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August 29, 2005


Torley Wong/Torley Torgeson

Like giving birth to a baby, it might as well be painful and there's gonna be a lot of cramping and cravings and crying and other C words, but the end result is a BEAUTIFUL NEWBORN CHILD!

And hey, after the first is birthed, if there's another, it might not be so bad but odds are it's still gonna hurt.

Growing pains in SL... hrmmm... I've never related to why "competition" or "favoritism" or "bias" has to be perceived in such a bad light sometime. For me, stagnation is ultimately more dangerous. If you stand in the middle of a street with a psycho car coming down, if you choose which way to jump out, you'll prolly have scrapes, but far better than being hit head on. Same with the kinetics of martial arts and keeping things fluid and moving.

Yeah, there'll be outcry. Even some from me. ;) But that's redundant.

Superior productmaker Residents who are also nice people I've already talked to before, the lot of them, know that they're gonna keep revising their products to take advantage of new features instead of staying in the muck. Francis Chung (gosh I miss her) and Rathe Underthorne have some very keen insights about this and their ROAM telehubby device. I once asked them, "Aren't you concerned if LL suddenly kills telehubs and gives us P2P?" but oh nooo, they're thinking not 1, not 2, but many steps ahead and this is but a dot in the stippled canvas of fertile imagination.

Ultimately, it may be a test that does not come down to economics alone but a displayer of personality and character.

If ya never make a move the clock keeps ticking and the game iz lost.

Cheerio! ^_^

Lecktor Hannibal

Get it right man. You totally screwed the pooch. It was a Triumph not a Harley.

Philip Rosedale

The point was it was initially a harley, but when he crashed it because it was too big they found him the triumph.

Miss K

To my mind, it's all about making the SL platform better. You should never stop adding features to the platform that enable residents to have a better experience and contribute better content.

All of those features you mention above in the bullets meet those criteria, as does facilitating currency exchange from within the client. The key characteristic is that they remove barriers from the residents' user experience. I'd hope that people would understand that that is your objective.

Surina Skallagrimson

[quote=Philip]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.[/quote]

I'm sure the 3rd party web sites would LOVE this. It would mean they wouldn't need the 'complex mechanisms' to which you refer. However, if you built your own web based SL store, and then integrated it into the SL GUI I'm sure the 3rd party sites would be just as upset as GOM are.

All that is needed here is a monetry API to allow exchange sites like GOM to directly charge sales transactions to a users SL account, rather than relying on PayPal. The same API could also be used by the 3rd party web stores.

Why is this such a problem to you?

Satchmo Prototype

Fostering innovation from the residents is the single most important business decision a pioneer in User Created Content faces. It is clear that these decisions must be made on a case by case basis. When LL's new features undermine the work of a real SL contributor, someone who created a market system for $L to $US payouts, someone who has helped create the infrastructure that has been helping sales in the Metaverse, one has to wonder where the incentive for innovating is. As Trent Reznor said "Will you bite the hand that feeds?"

Ken Kennedy

I agree with Surina's comments above, Philip...I think there's a fundamental difference between 1) an improvement by LL that reduces the complexity of the interaction between a SL entrepeneur and a "casual user" (ie, improving the integration between the client and web stores, or working with the various currency exchanges [including GOM] to develop an API that improves the efficiency of exchange), and 2) evaluating a SL entrepeneur's business and business model, finding something there that improves the experience for the "casual user" [growth area]...and appropriating it. Don't get me wrong; you're probably within your technical RIGHTS to do it, based on TOS, etc. It just reeks of "jump the shark". And uncoolness.

I really want this to be something that can work well for everyone, Philip...there's certainly a way to do this that works for LL, for SL, for the currency exchanges, for everyone. But to be honest, I'm getting some not-so-warm-and-fuzzies...and your above "justifications" don't help.

I mean, really..."LL has lots of improvements in the works for vehicles. ...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." Um...can you really say that's not a bit of a reach, Philip? By that logic, every improvement you've EVER made to the client is potentially bad, and I think that's self-evidently false.

My gut feeling is that you know the difference, Philip. The challenge here is to make the right choice; there is NO REASON to rush this enhancement into place in a way that you hurt the "open market for L$" that you (rightfully) tout on the SL website. Done carefully, with open standards and cooperation between all the principals, you can make everyone happy, and make the SL experience better for everyone.

What's up, Philip? What's the rush? Seriously.

Doc Nielsen

Hey Philip - it's not about what you have done or propose to do - it's about the manner in which you are being percieved as going about it.

Step back a minute, look at the information your customers have on this and try and put yourself in their place for a moment.

What do you think of LL and Philip Rosedale now?

Roberto DaSilva

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 "coopitition" 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.

Nothing lasts forever. 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.

Tiger Crossing

I think Linden Lab (and Philip, by light of leadership) have done well by the residents of Second Life.

That their primary goal is to make the Second Life experience better and better as the years go by is GREAT! Much better than sitting on their laurels and waiting for the world to pass them by.

GOM, yes, is being passed by. Just as the people that sold diced up and strung together songs were passed by when streaming audio was added. (You forgot THAT example, Philip.;)

I, for one, don't want to see Second Life's growth stunted by favoring 1 or 2 people over 39,999+.

Philip, I'm guessing that sellers will need to register on the SL website with direct deposit information (like Paypal) in order to sell L$, but that buyers can buy at any time and just get charged via credit card?

Will finacial data on these transactions be made as public as GOM made its data public?

Will people have to pick and buy, or buy at best price by default, or some other method?

Memory Harker

Holy primsouls, Philip, I'd hate to be in your shoes right about now – because I'd be stumbling around like a newbie with a plywood box on her head. But, even with as much admiration as I have for you & all the hardworking Lindens, I can only *hope* that your steps will be in the wisest direction: seems like a particularly tricky juncture y'all are approaching. Best wishes.

Gwyneth Llewelyn

As emotional as I am about Second Life, there are some times I also stop and try to think about it a bit. Rationalizing about things does not always lead to good results; following your gut is usually as good advice as any other :)

What annoyed a few residents with your recent "decision" was not really the way you dealt with a 3rd party site who have actually brought "value" to a "funny money" currency - the ability to interchange L$ and US$, and follow the ratio trend over the months, is what made the economy of SL *interesting* (some would even say: this is what made the L$ a "real currency" and not just a reference token in a virtual economy).

Challenges, innovation, adapting to change, taking risks - all these are part of the nature of business. Both LL and the 3rd party sites know all this very well, and if they weren't willing to take them - they simply wouldn't be in the business at all.

No, what annoyed some people was the *reason* behind it. I'm sorry to be blunt about it, but none of the arguments "for" this feature - residents being able to buy L$ using LL as a "mediator" - really convinced me. I'm stubborn and not easily moved from my position; however, as I usually say, give me one good argument, and I'll quickly change sides :)

In this case, the arguments we've been presented are:

- Things change. We should adapt to change or die trying (well, that's obvious, but tomorrow we could have any other random change for not reason at all, and we need a *bit* of stability to be able to evolve).
- LL will always introduce features that will "compete" with residents. Yes and no. Some features are definitely *needed*, even if many will suffer. Others need some reasoning for LL to invest time & money in them. As customers of LL, it's not unreasonable for us to expect why a feature is *needed*, specially if it's because of those features that we'll keep supporting LL and its product SL. As residents of SL, we all know we live in a world of trade-offs, and we just need explanations, not much more.
- New residents need easier ways to get access to L$. Now this is what we call a myth, or, better said, an assumption based on anedoctal evidence. To the best of my knowledge, no statistics have been collected among new residents who have complained that the access to 3rd party sites was "too difficult" or "too cumbersome". Rather the contrary - I found out that almost all new residents sooner or later feel either the need of L$ and figure out how to get them, or they simply become content creators -- or go to Tringo. They may grumble and complain, but that's what they do. Again, this is also reasoning on anedoctal evidence on my side - just because the 100 or so new residents I "interviewed" in the past month never complained, this doesn't mean that the remaining 3,000 didn't. Without "hard statistical data", this is simply an unproven statement.
- The new system will allow new residents to be "richer" (ie. they will have more available money to spend at the beginning), thus they'll buy more content - which will make content creators happier (more sales!). I was terribly frustrated when I patiently explained to a small group of people that giving easier access to money implies inflation - money becomes simply less valuable (it's a commodity that becomes less scarce), which leads to inflation. So, for a few days/weeks/months (if we're lucky), this will result in more sales for a while, until inflation starts to hit and prices will rise. Everybody just repeated to me that "no new money is created" - but better distributed (ie. poor, new residents will have more to spend, by having richer residents sell them more L$ easily). But that's hardly correct - prices *will* rise, simply because people will now have the means to afford higher prices. I can't understand how it can be otherwise!
- By getting rid of an external entity that actually gave worth to a virtual currency, LL is now able to control the "value" of money much better (we now know that not everybody will be allowed to sell L$ in-world - only "pre-approved" residents, to prevent fraud). But sadly this is also a fallacy. By removing an "outside check" on the economy, LL is effectively creating a closed, artificial economy. I shouldn't need to point out to what this may lead.
- A significant amount of residents create content or do transactions in virtual land because it simply pays off - in US$. Until the L$/US$ ratio stabilizes again, there is no way these transactions will be interesting to those residents. It's highly likely that they'll have to wait some weeks or months until they know what the upcoming new ratio is going to be, and change their prices accordingly. This will mean a partial standstill on the upper levels of the SL economy, followed by a period of adjustment of the new reality. Suddenly the prices will either rise or fall, and all the balances in the system (like the amount of stipends and bonuses being handed out) will need to reflect the new prices. The challenge is to get the economy stabilized again (the ratio is not so important as the stability, like the Japanese Yen shows).
- This "new feature" is just one of many that will conflict with other things already developed by residents. That's certainly a true statement. However, there is something different. This feature *may* trigger a sequence of events (inflation - no transaction data - no independent US$/L$ ratio) that *could* shake up the economy pretty badly - for *all* residents. All your examples - and many similar others! - only affect a few content creators. *This* change (as well as many others which happened in the past) will potentially affect us *all*.

Again, I'd like a good argument for this feature. "Just because I felt like it" is a pretty good one! At least it's honest and direct ;)

Another point is also not so clear to me: LL has always promoted user-developed initiatives. In the past few months, these have grown exponentially, not only content-wise, but at all levels - 3rd party eCommerce sites, even the reparcelling by land barons. This has been encouraged fiercely. Now we have a sign that not all these things are viewed as "good" by LL - sometimes they're acceptable, sometimes they aren't. The question is that residents cannot count any more on this principle to hold true. This means higher risks. When the risk is too high, either you can guarantee a good ROI and it's worth the trouble, or you don't have expectations to get a quick pay-off before LL changes the rules again, and it's better not to attempt any innovation. So, the message seems to be clear: do not attempt medium-to-long-term investiments in SL. Or stay clear out of very specialized content - build your nice houses and furniture, keep away from complex stuff like in-world games, information systems, or integration with off-world applications. This is for me very, very sad to hear.

As a side note, I do really appreciate your frankness explaining that most of these decisions are really based on feelings and not so much on real data or expert advisors (lawyers, economists). So far, all your feelings have been right - the number of people who left SL because they've disagreed with those feelings are minimal, compared to the whole masses that stayed, accepted change, and continued to support LL's efforts. Well, I'm one of the stayers, of course -- since I definitely admire not only your personal vision and your feelings on what a virtual world should be, but because you have led a successful team to implement that vision. Still, call me hard-fashioned, but I would definitely prefer more decisions based on statistical data. This would make me sleep sounder during the night, fully confident that the sun will rise again (in SL, that is).

All said and done, I'm curious about the upcoming changes, and eager to see the results. My own "feelings" tell me that the impact will be negligible, even if it means that some residents will not survive this crisis, and I really do feel sorry for them. Alas! The world changed dramatically in January (no event support, weekly bonuses cut in half...) and more recently (land auctions, sims sold wholesale), so, I guess that SL will survive another ordeal :)

Lecktor Hannibal

>The point was it was initially a harley, but >when he crashed it because it was too big >they found him the triumph.

My bad and I totally missed the nuance. Nice analogy Phil!


Bottom line, us developers will be less willing to innovate as the risk will be much greater. Last year you announced that we could keep Intellectual Property, this seems to fly in the face of this.


Thinking about this topic more, I realize there is an obvious litmus test between competing with residents and innovating. It's not so much about the problems that are solved, but the *methods* as to how they are fixed. This closely matches how US Copyrights define copyrightable material for software - you copyright the process / method, not the end-result.

In the case of something like improving teleports, something like ROAM is a method to quickly mvoe an avatar around the grid using a navigation system; it's not even really telporting, merely fast flying, of sorts. LL improving teleporting is about point to point teleporting. In this case, it's clearly not competition - you're not improving how residents can fly to places on their own, and ROAM isn't improving teleportation.

In the case of GOM, however, what you are proposing for LL to integrate into SL is essentially the same thing - selling L$ for USD$ using a market of sellers.

As I am developing a new search engine for SL, there's nothing stopping LL from adding new metadata into the interface, and adding search algorithms and interfaces into the client and servers, leaving me high and dry. I am planning on patenting it to protect myself, now, and that will cost me a chunk of change. I feel it's unavoidable in order to protect myself. This is the kind of thing this precendent with GOM forces.


Again, think about the method. If LL wants to implement a totally different method for achieving the same result as a user-made piece of software, so be it. However, if LL is using an identical or highly similar method, then we've rolled back the clock before 2004 State of Play and we've lost our Intellectural Property rights.


Thanks, though, for listening.


Pardon my type-os, and I meant the patent office, not copyright. I'm running behind on sleep... meh.

Timeless Prototype

Frankly, I'd like to see the enhancements to the platform get implemented. Wouldn't even hesitate.

Most of what we did was because we craved it in the first place. Thanks for bringing us the features we crave.

To all those who have spent time making elaborate out-of-world solutions: Things change. It's bad business to risk it _all_ on something you _thought_ would stay the same.

Go Philip, go! Create that platform!

Prokofy Neva

I'm glad Mulch Ennui appeared as a shark at the town hall and made an iconic reference to this moment -- Philip, either you will ride the shark over these troubled waters or you won't -- and you're the one who roiled them. We're waiting. I personally negrated you (I see you only have 6 negs) and said that if your currency exchange has the same customer service as GOM, and has cashouts at what GOM used to have at $4.00 with that magic 7 percent fluctation (which it doesn't have now), then I'll un-do the neg. Except now among many other upheavals you are also removing the ability to neg -- one of the few ways we had to express our opinion about bad behaviour in the game, especially by those so favoured that merely criticizing them leads to bannings from the forums under the unequal enforcement of the TOS.

What's terrible about crushing and crashing the GOM isn't even the thousands of US dollars many people with considerable investments are losing right now -- the saga itself helped crash GOM. What's terrible in the long run is the loss of independent civil society and its business and non-profit structures that were beginning to form independent of the state or "federal government". *We now have nowhere to hold our Linden dollars except on your website in your hands if GOM is forced to fold*. There is no independent sector, no truly private enterprise!

Given the arbitrary manner in which an investor with considerable wealth can be removed from the game "for any reason or no reason" for too many bannings swearing in PG, and misuse of the abuse report system, it's truly appalling to consider what the risk is.

These examples of how LL will compete with player businesses are also completely specious and fabricated, and they feel to me as if they've been pulled from the ceiling to provide some fake contrast to GOM as if LL is always in the business-crushing business -- it isn't -- and trees and cars don't compare to the huge overarching service of currency. The few products that produce drop-down menus taking you to the web (like Metaverse Messenger, the newspaper) will only welcome web on a prim. Car makers are already very wily and nimble about dealing with the really intractable problem of sim seams and constantly re-do their vehicles.

A more serious threat is to websites that offer creator content and services also should be in private hands and part of the private enterprise that makes up a really genuinely independent and immersive world -- again, in the company's hands, it becomes merely a division of an entertainment company, not the game and the world you're always saying it is.

During this GOM saga, you offered takeovers and even stock options. I'd like you to regularize that process, please, so there is not undue influence, lobbying, conflict of interests and all the other kind of potentially corruptive and corrosive features of state capitalism.

I don't at all buy this model where high-tech creators are partners on sufferance living under wicked rules of social Darwinism and brutally harsh market economics in the fierce game dev world. Note that the posters here are always dreaming up ways to make other businesses suffer harsh losses from risks, but never their own businesses.

Phil, part of the very feature of the "product" you are selling -- the embryonic Metaverse and all its works -- is that independent and protected space for content creators and those providing land and other services. Encroaching on that in the name of positioning yourself to be better at making software is to declare the operation a success even though the patient dies. It's to overlook that your product is not just the software and the platform: your product is the world, too. Never forget that!

The viable world of resident run businesses *is* the product you sell, not just the streaming technology, Philip! PLEASE zoom out and look at a broader view than the tekkie-wiki take! Everyone understands that you are not here to play socialist nursemaid and prop up businesses and soften risk. But why does the federal government need to be in the banking business in a liberal market economy? Why is it turning into Russia or China? Why are you also planning to take over the Internet/mail order type of business as well?

Let the users create the world. Stop being afraid of them. After all, you once called hither: "Your World/Your Imagination" -- and they are delivering on that if you stop getting in their way. Focus on fixing bugs, fixing flawed group tools, delivering on features, and stay out of the world-creation business.

God doesn't come back into the world after He creates it and start re-doing the trees.

Blunderful Bunderfeld


So, the budding Metaverse encounters a situation where its Philosophy of Intellectual Property (IP) comes into conflict with its 1) Philosophy of In-World Technological Development and 2) Broader Profit Model.

This is the standard GROWTH vs. IP debate that we've seen in RL. It reinforces the idea that SL is a real market, but hyper-fluid and operating at a quicker rate than the broader RL market.

Side #1: Philip wrote, "From a competitive perspective ... if we decide against implementing the currency exchange capability which triggered this debate, another company might build a more efficient mechanism and therefore outcompete us."

He's right, of course. PS3 and XBox 360 will enable a proliferation of Metaverses. In order to survive and thrive, SL must constantly refine its platform. Failure to consolidate and integrate the most basic features will make it harder to compete with other huge platforms. Failure to consolidate and integrate basic tools and infrastructure will slow down the technological growth within SL.

Side #2: But we invented this stuff and deserve to keep profiting from this model.

They're right as well. IP rights must remain sacred in any Bottom-Up VW, lest the users lose the incentive to Innovate.

Philip sums up his dilemma: "It feels like we must continue to innovate very aggressively, but how can we do that and sustain/build the culture of contribution that is at the heart of SL."

How can bottom-up profit-based economics work in a system that constantly needs to refine itself top-down? Especially as convergence is taking place and the overlap of innovations is increasing as a direct result?

In RL we have Intellectual Property laws. Worldwide, most people think they inhibit broader development by favouring the IP holder. In SL, the market, the Intellectual Innovation/Environment Change relationship, works at a faster pace. Therefore, the Intellectual Property Laws should be adjusted accordingly. The bottom line is that RL IP Laws are slow as far as RL is concerned, and slower than snail-paced as far as the Metaverse is concerned. Hence, the system needs to adjust its laws. (But which system? Are we talking about both?) That brings us to broader sovereignty.

Bottom-up VWs will proliferate. It is only a matter of time before a RL IP litigation will begin to hamper the growth of VW's. This will probably take place in the US or Europe where Intellectual Property and Tax Laws are most adamantly defended. Resultingly, VW developers will try to skirt the laws. They'll put up servers in other countries, split their worlds for users in different countries, and create new innovation contracts for users. As these bottom-up VW's splinter into different regions with different rules, they will essentially become virtual spaces with unique sovereign qualities. Some will be faster at innovating yet less profitable. Some will protect ideas but move slower. Personal VW's will emerge. Ideal paces for innovation will emerge in different VW's. Governments will react to these developments by tinkering with broader laws and will have to set new international standards. The VW's will react. Then the govts. And auto-catalytically so forth...

What does this mean for SL? First and foremost: Second Life is the first, not the only. As the first broadly funtional metaverse a legacy of pushing the legal envelope seems inevitable. How will SL and LL weather the storm? First, they'll try to minimize the legal issues and grow as fast as possible. Then, when they encounter legal issues they'll adapt. There is no clear straightforward path. There will be more, not fewer, challenges presented in the near-future. The one thing that does seem clear is that Philip Rosedale, and a few select others, will at some point be asked to present his thoughts to US legislators, who will ask him about the economic impact of bottom-up VW's on broader sovereign regions, at which point we'll enter another phase in the development of the Metaverse.

As far as the SL User/Creator base, as long as LL continues to do a good job adding value and enabling value creation they'll probably retain most of their customers. It appears that Rosedale's role is turning into that of a political leader, rather than a CEO. This makes sense when keeping in mind the trend towards the sovereignty of VWs. Perhaps his vision of democracy in VWs isn’t that far off from being a reality.

"God doesn't come back into the world after He creates it and start re-doing the trees." But a duly elected sovereign leader of a VW in a highly competitive international environment chock full of VW's must.


Prokofy Neva

No, Blunderful, he lets the creators make them, and trusts they will help him keep his competitive edge, since they are more motivated, nimble, and flexible than he is. And if he crushes their tree-making in the zeal to keep control over competitive-edge-making, he'll end up creating a creaky, brittle, historical artifact that will be overtaken by those willing to have free worlds.

Jumpda Shark

Heh, and here I thought Phillip was talking about me...

Richie Waves


Blunderful Bunderfeld

Wouldn't a moral God feel an obligation to constantly revise the engine, even if it resulted in new trees and pissed of some Greenies?

Morgaine Dinova

Here is an executive summary of the alleged "problem", devoid of any diplomacy or tact:

"Some people want the rate of technical advancement in SL to be artificially held back for personal benefit at the expense of others. Should LL side with these past-embracing vested interests, or side with future-embracing technical progress?"

Well, the answer to that depends entirely on whether LL sees itself as a technological leader or not. You're not going to be leading anything with the brakes on.

Blunderful Bunderfeld

In response to Morgaine's post: Based on talks by Cory and Philip Linden, LL does see itself as a technological leader, way out in front. But the gap is closing due to convergence. So it seems the broader and most pressing question must be when, how and with whom to make the strategic switch to open source SL, while maximizing profit. The GOM decision was part of a longer term strategy which will impact the development of Web 3.0. Which large company will pay for SL, while allowing it to go open source? The company with the brains and savvy to partner with NASA seems the most likely candidate. Perhaps as soon as the first or second quarter of 2007?

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