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“And this is why I worry so much about existing Residents’ resistance to change. Every day I read a Resident blog post or forum comment complaining about Linden Lab’s pursuit of new users, when the existing Residents are the ones who keep the company going.” – Wagner James Au, New World Notes.

I don’t hear a lot of resistance to change at all. In fact, I hear a lot of promotion of change from the users.

What I hear instead are assorted variations of “Don’t tread on me!”

It’s true that human beings are somewhat naturally resistant to change, but Second Life users are – in my experience – no more or less resistant to change than any other people.

No, what seems to concern them more is that Linden Lab, the giant in the playground, will take some thoughtless or ill-considered action that breaks content or breaks the business models that users rely on to maintain their properties or lifestyles.

Au suggests that the model is unsustainable, with a minority of users shelling out the bulk of Second Life’s revenues, as they maintain large estates in Second Life. And perhaps that is the case, as those same users work to generate enough revenue to sustain those estates.

What worries many is that Linden Lab might make a change that, at a stroke, invalidates the revenue models that they have established. Such things have happened before. Indeed, many might see Linden Lab as a metaphorical giant striding across the Second Life grid, accidentally trampling and crushing things as it goes about its business of maintenance and progress and day-to-day hurly-burly.

And, indeed, therein lies the problem. Highly-profitable business models don’t work well in homogenous systems or systems high in entropy. The big money in a market is made from filling in gaps, grinding down humps and papering over cracks; that is, in providing people with things that are not already readily available to them.

Once the market surface has been made more flat (either by Linden Lab or by the proliferation of products or services in a particular niche), commoditisation sets in and there’s comparatively small profit to be made in that portion of the market surface – you have to switch to small margins and high volumes. To make money in a commodity market you need a very large market.

So, yes, Wagner has something of a point, because as the market commoditises it needs to vastly expand to maintain profitability in line with the costs of owning sims. How many more skin stores does the grid need? They’re no longer the highly profitable businesses that they once were. Not without a lot of growth that Second Life is just not seeing right now.

And that’s without worrying that the giant will come by, crushing your business model flat as it erases a hummock or fills a gap in the market, casually destroying your revenue stream without a second thought with an outstretched foot, or a dropped sandwich.

Now that’s the change that worries people. The unpredictable and personally disastrous change, because you can never tell where the giant is looking, or going, or what it is planning to do next. It’s hard to get the giant’s attention to ask it questions, and – more often than not – it is disinclined to answer.

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