The SL economy, explained

Strictly speaking, I don't think the actual owners ever did cash out.

All the income has been made in mid levels, not the top. I've heard of one position at a high level selling out to an investment firm or something, but it wasn't substantial. Remember that there were a number of very big investments made in this platform.

Of course, some of the original investors have large fractions of billions of dollars... but the point remains: their money went in, and I don't think it all came back out. If they did cash out tomorrow, it would rock this world pretty hard.

* * * * *

Incidentally, I do okay here, my SL income is right about the average income for a US citizen and yes... I think I could do it all over again. Even now, even as a complete unknown. So maybe some of you don't believe that... but then, if you don't believe I could, you might also believe that you can't either... funny how that shapes the future, mmm?

Ironically though I came here for fun and stay because it's fun. So strictly speaking, Raymond's point still holds true. The point about the platform, not the ah... rodent thing.

Something to think about.


http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/

http://www.youtube.com/watch?v=tYbLR67_F9E

i believe you could.

Here's my explanation of the Second Life "economy:"

Take a dollar bill. Light up your fireplace. Toss your dollar bill into the fireplace.

I haven't tossed a dollar bill into that "fireplace" in three years. It's been keeping me toasty warm anyway.

I keep hearing it's just entertainment. Do it for the fun. You can participate only if you support it with RL income. Or run bots. Or carve out one of very few niches people are willing to pay for. Or hope for nothing more than to pay tier.

I think LL was hoping for more. Wasn't this supposed to be the next web? Weren't people supposed to be able interact with other customers in a 3D amazon.com? Now the hope seems to be on education. Apparently, LL's salary will have to come from school budgets because business won't operate on "way less than minimum wage". Looks to me like a platform looking for a customer. Do they have someone lined up next for when education doesn't pan out?

Maybe it will never be more than entertainment.

It's unfortunate that people value 3D content so little that creators can't be paid real-world money for their time. If SL content creation is only for hobbyists then that limits its potential. How many busy, capable people are going to work for "way less than minimum wage"? How much of people's best effort can come only in their spare time?

I think LL really was hoping people would be able to earn real money in SL. That'd draw real product developers to the platform. It appears the best they can hope for now is to cover their own paychecks. And I maintain that a large part of that is the myth that you can earn real money here. I also maintain that it's getting sour and will fail.

I have no interest in his products and have almost nothing in common with him, but I look to Stroker Serpentine as both a model for how success can happen and how it can fall apart. He puts real-world effort into creating quality products that enhance the platform, and he gets real-world money for his efforts. But he's not happy. It should alarm the hell out of The Lab that he isn't happy.

The problem is, without others exchanging US$ for L$, nobody would sell you things for your L$. Because without those people, L$ couldn't be cashed out to pay tier.

But, those people get no compensation for that critical service. Ok, they get the L$ and can buy with them, but that's an equal value trade; they don't gain anything by having bought L$ with US$, over the people who earned it by creating; yet their service is more important. Moreover, there is a good chance they enjoy SL less than the people who don't do this.

By the way, it isn't lack of value that affects content pricing in SL, it's the fact that what is being sold is different. 3D artists employed for living wages do custom work every time and sell it with full rights to businesses to sell on. Artists in SL who do work in that model can make a living wage, but that's the MDC route.

These discussions always remind me of the discussions at the water cooler in RL.

Little guys/gals complain that Big Guy/Gal is making it, and had all the advantages, and that the system is unfair, and that there is no way to get to that level.

While they are spending their hours complaining....Big Guy/Gal is out busting out sales.....which is what Big Guy/Gal did from Day One, when they were a Little Guy/Gal.

Once in a while Big Guy/Gal will generously offer some tips on how he/she made it successfully....but Little Guy/Gal has one argument after another why those methods will not work for them, and they go back to the water cooler to complain.

So Big Guy/Gal says screw it....and goes back to work, and spends his/her time more productively to proceed to Super Big Guy/Gal status, which takes even more market away from the Little Guys/Gals, while they stand at the water cooler.

Mickey, the next step is to ask why that happens. And my belief is, it's due to incrimental reinforcement.

Basically, when a market is new, almost anything made in it will be noticed and draw feedback and interest. That drives the person to make a better thing, and so on. A hill to climb. It's how something originally made for fun becomes a good product made buy a Big Guy/Gal.

But if there is already a Big Guy/Gal then that is gone. The hill is replaced by a cliff, since until the new product is already at a high level, the Big Guy/Gals will dominate, and the new entrant will be ignored. Such a cliff IS climbable, but it's more effort and much less fun than it was for Big Guy/Gal to ascend to the same height way back then.

Mickey, I think you've misunderstood the thread. I started this by saying I don't think the SL economy is a pyramid scheme, in part because it's still possible for a newcomer to be successful. Desmond said he could still be successful if he started today.

Yumi has stated well the challenge a newcomer faces, to which I'll add...

Some Little Guy/Gal comes along and applies the 80/20 rule, which he's optimized to be more 99/01, releasing a product that isn't as good but costs a lot less, for only a fraction of the effort, in part because someone who insists this should only be a hobby has released a full-perm construction set, or a tool to facilitate theft. Further applying the 99/01 rule, Little Guy/Gal uses bots and bogus search terms to get a jump on the competition, and this is enabled by LL's idealism and by the symbiotic nature of the business models of LL and Little Guy/Gal.

You might argue that Little Guy/Gal's product isn't as good and isn't as successful, but...it doesn't have to be. He/She's only put in a tiny fraction of the effort. Further, because he/she's easier to find and sells for less, he/she's de-valued the product of Big Guy/Gal.

Now for another Little Guy/Gal wanting to actually add something of value, the bar is not only very high through the efforts of Big Guy/Gal, but the payoff is quite low due to the idealism of LL and the Guy/Gal enabling the last Little Guy/Gal.

Or something like that

I know better than to go down this road with you Yumi....but what the hell...I'm waiting for my hair to dry before I go dancing.

I watch the same thing happen here, as I watch in RL.

Big Guy/Gal is benefiting from the "success breeds success" system. They've done all the work, now the business just keeps mushrooming, without a ton of effort. While they are trying to keep up with all the sales coming in....they become lazy in doing the very basic core procedures that are required every day.

Maybe in the early days....the core procedures weren't even necessary.....as the business was just there for the taking. Maybe they don't even know what the core procedures are, as they never had to rely on them.

They become complacent. They are not taking time to acquire new skills. They are not keeping up with new marketing trends. They are not keeping up with new technology. They may lack those core skills required to stay afloat in a changing market. They simply feed off the mushrooming for a while. During this time, a wee bit of an Ego develops.

Customer Service slides....new product invention slides....marketing efforts slide.....customer appreciation slides.....etc.....

But Little Guy/Gal is too busy complaining at the water cooler to jump in, and take advantage of the opening in the market, because it requires....OMG....Effort!

Of course they aren't (in SL), because the payoff is "much less than minimum wage".

Yumi: pull your bloody thumb out and just do something. Admit that you're feeding yourself bullshit... lying to yourself... about why you shouldn't even try. Because I'm tired of hearing about it, and I'm sure I'm not the only one.

I just can't buy the bot and bogus search terms, and whatever arguments, holding business people back from succeeding with fair business practices. I did at first.

I watch people here, purchase product and services just as they do in RL. The way they purchase totally cancels out any effects from bots and bogus search terms or whatever.

I don't see the bar as that high. I don't see ANY business here totally busting it out, and I watch a lot. You could name some businesses that you think are busting it out (probably not a good idea).....and I could list a number of resources and marketing tools that they haven't even touched yet.

Market is wide open for anyone who wants to put in some effort.

I'm the person who keeps many many of you running. People like me.

I employ over 280 people now in one from or another in sl. I pay hrly wages, I pay tips. I pay multiple tiers on multiple sims under multiple names.

I buy 3-400 usd of lindens every week now it seems and i turn all of it into other resident incomes so they in turn pay tier, rents, buy cars clothes and hairs. yes i make cash in sl - i turn that back into bigger or better investments.

Its residents like me who make this LL engine run. and im not even a big dog. My male part of me regularly meets and beats tiers and workforce fees and retuns the extra cash to me weekly to re-dole out.

Do i cash it out? rarely, I could but i have this outlook.
when I push that button to buy, say 150,000 lindens. I look at that money as fun money, its gone the second i trigger that transaction. If i couldnt afford it. I wouldnt be doing it. I find it fun yet. even with the griefer kiddis who have been harrassing me as of late. (was it fun bouncing off the ban lines for a hour today? I thought it was funny.)

See, as long as i find humor in it, I'll keep doing it. I have money to burn. But when it no longer becomes amusing I will pull the plug and there will be a lot of sadness and loss of revenue. which may or maynot be felt by others. Doubtful, many, of us arent that big.

So is ti a pyramid game? ponzi? Well, its a bit of both. but mostly its just a really expensive game.

WAR GAMES:



Wanna Play?

Mostly rhetorical questions since it's none of my business...

How much money are we talking? If you worked a real-life job to earn that money, how much time are we talking?

I can't tell if you're arguing that hobby-level success is good enough for you or if you're saying you're doing better than that.

My point is that I believe LL was hoping for better than that, and they often sell the platform on the vague promise that better-than-that is well within reach, and spin the numbers to look like a lot of people are doing better than that. But we don't know how many people are doing better than that.

Mickey, same rhetorical questions I had of Argent. Basically, define success. You've taken shots at my definition of success (being compensated for effort at real-life income levels), but haven't defined what success means to you.

How much money are we talking? What do you think is possible with the effort you say is necessary? How much money do you earn? With a real-life job, how many hours would you be working? Is that a lot fewer than your SL efforts, or not?

Rhetorical questions since it's none of my business, but...I can't tell where you're coming from.

she's saying, if you want it - go get it. go work hard to achieve your goal.

you won't get anywhere just talking about it.

You don't know how hard I've worked, so why would you say such pablum? And you haven't defined success, either. Do you think my definition of success is just a matter of effort, or not? And, most importantly, do you have the experience to back it up?

So far I recognize only Desmond as having the experience to back up his claim to be meeting my definition of success.

In a nutshell



I'm not taking shots at your definition of success. What is it? Being compensated for effort at RL income levels?

I was taking shots at people who complain and don't make a stab at it.

"IF" I applied myself (and I did one month - lol) - and treat it as a full time job - doing all the right things at the right time of day - in the right places - etc......(and I know people who do this....but doing all the right things does not allow time to post in forum....so you won't see them here).....then yes....it is totally possible to make a living here, unless you equate making a living with a 6-figure income.

The definition of success is up to. I've found out recently (due to the economy).....that it is an entirely different definition this year....than it was last year. LOL

yer doing it wrong.

Has Yumi, in fact, not even tried? I clearly don't read as many posts as you do, but I haven't seen her say she's failed, let alone not tried.

oh dear. pssssst....Anna....over here, by the water cooler....private conference to get you up to speed.....

she has not tried.

Am I being invited to hear gossip? No way! That just doesn't happen

No gossip....was just going to catch you up with past discussions, that occurred right out here in the open.

So what were you thinking when you wrote the thread Anna? You wanted to discuss the mechanics of the SL economy? or you are frustrated because the economy is not working for you? or something else?