BUSINESS MODEL PROTOTYPE

Behold the latest in Second Life user-created content: the high-tech startup business plan.

With a community so large and competition so potentially fierce, it isn’t enough anymore to create a cool thing and hope it catches on through mere word of mouth. No, you also want to do some advance consumer research, and when you’re about ready to launch your product, create a solid distribution and marketing strategy.

At least that’s the lesson I gleaned from a demo of Timeless Prototype’s Multi Gadget, a kind of nuclear-powered PDA utility that clips onto your ear, and comes with over 60 unique commands-- sort of an in-world Swiss army knife for just about every experiential aspect of Second Life. For futuristic combat roleplay, say, there’s a tear gas canister that knocks everyone in the vicinity in all directions, and an instant jail that materializes around the owner; for builders, there's several varieties of insta-bridge which appear at your feet, at a single-word request; for scripters, an “I’m busy scripting” thought bubble that appears above your head, so you can work in peace; for general fun, a giant lightshow that materializes in a single-word command. And so on. Pretty cool, all told.

But what really impressed me was Timeless’ business plan for the Multi Gadget, the end result of a year researching the market, and what worked within it.

“Basically I've been exploring various business models in SL since I joined,” he explains. In the beginning, “I actually paid people to bring knowledge to me… it was a general request for information. When it came back to me, I would assess the usefulness of it and tip accordingly.” So when someone clued him in on a new club, for example, he spotted them with an L$ kicker.

With enough of this informal research, he continues, “it did give me a feel for the community and the big players in it. When it comes to human networking it's important, because each person is a potential partner or facilitator.” In the process, he realized this was a monetizable activity on its own. “Information gathering in itself can be useful as a business,” he says. “[F]or examples, take a look at private investigation and market research,” Prototype observes.

After some veteran Residents helped Timeless hone his scripting skills, he continues, “I moved into the next business model: a scripting service. This model is flexible and requires no prior investment or setup. Skills, experience and the ability to solve problems are all you need to get into a scripting service.” He didn’t originally script as a commercial enterprise, though. “At first,” he says, “I was giving things away freely, until people started asking how much for the products. I considered the effort invested and reduced the price by how many I thought I might sell. This is when I entered the direct sales business model.”

His next move was informed by a larger social observation.

“I know that a healthy community circulates the wealth within itself and exports wealth to neighboring communities (in this case, the real world),” Prototype Timeless tells me. “My first idea to get the circulation moving was to bring quality scripters' [vendor machines] into my shop space.” But because he was also selling his own products there, “I felt it would be unhealthy to compete with my fellow scripters by creating better products of the same kind… [that] would have killed their success and subsequently my own.”

What he wanted was true retail. He even proposed a royalty feature in the Linden Lab feature voting system, but for various reasons, couldn’t build up enough support to convince the company to add that into a future version. “[I]t almost killed me to realize that we'd never see true retail in Second Life, and potentially it would stop the circulation of wealth and parts of the community would fade as users would inevitably leave,” he says. “I became despondent.”

Some time away led to new thinking, and a new strategy.

“It takes a killer product for a start," he reasons. "Killer products are typically a must-have and in the best cases, people will buy them over and over again (like toilet paper).” Another Resident had recently built a successful multi gadget, but subsequently left Second Life; Timeless was sad to see him go, “but it left a gaping hole in the market for another product in the same niche. So I invented Multi Gadget with automated free updates. This product was going to be my way of exploring more retail options in Second Life.”

Because the retail system is about as important as the product itself. Timeless sells the Multi Gadget at an incremental discount (the larger the unit buy, the lower the wholesale cost), so prospective retailers can purchase and resell at a decent mark-up.

“The pricing allows the retailer to sell the product for much less than I sell via direct sales, and yet still take a profit. This immediately empowers the retailers,” Timeless tells me. (The wholesale units even comes with a helpful retail plan, and a sample ad, for use in billboards and such.) “In fact, the retail model would still work even if they sold it right next to the direct sales that I provide in my shop. In a virtual world where teleportation is possible, location must not determine whether a sales model will succeed or fail.” With a month on the market, he’s sold far in excess of a hundred units.

“This is my best business process so far in Second Life,” Prototype tells me. “Market research, idea, develop, test, human networking, freebies and public beta testing, sales channels (word of mouth, New Products in Forums, SLExchange.com, SLBoutique.com, SecondServer, MetaAdverse.com), exhibitions, retail, support, promoting retailer growth by assisting with marketing.”

But his plan is informed by his real life background and business experience. “I owe it all to my father who used to own a group of companies, and of course my exposure to creating software and web solutions for businesses,” he says. And his ultimate goal goes way beyond the success of his own product; it’s a plan, he says, for Second Life’s improvement as a society: “Community circulation of wealth through the ability to work in groups (employment even) and through the use of retail. Exports, including but not limited to: entertainment; enhanced real life; game prototyping; business prototyping; real world collaboration.”

Retail as a way to build a better world, in other words.