Business Goes Virtual - Chapter 9 - Real in the Virtual World

The ninth post of my Business Goes Virtual blog series continues with “Chapter 9 - Real in the Virtual World”.

Some companies gave up on [Second Life] (SL), others learned and revamped, and a select few actually got it right the first time. In the past 5 years, we have learned a great deal about what works and what does not work in SL. Learning insights include the following:

• Virtual worlds are about interaction and engagement. 
• Events drive traffic.
• In-world staff are better than bots.
• Second Life offers unprecedented room for innovation.
• Community experience is crucial

Some Tips on How to Successfully get started in Second Life:

• Set a clear vision in your organization to embrace new virtual world capabilities:
• Increase your employees’ collaboration, project management skills, and their sense of fun in the workplace.
• It is imperative to develop, early on, clear goals and objectives with effective and relevant performance metrics. Start simple, gain some success, and build momentum.
• Evaluate and experiment with virtual world experiences to learn.
• The best way to optimize learning is to develop a learning lab or a pilot to interact online with external customers or recruits. As the numerous case studies have shown, learning labs and pilots are effective in SL. Having relevant performance metrics and reporting approaches to gain further executive support is also a key success factor.
• Develop a collaboration competency. Collaboration competency is necessary in order to leverage virtual worlds solutions. This is the ability to collaboratively solve problems of mutual interest and work toward win-win outcomes. True collaboration requires the development of leadership behaviors that work in a virtual world. The leadership behaviors include the following:
• The ability to develop rapid trust with people that you may never have physically interacted with.
• Ensure your SL strategy is integrated into your Web 2.0, social mediated, and knowledge management strategies.
• Develop collaborative work spaces to gather knowledge, express ideas, and concerns and share collective know- how. There are a variety of solutions that support collaborative knowledge generation activities:
• Web conferencing solutions (e.g., WebEx, Live Meeting)
• Document creation collaboration solutions (e.g., Atlassian, Confluence Social Text, IBM Lotus Connections, Igloo, Jive, Microsoft SharePoint)
• Start small, yet think big!
• A small and tightly focused project with clearly defined goals and objectives is usually the best way to get started. Suitable application areas for getting started include the following:
• Recruiting islands— such islands offer an effective means of attracting users, particularly web-savvy and technically skilled talent (Gen X and Y).

Source: Pages 152, 154-157


Does your company use virtual worlds?  If so,  how does your company utilize this newer technology?  What kind of benefits does it reap from using VWs?

If not, how can your business benefit from using VWs in the future?

Buy a physical or electronic copy of Business Goes Virtual: http://www.businessexpertpress.com/books/business-goes-virtual-realizing-value-collaboration-social-and-virtual-strategies

The content includes:

PART I - THE CONVERGENCE

Chapter 1 - Virtual Business: Real or Imaginary?

Chapter 2 - The New Face(book) of Organizations

Chapter 3 - Real Leadership in the Virtual World

Chapter 4 - The Power of Sharing

Chapter 5 - Making Sense of Virtual Worlds

PART II THE STRATEGIES

Chapter 6 - Any Place, Any Time

Chapter 7 - The People Know Best

Chapter 8 - Everyone Has a Stake

Chapter 9 - Real in the Virtual World

PART III THE WAY AHEAD

Chapter 10 - What Every Leader Needs to Know

Business Goes Virtual - Chapter 5 - Making Sense of Virtual Worlds

The fifth post of my Business Goes Virtual blog series continues with “Chapter 5 – Making Sense of Virtual Worlds”. Although it may seem like all Virtual worlds (VWs) are games, they’re not. World of Warcraft, Farmville, and other popular massively multiplayer online role-playing games (MMORPGs) have taken the world by storm, but nongame VWs, like Second Life and Project X, are only starting to come out of its shell.

In Business Goes Virtual, we have provided four laws to be successful in VWs.

Law #1: Virtual Worlds Are Not Games

The first assumption that businesses often make is that VWs are games. This is a wrong assumption. The right answer is that VWs are a new, rich media communication channel. While the market for nongame VWs is still relatively emergent compared to MMOGs, VWs are a rapidly growing new market segment. Based on our research preparing for this book, businesses need to start planning an online presence in VWs in order to create interactive community experiences so that they can learn how to exploit new ways of communicating with customers, suppliers, and employees in rich, virtually immersive environments.

Virtual worlds are powerful as they have tremendous online reach and can easily bring together large groups of simultaneous players in a fast- paced online environment; they can provide an interesting capability for the future of organizations. MMORPGs represent a growing business that, according to the Tower Group, will reach 40 million people and generated over $9 billion in revenue by 2010.

Virtual worlds present the next frontier for customer and employee interactions. Organizations need to start preparing now for these new methods of communication, or they will lose talent and customer segments who desire this form of customer interaction experience.

Law #2: Experience Must Be Relevant to Solve a Business Need and Create Value

Law #3: Each Avatar Is a Real Person

Law #4: A Virtual World Experience Is a New Branding Opportunity

Are you a part of a VW? How do you think it will disrupt the market when it becomes more popular in the future?

Buy a physical or electronic copy of Business Goes Virtual: http://www.businessexpertpress.com/books/business-goes-virtual-realizing-value-collaboration-social-and-virtual-strategies

The content includes:

PART I - THE CONVERGENCE

Chapter 1 - Virtual Business: Real or Imaginary?

Chapter 2 - The New Face(book) of Organizations

Chapter 3 - Real Leadership in the Virtual World

Chapter 4 - The Power of Sharing

Chapter 5 - Making Sense of Virtual Worlds

PART II THE STRATEGIES

Chapter 6 - Any Place, Any Time

Chapter 7 - The People Know Best

Chapter 8 - Everyone Has a Stake

Chapter 9 - Real in the Virtual World

PART III THE WAY AHEAD

Chapter 10 - What Every Leader Needs to Know

Virtual Worlds and Innovation(s).

We have spent the last two years researching, and developing virtual world experiences in numerous experiments internally and with clients - all with the goal to understand how Generation Virtuals will change and impact the future consumer/customer landscape.

Some of the interesting findings that we have determined are:

1.) Generation Virtuals (children ages 3-14) socialized on Habbo Hotel, Club Penguin, or WebKinz look at virtual worlds as an extension to their real worlds.
2.) Generation Virtuals will continue to have multiple personas intergrated into both their virtual experiences and real life experiences.
3.) Generation Virtuals love the multi-media, colorful and rich 3D interactive experiences and find 2D experiences on the web boring and lacking "fun factors."
4.) Generation Virtuals will choose customer experiences that leverage 3D "fun" experiences into traditional purchasing experiences.

The Entertainment Economy is rapidly evolving as Virtual Worlds continue to integrate with real world and digital intelligence content and distribution models(mobile, web, etc).

From our research, the Asian communities are rapidly leading in this evolution and for Innovation to occur more rapidly in Canada - Canadians must rapidly understand entertainment, artistic design, and social media experiences integrated into traditional processes. Governments are stimulating national policy to promote V worlds for eLearning and new solution delivery models, in particular in Singapore.

What we have seen in the Canadian environment is a very weak receptivity to Virtual Worlds in leveraging how these solutions can add value to the enterprise for eLearning, recruiting, employee on-boarding experiences, product development and many other solutions.

There are some bright lights slowly starting to emerge as companies like Rogers experiment with Virtual worlds to train their distributors in Second Life, the ten pound gorilla. Other companies like IBM are the most prolific in this space in Canada globally with over 33 islands. They are also leading the global virtual standards movements so objects developed in diverse virtual world environments can easily be transported from one VW platform to another to achieve increased ubequity.

The Ontario Government have also been successfully experimenting for recruiting new employees using second life learning experiences, however their continued marketing of their investments and community building efforts are not up to par to drive traffic to their websites and create sustainable community participation.

Helix is very committed to helping our clients develop successful business models that tap future capabilities. Virtual Worlds is one key enabling solution that as Canadians striving for increased innovation capacity need to learn 4 key things:

1.) What are these solutions?
2.) How can they be applied to the enterprise?
3.) What are the best practices,and lessons learned?
4.) How do I successfully get started?

We have recently issued our NEW Virtual World Research Report and it is available for purchase now at our new publishing center.

We also have developed a conference center that our clients can experiment in to learn how to use these solutions in a low risk learning lab environment, with instructional guides or event planning resources to support learning and growth for leveraging these new solutions.

Helix has also developed a NEW virtual worlds community to help our clients learn more about these capabilities.

We hope you will join us...and together we can learn how these new business models will shift current and future business models.

Call us at(647)477-6254 to learn more or post a blog comment.

Virtual World Valuation Perspectives on Second Life.

Analyst firm Next Up Research just published an extensive report on Linden Lab, the San Francisco company behind virtual world Second Life. Highlights are summarized below:

The research is based on aggregate data and is available on SharesPost, a site set up to trade shares of privately held companies (if you register, you can download the report for free from that page, or you can find other valuation reports on companies like Facebook and LinkedIn). The report goes rather deep into the valuation of the Linden Lab, which it pegs at somewhere between $658 million and 700 million.

Now that Linden Lab has been around for nearly 10 years, and with its product Second Life celebrating its sixth birthday since launching publicly in June 2003, we thought it would be a good idea to take a close look at the report and see how the company’s doing according to the analysts.

First of all, you may be wondering if anyone is still using Second Life at all. The answer is yes, and users are very active on there. During the past 30 days, one million users logged in, according to Second Life’s own statistics. In average time spent per user per week, Second Life in fact trounces all other MMORPGs, including World of Warcraft and Civilization IV. In another testament to the service’s apparent stickiness, the number of hours users spend on Second Life has been increasing steadily and is currently at historic highs, totaling approximately 124 million hours in the first quarter of this year.

More importantly, Next Up says in-world transactions have recovered after a significant drop in September 2007 - when gambling was banned in the virtual world - and has been steadily increasing ever since December 2007.

Which brings us to the valuation, or at least the estimated value Next Up claims Linden Lab is worth after running a couple of calculations. Using publicly-traded online gaming companies as a proxy, Next Up pegs the median enterprise value (EV)/ Revenue multiple for that group at 7.2x off of 2009 revenues. Subsequently applying this self-proclaimed “conservative” multiple of 7x to the estimated revenue of Linden Lab ($100 million for this year), the current target valuation amounts up to $700 million.

That seems like a stretch. In November 2007, the last time we asked ourselves how much Second Life is worth, we came out somewhere between $500 million and $1 billion. The current estimated enterprise value calculated by Next Up falls pretty much right into the middle of that range.

Next Up defends the 7x multiple variable by referring to a two-year-old M&A deal. When Disney acquired Club Penguin for $350 million in cash back in August 2007, it paid out at least a comparable multiple based on Vlub PEnguin’s projected revenue for the year (between $50 and $65 million), despite the fact that it reaches a narrower demographic profile. But things have changed since then: stocks have tanked, valuations have dropped, the IPO market has pretty much dried up and VC-backed liquidity is at a record low. So that implies a major discount, with a valuation between $300 million to $500 million, which is decent but not spectacular, assuming Next Up’s revenue projection is accurate.

Here’s what else Next Up says could have a negative impact on Second Life’s valuation:

- the aging population of its main target markets (U.S. and Europe) and less of a presence in developing nations where its main target audience (people from 13 to 45) is quickly gaining in size.
- limited amount of premium subscriptions (about 1% or 170,000 users)
- possible taxation on virtual monetary transactions in a variety of countries
- cost and complexity of running the technical infrastructure behind the virtual world

Based on our own Helix Commerce Research on Virtual Worlds, and Gartner Group predictions Fortune 500 companies focused on innovation need to execute experiments in Virtual Worlds to be ready not for the Gen X and Gen Yers but the Generation Virtuals who are growing up on solutions like WebKinz and Club Penguin or Habbo Hotel. We now have our first generation of Virtuals.

Source link

Innovation in Virtual Worlds - Strap Up - New Virtual Economics

Virtual Worlds Creating New Market Dynamics

Just like blogging and the ability to comment on news items online are, in essence, popularizing and decentralizing the news industry, so too are virtual worlds popularizing and decentralizing the gaming, meeting, and 3D graphic design industries, reports In-Stat (http://www.in-stat.com).

Virtual worlds-especially the 3D kinds-are classified under the Web 3.0 category because of their profound ability to integrate multiple types of content, information sources, and feeds into one highly engaging and interactive format, the high-tech market research firm says. Virtual worlds are online, computer-generated simulations of life-like or fantasy environments where users guide their "avatar," or digital representation of their physical selves, to accomplish various goals.

Evidence supports the conclusion that the 'killer application' that is critical to virtual worlds-and, by extension, to Web 3.0-is, in fact, already here and it is none other than social networking.

Recent research has found the following:

*Total registered users of virtual worlds are expected to exceed
1 billion and total revenue is expected to exceed US $3 billion by 2012.

*70% of the more than 300 million registered users of virtual
worlds are younger than 18.

*Virtual world companies earn close to 90% of their revenue from
the sale of virtual items, currency, land, and fees associated with these items.

The Ten Pound Gorilla is Second Life, and my firm has been researching the evolution of the brands in SL for over two years and we will soon be bringing to market an unprecedented research assessment of over 60 leading brands in SL.What is clear from the initial research is - the Good, The Bad, and The Ugly are very evident in SL. The failures of so many great companies in understanding the community dynamics and continual requirement for content refreshing with engaging, and entertaining experiences is disappointing.

The reality of the new world is based on collaboration economics, or the network effect, or now easily dubbed crowd sourcing economics.

Wealth will be created from companies that create community experiences that are deeply embedded into all their business processes. Business engagement practices are now undergoing a steady evolution. With the Gen Virtuals growing up and hard wired to WebKinz, Club Penguin, There.com, etc.....the integrated experiences of working with our avatar personas will simply be universal in time.

Wake Up Call.

Is your company starting to experiment with Virtual Worlds? Do you understand what they are? If not, give us a call, and we welcome help you develop your business models more effectively in this area.

Virtual Worlds and Real Estate

Virtual Worlds and Real Estate

Virtual Worlds continue to evolve and enchant marketing professionals as rich media experiences continue to improve and integrate blogging, instant messaging, podcasting, discussion forums, gaming, and rich communication interaction experiences. One of the major opportunities for Virtual Worlds is to help sell real estate property as it provides an opportunity to navigate real estate properties leveraging three dimensional experiences. Second Life, the 10 pound gorilla, founded by Linden Labs, has been innovating in Virtual worlds since it was founded in founded in 1999 by Philip Rosedale to create a revolutionary new form of shared experience, where individuals jointly inhabit a 3D landscape and build the world around them. Second Life, has a rapidly growing population of over 10,000 Residents from around the globe, who are creating and inhabiting a virtual world of their own design. Just today, when I signed in to my account under Syndi Lane and, there were over 200,000 member’s teleporting (navigating or flying) from one real estate landscape to another.

There has been a number of innovative real estate developments enter Second Life including Starwood Hotels where they initially launched a new hotel brand, aloft, in the massively multiplayer virtual world of Second Life over a year ago. Their in-game implementation, called “aloft island,” was based on early designs and floor plans and will serve as a 3D dress rehearsal for the actual hotel. Another active Real Estate company, based in Canada that aggregates market information on condo projects around the world is Global Condos.

On November 12th, 2007 they unveiled its comprehensive virtual directory of new condo developments in Second Life. An international project with locations in Dubai, India, and South Africa, developments are organized by the city and region in which a developer’s project is located. This ensures the property is showcased in searches by local residents as well as global buyers. Condo Centre offers access to information about multiple developments in a single location and a Web site listing condos for sale in different cities. Potential condo buyers in SL can to explore new developments, view information detailing real-world properties with interactive floor plans and design options. “We wanted to create an immersive and interactive experience for prospective buyers”, says Cliff Bowman, President of Global Condo Centre. Bowman’s SL avatar name is Barry Janus. “Our real estate developer clients around the world pre-sell condo developments aimed at several demographic profiles. Namely the Boomers, X, Y generations and the newest profile, the “Net Generation or Thumb Generation”. Visitors to Global Condo Centre Island may get the chance to a walk through floor plans in real time and interact with design options, altering the flooring, kitchen cabinets and wall colors that better fits their lifestyle: urban, resort or ski recreation.

What are the implications to Real Estate Developers in Canada?

1.) Marketing Strategies and Online Web Planners will need to start thinking about how to develop virtual world experiences to reach out to a new market segment of buyers that are tech savvy. In looking at future segments like Gen X and Gen Y’s who in less than 10 years will be able to make major investments in the real estate or condo market….companies that get ahead of the game and build relationships with their future customers here will have a lead advantage

2.) These environments provide low cost and low risk ways to test new real estate design plans and seek customer feedback on the design using online focus groups in virtual worlds.

3.) Opportunities to sell virtual world real estate and develop a new revenue line.

Summary

We have been analyzing marketing approaches to Virtual Worlds with CMP Media out of New York for over a year, with Dr. Dobb’s brilliant visionary, John Jainschigg and in our seminal evening conversations when we were key note speakers last year at the International KM World Conference, we both concluded that we are entering another generation of web presence, where the experience economy promise is rapidly changing how consumers, and markets will interact in purchasing their products and services. There was a day when people could not fathom how eBay could dominate a global community auction, with staggering growth rates

Marketplaces net revenues totaled a record $1.5 billion in Q4-07, representing a year-over-year growth rate of 21 percent. With 46 percent from US operations and 54 percent from its International business.

In Q4-07, gross merchandise volume (GMV), the total value of all successfully closed items on eBay’s trading platforms, was $16.2 billion. (Total GMV for the full year 2007 was more than $59 billion.)

eBay users worldwide trade more than $2,039 worth of goods on the site every second.

There were 637 million new listings added to eBay worldwide in Q4-07. At any given time, there are approximately 113 million listings worldwide, and approximately 6.7 million listings are added per day. eBay users trade in more than 50,000 categories.

We predict that like with communities like eBay, virtual worlds will create new communities of interaction which will shift traffic patterns of consumers. Early predictions by Gartner Group have indicated that by 2011 over 80% of tech savvy users will have an avatar. This is only three years away.

If this growth rates happens as aggressively as forecasting this has significant implications to not just real estate markets, but also to all marketing professionals world-wide in their struggle to capture eye balls.

The real question is your organization prepared for a virtual world tsunami – it is moving and gaining strength and momentum – although skeptics are still resting on the beaches – those that are smart are entering virtual worlds now to test and learn to ensure there are positioned effectively to ride the constant currents of change.