Okay, what I'm about to say isn't a particularly "oh wow!" kind of thing but its possible applicability to new business models might be interesting to those of you trying to wrestle with figuring them out as we move deeper into the Experience Economy a.k.a. the Customer Ecosystem and head off into 2006 to be more precise.
An article showed up a couple of days ago in the Washington Post with the 5 of a scale of 10 cool title of, "Self 2.0: Internet Users Put a Best Face Forward". It was about avatars, those little online versions of you and yours that you use each day to represent. Usually what it represents is a slightly darker, or goofier, or more urbane or wittier version of yourself . I don't have an avatar anywhere - however, I do use emoticons with MSN Messenger and Skype - you know those little smiley, drooly, kissy faces - I prefer the lascivious ones. If I had an avatar, it would be a lot skinnier for sure. Avatars are sometimes dynamic, sometimes pretty static but what they always are is personal. They are a digital "you."
As I keep attempting to wrestle with how to think about the new business models that will resonate with the new customer, there is something about the avatar that seems to be at least a piece of the puzzle. Once again, avatars are known more through the gaming community and games like Final Fantasy. Whether called avatars or not, they and their cousins so to speak are the individual game characters that you personalize with varying characteristics to your liking. There is one game called Fable, in which your decisions to do good or evil, actually dynamically evolve the character that you play toward being a superhero or a evil nemesis. Another game called Black and White 2 (the sequel to guess what?) allows you to play God (represented by a hand) and in the beginning of the game you choose an animal based (lion, wolf, a couple of others) avatar and your decisions to do good or evil affect the animal avatar, which also represents a What makes avatars interesting to me as part of the model for personalization is that they are something that makes the path to self-control of a customer experience potentially easier and much more personal.
Their applicability extends far beyond just gamers too. The use of avatars and the creation of simulated worlds represents a way of developing training labs for the real world.
Second Life is First to the Gate
There is a company out there that seems to have gotten the picture ahead of most others. Its called Linden Lab and it is the spawning ground for the use of avatars and virtual worlds for business. It has visionary legend and founder of Lotus Corp. (and,thus, Lotus Notes) Mitch Kapor on its Board of Directors and seems to be the leader in this whole virtual world initiative. I didn't discover them hidden away. They have an active presence and seem to be well known in the virtual reality space. They are the place where organizations like the International Center for Automated Information Research or NY Law School's Institute for Information Law and Policy or the World Bank, The USC Center on Public Diplomacy, the Dept. of Homeland Security and multiple others buy "land" inside Second Life (their virtual world) and carry out avatar based scenarios. For example, the Dept. of Homeland Security is using a plot of land to develop emergency response training.
Second Life is tied to the real world and has a real world business models. First, it costs real money to do things e.g companies renting virtual real estate, even though there is a virtual currency (Linden dollars). So, for example, Democracy Island, the experiment funded by a $50K grant from the International Center for Automated Information Research (ICAIR), costs $1250.00 for 16 virtual acres and $195.00 month maintenance - real money. Democracy Island is being used to put up protoypes of parks for Queens, NY borough residents to check out and comment on - prior to their being built in Queens - giving the constituencies real input - a pipeline for determining what parks will be best for them in Queens without a major expense to the Queens Community Board. This is only one of the uses of this virtual world and its avatars.
What is even more amazing is that it is inextricably linked to the real economy in the real world. It isn't just an ordinary simulation. I've become a member (free) and have been wandering around looking at cars like the Viper for 2006 (in fact, one hot avatar named Crystal Peart - fake name - asked me how to buy one of the Vipers. I, of course, didn't have a clue) and it was a dealership that had pix of real new model Vipers - a car I would never buy in real life but I could see the virtual showroom it was in. Look at this quote from ABC News to get a sense of the scope of this as of this year:
Second Life, for instance, has its own currency that is convertible to U.S. dollars at a fluctuating exchange rate. Users can buy the virtual currency using their credit cards, or sell it and get real dollars via checks or PayPal transfers.
Its 60,000 users trade $2 million a month, making its economy about the same size as that of the South Pacific island of Tuvalu. That's small, but large enough that it supports about 100 virtual jobs, according to Philip Rosedale, chief executive of Linden Research Inc., which created Second Life.
This leads to an actual economy where some literally run stores that sell goods that become checks in real dollars. No one is getting reach but there are a few making a living. For example, in the latest numbers I could find (2003), the users of Second Life had created over 250,000 objects, some for sale, some for show, 75,000 objects with scripted behaviors, and 300,000 items of clothing. Again, the users of Second Life had created....what turned out to be over 95 percent of all objects created in this virtual economy with real live economic activity.
The Implications Are Fascinating, Aren't They?
This is just a brief discussion of something that is entirely cutting edge that I'm sure some will see as a simulation, some will see as a suspension of disbelief - a sort of fantasy; some will see as a reality substitute - especially for those who are engaged more than 30 hours per week (there are those kinds of people. All of them I suspect apply. But there is a strong upside to what this virtual world is all about. The ability to not only customize your individual avatar to an extraordinary degree, to program your behaviors into it, to control and conduct the avatar around this virtual world with its malls and attractions, the ability to actually make money from and spend it for things related to the virtual world are a germ of something that several of us CRM-type pundits and multiple economists have been talking about for a long time or at least thinking about for awhile. This is an element or two of the prototypical new business model. It provides a customizable, personalized, individual experience.. It provides control of that experience. There is real world commerce going on that is focused not around the products or services being sold but the experience with the purchase in this case. Plus it is cool and fun. Sure there are issues and problems that are there and could eventually make the proposition let's say a litte iffier. But for now, this looks like another toolset in the continuing battle for the discovery of the experience economy's business logic. Another avenue to explore.
And explore you should. I'd seriously suggest you go to the Linden Lab website and sign up for Second Life to see what its like and to spark your creative juices. Its worth the trip and no matter how much you move around - and you can even fly if you want. Best of all there is no "drop" in this shop 'til you drop - you never get tired! :-) (See I told you I use them)
Tale a look at my avatar, Paul Faschning, resting after searching around Rick's Fine Jewelry Store (I'm the one in black with my back to you)
Optimally, we are looking at another practical example of one of the forerunners for value co-creation and the blurring of the lines between the producer and the consumer around the customer experience. Minimally, its a blast. Either way, check it out.
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