Avoiding The Spiral Of Death

Sunday, August 1, 2010 Sunday, August 01, 2010

Fast, Easy and Fun. How has it come to this?

Fast, Easy and Fun is the new direction of Linden Lab for their product, Second Life. It’s a reaction to the troubles they’ve gotten themselves into in the past year or so. Here’s how I see the sequence of events:

  • A company discovers and builds a service around an amazing concept
  • The concept, while breathtaking, is so new it’s not fully understood by anyone yet, even its makers
  • The service is implemented in the only way possible, given everyone's limited experience with the concept: it’s difficult to use
  • Reasonably large numbers of early adopter users, who are tolerant of difficulties, begin using the new service
  • Beyond the early adopters, few people use the service because its difficult interfaces are forever past their capabilities and tolerance
  • Company notices growth stalling as the pool of early adopters is exhausted 
  • Company seeks ways to break into the mainstream market by simplifying the system
  • The simplification attempt fails because the system is still not fully understood
  • A few early adopters begin to leave for alternative services
  • Management panics and makes big changes. New approach: Fast, Easy & Fun.

When I say “not fully understood”, I mean that while we may fully understand the use of the existing tools and interface, we really don’t understand the *right* way to do the interface. For example, the permissions system is simply unable to deal with many day-to-day situations. How should someone be introduced to the service such that they don’t immediately give up? No one really knows the true answers to these any many other key questions yet. This is a system still figuring itself out. It’s still an experiment.

Experiments are for early adopters.

I’ve written of this before, but it is a phase all companies must endure: the transition from initial “early adopter” mode to a more mainstream “easy to use” mode. Some tech companies don’t survive, others are utterly transformed and some are overtaken by alternatives that have a better approach.

But that doesn’t answer the question of the panic. Why panic so much? Why layoff huge numbers of people? I suspect it has to do with what I call “the Spiral of Death”.

Consider the situation myself and many SL shopkeepers find themselves in: we spend huge amounts of time setting up a shop in SL, making products, doing promotions, etc. and just barely make a living. Suddenly, some users panic and move away to other grids. They say “it’s wonderful, please join us over here!” It may be wonderful if you are, for example, an educator or business person who simply needs to build some type of installation. But if you’re a seller, it’s quite a different situation.

A seller needs a market, and right now SL is still by far the biggest grid with the largest number of potential buyers on it. Yes, there are OpenSim grids all over, but all of them are tiny compared to SL. It’s hard enough to make a living in SL even with its giant user base, let alone grids one one-thousandth the size. It’s even worse because in order to gain any significant amount of OpenSim market, you’d have to set up separate shops in multiple grids (thus spending time building multiple shops and paying multiple tiers. OpenSim grids may be cheaper per square meter compared to SL, but when you need several parcels on several grids, it probably costs more). It just doesn’t make economic sense to move virtual businesses to other grids.

But it would make sense if large numbers of users begin to bail from SL and move to a single popular alternative grid. If that happened, then SL would lose something very critical: its size. When the market moves, so will the sellers. And with them will go even more buyers. And so on, developing into “The Spiral of Death”. Once the user base starts shrinking, it will inevitably go down, faster and faster.

I suspect this is what Linden Lab fears the most. And it’s certainly worth a panic, because they risk their entire business. It could happen: more and more OpenSim grids are appearing, each with some type of innovation or another, but none with massive market share. Yet. Eventually, one of these grids will accidentally or on purpose hit on the right combination of services and interface and they’ll begin to win users over. Linden Lab, if they are to survive, must prevent the Spiral of Death at all costs.

That’s why there’s an “all hands on deck” mode and a focus on the basics. Fast, Easy and Fun are indeed the basic keys to success. If these are achievable, then existing early adopters will stay and newcomers will not abandon the service nearly as much as now. That should result in a growing service once again.

But only if it works. I’m terribly interested to hear how “Fast, Easy and Fun” will be achieved. Perhaps Philip will enlighten us at SLCC 2010?


Tymmerie Thorne said...

Great write up!

I had a thought that the "death spiral" could be used strategically by LL itself. It could use SL as a cash cow (I have no idea if it is in the shape to be one.) that funds the building of a new virtual world. The new world, in this example, would be free of the unfortunate SL name and free to use a new viewer, new rules, new pricing, new coding/hardware, etc. It might even be free of the stigma and some of the problems that plague SL.

In essence, LL would poach itself and create the new, fresh world that can be introduced to a market beyond early adopters.

Maria Korolov said...

ArminasX --

Yes, the OpenSim grids are tiny, better suited to educators and enterprises and artists and non-profits than merchants. I agree with you there.

But you don't have to set up a shop on every single grid. You only need to set up shop on one hypergrid-enabled grid (or your own hypergrid-enabled minigrid) and people can teleport in.

Today, half of the 100 or so public grids I'm tracking are hypergrid-enabled, including the largest, OSGrid. With the new release of a better, more secure, Hypergrid 1.5, we're probably going to see an explosion in hypergrid-enabled grids. There's even a multi-grid currency, OMC, currently available on 14 (last I checked) commercial grids. It even shows your balance in your viewer, and it follows you from grid to grid as you teleport around.

The hypergrid brings with it significant risks. Selling an item on the hypergrid is a little like selling a digital product on the Internet -- people can then copy it and redistribute it. (Of course, people do that inside Second Life, as well...)

The hypergrid also brings with it significant opportunities. There are few big brand names there yet, for example.

I also urge content producers not to forget the education/enterprise market -- these folks love OpenSim, respect copyrights, need full perms -- and are willing to pay extra for goods that they have clear title to, and can modify.

-- Maria Korolov
Editor, Hypergrid Business

iliveisl said...

very nicely summed up in your bullet points

yep, i am one of those that left. from owning a 19 sim estate for two years (been isl for 4 years) to now having 16 sims in OpenSim

i have not logged into SL since March

it is tough to leave after investing so much time and money. the time investment was a bigger thing to walk away from than the money

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