7 Reasons Why Second Life Should Matter For Biz Executives

Here’s some recent Second Life-related news items:
• A development studio based on an SL avatar secured venture funding from a NYC financier.
• A consortium of U.S. government agencies (including the Navy and Air Force) announced plans to develop a substantial presence in SL.
• An international coalition of labor unions is preparing to strike on behalf of Italian IBM workers at the company’s massive SL campus today.
deltadharmadawn-aubret-detail.jpgIf you’re a successful tech professional with zero personal interest in online worlds, those blurbs probably just provoked a bemused shrug. Even after reading constant rumors that Google (GOOG) itself is creating a competitor to Linden Lab’s user-created MMO, you’re probably still wondering, “But why should Second Life matter to me?”
In full disclosure, I’m writing a book on the subject, so I have a vested interest in replying. And while I’ve already written a lot about Second Life here, Om asked me to back up, and start from the beginning.
So, the brief answer: In a rapidly growing market of online world users, it’s the most successful example of an embodied, dynamically collaborative content creation platform that’s personally and economically transformative, and scalable to the entire world.
That’s a mouthful, so to break it down into individual parts:

1 – Rapidly growing market: By one reasonable estimate, 80 percent of active Internet users will participate in an online world by 2011, a trend largely driven by the young, who define and shape future Net usage. (A separate study forecasts 53% of all kids on the Internet will be in an MMO by that year.)
2 – Most successful: Currently with some 550,000 monthly active users, SL has grown rapidly and with general consistency since 2004 (12 months ago, it only had about 150,000 avid residents.) Yes, other MMOs are larger, but none of them are user-created, a crucial distinction I’ll get to later.
3 – Embodied: A 3D space navigated by user-controlled avatars that are convincing enough to make their owners feel a personal and social investment in the simulated world they’re in. MMO players refer to their avatars as “me”; several studies suggest this perceptual leap is a real phenomenon. When controlling a Second Life avatar, we even unconsciously obey our unwritten rules of eye contact and personal space.
But what’s so special about feeling like you’re in a 3D world? The better question is: what’s so special about words, numbers, and flat imagery? Those are relatively new tools, artificially imposed on a human evolutionary cycle of a couple million years. When we remember the past, plan the future — when we dream — we do so in the three dimensions displayed by our mind’s eye. Communicating information in simulated 3D seems to enhance learning and insight for that very reason: a common sense intuition that some studies seem to reinforce. Of course, other successful MMOs convey this embodied effect, but largely through content created and controlled by the world’s holding company. Which brings us to the next feature:
4 – Dynamically collaborative content creation platform: A medium where online multi-user content creation is updated in real time. SL is often called “a 3D wiki” — an apt analogy. Consider Wikipedia: At first, most entries in the amateur-driven encyclopedia were mediocre; through a networking effect, however, it quickly became an indispensable resource for every type of information. Second Life is Wikipediafying the universe in 3D, not just the real one, but fictional and even conceptual realities, including abstract art and mathematical theorems. Like Wikipedia, Second Life content skews heavily toward Internet culture in all its lovably geeky strangeness. But dismissing it on those grounds is like dismissing Wikipedia because most of its users (as this search ranking shows) are primarily interested in sci-fi/fantasy/videogames, celebrities, and sex.
5- Economically transformative: SL’s virtual currency (which can be bought and sold for US$) and intellectual property rights to user-created content (which are retained by their creator, even in non-SL projects) are transferable in and out of the global economy. In practical application, this has resulted in movie-makers, fashion companies, and even architecture firms using SL as a prototyping platform for their real-world businesses. The depth and variety of projects that have made the leap from online world to the real world market is unprecedented in other MMOs — or, arguably, in any other web 2.0 platform.
6 – Personally transformative: The striking thing is just who is doing this work, even making a living at it. Often they’re business-savvy homemakers, talented bohemians, physically or mentally impaired people, retirees, tech workers in developing nations, and people who’ve been otherwise kept out of the mainstream job market through real-world barriers that become irrelevant in Second Life. And this is what’s meant by personally transformative: a technology that improves people’s lives in a substantial, profound way. On the macro level, this leverages dormant human capital into the larger economy. eBay (EBAY) is revolutionary because it converted thousands of people into garage-based entrepreneurs and channeled enormous wealth back into the market. Second Life is an eBay of the imagination. (And unsurprisingly, eBay’s founder was an early Linden Lab investor.)
7 – Scalable to the entire world: Last January, Linden open-sourced its client code, and from this flowered a variety of alternate access portals into SL, including Wii controllers, cell phones, and thanks to a 15-year-old female hacker, the web itself. This makes SL a lead contender to become a universally accessible mirror world, where all our physical data is modeled in a dynamic network, an inconceivably valuable resource for scientists, governments, corporations, and beyond. Linden’s stated intentions to open-source their servers would make this outcome even more probable, while transforming the Net itself into a 3D medium.
That’s just the beginning. Many futurists envision a time when 3D printers will supplant or enhance much of our traditional modes of production. Impressive trial runs are already being conducted in Second Life, exporting avatars and other content into the real world — early glimpses, perhaps, of a time when most of our real world goods are developed and produced in the metaverse.
Does the above mean SL itself is an all-bets-on phenomenon? No, because it’s still staggering under scaling difficulties and poor retention rates, while a slew of competitors — Metaplace, Multiverse, HiPiHi, whatever Google’s cooking up, and near a dozen more — are attempting to outgun Linden Lab on their own terms. They’re creating new MMO platforms that’ll also feature avatar-based content creation where users own their IP, and some will probably do it better than Linden is right now. The ferocity of this competition proves one thing: from the market’s perspective, what Second Life originally unleashed is simply not going away.
Image credit: DeltaDharma Dawn