Chasing the Bar: The Linden Lab Layoffs

Thursday, June 10, 2010 Thursday, June 10, 2010

I read the latest news from Linden Lab, where they abruptly announced they were letting go approximately 30% of the staff, closing and consolidating distant offices and changing strategy. On the surface, and indeed for the unfortunate 30%, this seems to be very bad news. Is Linden Lab on the ropes? Are they desperately cutting expenses in a last ditch effort to buy a few more months of life before the inevitable cash crunch?

Maybe, but I don't think so.They're profitable, but not growing fast enough.

As a business, Linden Lab's role is to provide a good return to the shareholders for their considerable investment. As business managers, they do this by executing strategies that hopefully will accomplish that goal. Like any business, strategies sometimes don't work out and alternative strategies must be developed and deployed. If it doesn't work, try something else. I think this is the case here.

From his beginning at The Lab, CEO Mark Kingdon has spoken about simplifying the user interface, improving the first hour experience and growing the user base substantially. I even seem to recall seven-digit numbers being bantered about.

Over the past year we've seen some moves that theoretically should have supported those goals: viewer 2.0, Linden Homes, policy changes and several others. However, we are now in mid-2010, and we just haven't seen any significant growth in the user base. We also haven't seen growth of the business client base, in spite of the release of the Second Life Enterprise private grid server. These strategies, while good intentioned and reasonably executed, haven't done the job.

For me, the main problem that still exists is the incredibly difficult user experience. Yes, viewer 2.0 did simplify some things for new users (although complicating things for some existing users), but it's no where near the level of simplification required. Let's face it: users who can have a good time in minutes on innumerable other simpler systems just won't spend the time to learn the mysterious intricacies of the SL viewer and the virtual culture.

The Lab has been spending efforts trying to simplify their total experience, moving towards an invisible goal of easiness. But the bar has just been moved.

This spring the iPad was introduced and it is a monstrous hit, so much so that it's expected to be in the hands of tens of millions of people a year from now and many more after that. I'm not saying we should run SL on an iPad, but there's an interesting phenomenon taking place: the iPad has revealed that many people want ultra-simplified computing. Its amazing to watch seniors, very young children and those unfamiliar with computers to immediately use an iPad. It turns out that many people (but probably not you) just want instant on, touch and a reliable simple interface. They don't want software versions, graphics cards, DLLs, viruses, upgrades and all the nonsense you have to put up with to use a PC. Sure, techies will still want and use PCs, but who among us hasn't found ourselves helping a baffled relative with a PC problem - and you just know they have no business owning a PC as they have no chance of ever properly operating it. Those are the new majority of computing users, the folks who will be using very simple interfaces on simple devices - and not just the iPad, but many similar devices that will inevitably follow. The bar of simplicity has just been raised.

Back to The Lab. Their new strategy involves creating a new web browser based interface. You know, something that would run easily on all these new simple devices? The ones to be owned by tens or even hundreds of millions of people?

Does this mean we'll all have to use it? I think not. I think we'll see existing and sophisticated users keep the main downloadable viewer to create SL content: the content needed by the (hopefully) huge numbers of new simplified users. Perhaps some of them will like SL so much that they'll take the time to download the "full" viewer and become content creators themselves.

Meanwhile, there should be a great many new users seeking content - from the content creators, property owners and service providers who could enjoy a new boom. At least I'd imagine that's the theory; we'll see if it comes to pass.

One more thing: this post was entirely created on an iPad.


Botgirl Questi said...

Thanks for the level-headed analysis. I have one question: Did you enter the text for this post via the onscreen iPad keypad, or an external keyboard? Just wondering. :)

Tinsel Silvera said...

Finally a voice of reason amongst all the whining and gnashing of teeth over the past 24 hours. Is it sad that we lost a slew of Lindens, many of them favored Lindens? Of course it is. Is it sad that a slew of LL employees lost their jobs? Of course it is. Is this any reason to pronounce SL dead? Not at all. It's business. Plain and simple. My ex-employer just finished some major layoffs, myself being one of them. LL has to be fiscally responsible otherwise there will be no LL/SL. I wouldn't expect them to do differently. Nor would I want them to. Thank you for rising above the hysteria and speaking calmly about the reality of the situation. I look forward to having a slimmed down version of SL that I can access on my iPhone and iPad. How can it be a bad thing to have SL with me 24/7? {:o)

Gwyneth Llewelyn said...

Oh, good points here, ArminaX! Nevertheless, I should point out that "ease of use" was not the major goal for LL in 2009. The goal was the enterprise and educational markets. "Ease of use" was a side-effect, something that was a requirement for many corporations and universities, and one secondary goal that they would continue to pursue if the primary goal was as successful as they hoped.

Sadly, that didn't happen. For a lot of reasons, but ultimately, what matters are the numbers: allegedly 99% of LL's revenues (or possibly even more!) comes from the residential market, not from the corporate market — where the only ones making a profit are the independent developers (LL just gets a handful of extra sims that way).

So, hidden between the lines of LL's press release, there is a new primary goal: focus on the consumer market, and it's not a coincidence that built-in voice morphing has been announced today. It's clearly something for the residential market.

The Web-based viewer is something that LL ought to have announced long, long ago... honestly, I don't see much difference between having a 50 MByte download as a browser plugin or a 100 MByte viewer (we'll have lag on both :) ) but there are two fundamental issues that the Web-based viewer will solve. First, it'll go through firewalls — which is also important for the corporate and educational markets. And secondly, of course, it will run on all platforms, not only Windows, Mac, and Linux. Anything that is able to run a browser will be able to run Second Life, and that is really a fundamental need these days, where almost everybody else (except die-hard old-school game designers) wants to be. Blue Mars announced that a few months ago.

The issue right now is to see if LL is going to port their rendering engine to work as a browser plugin, or if they're just going to use Unity3D as their engine. Unity3D already supports Windows, Mac, iPhone/iPad, Android, and Wii natively... and everything else via a Web plugin. It would be the most obvious thing to do — just get Unity3D display SL content. I estimate this to be achievable with one year of development and a handful of programmers.

I surely hope they go ahead with that and don't leave the project mid-way :) These days, everybody is too lazy to download an application and learn to use it, but downloading a browser plugin is perfectly acceptable. And with the current generation of under-$300 laptops becoming increasingly popular, it's not just iPad owners that will enjoy SL-on-a-browser :)

ArminasX said...

@botgirl I actually did the entire operation on the iPad, including writing using Pages, then cut/paste into Blogger via Safari. Heh, no pictures yet, haven't figured that out. Also, these comments done via iPad too! Get one!

Unknown said...

tbis is the only perspective I have agreed with so far.

Botgirl Questi said...

Got one! My atomic sibling has a blog devoted to iPhone and iPad creative work. :)

Natsuki Morigi said...

You may well be correct and the future may be rosier for us all and give us full 3D access to SL via mobile devices.

The problem is why could LL not be more explicit about what it wants to do? We are all left trying to read between the lines what their plans are regarding linking with social networks, web-based viewing, dumbed down experience and so on.

If we have to disect their announcements it is no wonder some or many of us would take a sceptical or pessimistic view.

Angie McGregor-Pearse said...

I hate to sound like a broken record, but shouldn't we make the grid usable for seven-digit concurrency first? Or even six-digit? Or making it usable for the numbers we have right now?

Rubberbanding on an iPad will be just as annoying as rubberbanding on a desktop PC.

lufpleh said...

Netbooks & mobile is where the tech/growth is, LL already previously said they wanted to develop for this market. This is just the public announcement showing that they will not be dinosaurs still developing for desktops with massive graphic cards.

Maria Korolov said...

Even techies need a break sometimes. I run Linux on half of our computers, but love my iPhone -- there's only so many times you want to have to learn a new interface.

I love the building tools and scripting built into SL/OpenSim. But it's a pain in the butt to fire up a browser and log in and teleport to where I need to go -- I would enjoy being able to get there with a single click from the Web. Get in, do a quick meeting, and get out.

-- Maria

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