The Question LL Asks

Any business has a fundamental philosphy, even if they don't codify it in a mission statement.

And every business (as opposed to hobby) has to make a profit.

For a virtual world platform business, the question of how to prosper financially must center on convincing people to spend either their discretionary (entertainment) funds or the operating funds of their own business, on that virtual world platform. (Yes, I know: Captain Obvious. But, bear with me...)

So the logical question such a business might ask would be something like:

.....................How do we use our resources efficiently and effectively to create an environment that persuades people to spend their money here? How do we make it reliable yet exciting, and unique--something they can't get somewhere else, which is simultaneously something they want very much?


But this doesn't seem to be the question LL is asking--at least, not in recent months.

The question LL seems to be putting all its resources and ingenuity into answering seems to be:

......................How are people currently making money inside SL...and how can we move in on that business ourselves? How can we take it away from them and get it for ourselves?





My questions for Resident Answers: first, what's your own view on the nature of the Question guiding LL? And second, if your answer is as likely-to-lead-to-the-demise of SL as my own, do you think there's anything that could be said to LL that would alert them to the short-sighted self-destructiveness of their choice of mission?

I agree with you for the most part, with an added dimension. The steps LL are moving toward will change SL, and not for the better , in my opinion. While they are looking to grab what they can of the business pie that residents have worked so hard to develop, I also think they are looking for residents to still be active in those areas. However it will be a select group of residents, Approved and Certified for the New Corporate Friendly Mainland. Even the latest announcement of Lindenville. Right now, they are providing thos freebie homes, to start, but I expect that to be farmed out to various FoL's once it is fully up and running.

Good points. Yes, they definitely seem to believe a cronyism system will maximize profits.

I wonder if that will prove to be the case...I'm trying to think of any business that has prospered by discouraging creative input from newcomers. (Of course few businesses have been built, as SL largely has, from the creativity of volunteers, so it's not easy to think of an analogous business. Maybe you have to go to nations, rather than businesses, to see a good analogy: is it best to have a State-Approved Composer, State-Approved Painter, State-Approved Computer Engineer, etc.? Does that result in the best work?)

Co-option is LL's forte.

Afterall, they have unfettered access to account information and balance sheets.

Ever since the GOM issue, LL sunk it's hooks into alot of business, mostly by hostile takeover or after-the-fact policies.

Fudging numbers doesn't seem escape them either.

Not in my opinion. State sanctioned anything breeds mediocrity, conformity and complacency. Essentially, a More Predictable Experience. (tm)

If only you could get a dime for every time LL makes a decision that leads down that Trademarked road...

GOM?

And, yes. They have to do a lot of fudging to create an upbeat report, these days (much to my own personal loss.....hey, I used to pay my tier every single month from what I earned inworld! And the sad thing is, I'm scarcely the only one for whom this is true...)

Gaming Open Market

SL's first resident run money exchange. They provided a reliable and responsible service.

LL co-opted them in a hostile takeover, claiming it was for the better of SL, but it's not.

Money transactions now, take weeks to close and Supply Linden became the printing press for millions of USD.

Someone should test the "anti-trust" laws.

Ah, yes. Good example of what would certainly appear to have been a bad decision.

(And those decisions are all the more annoying when cloaked in the 'we're doing this for the good of Residents' or 'we're doing this at the request of Residents' language...)



Just heard (on NPR) what might be a good analogous business relevant to the "creative work to be done only by cronies" business plan: Wikipedia and all its offspring. Would wikipedia be as successful as it is, if it were written and edited only by a few select 'authorized' people?

LL knows better than anyone how little residents actually earn. They, who all earn a living wage, are already doing much better than residents. I doubt very much that they see resident "businesses" as territory to move in on.

I believe moves that are being interpreted as LL "moving in" are actually LL wanting a more professional face for SL. Even the SLX takeover. I think they bought it for the critical density it already had, not for the income. I believe they'll integrate it into the client and the server and make it work better than it ever did, improving SL in the process. And it still won't earn LL a profit. The people now running it have to be paid RL San Francisco wages.

They've got a point. They can work full time at this, so they theoretically can do better work than underpaid (and un-paid) residents with day jobs outside SL.

Only to the degree that they can get free labor, or sub-minimum-wage labor, out of residents. And only from those who are good at it and willing to work for peanuts. SL has taught them that people will work for nothing if they get to do it in their underwear, without going outside, without having to talk to people. Witness the web interfaces through which LL and Philip now want to offer sub-minimum wages.

I do see striving for a more professional face for SL as perfectly legitimate.

I also see a number of decisions in recent months that appear to have begun as musings about Where These Residents are Making a Few Bucks.

Legitimate, too, in any business, is an analysis of where the money may be in that business.

But it's when (to all appearances) so much time and energy is spent on efforts to co-opt the money-making efforts of Residents, piddling as those may be, and so little time and energy is spent on platform stability and improvements, that one begins to wonder: what IS the mission statement?

The prime problem LL have is that they _can't_ "create the experience of SL" because social aspects are so important to it. LL can't control how people behave socially, but what a resident experiences socially is likely to be a vitually important part of their experience. So LL are left in a very difficult position, unable to control the value delivered by their own product.

When you see that they're in that position.. their strategies make a lot more sense. Like, the focus on outside corporations is because they provide much more reliable income streams. Sony or Coke aren't going to abandon their islands because they had a bad falling-out with their in-world boyfriend.

So here, it's about capturing the newbie stream who maybe like the idea of having a house, before they've really got the hang of what that means and implies in SL. Is that a rather sharp practice? Perhaps, but if residents were happily doing it before, they can hardly turn around and complain when LL do it..

It seems to me that SL and LL are struggling,they are actively, in my opinion,running round in circles trying to drum up more cash and failing,The only way for them to grow is to become a better platform and give real value for money
.Unfortunately they seem set on trying to muscle in on their own account holders ,trying to cream off an even bigger piece of the pie.

This in my opinion is a last ditch attempt and is doomed to failure.It seems they are trying to stick their finger in the proverbial dyke.It won,t work.

LL get more sign ups and stop stealing off your existing customer base.

I know you qualified this statement with "to all appearances" but that's quite presumptuous statement none the less. On what are you basing that? SL is a cumulation of over 5 years of code with, possibly, hundreds of millions of lines of code written, corrected, and even deleted. I admit my experience in SL it's be a lot of "oopies, that didn't quite work out like we planned", but to say time and energy has not been put forth on the platform stability and improvements is a little over the top. I cannot believe that and, if you think about it seriously, you'll see why.

We all know SL has been reverse engineered and put out to the open source community. That was a couple years ago. I happen to believe open source software is better written and progresses quite quickly compared to propriety software. And that open source software is still way behind LL in it's stability and improvements. That shows me SL is quite complicated........if it were not then the open source people surely would have have at least brought thier efforts to equal SL. Obviously they have not.

On the topic of the thread. As I've said many times I have not dog in this fight..........I don't have a business (nor do I want one) in SL. I can see why SL would dig a little deeper in everyone's till. Most of the reason, I believe, is entirely their fault when they took the emphasis off premium (or customers who obligate continued) financial support. There are quite a few business owners who have not contributed one dime of RL money to LL and only cash out. Yeah they offer a service or product that causes others to spend, which in a round about way, brings LL income........but when it's cashed out that income is reduced dramatically (possibly even cancelled out completely). It ain't cheap to buy, maintain, and house the hardware required. It ain't cheap to trouble shoot, fix, or upgrade the software. And it sure ain't cheap to supply the bandwidth required to deliver all those virtual assets worldwide. I can see the need for more cash flow at the Lab. I don't like the idea of possibly having to suck it up a little tighter than anyone else..........but, so far, LL has been reasonable in that area. When it gets too much for me, I'll find something else to do.....like, I suppose, will a lot of others.

Well, of course I DIDN'T say that time and energy "has not been put forth"...I said "so little" in comparison to the time and energy apparently being spent on ways to dip further into the pockets of existing customers. And more than that: my posts in this thread have clearly been aimed at the current regime...NOT at the entire existence of LL.

On what do I base my guess that their (presumably) unofficial mission statement has focused more on squeezing existing customers than on improving the platform so as to persuade both existing and future customers to voluntarily spend more?

I base it on decisions announced since the advent of the new regime.

How many of these announcements have concerned advances in platform stability and functionality?

By contrast, how many have concerned raising prices and fees, or policy changes that would limit the financial opportunities of existing customers (e.g. segregating adult-related business to an isolated continent, double charging those who list on the shopping site [both listing fee and commission on sale], and so on)?

There is an imbalance here. Personally, I believe this imbalance is of the 'penny wise and pound foolish' variety.

I want to answer your entire post tomorrow (when I'll be a bit more energetic), but wanted to comment on this fragment.

I think it must take a certain type of executive to successfully administer a business that's fundamentally, well, messy---built on individual human interactions. Someone who's more oriented toward control is naturally going to be pining for something like Blue Mars, which by most accounts will be fairly rigidly regimented.

I suspect what's seen as LL muscling in on residents business is in fact incidental to a more reasonable but less visible business strategy. The SL economy is so free (compared to RL) that every imaginable niche is filled with someone seemingly prepared to put in all sorts of effort to make a few lindens on tiny margins. The result is that any change LL makes will upset someones business model. Reasonably, these people will complain.

There's probably more to it, but I'd guess at least part of LLs strategy goes like this...

Make the world more *cough* predictable for new users. e.g. ring fence adult content
Make it more accessible for more users. e.g. more language versions.
Make the platform more stable. Well, it is... kind of.
Lead new users towards paying for stuff. e.g. Xstreet changes,
Make first time buying of land as painless as possible for new users e.g. Linden homes
Finally re-launch the product sometime in the northern winter with the new user friendly Viewer 2.0.

ohh... and... Profit.

I think the OP misstates the question... the actual question should be

LL: how do we improve our bottom line?

unfortunately the answer vary, but they seem to be stuck on "make it as widely acceptable to the general public so we don't garner negative publicity" which amounts to them sanitizing every aspect they can, even though some one will always take issue with some political aspect of it, instead of focusing on the technical limitations. Mining residents for salable business ideas is just a hobby for them (as evidenced by their only pirating already successful ventures)

Did you read the post?

I don't mean that in a snarky way. But I don't see how your suggestion ("how do we improve our bottom line?" differs materially from what I wrote:




...not to mention the second sentence of that post:



...and the third sentence of that post:



...all of which indicate, one would think, a clear understanding that LL is a business and needs to make a profit.

I don't mean to pick on you, but your comment raises the point that many critics of those who dare speak a word of disparagement of LL decisions, rely on the ol' "this person simply doesn't UNDERSTAND that LL needs to make a profit!" chestnut. And frankly, sometimes this chestnut gets trotted out despite clear evidence that it is unjustified.

Hell, I'd like a dime every time Brenda says, "More Predictable Experience."

That seems to me to be a fair reading of the situation. I'd add that the point of this thread is that in my view, LL is spending too much time and energy on examining these niches (with a view to moving in on them) and too little time and energy on basics such as platform stability and functionality. The net result is increasingly bad word-of-mouth on SL, which LL seems to consider to be of negligible importance.

What I'm seeing, in comments made by Lindens in the Blog, in office hours, and in published interviews; in warnings of dire consequences sent to XStreet purchasers of freebies that later turn out to contain pirated content; in the handling of major changes (such as Zindra and the new xStreet double-charges); and even in the handful of contacts I've had with a Concierge staffer---all this reflects (in my opinion) a fundamental philosophy that has never proven successful in all the annals of business enterprise: The Customer Is Always Wrong.

Yes, some customers do react negatively and loudly to every change, in a way that would lead a reasonable person to suspect that their opposition is not thoughtful.

But this is NOT true of all LL customers who voice objections to LL decisions.

LL, however, seems to operate on the assumption that all who object:
----are childish and irrational
----fail to understand basic business principles (such as the need to make a profit)
----will oppose any change and lack the ability to adapt to change
----fail to appreciate all the hard work that's gone into running SL
----have selfish expectations that are unreasonable in every respect
----are keeping us, LL, from the paradise of lucrative partnerships with major corporations

I don't believe that all who work for LL hold these views.

But I do believe that those at the top, do.

That would be a lot, too.

I don't see that at all. I see them offering a lot of tools and means for the residents to continue on with their businesses. If they wanted to know how we make money....all they have to do is read some of the comments in forums, and check the transactions.....then run with it. It's all right out in the open. There are too many doors open for people to make money, to indicate that their mission is to take that away.

I don't think anyone has a clue what the mission is.

One more attempt to try to express my thoughts on this (and similar) subject. Seems every thread with LL's bottom line as the main topic makes statements about how poorly they are at assessing what their goals are...........that, is extremely subjective and presumptuous. You (nor anyone else on this forum) are privey to LL's business model or plan. You are making assessments about their wisdom or knowledge of their base without actually knowing the facts that are used by LL. You (not you specifically, Ponsonby, but you as a collective of like thinking users of this platform) make judgements by how anything LL does effects you........not how it affects what LL considers it's users. The bottomline is one very important factor (as you have stated), but so is LL's vision of where they want to go.......their goal, or business plan, or business model. Those you simply don't know. The use of statements made by LL in years past are common agruments used to state how confused LL is. Yet, in the same breath, many will openly admit SL is a moving target.......changes almost daily with new technology, new hardware, new software. That will change, even make obsolete, any goal expressed in the past.

I don't know what is so hard to understand that what appears to be confusion, lack of insight, lack of understanding the users needs or wants is in reality changing due to necessity.........or simply finding a better way. I don't know how many regular users of SL there are but it appears in be near the 100 K mark. Every change LL makes effects each one of those. And, my experience, the vast majority (I'll go out on a limb here and say 80 to 90%) accept the changes and over time see improvements to their personal experience in SL. That's who LL caters too......that is their bottom line. As important as creators are, they are merely part of the equation........and not the central part either. If LL only paid attention to the 10 or 20% that find LL's changes objectionable or questionable then this would be one lonely place..........the major population will not be here. A world full of creators with no audience to apprecieate their creations.

I think anyone who has been in SL for more than a few months can see LL is wanting businesses (corporations) to migrate here.......it's been their stated goal from at least as long as I've been in SL. That vision or business plan has not changed one bit. As with any for profit business a customer base is necessary. Sometimes those customers seem unappreciated true........but LL is not attempting to run the customers off in order to make room for corporations. That's insane..........and dispite my occassional wonderings, they are not insane. LL has created a platform that is many different things to many different people. They did that on purpose thinking it would attract real life businesses to SL (which I believe is not going to happen....at least not how LL wants it). That's their goal, their business plan. We have little to nothing to say to change their minds. If LL ever changes their mind and starts catering to the businesses within SL (and drops their corporate investment idea) then there will be others just as unhappy with that decision too.

SL is a changing invironment. We tend to get caught up in our narrowly defined definition of what SL is or what it should be............we don't have any access to LL's plan. Nor are we likely to ever get a glimps of it.

Call me a LL fan boi (gal) if you like. I think I'm just more realistic than some here.