life has failed" is to narrow that broad, and not entirely correct, statement, that Second Life "has failed", down to something you can actually define as success and failure.

The answer to why SL failed to meet growth expectations in 2007 is extremely simple.

Linden Lab never could quite pin down what they wanted SL to be. In addition they failed to recognize, develop, then capitalize on, SL's strengths.

To this day SL remains unfinished, unprofessional, pre-beta software. Even the most basic, vital components, such as the appearance editor, are riddled with bugs, broken/missing/incomplete features and a severe lack of any sort of polish in terms of presentation or usability.

Another problem due to that early lack of focus, SL is trapped in architecture that woefully lacks any sort of scalability.

In addition to all that, the whole idea that Linden Lab could draw in a large corporate presence, with no idea as to how that would work, what they would do in SL, while ignoring the usebase that had flocked to SL early on and was continuing to grow right up until about 2007-2008, was another big part of why SL failed to live up to the expected growth. The corporations were interested in SL as a means of marketing, reaching people. They didn't want corporate office spaces! They didn't want 3D websites for internal work! They didn't want to conduct business meetings with avatars! They wanted exactly what they get out of Facebook. A new avenue for marketing to people. LL failed to deliver both the people and the means to market to them.

SL was never going to be "the next Facebook", it was never going to replace Twitter. By its very nature a mobile component is unnecessary and could only be used to compliment the primary product (say, being able to transfer inventory and funds, being able to chat with friends, and otherwise maintain your account via a mobile device when you lacked direct access).

If Linden Lab wants SL to grow in the future they need to recognize its strengths and weaknesses so that they can work around them and focus on developing those aspects that play to those strengths.