Business Turns to Virtual Second Life for Opportunities

If you haven't heard of Second Life, you might be living under a rock. It may be just another first-person, 3-D game but then again, it might represent the future of the World Wide Web and how we use it. You had better start paying attention.

Second Life is an online 3-D virtual world owned and operated by Linden Lab. You can signup for a Second Life account, select an avatar to represent you, and become a resident or visitor in the virtual world. Residents and visitors can meet, participate in activities, and even buy and sell goods and services using Linden dollars.

Residents may acquire Linden dollars by exchanging US dollars at a currency exchange. They may also earn money by supplying products and services to other residents. There are even consultants available to help navigate and explore the potential of this virtual world.

Second Life sounds like a game but there are no points, scores, winners, levels, or other game characteristics. It also sounds like a social networking site but it is far richer than it needs to be for that purpose.

So why have organizations like IBM, Dell, Cisco, GM, American Apparel, Best Buy, Reuters, Starwood and Harvard established a Second Life presence?

There is clearly a trend toward bringing the online experience closer to real life. These firms recognize the potential of a fully-interactive, three-dimensional, virtual world. People want to experience the same things online that they experience offline.

Second Life may not be able to fully realize that potential due to physical constraints such as those imposed by hardware, software and bandwidth. However, as technology advances, the potential is staggering.

Here are some of the innovative uses for this 3-D world.

Marketing and selling products and services – Residents and visitors can learn about and interact with your offerings just like in the real world. For example, Dell sells PCs and American Apparel sells digital clothing modeled after real merchandise. Consumers wanting to make a physical purchase can be directed to an online store to place their orders.

Testing new products and ideas – Second Life presents an interesting test market for a new product or service. The investment is minimal and the risks are low. Starwood Hotels has tested a hotel concept and Reuters has tested a personal news service.

Workgroup collaboration in real time – Using the interactive features of Second Life, workgroups can meet, exchange ideas, brainstorm and update each other regardless of physical location. These virtual meetings can be public or private at your discretion. IBM has been experimenting extensively in this area.

Training and educating in virtual classrooms – While online courses serve a purpose, the interactive nature of a classroom setting is lost. Creating a virtual classroom regains that advantage. Many universities, including Harvard, are experimenting with this approach.

Technical support and customer assistance – Answering questions and providing technical guidance can certainly be improved by leveraging the three-dimensional capabilities of Second Life. Cisco has conducted customer training and support as well as engaging in spontaneous customer conversations.

Public events and open meetings – Rather than require people to travel to an event or make it available to local residents only, why not do it virtually? Attendees can interact with your team and with each other. Sun was the first major company to hold a virtual press conference. They won't be the last.

Telephones, email, instant messaging and video conferencing each have their advantages and uses. Now just imagine your team seated in a virtual conference room, viewing a presentation, asking questions, and interacting with each other. The added dimensions supplied by this 3-D virtual world transform electronic meetings into dynamic rendezvous.

There are many advantages and opportunities to virtual worlds but before you jump into this brave new medium, be aware of a few downsides and potential pitfalls.

Second Life is a proprietary offering. It could be discontinued or modified at any time. Being heavily reliant on another business with little or no leverage is not a good position to be in. Alternatives to Second Life include There and Active Worlds. Many more are sure to follow.

While there are tens of thousands of Second Life businesses and millions of residents and visitors, the overall level of commerce is tiny. Today, the most exciting aspects of Second Life revolve around collaboration and education. The potential for economic gain is enormous but it remains potential, not reality.

Scope out the landscape and the people before spending large amounts of money. Doing business in a virtual world is like establishing an office in a foreign country. The customs, styles and norms will be different.

Technology limitations will also affect your plans. Creating large, ornate structures will slow down graphics rendering. Keep structures simple and boxy. Inviting hundreds of visitors to your event simply won't work because servers slow down when too many avatars convene in one place. Consider holding a distributed event at multiple locations.

Give it a try. Obtaining an account and designing an avatar is free. Buying property and setting up a storefront requires a paid account. Monthly fees can range from a few dollars to several thousand dollars depending on the amount of "land" you buy.

Second Life may be just another virtual playground. Or, it could be the beginning of a new trend in electronic commerce. Companies like yours could decide which path it takes.

Vin D'Amico is Founder and President of DAMICON, your ADJUNCT CIO™. He helps companies avoid the subtle mistakes that cause missed deadlines, lost opportunities and fragile results. He shows them agile approaches that slash risk and cut development time so they get to market 25-50% faster. He helps them carry that momentum into the sales cycle using white papers and case studies that accelerate the selling process.

This article appeared in Vin's monthly Virtual Business column for the IndUS Business Journal in September 2007.

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