Tateru Nino's Second Life avatarThat seems like a fairly simple question on the surface, and – in many senses – it actually is fairly simple, with fairly simple answers. You have to think it through a little bit to actually get to that simplistic core, however.

The simplest answer is “everybody”, but that’s a very facile and superficially misleading sort of an answer.

Linden Lab is, at its heart, a business. A for-profit business. If it weren’t, Second Life and Linden Lab itself would have been dead and gone years ago. In order to survive, any business must perpetuate itself, to strive for its own longevity in a world of changing circumstances.

Any business that forgets that key notion becomes extinct (often quite abruptly). Many businesses do just that. It is the single most prevalent cause of failure in the enterprise – businesses get so wrapped up in what they’re doing today, that they forget to plan to be around tomorrow.

The circumstances of tomorrow may be quite different to those of today – and those changes can happen quite suddenly – and if you don’t fit the new circumstances, you may die a sudden death.

So, as a business like Linden Lab, who do you really pay attention to?

First and foremost is the media. The media defines your product and/or service to everyone who hasn’t become a customer, and that makes it both an opportunity and a threat. If you’re not already a customer, all you know about Second Life is what you read in the media, and almost everything the media has presented people with about Second Life to-date generally ranges from “mostly wrong” to “utterly wrong”, with only rare exceptions.

Put simply, if you’ve not already been a Second Life user, then pretty much everything you’re likely to know about Second Life is wrong. A failure to compensate for the dichotomy between that perception and the actual reality of Second Life will lose you the majority of new users, outright, even if the user interface were dipped in gold, and vomited money. Rarely does a new user try twice.

The big ‘media hype’ phase of Second Life from 2005-2007 or so, was in many senses a near disaster for Second Life, costing it millions of potential, long-term users.

The media; pay attention to them, even if they can’t write two consecutive factual sentences about Second Life, on their best days.

Next up, obviously, are the customers you do have. Despite the pervasive influence of mass media, word-of-mouth is pretty strong. Not overwhelmingly so, but pervasively subversive in its own ways.

Linden Lab pays a lot of attention to its users. That it does should be no surprise – they’d be dead already if they didn’t – but the means and mechanisms aren’t always all that obvious at first glance. At first glance, it might seem like the Lab isn’t paying attention at all, but that is far from the truth. In many ways, Linden Lab is as attentive to its users as any company I’ve ever worked for, and better than most of them. There are definitely reasons that it doesn’t look like it sometimes, though, but I’ll get to those in a bit.

The Lab, like any business, pays attention to money. Has to. Must. If the money dries up, everything goes away. Poof.

It’s concentrations of money (and influence over money) that determines whether the Lab pays attention to you as an individual, a group, or as an aggregate.

If you represent a large enough block of the Lab’s revenue, sure as hell they’ll pay attention to you as an individual. They’ll know your name, and occasionally ask you questions. If you’ve got a demonstrated history of being right more often than not, they’ll pay particular heed to your responses. If your history shows you being consistently wrong, they’ll still listen but use you as an example of what not to do (unless other folks of more proven rectitude agree with you).

Much the same that goes for individuals goes for groups – self-organised collections of users with goals and purpose, like Caledon Oxbridge, NCI, and The Shelter (to name just three). Groups that influence chunks of the Lab’s Second Life revenue, those get attention, though rarely quite as personally.

In addition to the finite number of foci that individuals and groups represent, there’s the rest of the users. That’s where the bulk of the revenue is, far outweighing that represented by the individuals and groups mentioned earlier. That’s the real money, if you will.

Now, that’s a lot of people. That’s hundreds of thousands of people. You can’t just walk up and start asking them questions – I know, I’ve tried. People run away when you do that without sufficient preamble, at worst, or tell you things in response that they don’t necessarily adhere to themselves, on the assumption that everyone else does. It’s pretty unreliable.

That information has to be collected in aggregate. Everything you do, everything you say, everywhere you go, everything you buy or sell or spend is logged and stored. Multiply that by a million people, and you can get a truer picture about what people actually do and are interested in, than what people tell you. At this level, Linden Lab doesn’t know you as an individual. That never even comes up in the data, long having been stripped away, but it tells Linden Lab a whole hell of a lot about where money comes from, where it goes and how much of it circulates and why.

John Zdanowski (former CFO of Linden Lab, from 2006-2009) once told me:

Users consistently spend $1 per hour in user to user transactions in second life.  The lindex users spend about $0.20 per hour and Linden Lab’s revenue was also a consistent amount per hour (when I was there).

It’s the most important metric because users are willing to spend a certain amount per hour for entertainment…no matter how you charge them.  That’s the surprising thing.  Changing pricing doesn’t seem affect how much users are willing to spend per hour.

That right there means that the mass of aggregate data (and whether user-spending ticks up or down following a policy-change, bug or feature) is of absolutely critical importance to Linden Lab. Because regardless of what you or I or a large landholder, or a large representative group thinks about what the Lab is doing, that revenue per-user-per-hour (and the data underneath about where that money comes from and where it goes) is the ultimate arbiter.

Outside opinions, information and observations can help inform Linden Lab or guide it, but users-times-hours-times-revenue is what Second Life lives or dies by, and the Lab skews that product downwards at its peril. The good part (for all of us, I suppose, not just the Lab) is that even a few hundred angry, sign-waving users can’t really put a significant dent in it (but a major bug, a poorly-planned feature, or a screwy change in the Terms of Service certainly can). That, at least, makes it sensitive where it counts – though it only really gives you excellent hindsight. [EDIT: I don't want to give the impression that the Lab slavishly adheres to just this single metric - it does, in fact, have quite a number of broadly-based feedback metrics available to it, but you get the general idea, I'm sure]

That brings me back to why the Lab doesn’t often look like it is listening.

Now, talk to most anyone, and they’ll tell you that the Lab doesn’t really pay attention to users, or maybe only to a small handful. For most, it seems like the Lab isn’t listening. It’s not like a Linden has walked up to you and chatted with you about your views, is it?

Well, actually, that’s something that does happen. More often than you might think. You generally don’t know its happening, though. That fellow at that in-world party that a friend introduced you to, or that lady you’ve known for years – they could be alts of Linden staffers – there are certainly a lot of those, and they like their time off in Second Life as much as the rest of us sometimes.

They chat and build and shop and dance and hang out with the rest of us, experience many of the same bugs and issues, and listen to what we say. That information filters back into the Lab when meetings happen. Just because you don’t think a Labber has talked to you doesn’t mean they haven’t. You’ve probably complained to one of them that Lindens never listen to the users.

Also, as we’ve already covered, a lot of information gets picked up in aggregate, Labbers compare changes in that data to key decision-points to determine if something was ultimately a positive or negative change – quite independent of what you or I might think of that change.

And, of course, there’s screw-ups. In my experience, Linden Lab is no less prone to group-think, decision-isolation, and other ills than any other company that you can think of. For some, Linden Lab and Second Life isn’t a calling or a passion or a commitment. It’s a job no different to yours, where the most important thing is to get through the day with a minimum of fuss. Pretty much every company (and every human endeavour) has some of those – and that’s something that just seems to multiply as workloads increase.

And lastly, the Lab is stink-poor at communicating its intermediate thinking, and at communicating that it is paying attention. Instead of a media strategy like many other developers and online platforms, they tend to opt for a communications strategy that is more reminiscent of Walmart, or IBM; It isn’t a conversation. You never know what’s going on until the Lab chooses to speak.

So, ultimately yes, the Lab pays attention to everyone. In different ways, through different means, measuring and grading its successes and failures in the lifeblood of business – because if it didn’t, it wouldn’t be around anymore to talk about.

Addendum: Ciaran Laval pointed me to a piece from Eric Ries, back in 2009. Superb reading. Thanks, Ciaran!

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