Rates of business faliure in SL

There's also the fact that some people make things that other people don't want to buy.



The original question is virtually impossible to answer, because what constitutes a business, and what constitutes failure? Is it a business if someone uploads half a dozen pictures, puts them on prims, rents a space in a mall for a couple of weeks expecting to sell plenty, sells nothing, and quits? That's not really a business, but the person could say that s/he had a business but it didn't work. Also, it isn't a failed business if someone ends it from choice, rather than from putting effort into it to get a business up and running, and it not succeeding.

There is also the question WHY 'proper' businesses don't succeed. My guess is that most of those that fall by the wayside do so because the owners don't try well enough to make them succeed. In other words, whilst they are proper businesses in one sense, they are not proper businesses in another sense. As I said in another thread, any individual with an average brain can succeed in business in SL >>> if they have the will to succeed <<<

All in all, I think that any business failure statistics cannot give an accurate idea of SL's business potential, unless they are categorised into types of failure.

Everyone has raised good points here....I have several successful businesses and I am now making enough to pay tier and take money out for myself...yayyy! But, I also do marketing and new business consulting work and see alot of the issues. People do not know many of the very basic things to do to advertise themselves that cost little or no money. Things like (free advice here folks LOL) having a great description for their land of their business, listing their land in search, using their picks to describe services, products and store locations, using the event calendar and forum posts.

I find that most people come in and think "if I build it, they will come." And we all know that is not the case. Anyone I meet who is less than a month old who has not explored SL before they enter into a business to make a profit is doomed. They just are not educated enough about their target audience, their competition or the SL economy. The funny thing is, many call me to help them and when I tell them I will work for them as a consultant and then tell them my fees, they decide they don't need help LOL. The ones that DO hire me are taking their venture seriously, committed to increasing real traffic and will prob do well.

I manage two sims and I can't tell you the number of people who come in and chat and tell me they want to open a business. When we talk and I start telling them some of the things they need to be able to do, I am met with - "what is a prim" "waht is a sim" etc.

So, I also believe the failure rate is high, but for good reason. I am not afraid of those numbers. I also do not believe most BIB folk stay in biz very long, so those don't bother me either. I am happy to chat and help any business owner and I find that most are just not educated about how SL works or even that the rest of the world is ALSO selling BIB items. For those who are discouraged, take heart. Once folks get some SL time under their belt, they will either move on to sell other things or fold...no need to rant and rave against them. The natural progression will weed them out soon enough.

Love these discussions! Keep them going!
jojo

I sell some of my builds at my home and a few other locations. Sales are much less that they used to be up until about last summer.

However, I didn't come to SL with the primary purpose of making lots of money. My home is still my home whether or not I sell stuff, so I might as well carry on selling.

I had a store for awhile. I kept one L$50 clasified ad paided by my builder avatar account. No keyword list in the ad, just a short description of the store. I never expected people to find it through the search tool; I kept it running so people could find my store through the creator profile.

One way to end your business early: Ignore your customers. I can't tell you how many times I have sent a notecard to people,either asking about the product, failed delivery or some other issue. No answer,but yet they accepted the notecard. Thier loss,cause I won't be going back and I love to shop.

It's all that BS hype about "She who musn't be named" and the few lucky ones who have made some real money in SL. i wonder how many would bother even signing up if they saw that most business owners are happy to cover tier and maybe make some beer pocket money.

But from a shoppers view, a lot of the business owners out there don't seem to want to do much beyond setting up their initial operation. i've been going back to some of the placs that I really liked during my first month or so here, ones that I haven't frequented since. Some are gone, but a lot haven't changed at all in the year that's passed. No new products, no change in the build at all. I love spending money in SL, but you have to give me new stuff to buy.

Exactly Brenda. The first time I go to a store,I pretty much look at everything and buy everything I am going to buy.(Unless I am broke that week,then I go back the next week to get the rest of the stuff,lol.) If I come back a few weeks later and there is nothing new...I most likely won't be back again.

Thank you for that, Brenda. I needed it. My store hasn't been going many months, so my stuff isn't stale yet, and it continues to sell very very well, but my thinking has been along the lines of, as long as it's doing well, there's no need to add much to it. But your post made me think that I do need to add new stuff frequently, so that returning people don't get the idea that nothing ever changes, and stop coming back. A very good comment, and I thank you for it.

Hiya JoJo

Be sure to look everywhere, Rioko. In big places, new stuff won't stick out a mile

I have a unique product line and we also do textures, over the xmas period compared to last year we were 50 percent down, although we expected that due to more competition from new residents in the grid and grid saturation of xmas items.

My main business saw a slight decline in december but has gone on to be at its normal evel and increasing as i am expanding stock daily. I released an rl book in december late and i do see traffic coming in via the book which explains the rise.

The new search is fine for me although i was worried but a lot of research and fiddling with items names and taking into account the other factors like PICKS and letting the smaller ads go in and key words or lack matched to land we managed to get top in ads and 4th in rankings ( took me 3 weeks though ). i think now because there are so many places to go versus 2005 land mass and the huge loss of new residents it will only get worse till we settle and retention of players goes up to fill the sims and shops and our pockets up.

That reminds me of another complaint I have. There should be an area showing new stuff.Especially if the store is huge. BTW I am mostly talking about clothing/hair stores. Or stores where you don't really "need" anything,you just like to browse/spend. Furniture stores for example IMO are somewhere you go when you know what you need and what you want to buy.

i like to buy limited edition items.

I would say having a well organized store (clearly named sections with a landmark notecard giver listing of them in a single note, and a teleporter to match) and an update group pretty much eliminates that issue no matter what size the store is. The update group is opt-in and opt-out obviously, so if the messages get annoying or too frequent then people can just leave the group. Those interested in staying in the group can get updates as soon as the creator releases new stuff. Everyone else gets to browse the store with relative ease using landmarks (which work gridwide) or a teleporter (once you're there at the store).

Oh yea... and a Blog... I still have to get around to doing that .

I know it takes time and effort to make the stuff,people can't devote a lot of time to it in some cases I don't expect to see new items every day or week, but even just freshening up things with little changes go a long way. car manufacturers do it all the time, slap a piece of plastic somewhere and tout it as a new model. Some products don't need updating as much as others. I own your platform bed Phil, it's the perfect clean design I like, it's got a good selection of textures, and a small but good variety of animations, all at a great price. What else can you do for it? Maybe slight variations in style, maybe a new version with more textures and more animations. I'd probably buy . another one.

Clothing is where the lack of new items is more a problem. Perhaps the best feature designers offer can be their worst hurdle. The mega pack and color change items. It's great to have, but if I can buy a dress in every color and one pair of shoes that I can change to any color, you've lessened the chance of me returning to your store. I don't buy color change shoes as a rule, I've found the colors don't look that great on my machine, too cartoonish, and I rarely buy mega packs as there are usually several colors I would never wear, so it just clutters up my inventory.

Your point about new items is a good one, Phil. If you have a big store, please put new stuff where it can be easily noticed.

re: furniture - if it means anything, sometimes just rearranging the layout gives a fresh new perspective to returning buyers, who might not have noticed a particular lamp or table, or thought to group certain items together.

I'm old fashioned. I don't usually take notecards at the store, half the time the lag keeps them from opening, I don't want to bother putting them in inventory and re opening them, and I usually walk through the store as opposed to teleporting. I generally don't join store update groups. I have my favorites that i browse through periodically, and I look at the new products forum here.

Good points.

Very good idea. Changing just the dispaly can be a big differernce. I also like limited edition items. it's not too hard to get me into a store, and even buy something once, but you have to get me to return.

I think that essentially this thread is showing up a whole problem which is that SL radically needs to redefine its concepts of "success" and "failure".

That might sounds strange, but at the moment, they're dangerously tilted. In real life, people who are "successful" are usually people who are doing well for society as well as themselves (most people would not refer to Pol Pot or Saddam Hussein as "successful" even though they did very well for themselves). Unfortunately in Second Life, the correlation isn't working so well.

The most obvious example is the people who buy L$ for US$. They get the worst deal of anyone on SL with regard to the final entertainment experience. If they just feel like doing something a bit different on SL today, they have to pay again. Very often, they don't get to benefit from any of the creative freedom of SL either. Yet without them the entire SL economy would collapse. It's completely backwards.

There's also the issue of people getting to express or not express their creativity. SL has a range of role-playing sims. Some of the people playing in them, might have preferred to play in a different environment, but couldn't build that environment because they could not compete with the established sim. But at the same time, those people are critical, because if everybody built their own environment, all the environments would be empty except for their builders. So they are critical, but the experience they're offered is to settle for less.

Yumi, your insights are usually .."insightful", but one theme you do carry is one that I don't agree with and actually find somewhat insulting is that people must "create" in order to be getting the full SL experience, or that they will suffer from some inferiority complex. That just isn't true. I don't build or create anything in world, never will. It is of no interest to me whatsoever. I buy my Lindens with my own money and spend them in a variety of ways. That's how I enjoy SL to it's fullest. The fact that i don't create anything is of no issue to me. Maybe I'm misunderstanding your meaning, if so I apologize.

Newbies sometimes don't understand the amount of work involved in creating content. Let's take a 5 prims leather seat for example. Take 5 prims resize, position, align so there are no gaps. Find leather texture, either buy a good ready to go texture or make one from scratch in PS. Adjust the lighting and add details like stitching, upload to the Beta grid, does it work? Will one texture work for all sides of the chair or does it just look lazy and stupid? Make a second texture for tops of chair arms, repeat checks. Upload to Main Grid, damn forgot to check what it looks like in Windlight, tweak, upload again. Align texture on all sides of chair prims, that's 30 sides, usually you can get away with aligning half that amount, as tweaking one changes another correctly. Sit in chair, hmmm why am I on the top of the backrest? Explore scripts, make one? ||sitparametersrotaterightwayupnsew(), errr ok use a free script or buy one. Ok now sitting on the seat, but why is my bum halfway in the seat and my feet in the floor. Research, buy prim-sitter (actually there's a neat freebie program out there for aligning poses). Oh where do I sell it, buy or rent my own land to make a shop, or just rent a shop, what location…

…damn this is a longer process than I even thought it was, would take me all day to finish this …

So, then everything else, graphics, how much to charge, advertising, set up vendors, make a special version without scripts to show in halovendors, whats the competition doing, any shiny's i can add to make my product more interesting, etc etc etc,

…and that just one, 5 prim chair, it's exhausting actually, and don't think about having a social RL too!

To some extent you're right and I'm sorry. I think it's better if people can create in SL, and I do feel a bit of an inferiority complex myself at being unable to create some things I'd like to, and so I suppose I am projecting a little there.

But the other side, where it becomes a global argument, is that many of the technical limitations on SL are basically due to the fact that it allows freedom to create. If SL didn't support free creation, then lag and rezzing times could be practically eliminated, along with a lot of other things. So if lots of people aren't making use of SL's ability to create, then they miss out on the "upside" of SL's technical design, but they still get the "downside" of the lag and similar issues. In the wider market, SL will have trouble competing with other worlds that don't allow free creation if customers can't or don't want to take advantage of that function.

If someone genuinely doesn't want to create anything then that's fine, but I tend to think more of the people who might like to create things but dismiss the idea out of hand; or who approach SL as a carte blanche that they'll adapt themselves to, and wind up adapting in a way that doesn't involve creating, even though they would have really enjoyed it if they had tried it.

I should furthermore add that my original argument still stands - when a person thinks of the names of successful people on SL, most of the names they think of will be L$ sellers (which may be because they are also creators, or for other reasons), and I think that's dangerous when the people like yourself who buy L$ are critical to SL's existance.

I'm not reading through all the pages, so forgive me if I'm off the line of discussion, or my point has been said already.

Buisness in SL fails the same rate as buisness in RL. A lot more fail than succeed.

Though the deffinition of 'success' needs to be measured by the person running said buisness. A philantropist that gives things away for free, helping people out of the goodness of their heart is a success if they can see they've helped just one person. Others can make money hand over fist, but call it a failure because it's not making 'enough' money.

The first thing of any buisness is to set your goal. What you want to accomplish. Both in your product and in your vision of success. Setting out to make a killing on retail, and then not following trends, or even attempting to understand what the community desires is one of the main things I see for 'failure'.

SL does not work like RL. It is it's own animal. Many people could write about what it is, and is not, and what you would get at the end is simply many different answers. To understand SL, you need to get out in it, just like RL. RL is easier as RL has been around just a bit longer than SL, so there are more examples to learn by. Both success and failure. SL is an infant by economic or buisness outlook. Some have found a great nitch for themselves and 'succeeded'. Wether that is making a lot of L$, being well known, or simply helping others.

I, personaly, call myself a success. I have a modest buisness that brings in more than it costs me. It won't ever let me retire from RL, but it doesn't break my back either.

So I'd say the 'failures' of buisnesses are simply those that didn't meet the owner's expectations. Either from not gaining what they wanted, or from simply being more of a burden on their Second Lives than they wished. To me, a failure is only when your SL adversly effects your RL. And you don't need a buisness to let it do that.

~Jessy

Yes, creating content and running a business are work. A lot of work. But if you want to succeed, then that goes with it. Pretty much why I don't do it. Work is for RL. That's why I have no qualms with spending my money on the things I buy in world. And don't mind paying more for high quality items.

EDIT. No need to apologize, Yumi, your followup clarified what you mean, I generally agree with you. The only thing that should stop people from exploring their creativity should be their own limitations, and there are too many other things that can get in the way it seems.

Those are all valid points. That's why I like to cover as wide a base as possible.

I always use the New Products forum here. It only reaches maybe 2%-5% of my customer base, but it is just one more option in a long list to get the word out. Releasing new stuff is a BIG deal for me. I will often solicit advice from people in the Gallery section (with lots of pics) several weeks prior to a release, make some change requests and refinement updates, then release when it feels finalized. The day of release usually accompanies a spike in sales, then everything returns to normal after a day or two. That tells me I was successful in getting word out.

A personal word on creativity - The process and the feedback is often what drives my creative motive. Selling stuff is an added perk. It gives me a means to devote more time to it (pay the bills, buy software, computers, studio space) as well as get truely honest feedback from people. People wouldn't buy my stuff if they didn't like it. If SL was a closed or exclusive development platform like Kaneva I would have very limited interest in participating unless I was hired by the company (where I would require honest feedback).