GOM and the question of SL as a business platform?

Yes, events like this clearly signal to any potential investor that currently it is nearly impossible to launch any kind of inworld-project that is not profitable in a very short time frame. Nobody knows how the actual implementation of SLs "inworld GOM" will finally look like. But I am sure it will be a valuable addition to the user experience and many will profit from it. It was probably a wise decision to implement this, but it also makes clear ...

Any project requiring a substantial investment and more than a few months to break even could be killed by a decision from LL in a matter of days. And I am not talking about "cautious" investing. Anyone building a substantial business on the "platform SL" has to accept great risks anyway. The long term market perspectives of SL are still unclear.

But the position of a "resident" doing business in SL - or of someone on the outside doing business with residents in SL - is such a weak and vulnerable one that no responsible businessperson can justify substantial (in RL terms) investments.



This might not be a problem for LL because most residents businesses right now have a very small volume in RL terms. Its quite possible for a few creative designers to make a living from their inworld products. ANSHECHUNG.com is another issue but probably not as easily reproducable as many would like to see - and some Linden PR seems to imply

On the other hand, even small projects with an investment volume in the five or low six digits, which might have looked feasible for groups of residents, and which might have been valuable for the SL economy, look very risky now. (They allways were - but its more obvious now.) I am not talking about designing clothes or furniture But SL obviously could benefit from some additional software components which could be implemented with a combination of LSL, RPC and web servers.

System changes could make these obsolete or impossible, or LL might integrate similar functionality in the core system. This makes for a very unstable ground on which to build a business on. Even a developer for the "ebil empire of Microsoft" has more rights and gets a lot more information about future developments than even the most prominent customers of LL (residents).



This is not to say that SL treats its customers unfair or does not have a right to do this; the TOS are rather clear on the rights a customer has But its not clear to me if this is in LLs own medium to long term interest.

One of the guiding principles for SL has allways been to provide its residents with a platform to create valuable and interesting content for other residents. This made the current world of SL possible without a huge investment for content from LLs side. Maybe those residents would be even more creative and productive if the platform would be a little bit more open, "developers" would get a little bit more rights (and security) and some more information on future plans...

Linden Lab is doing a great job already. But some small changes in corporate policy might make SL even more attractive.

Welcome to the reality of doing business. Nothing is guaranteed. Every business engenders a risk. Your real life business, which is profitable today, might be altered by new laws and regulations, changes by your partners, natural disasters, just about anything.

I think people really need to remember one of the founding tenets of a successful business. Evolve or die.

*Smiles* Why was I waiting for this response?

I am in (RL) business for some years now. And of course I know that "nothing is certain". But with regard to any power involved in my business environment - with the exception of "the customer" - I have a kind of controlled risk.

Changes in the law usually are checked very thoroughly for their effect on current business and sometimes are even accompanied by compensatory measures. We may not allways like the results but the "making of law" is a rather well regulated process with a lot of checks and balances.

And when I am a developer who is dependend in a way on some big "partner" company (yes, I know the situation) I usually enter a contract which more or less describes exactly what are my rights and obligations - and those of the partner, too. And - as funny as it seems - most of the companies that are often decribed as bullies in the software field are not that bad with these contracts.

For example changes in the System/Product are announced to developers a long time before the implementation and any old interfaces, which my solution might need are supported for a while, etc. etc. This is essential everytime I do a solution/product which is not a quick hack but even in an ideal world needs some time to break even.

And because it is so essential every supplier who is interested in me working with his product usually gives me these guarantees. Just have a look at how Microsoft, Oracle, SAP and others handle their developer relations.

I think when it comes to major feature or rule changes that will have a big impact on a particular business niche, the only thing that LL owes resident businesses is fair warning. In this case, since GOM knew what was coming down the pike before anyone else, it seems like they got it.

Sounds plausible - even though, what exactly constitutes a "fair warning" might be very much debateable in the actual case.

But I was not arguing pro or contra LL in the GOM case. This event and the discussions surrounding it just highlight a problem developers are facing when doing some work in/for SL. The only contract ruling this relationship are the TOS - and thats a little thin for a serious investment/risk. We all know which rights the TOS give to us as customer. Thats fine for playing a game. But not for more.

Every serious supplier of a "platform" - and LL is touting SL as such a platform - offers its developers a litte more

yes, SAP partnered with i2 while it was in its interest and it had no supply chain solution. SAP knew it eventually was going to add a supply chain system to their suite -- growth demanded it. During that period they were dependent on i2, SAP promoted their supply chain partners enthusiastically since they filled in a gap in SAP's offering. However, during this time SAP also learned a lot from its partners, and employed its own smart product designers. Eventually SAP developed and released its own solution.

SAP being the biggest provider of ERP software, and having a customer base which typically preferred to buy from one vendor (i.e. SAP) rather than 10, you can imagine what happened to the i2 stock price.

So...

1. i2 knew they were on borrowed time. They needed SAP as a partner in order to sell their software, but also knew that SAP could compete against them at any time. They did make a fair amount of money while they could.

2. i2 had only three choices at this point, and complaining about SAP was not one of them: A. either they gave up and watched revenue shrink away (no longer sold their software to SAP customers and focused on Oracle and MSFT -- until those companies created their own offerings]; B. they sold their company for a fire sale price since everyone knew the future of the company was high-risk at that point; or C. they fought on and tried to do supply chain SO much better that SAP customers still wanted to buy i2, even though it was more expensive and not as tightly integrated.


postscript: i2 still fights on... although I bet that a large part of their revenue stream is from historical accounts and support contracts. They may get snatched up by a private equity firm, although at a 10x EBITDA multiple they may still be too expensive... stock had a run-up this year.

there is more to the story of course covering how the market matured and the high-end market got over-saturated, but that is not relevant to our situation. ... anyway... you asked for a look at how SAP handles partners...

Good discussion. As I said in an earlier hotline post today, there are many many examples of cases where features that LL might deploy will conflict or compete with work done by SL residents. What I see as an open question is what sort of policy or approach LL should take in these cases. One thing to consider is that in a competitive environment where there become alternatives to SL, it is possible that the price of LL not implementing a feature might be the failure of SL to compete and therefore the loss of the entire platform/world. Below are a few other examples of cases where we would have to measure the value to the overall community and platform against the cost to specific content developers. I am very open to thoughts:

LL has lots of improvements in the works for vehicles. Cornering and handling better, better camera, etc. When we deploy these changes, they will potentially make some of the very cool vehicles already in-world and being sold less appealing - thus competing with the folks that are building them.

When in version 1.6 we deployed the ability to display video streams, we were competing with people who had made various video 'viewers' that work by stapling together long strings of textures and displaying them quickly to create video.

Releasing HTML browsing on a prim surface will compete with the many methods that have been created and sold for displaying text on surfaces, and presenting menu choices to users.

As mentioned in previous threads, if we deploy a way for web-based businesses to quickly offer inventory for sale to users based on their selection of an item from a web page, we will be competing with the complex mechanisms that several people have already built to enable their web-based catalog businesses.

Many people have complained (correctly!) about the lack of better 'security' measures for parcels. As we deploy improvements to parcel management like better banning tools, we will be competing with the variety of 'home security' devices being currently sold in-world.

Any changes made to the behavior of teleporting (again, an appopriately important topic) will potentially compete with the number of cool rapid transportation devices available in-world.

Thanks for your comments Philip. I think that we residents have to always have in the back of our minds the knowledge that SL if a moving target. The niche our products fill today might be gone tomorrow, or supplanted by something better... whether it's from a new competitor with superior skills or a new feature implented by LL doesn't really matter. Any product or service in SL will have to continually reevaluate and evolve or live a short life before becoming obsolete. That's something we all need to accept, and to the extent possible, plan for.

LL shouldn't hesistate to develop SL as a platform, even if it means some resident businesses might have their market pulled out from under them. Those are the risks we all take, and the good of SL as a platform and future as a product that best suits the most people will by necessity always outweigh the concerns of any individual resident business. It really can't be any other way.

What you can do for us is give us ample warning of impending changes or features if they'll have a big impact on a particular market segment. Having time to prepare and alter products and plans goes a long way towards helping people avoid feeling like the rug's been pulled out from under their feet. But with a world now this large with so many nooks and crannies, every change is going rain on someone's parade. You can't please everyone all the time.

Forseti, thank you for that nice example of "partnership" in the industry.

No, I did not want to imply that these companies are led by "nice guys". They aren't! And there are a lot of examples that show this. We don't even have to look at the big cases like this or the famous ones in the Microsoft world with the Internet Explorer or Mediaplayer. All these companies have a long history of "partnering" and then pushing "partners" out of the market with their own solutions. In some cases the "small fish" are bought out, sometimes not. All true.

But what all these companies have (and a lot of much smaller ones, too) is a developers program including contracts between platform supplier and 3rd party developers. This does not protect anyone from being bullyied out of the market by the 800 pound gorilla. But - for a limited time - it gives you some confidence about what can happen and what not. You can plan better and justify substantial investments - to yourself and to outside investors.

What is maybe most important in such a developers program might be early information about coming changes and long term strategy. The Lindens policy on informing their users and developers has not allways been the best. That is understandable for a small company growing fast. And of course you dont want to inform competitors about new features too early. But there has to be a middle ground. Other companies (even the "baddies" mentioned above) show that this is possible - not out of altruistic reasons but in their own best interests.

And I am very glad when I see a post like Philip's here in this thread (and some comments from him in other threads). This shows an understanding of the situation and the willingness "to share and to listen". Its not easy, as Philip decribes in his post here and at /invalid_link.html. But in the long run LL and (most) developers would profit from a more intense informations exchange and a formalized developers program.

Well, I agree with your posts, Pham, Chip and Philip.

Linden Lab has to innovate and continue to strengthen and improve second life and the second life client. If that means some third-party add-ons disappear, so be it. If that means some business plans have to be reworked, so be it. If that means some skins and clothes have to be redesigned, so be it! SL will either improve, or wither on the vine, and I'd rather see it thrive.

I agree with Chip that fair warning will help this situation. LL will have to decide how it walks the balance beam of useful versus careless disclosure. From the community's perspective, more information is always better than less, and even from a software company's perspective, pre-releasing features can often be a useful weapon in the market. At the same time, LL cannot just post up its product roadmap for potential competition to copy.

A partnership program might go a long way, especially in formalizing an NDA process if LL decides to share information to key third-party developer partners that it is not ready to share with the market as a whole.

LL will get hell no matter what level of disclosure it chooses, but then, that's the nature of creating a consumer product, isn't it!

TYVM for that answer, Philip. It (like your answer to the question of competitiveness in the Hotline to Lindens) really sheds light on the dilemma SL is facing in its corporate policy towards the developers community. At the same time it clearly shows the huge and honest interest LL has in a healthy developers community. There are not many companies where the CEO involves himself in a discussion with its customers and developers like you did it here on the forum in the last days.

And of course it is true, (like Forseti emphesized) Linden Lab has to continuously evolve the SL platform or it will fail when competitors will enter the market - and they will. And if that means that a residents (or a group of residents) business will suffer, thats sad but probably unavoidable.

The number of these unfortunate and probably rather demotivating events could be significantly lowered IMHO with a more intense (in time and in detail) information exchange with the developers community.



Your answer here is a good example for this. It contains valuable information for anyone active in these markets and anyone planning to start projects. Let me emphasize that such information may not only kill projects. It may actually initiate exciting new projects. Because any of these improvements results in new opportunities. Better vehicle physics for example will not only result in some products becoming obsolete but also in some better "game in game" solutions in this area. If I know about these improvements I might start working on ideas now.

Philip, I admit, most of the information given is not new but can be found on other places at the forums, in posts, comments, transcripts etc. LL actually is rather open with some information. But - no offense intended - this way of information distribution may not be an ideal one. The valuable bits and pieces are very much scattered, sometimes sketchy and may even be contradictionary - when policies change.

Thats, why I would love to see a developers program which would give those who need it, timely, accurate and if possible detailed information about what is possible right now with the platform, who is offering what tools, which other developers and resources exist (the developers directory is a step in this direction) and what will be the next steps in its evolution. The latter information obviously being more detailed in the near future and more sketchy for the big steps. Nice would be a way to get even more detailed information in a direct dialog with some developer liaisons - in some cases maybe under an NDA.

Like Forseti mentioned this means walking a narrow "balance beam of useful versus careless disclosure". I am not talking about sharing trade secrets with the public. There is probably a lot of information which could be given out if only someone could find the time for collecting and preparing it. And, like you mentioned yourself, sometimes it might even be a competive advantage to announce new features which the competition will have a hard time replicating The "platform SL" is not as easily to reengineer as some hotblooded hacker might presume.



Of course, collecting and updating this information, answering those questions etc. would bind resources in the company; result in additional costs. The usual solution to this challenge is to have a paid-for developers status. Thats nothing exceptionally new or innovative and not "unfair" to those not in the program. Many providers of platforms and tools have such programs installed.

good post pham

First of all, I think it makes more sense to see content creators in SL not as customers, but as business partners. I have worked for 2 highly-successful platform software companies. There is always a kind of lively "coopetition" dynamic between the platform provider and the partners. It's the name of the game; the difference is that it is much easier to deal with when people use the terms "partner" and "platform" instead of "customer" and "service". You guys are not customers. You pay partner fees in order to have the chance to build a business on this platform. And yes, LL does compete with you in many ways. There is NO WAY to have a non-competitive partner ecosystem.

SL is a platform. Those who create cool content must accept from the outset that SL will frequently 1) incorporate similar capabilities directly into the platform, as well as 2)attempt to capitalize on a profitable partner-created business by stealing the business. That's how it works. The positive side of this is that successful partners continue to gain reputation and expertise, so that when the rug now and then gets pulled out from under them, they are the first ones able to leverage the changes to the platform by building new and better products, and to market those products into a customer base where they already have substantial credibility.

The plaform must evolve. And no one hanging out in a sandbox is a customer. SL's business model makes *everyone* at least a potential partner.

I like this attitude and I would love to see it expressed by LL even more. I think a lot of people at LL already see it that way.

But it would be rather unrealistic to expect Linden Lab to support all residents like an platform provider has to support its developers. Its all a matter of cost in the end. I think SL needs a "real" developer program and would benefit from it

I'd like to know what the hell THAT means.

coco

I bet there would be a lot people who could accept a higher (monthly) fee for a partner status.

This could be shielded by an NDA - no problem.

Things which could be interesting if provided:
- Detailed roadmap
- Early access to information and software
- Developer Grid and/or developer client

I know we already have a preview grid - but AFAIK this is kind of a "compatibility test grid" or a "final Q&A". What I'm talking about would be something like a "snapshot grid" - which LL has, I'm sure...

Philip,

I don't see any similarity between the examples you gave and the situation with GOM. In the examples you gave, improvements in SL would cause problems in existing content that had been created entirely inworld. That has always been the case, and is something that creators have grudgingly accepted.

There is all the difference between that and content that has been created independently to interact with SL, as was the case with GOM. It provided a service that had up until then been lacking, and fulfilled a need which many of us had not even been aware of at the time.

Linden Lab takes a large amount of money every month from people who use this world. Many of them are here because they trust LL and enjoy the relationship that has up until now existed between yourselves and your customers. It seems, from the point of view of an ordinary paying customer, that recently that relationship has begun to change. If that is the case I see it as a serious issue, and one which could badly impact everybody concerned.

Jamie is apparently leaving Second Life, as have several other prominent residents in recent months. I would imagine that much of SL's income from its customers comes from a relatively small number of active residents. If they begin to leave in greater numbers it will surely have an impact; I do hope LL are giving this issue their full attention. Just lately there have been a few PR disasters, and this is symptomatic of either a changing attitude of LL towards its customer base, or a lack of suitable personnel to deal with these issues.

I do hope it proves to be the latter.

Coco, if your question was about my previous post , which is not totally clear, it means

1. There might be a group of people working in/for SL who could benefit from better and much more intense support from LL than they get now as residents.
   
2. For lack of a better word I call these people or groups "developers" - even though I know, any resident is or could be a developer/creator.
   
3. Supplying this support (information and other types of support I listed above) to developers will result in more and better new cool projects inworld and connection RL and SL.
   
4. This level of support will cause additional effort to Linden Lab.
   
5. So people or groups needing this should pay extra for it.
   
6. All of SL and Linden Lab would benefit greatly from such a program.
   

Selador, I don't quite get the intention of this ... of course there is a technical difference between someone doing a project that is 100% inworld and another which is a combination of SL and Web components.

But on the business side, where is the big difference? IMHO both inworld and outworld developers allways stand the risk that a change - or "improvement" - of SL renders their product disfunctional or obsolete. And such a change might be beneficial to some residents (hopefully lots) and "very problematic" to others.

I don't think Philips examples were misleading. There are a lot of similarities between the GOM case and his examples.

Pham,

Well, to me there is a big difference. Sites like Paypal might have an intimate connection with other sites, such as ebay, but they are basically independent. To me, the relationship between GOM and SL is similar to the one between Paypal and ebay.

Content created inworld is part of the world, and is therefore rightly subject to the vicissitudes of Second Life itself.

I am not sure there were any "vicissitudes" of GOM by LL...

And payPAL/eBay is a nice example. If payPal would not be owned by eBay (which maybe it was not initially; I would have to look that up - no time), it could allways happen that eBay changed its interfaces, implemented its own payment system or ... this would greatly effect the business model of payPal. But eBay would have every right to do that, as long as not contract said otherwise. And it would make sense - especially if that would make eBay easier to use.