Happy New Year everyone, and welcome to my third Word-of-Mouth Wisdom interview.  Three is a powerful number in business (and in many other fields), so I chose to have this interview focus on the future of business and the Internet.

Second Life on cover of BusinessWeekThere has been a ton of buzz (mainly positive) about the online 3D world, Second Life.  My two favorite magazines, BusinessWeek and Wired, write about Second Life in nearly every issue.  Wired called it the "coolest destination on the Web" and they loved it so much they set up shop there.  IBM recently built a Circuit City store in Second Life, and Dell recently opened up shop there as well.  I have my own views on why Second Life is getting so much buzz.  First, the promise of the Internet and virtual reality has been science fiction worthy for a long time.  The groundbreaking book, Neuromancer by William Gibson, invented the term "cyberspace".  The insane cult-classic movie, Brazil by Terry Giliam, showed a warped glimpse into the world of virtual reality.  Neal Stephenson's book, Snow Crash, made the virtual reality Web more tangible and exciting by painting a vision of the "Metaverse", which caught on as a new term to describe many massively multiplayer online RPGs (role-playing games, like World of Warcraft), and was adopted by Second Life to describe their virtual world.  Second, the promise of the Web on viable telecommuting and having a successful business that doesn't need to be located in a specific geography (like Silicon Valley) is a very real desire for many.  And third, it is just plain cool to imagine a world that you can live in without the rules of gravity (in Second Life, you can fly), where you can be anyone (in Second Life, many choose avatars that are quite interesting to say the least), and build anything (in Second Life, all it takes are a few pixels).

I have my own experience with "virtual worlds".  In 1990, I created Renegade Outpost, which grew into the most popular multiplayer role-playing game on the Internet by 1992.  I only had 5,000 players worldwide (as compared to World of Warcraft's 7.5 million today).  But, in comparison, Renegade Outpost was a text-based game which only supported 256 concurrent players and you could only access it via TELNET (there wasn't a whole lot of HTML in those days).  In any case, it was completely immersive.  Players could create their own worlds once they became immortals, and many people would play over 160 hours per month.  The ability to communicate with anyone in the game (players were connecting from Germany, Singapore, and many other places around the globe), go on quests together, and create your own world for other players to explore was a powerful draw.

So, from my own experience, Second Life makes a lot of sense.  And I am very bullish on the need for an immersive, 3D Internet experience, whether or not Second Life will be the forum to survive is the key question.  But, for now, it is a very exciting place, and I think we can all learn from it.

Giff ConstableGiff Constable may be the best person to explain how businesses can tap the potential of Second Life, and he was gracious enough to be my interviewee today.  I first met Giff at Resource Interactive's iCitizen conference, where he and I were both speakers.  He is the VP of Business Development at The Electric Sheep Company, which builds a precense in Second Life for businesses.  Giff has 12 years of experience in Internet and software businesses, and a Princeton University degree.  In Second Life, Giff is known as Forseti Svarog (he told us why at the iCitizen conference, but I can't remember).

So begins our interview… (all images below are samples of Second Life portfolio work from Giff's company, click on them to get a full-size view).

iVillage loft  aloft virtual hotel: lobby  aloft virtual hotel  Sony BMG: Music Store

1.  Giff, would you please provide an overview of your work in layman’s terms to our readers as they may not be familiar with Second Life?

The Electric Sheep Company is a 40-person company focusing entirely on virtual worlds, including Second Life.  If you want analogies to existing businesses, we can be thought of as a mix of movie production house meets Web development company meets strategic consultancy meets software company.  We really do blend everything from strategic advice to user experience design to virtual architecture and application development.  The cross-functional nature of our business makes for some interesting challenges and a really interesting team.

The second part of that question of course is what is Second Life itself, but that is not a simple thing to answer in two sentences and layman’s terms.  It is an online, immersive 3D space where people interact as customizable avatars, participate in an economy with an annual GDP run-rate of over US$100 million, and where all of the content seen and used in the world is built by its participants, whether individuals or corporations.  Say that ten times fast?  It is important to note that Second Life is closer to the Internet than a game, although like the Internet games are built on top of it.

2. What companies do you think are doing the best job of marketing themselves in Second Life?

I’m not sure anyone has totally reached their potential yet, but then I am not surprised given that for many Second Life is still viewed as experimental.  There are quite a few companies now, however, who have dipped their toe in the water, enjoyed the experience, and are now increasing their focus and effort in this space.  Reuters is one of best examples of a success both inside and outside of Second Life.  They received a huge amount of PR outside of Second Life, but they also received a great deal of respect in world.  I’ll touch a bit more on this [below].

3. I’m sure you read the article about crayon in Adrants (where Urizenus Skylar, who writes for The Second Life Herald, calls some marketers entering in Second Life a “bunch of desperate clueless &$%^*$&%#”).  We have seen this before with members of Facebook and MySpace vigorously defending their turf from marketers.  How do you navigate this new medium for your clients so they aren’t viewed as desperate or clueless? 

Well, I should first say that Uri loves to stir the pot – the SL Herald is a tabloid after all — but blunders do happen.  Effective navigation requires knowledge of water depths and shoal locations, and in this case, an awareness of history.  Virtual worlders are not sitting around waiting for a brand to come complete their life (probably less in the Second than in the First), and arguably brands need to enter a virtual world with a little humility.  You need to know what has come before, what has and has not worked, and you also need to have a sense of the community.  We try to steer our clients in the right direction, although they don’t always listen to us and sometimes singe a few hairs, but even that is an important lesson.  Frankly, mistakes will be made in this new medium and that is okay.  It is very early days here, and everyone needs to remember that.   It is better to be innovating and helping to define the conversation rather that show up at the party 2 hours after everyone has gone to bed.

4. What is your most exciting marketing success to date in Second Life?

To elaborate on Reuters for a bit more:  Reuters decided that their audience was going to be the Second Life residents, and they did a number of smart things to gain the respect of everyone.  They proved their intention to stick around (rather than be a PR stunt) by dedicating a journalist to the Second Life / virtual world beat.  They created a website to go alongside their virtual world presence.  We created an island for them, which they keep somewhat active with interesting events, speakers, and Adam Reuters’ office hours.  More importantly, we created some wall-mounted and heads-up displays which brought in their live news feeds.  This allowed people to take Reuters out into Second Life with them, rather than having to work really hard to constantly bring people back.  From the beginning, it was clear to people that this was a project with substance not hype, and the audience reacted very positively.

5. eMarketer predicts that advertising on social networking sites will grow from $280 million this year to $1.8 billion by 2010.  What do you think about their prediction, and how do you think it applies to marketing in Second Life?

I think that number is almost meaningless because social networking is starting to touch everything we do online, so the definition becomes increasingly blurred.  On e-commerce sites, social networking will become an important component of establishing reputation/trust around a product, especially once you can overlay collaborative filtering and reviewing technologies with social network information.   I think that the web and a Second Life-like technology will become increasingly interconnected and complementary.  We will use both, depending on whether we want a 2D or 3D experience for a particular purpose (they have different strengths and weaknesses), and depending on whether we want a live social interaction.  There is no question that people feel more “together” in a 3D immersive environment.

6. What would you recommend to Bazaarvoice clients like Sears, PETCO, or HP that may want to dip their toe in Second Life and start planting a marketing seed?

This may sound self-serving, but you really do want to talk to a longtime Second Life consulting group like Electric Sheep or one of our competitors.  The bar is being raised as to what it takes to capture attention, and you do not want to do a cookie cutter project. Even if you have fabulous creative ideas already, chances are they are going to have to be adjusted somewhere to deal with technology limitations or community relations, and you want a guide to help you.  But in terms of basic rules, many are not that far from marketing basics.  Here are a few of my common ones:

  • stay honest with yourself about your brand and how it is perceived
  • stay authentic and honest with consumers
  • decide whether your product really translates into a virtual world or whether you need to focus on brand
  • don’t think you can control everything about your brand in a virtual world (or put another way: do not be afraid of your consumer)
  • create an opt-in experience and let people take your brand with them somehow
  • keep your standards high – you are representing your brand and company
  • like a blog, keep things fresh, new and interesting if you want people to come back again and again
  • be prepared for technology bumps, because this space is new and evolving extremely rapidly, and rapid evolution in software means bugs

7. Is there anything else you would like to share with our readers?

When people come into Second Life, they ask two basic questions: what do I do? who do I meet? (the order depends on the person).  When planning your virtual world offering, try to answer one or both of these questions.

Text 100 amphitheater  MTV Laguna Beach prototype  MLB Yankees-Red Sox game  Sony BMG: Christina Aguilera fan room

For further reading, I highly recommend Giff's blog.  First, he responds to Second Life skeptics.  And, second, Giff does a great job of highlighting 2006 milestones for Second Life.  You may also be interested in my March, 2005 blog post, in which I discuss closing the tactile gap between offline and online shopping (I didn't know about Second Life when I wrote it).

And for more Second Life images, see Giff's personal collection or this BusinessWeek slide show (which includes many images from Second Life's predecessors).  Or check out the Second Life media page, where you can view user-generated movies made within the virtual world.

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