Your Customers Are Flocking to Second Life. Are You?


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When Suzanne Lane of Coldwell Banker Bain in Washington put a high-end home up for sale for one of her clients not long ago, she quickly attracted the attention of a buyer from Italy. He had walked through the property, even though he never visited Mercer Island, Wash., where the house is located, to do it.

Instead, he visited the house virtually with an “avatar” on the increasingly popular three-dimensional virtual-reality platform called Second Life.

When I last looked into this transaction, the house hadn’t sold, and I don’t know if the Italian buyer even made an offer. But you can expect to see more business transacted this way in the next few years because all of the technology to make these kinds of transactions commonplace—regardless of the industry you’re in—is already in place.

Second Life was launched in 2003 by Linden Lab of San Francisco and received little notice until about three years ago, when the company announced that it was turning the platform into an experiment in free-market economics, allowing people to make whatever virtual products they wanted, sell them for virtual money and convert their virtual sales proceeds to U.S. currency at a floating exchange rate. Of course, you can also buy and sell real goods and services on the platform, too.

It’s a real virtual tour because you’re taking a stand-in of yourself, known as an avatar.

That experiment has helped spawn a thriving virtual economy that last year had a GDP about the same size as Saint Lucia’s in 2006. But where businesses like Coldwell Banker, H&R Block and Dell Inc., among hundreds of others, are finding the platform the most intriguing is in its potential to present their products and services to customers in an entirely new way.

Enabling an Italian homebuyer to take a self-directed tour of a Mercer Island house is a case in point. This is not the same kind of virtual tour you can take of a house on a web site, where you watch a series of slides or a video clip. The Second Life virtual tour is—well, it’s a real virtual tour because you’re taking a stand-in of yourself, known as an avatar, and walking it through a 3-D replica of the house.

When I last checked in, Coldwell Banker just had the one house for sale this way (although it had lots of virtual houses for sale). This is just its opening foray into an exciting new technology for the company. But others in real estate have hopped onto the platform, although they’re using it in a much more modest way, just using photos to showcase houses and then sending people to their web sites. All sorts of companies and nonprofits in entirely different industries are finding novel ways to use the platform, too.

One nonprofit, called Books for Soldiers, is developing a replica of a USO facility. When its project is ready to go (it might be already; I haven’t checked in on them in a while), soldiers in Iraq and Afghanistan (or anywhere else, for that matter) will be able to meet up at the facility with their spouses to dine and dance together in real time.

Doll world

If this sounds a lot like playing dolls, that’s because what you do on the platform is very much like that. Once you open an account, you’re given an avatar, and it becomes something you need to take care of: It needs clothes, a place to live, furnishings for the house, people to visit, things to do and so on. As you can imagine, many people spend hours playing this game of computerized dolls. Last time I checked, the platform had about 10 million residents, more outside the United States than in it.

But for businesses, it’s safe to say, this doll world is really just a stepping stone to what lies ahead: At some point in the near future, the firewall between Second Life (or another platform like it) and the World Wide Web will come down, and when that happens, the kind of 3-D interface that makes the Coldwell Banker virtual tour so arresting will over time become a part of the Internet browsing experience.

It already is today—but only on a limited basis, because travel between the World Wide Web and Second Life is not seamless. If you’re a company that’s doing some very interesting things in Second Life, it’s not easy to get people visiting your web site to jump over to the virtual platform to experience what you’re doing. You first have to ask them to click a hot link to Second Life on the web, open an account (it’s quick and free but still a hurdle) and then follow some fairly detailed instructions to get exactly to your location in Second Life. At the same time, it takes practice for people not accustomed to the environment to learn how to operate their avatars, even if all they’re going to do is tour a house.

But these challenges are just the growing pangs of what many analysts and business people think of as the new face of the Internet. Arlene Ciroula, chief operating officer of a regional accounting firm in Maryland, who had a virtual office for her company developed in Second Life, says it won’t be long before everyone has an avatar, “just like everyone today has a PC.”

Ciroula’s accounting firm has a very simple setup: an office with a meeting room and reception desk. Visiting avatars can click on a laptop on the desk and answer questions about their financial needs and then get “teleported” to the company’s web site.

That’s a very simple use of the platform (and it only cost her a few hundred dollars to develop), but it’s enough to engage with customers in a novel way. You can be sure people won’t quickly forget the name of her accounting form. (It’s KAWG&F.)

It’ll be a few years before virtual tours like Coldwell Banker’s and virtual dances like those hosted by Books for Soldiers become commonplace, but make no mistake: Now that the technology is in place, your customers will increasingly expect to engage with your company virtually.

Robert Freedman
American Society of Business Publication Editors
Robert Freedman is author of How to Make Real Money in Second Life (McGraw-Hill, 2007) and is past president of the American Society of Business Publication Editors. He's editor of three other books, including Broker to Broker (John Wylie & Sons, 2005), a compilation of real estate brokerage management practices.


  1. Robert

    A very interesting post.

    Second Life has certainly created a stir over the past few years, but I cannot share your optimism about its future.

    Problems caused by Second Life tipping over into the slower growth phase of the diffusion cycle, businesses leaving due to lack of results, and real world problems like crime and copyright infringement lawsuits, all suggest the honeymoon is well and truly over.

    Whilst Second Life is a very interesting experiment, it remains the virtual equivalent of the Wild West. Companies and consumers should enter such an environment with great care. Lest they are the ones that get virtually scalped!

    As the old saying goes, “Only fools rush-in where angels fear to tread”.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

    Readability Index: 12

  2. Graham, you make good points about the challenges to the long-term viability of the Second Life platform, and some of these challenges have been discussed exhaustively in other forums. Yet I remain bullish on the long-term prospects of a virtual reality platform becoming an integral part of the Internet experience, certainly in the long-term. Even in the short-term there are ways to leverage the platform without falling prey to its negative aspects, and many companies and organizations are doing that today. In essence, they’re by-passing the broader platform and sending people directly to their virtual location from their Web site. In that way, they’re leveraging what’s good and unique about Second Life–it’s real-time, 3-D interface–without getting caught up in the Wild West outside their borders. In essence, their 3-D location serves as a private, security-enabled adjunct to their Web site. To be sure, they must send new users to Second Life to open an account, but once their customers do that, they can proceed directly to the company’s virtual facility via a SLURL (Second Life URL) and avoid everything else. Since the facility can be protected by a security perimeter, the users enjoy all the benefits of the real-time, 3-D experience without any of the drawbacks. I see the platform evolving in this direction, and it’s in this way that I focus on the use of Second Life in my book, How to Make Real Money in Second Life (McGraw-Hill). I appreciate your comment and hope you find this reply helpful.

    Robert Freedman

  3. having watched second life evolve over the past couple of years from “next big thing” to its current novelty status, i have to agree with graham. the friction to engage was the kicker — it’s still really, really difficult for the average jane or joe to get going in second life. the hardware requirements are steep, the lag times are long, and the experience for me hit the non-starter status of being significantly slower than other interaction mechanisms such as IM / chat / twitter / etc. without corresponding benefit.

    one guy’s opinion…


    christopher carfi


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