Going public: 18-24 months?

That means I should be buying some stock in caffeine and ibuprofen, right? Or just plain buying some caffeine and ibuprofen.

The web page is full of rendering trouble, doesn't work at all without javascript enabled, has controls that are unusual and unexplained, and has bugs that indicate a poor implementation of even the simplest things (e.g. tab twice to move between fields because the first one does nothing). Minor things, perhaps, but indicative of the open-source philosphy at work. The basics aren't right because they aren't fun to work on. This is the same trouble LL has. In their current incarnations, the alternate grids will fare no better.

And there is no opengrid viewer. It works with the LL viewer.



I would have believed it'd be easier to fly, land from flight, cross region borders, and get out of appearance editing, even if I'm willing to wait for attachments and scripting. I'm not knocking them; it's impressive what they've achieved. But they have a long way to go to achieve even basic feature parity.



You can't take scripts; you can only immitate them, and that'll be no less work outside SL than in. The new grids probably will be havens for copied content, but will it matter? I believe the alternate grids, at least the current ones, will be populated by people who aren't willing to pay anything for anything, anyway.



Adding new features is easy, since the code is new. Keeping it working and getting the basics to work is less fun. We'll have to see if they have the discipline for it.

I think competition from the alternate grids will benefit SL because of one fundamental characteristic of developers: pride. LL will innovate and improve on quality not because anyone is threatening them, but because other people will be showing what's possible, and they won't want to be left behind. I also believe LL is taking steps to improve its own discipline, and that it'll be an advantage they'll have over the upstarts.

You just described the executives, not the shareholders. Most shareholders are in for the long range, execs are only interested in next quarters numbers.

Depends - individual shareholders will often show more long term loyalty than big institutional inverstors. Buying shares in something like SL would be seen as a high risk investment - and in return for taking a high risk, investors will want to see the potential for a higher than bank rate return on their money.

But think....would you want your pension fund provider investing your pension contributions in SL? Or would you want something less risky?

The Execs and the Board are rightly concerned with the company financial reports - shareholders naturally expect a dividend and an increasing share price. If share price drops too far, a company will get taken over.

No, Is your Ford in Beta while you were supporting the company with your money? Do testors have to pay for products they are testing? Does Warcraft charge to use the test grid?

Were you paying Edison to get it's act together, so someday the lights would work? Were you paying Mobil for oil wells to be drilled, so you could buy gas someday? If you were then you were an investor.

That is my point. generally speaking people do not have to pay for Betas. People putting money into development are investors and this has really been the case with SL. In fact in SL, user content makes most of what we see. Without these people investing time and money into SL, it wouldn't be much to see.

Usually when a company has a product that is alpha or beta quality, and it fails alot...no one expects you to be paying for it, unless you are an investor of some kind.

If your Ford worked as well as SL, you would demand your money back----unless you were just testing it. You would think Ford was pulling a fast one to sell you a car that was still really a work in progress.

There is a line in the sand that has to distinguish between an acceptable level of bugs in a saleable product and something that is really just being tested. People in SL put up with alot of issues as one would expect to see only in a Alpha or beta version of a game. So those loyal people, should be recompensed for their time and effort.

SO I would hope that SL, sees how their long time loyal residents, paying SL money, who have been the real investors in SL all along.

Especially when there are way more people getting those BETA Fords for free---while premium people and landholders, pay for it.

Were SL to really go public, that would mean big investors in stock, would totally overshadow all the people who have been the real investors all along.

What is the #1 reason LL would go public in the next 12 months? Because LL's VC backers want to cash out before LL loses its competitive position to other grids. Cleary, there are other reasons why it would make sense for LL to go public (e.g. new capital, public visibility/credibility, etc), but you can bet that if they do, it will be because the early investors want to realize their profits.

Executives are only interested in next quarter's numbers because that's what the shareholders demand. Most shareholders are invested through institutions and have no clue where their money is. Money is moved between investments based on the numbers, not the product. The state of the company next year is irrelevant because by then the money can be elsewhere.

A United States company cannot lawfully allow gambling on their servers, and taking it offshore does not absolve them.

Furthermore even a foreign company would find itself blocked to United States electronic payments (cc, paypal) if it was identified as a 'gambling site' - sooner than later.

I don't mourn the loss, nor do I think it matters much in the end.

Look at other tech: there was plenty of content theft, gambling and whoring early on in key technologies. Mp3 ripping, internet poker, phone sex, naughty VHS and even 8mm - we can take this waaay back.

But the endgame turns out to be stuff like Itunes, grandma getting Disney DVD's for her kids, and mom saving the family pictures on the computer. As horrific as that sounds, that's the financial basis of the future - it's been proven time and time again.

* * * * *

The small third party copies of Second Life may survive but always be 'also rans' I think. Too prone to lawsuits by content creators, no good way to keep off (or even identify!) unlawful content even if they try.

And they will be outdated quickly. "Oh, but the opensource community has incredible development capacity!" you say. Well sure. But they are also fickle, and will move on. Great for code, terrible for infrastructure, standards and near useless for financing.

The other trouble is that the server/client functionality is maybe only 5 or 10% of what you gotta do to have a persistent online service. Think about it. It is *anything* but loading some software, turning on a box and as they say in South Park: "Step 3: Profit!!!!"

Welcome to the struggle for six sigma uptime - in an environment where price is your feature. And when price is your feature, you only have one direction to go with it.

There is definitely a place for open source worlds, don't get me wrong. But there's also a place for ham radio enthusiasts. Hey, global calling for free, even back in the 1970's! Funny, it just doesn't catch on. Simplicity, and stuff that works even for grandma (whatever the cost) wins every time.

* * * * *

Prediction: Someday, a small but reasonable patch of land on the grid will be utterly free.

Yep, you heard me. Free.

Like email. Or a web page. Or storage. A la Yahoo or Google. And I'll even be willing to guess that you'll see it here first on the Second Life main grid.

When will this come about? When the masses are in 3d worlds, and avatars will be somewhat as common as an email/IM address.

When you can go to grandma's house - her virtual house, even though she's in an apartment in real life - and sit out on the back porch and watch the fireflies just as she could growing up - in fact, it will be almost the same view. She can do that now - but more to the point, this will be because grandma *herself* heard of Second Life, logged in *herself* and was able to set up her home. Like email or a cellular phone or a TV. And because everyone's grandma is online - what, isn't yours?

Here's the other shocker: this won't destroy the grid land market.

Far from it. Land in large amounts - or more accurately: resources - will be more precious than ever. Location will start to matter in a huge, huge way, driving value up in those areas. Businesses that seem like afterthoughts now will be huge. Remember how Yahoo started? Google?

Try telling someone in 1995 that a directory of links or a search algorithm would become a multibillion dollar business by 2005. They would laugh at you. Well, you can laugh at me now - please do!

Prediction: some cottage businesses on the grid now will be multimillion dollar companies inside of a decade. I'm not talking about Rivers Run Red or Electric Sheep - I'm talking about people who will casually sign up as noobs in 2008, realise the potential and run with it. Maybe they will move to a different grid, maybe things will really change - but they and their biz will make it.

* * * * *

This brings us back to leadership and IPO's, incidentally.

I'm going to make a just *terrible* analogy! Yes, even I know it! Prepare to laugh.

Philip is Moses. He brought the early adopters to the promised land. It was *huge* - a moment that will never be forgotten.

But we still await the messiah who will bring cyberspace to the hundreds of millions.

This person will have vision - far beyond margins, far beyond the company boardroom. This will be a people person - a person that even your grandma will 'get' - a person that even your five year old will understand.

This person will change the vibe of the grid - people will boast of their rezdates, rather than embarrassingly hide the fact that they have goth eye makeup, black wings and a dominatrix they spend time with when the TV has crappy stuff on.

If you don't like the messiah analogy, think of what Steve Jobs meant to the Ipod.

The Ipod is the worst product in the world - you can't copy songs from one to another, it's got a weird format, it's bloody expensive - it can be technologically duplicated for 1/2 the price. But it's an Ipod!!! (sound of angels singing). Even Microsoft couldn't take it down.

I think that just like we as residents have stepped up to become people who make this world work, someone will step up inside Linden Research and be 'that person' that makes everything going on now seem like the early dawn.

I doubt it will be a techie person - it may be someone who understands the tech also, but is a popularist at heart, not a bit-flipper.

* * * * *

Am I crazy?

Yeah maybe.

This is all just a guess - but then, we all guess every day. We guess that the price of gasoline will still be reasonable in two years - any assurance of that?

We guess that computers will just keep getting better - I never saw that guarantee!

So it's like that. Guts and vision - because anything else will leave you behind, and the truth has always been wilder than fiction.

Anya, there is a seperate viewer as I downloaded it and installed it. But I accept that I poked around to find it on site.

Web page is harder to compare. On my set up it worked okay but I totally accept it may not on others.

Inside that world today I did notice sim crossing is far more fraught than SL.

Finally a delight to talk with someone like you who is fair and objective

I feel like no one from outside the US who wants gambling, and quite a few inside the US who want gambling will ever "GET" what you just explained.

I think its a lack of motivation to really understand what happened.

And to differentiate a difference between a straight online gambling ban in the US, and a commerce with gambling sites ban which is the real issue.

Since the same people bring it up more than once or participate in the threads, but still can't see the distinction.

That may be true for large companies but institutional investors tend to shy away from small companies like SL because the risk is more than they prefer to play with. I've also watched (as an investor) CEO's outright defy shareholder proposals that passed by vote -- usually proposals involving corporate governance or compensation, of course. So, don't be too certain that "shareholder value" isn't decoy for "I've got a bonus riding on making the numbers....."

Anyway, this is all pretty speculative right now given the meltdown happening in the stock market and probability of a significant crash by the end of this year. Nobody in their right mind would be considering an IPO in the next 12 months.

Well Executives run the corperation. Shareholders the people buyin gito the company(s) are the investers or source of income to future funding for said companies( some times if not always are also Executives within the company. Hence Executives would be intersted in "End of the phyical year Numbers"

I hope they go public. I wil buy at least one share of the company. The shareholder meetings will be the highest comedy gold to have ever been seen on this planet.


Dallas

Even better than the Town Hall Meetings?

Buy shares in LLAB? well........not sure about tht one.

Hi Desmond,

Firstly I'd like to say congratulations on what you've done in SL. I, like many others, am impressed with what you've accomplished.

However, having read your posts, it looks to me as if you read far too much into what LL have done here and where it will go in the future.

I understand that you're very invested in what happens to SL, and the fact that SL is simply an organization of some 200 employees, a business plan and the potential (like all businesses) to fail.. is not something you like to consider.

SL isn't a disruptive or breakthrough innovation, it isn't really going to engender what Schumpeter called a gale of creative destruction.

At best it's a social prototype. It proves that a certain sector of society are prepared to live a large portion of their lives within a virtual environment given a certain set of tools and abilities. It leverages existing technologies to bring a new product to market, that's all.

Philip Rosedale is not Tim Berners-Lee, he's not Albert Einstein or Alexander Fleming... hell he's not even a Bill Gates...(ok many would say that's a good thing )

SL is simply an early entrant into a market, it may succeed.. it may fail and the factors that effect the outcome will be the same as that for every other business.

If the sector proves popular and profitable, new entrants will arrive. The IBM's and the Microsofts will come stomping in and in 10 years time we'll all look back and think.. "I wonder what old Phil is doing now..? Goodness I bet he made some cash when he cashed his shares in on the Nasdaq in 2010!"

Perhaps, with fantastic organisational management, fiscal prudence, and some luck.. in 10 years time we might be able to use Ford as a metaphor for SL.

Ford brought the affordable product to the individual for the first time, and yes they're still around and thriving. But so are Mercedes and Audi and BMW and Chrysler. Ford didn't invent the internal combustion engine and SL didn't invent the idea of merging software and hardware to create a new application which it then can sell.

It won't come as a surprise if LL at some point make land in SL free. I still have no idea how they can justify the charges they currently levy for what is essentially some server resource running an application. ISPs and webhosts latched onto the idea of free resources as a loss leader ages ago, I even get free online storage and application software with my cell phone contract these days.

I don't doubt that some people will make some money in SL. That's no great shakes.. where there's a group of people, there will always be those that can make money.. even if in some case it's nothing more than a pyramid scheme..

I would hate however to see people invest money or time they couldn't afford to lose in an enterprise within SL. It would be like constructing and then running a hotel on rented land. Fine until the real landowner came along one day and shut you down with 24 hours notice.

Don't misunderstand, I've been in the IT game for 20 years. I started my own software business 10 years ago and there is nothing more exciting. I do believe that VR, AI.. greater bandwidth, moores law, even quantum computing will change the world.

I can almost guarantee however that SL, even google and yahoo and skype will all come and go.. a disruptive innovation is coming.. and like electricity will light up the world.

In my opinion though SL ain't it..and anyone that bets the farm on it being something it isn't is going to get burned.

With all due respect, you read me dead wrong on that one.

Could it fail? It could. Truth is always stranger than fiction anyway. I'm not 100% invested in SL by a longshot, either.

Am I a believer? Yes, I am. Not afraid to say it.







Many have said they were 'impressed' but thought I was all wrong about things - hey, I daresay 99 out of 100 here would largely agree with you.

I'm not one of the 99.

If anyone said there would be a concurrency of 50,000 in 2007 in forums, back in 2004 - imagine the howls of laughter, or the fatherly pats on the head.

People said the same thing about amazon.com - what a money loser that was for years! And that eBay thing - trade old junk online, what's up with that?

I really don't see IBM stomping in, as you say. They didn't stomp in to check the place out, either - my online friend Jessica Qin brought them in. (Caledon's neigbour to the east - ever wonder the connexion?).

IBM will figure things out and chase their own goals - great guys. But even they know better than to go head to head against eBay founders with a decade of experience when it comes to 'stomping in.' They are pretty smart, unlike Microsoft who tried to compete with the Ipod. Doh! Vision wins. Getting it, wins.

I do agree with you though on one thing: Rosedale isn't Tim Berners Lee.

Way I see it, Rosedale kicks his ass, much as I've got nothing against Berners Lee. There may always be more internet-as-paper-pages, but implementing the beginnings of true cyberspace will grant unprecedented global freedom to interact.


Guts and vision for the win. Failing that, there's always officework.

I agree that LL's main competition will not be from open source grids. I think more serious gamers will have a great time with them, and I think technology will migrate back from them into LL's offering. But I agree that open source is not strong in either scalability or systems design, and both the "retail" market of entertainment users, as well as the corporate markets, will want a company to be accountable for any platform they spend dolllars on and in.
I totally agree. Not because I hold an educated opinion on this, but because YOU say it, having so much knowledge about SL's land market.
Moore's Law?
Well, I have drunk the koolaid as well (which I don't often do) and I do believe that SL is revolutionary. I think that a true understanding of how virtual worlds ultimately will augment real life is indeed in the future ... perhaps it will come as a new platform, or perhaps users will force its evolution from existing ones. *shrugs* Perhaps Kurtzweil has already shown us this future.

Personally, I don't see why that future MUST come from the ranks of LL, as you assert. But certainly that's a possibility. A company as successful as LL usually has a cluster of very bright people at its core, even though only one or two are usually visionaries like Rosedale.

To bow in the direction of the thread topic: Despite my pragmatism, I do hope that LL's new CEO also drinks the koolaid. I hope they will have spent time in SL, and that they understand its potential in their gut. I don't see that as incompatible with them being recruited from outside the current company.

Further, I see going public (eventually) as a necessary step in LL's evolution which is not at all incompatible with SL's current mission to 'advance the human condition'. In fact, I see that sort of access to capital as necessary at some point. It's a question of how soon you want the future to arrive ... If you want it soon, then the sort of growth funded by SL's population and a reasonably successful corporate platform offering STILL will not be fast enough.
.

Or look closer to home.

The personal computer was a silly toy for years. People predicted that IBM was making a horrible mistake by producing stupid little computers for home use. There were too many operating systems, and no good use for the machines, except for word processing. A company called Wang had that market sewn up, and their dedicated machines produced much better results than the crappy dot-matrix printers used by PCs.

Then some guy named Mitch Kapor helped give business a way to do financial projections without drawing up a zillion spreadsheets by hand - Lotus 1-2-3. You didn't have to send your work back the word processing dept again and again - you could change your projections at your own desk and see the results immediately.

There was already a spreadsheet program in existence - VisiCalc. It didn't go far, because it didn't have good market penetration. Lotus ran under DOS, and the program was constantly being updated, both by the manufacturer and by users who created macros to give it the functionality they wanted.

That made the difference between the PC being an expensive toy and being an essential business tool. It changed the world.

Now, let's move ahead in time. It's the 1990s, and the Internet has existed for decades. Peoples' parents used the internet when they were in college in the 60s. It was a home for geeks and oddballs who used things like USENET and GOPHER and BBSs and email. For the average person, it was completely mysterious and useless.

Up until Mozilla made use of hypertext, and let people make their own magazines online. Once that happened, business jumped in to make use of the new way of connecting with people.

Each of these things came from a new technology that provided an essential function to business. But before these technologies could take off, someone had to find the killer app.

3D virtual worlds are new, and they aren't robust. So far, no essential business use has emerged. So far, they are games and toys. That won't last.

Will LL be the company that brings the killer app? I don't know. But it seems to be the most varied and robust of the worlds that are out there. I think it's most likely to either provide the launch point for business use of 3D worlds or provide the expectation for how they will work.

I doubt this will turn out to be true Cyberspace. That's going to be an entirely different breed of cat. But it's a huge step on the way.

Oh, and as for looking closer to home, Mitch Kapor is on Linden's Board of Directors. Personally, I think he still has the mojo.

Hi Desmond,

I guess my view is that while I haven't drunk the koolaid, I'm also a bit reserved when trying to crowbar SL into the company of eBay and Amazon.

The big difference actually, when trying to extrapolate SL's future from what we know now is that the companies you mention had already turned a profit by this point in their lifecycle.

More to the point they'd already gone public by now. eBay and Amazon both floated 3 years after they went online.

If SL was truly in the same company as those guys, LL would have floated in 2006 and Philip would be a billionaire by now.

I know that there are huge differences in what these companies are trying to do, and perhaps it is like comparing apples with oranges... but I guess that's the point. LL and we can't keep using the reflected glory of Amazon and eBay to shine up the SL apple and then use the old "uniqueness" excuse when people ask why SL hasn't worked to the same schedule.

Philip first espoused his vision in 1999, SL opened it's doors in 2003. It's now 5 years later and most observers reckon SL has around 500,000 unique active account holders and an average concurrent user count of 50,000 (to be generous). In fact the current stats page is quoting a figure of 234,011 "residents" logged in over the past 7 days.. and we all know residents doesn't mean unique RL users.

I'm not blowing my own horn now (I know it'll sound that way though), but my wee software company runs asp solutions which would ring alarm bells if we were talking those sorts of numbers, and trust me I've no aspirations to change the world.

So as a fan of SL and someone who wants it to succeed, I'd actually like to see a little less "vision" and "guts and glory", a little less hyperbole and some honest to goodness corporate governance and strategic management going on.

To be honest when I deal with entrepreneurs and business people, if I hear "vision" and "I paint with broad brush strokes" too often from somebody, I can pretty much guarantee I won't see them around in 12 months.. they'll be part of the statistic which puts people off starting their own business.

So I hope the new CEO doesn't drink the koolaid, I hope they never know what a prim is or that avatars can fly.

I want a CEO to have an MBA, a track record of success in business. I want them to come to LL and be able to use their experience to get LL the money it needs to grow and develop and fulfill the vision that everyone agrees with so much.

You're right, I don't see IBM and MS coming in any time soon because as I've said a few times before.. they'll want to see some money being generated from this market first.

SL has been open for 5 years, in 2006 a large (and I'm ssuming costly) PR campaign drummed up some column inches and free accounts falsely ramped up SL's apparent popularity.

It's a couple of years later, sentiment has turned and SL isn't the boomtown it once was. To be honest at the moment it looks like the only koolaid dispensers can be found in the SL grid and you have to actually log in to get some.. and there seems to be a wee decline in the number of people that can be bothered to do that these days..

Bump to top to reply later folks. Busy this am. Good posts

...why Philip R. stepped down as CEO and let his seat to an experienced Exec. No doubt this IPO will be a blast. I'll subscribe to it as much as i can.

Read the signs: off with the gambling, off the shady financials setups, clean up the ad trash, age verification, Grid expansion and stability (Philip's 2008 main objective btw - ). New tools, big jump in the interface functionality and stability over 2007. I wouldn't be suprised if a new crop of biz 2.5 applets are coming to the grid soon. Problably some more cleanup in 2008...

Basically, the vision is there, the execution needs tuning but can be fixed without major headaches. This is not facebook! This is a long term platform that needed a lot of experimenting before being mature enough to seduce institutions and investors. Now with an experienced exec at the helm, that IPO looks set for 18 to 24 months maximum.

Its a double whammy: Philip can focus on looking forward while the CEO handles the quarterly requirements.

Top it up with a 5 year head start in grid management and creative aspects of the sl world and i can't see this IPO going south anytime. In fact, its just the right time. Tech stocks are picking up the slack of the financial stocks. Inflation and lower consumer spending favors marketing alternatives. And SL is right up there as the alternative of choice.

The only thing i'm worried about is how SL will manage property rights moving forward. Although Philip has repeatedly said in public it would protect virtual land buyer rights, based on RL models, the lack of legislation and precedents still basically makes the sole judge over everyone's property. And that is not compatible with the requirements of a public company...

Cheers!
Prime

Great discussion, folks.

/me drums her fingers on the desk and wonders if there's any way to get a Linden to post even a joke to this thread.

Hmmm .... no.

Any other thots on this out there?
.

I thought about this before replying after my "bump" post.

I could either write 20 paragraphs or 2 sentences and decided to opt for the latter, just in case a Linden who wishes to absorbe information quickly, reads it.

Second Life needs to develop and grow compelling mass-market product that cannot be achieved via a more conventional 2D webpage or adds value in 3D. If it does not SL will only ever be a niche product

I'll put it out there - once custom skins like Namssor's rl adaptations become more prevalent, you would see SL being taken more seriously for conferencing. We find them to be a little scary but cool, but how much more professional is it to see a real person's face in SL, and not a cartoon, when discussing business on a conference call.

With voice, telephone calls on the way, and a more realistic appearance, it would be more like virtual conferencing. Add in enhancing the physics engine, and Windlight, and this becomes a more useful application for engineers and architects to make models to scale, and gives them a professional means of displaying these models.