Virtualization in the Real World

Conventional wisdom, in lumping Second Life with MySpace, FaceBook and other social networking sites, dismisses it as merely a social site. By “dismisses” I don’t mean to say that people think as a phenomena it is unimportant and can be ignored, but merely that they think of its impact solely in terms of social interaction. I am more convinced than ever that Second Life is really a new medium of virtualization, and is far more revolutionary than most people realize.
Just as film revolutionized the business of performing arts and news (back in the days before they were one and the same) or vinyl records revolutionized the music industry (really the shellac versions that preceded vinyl LPs in the 1950s), Second Life offers a virtualization medium that has the potential to change the way we think, operate and do business. The change will come whether you personally participate in Second Life or not.
To help make my point, below are four examples of increasingly practical uses for Second Life that help explain what a “medium of virtualization” really is.
Cory Ondrejka, CTO of Linden Labs, calls music the killer app of Second Life. The Second Life grid is dotted with small music and dance clubs. The music is streamed from a musician who could be anywhere in the world. What has really happened is the otherwise obscure musician has replaced the grind of finding little local gigs or putting out the hat on a street corner with a global tip jar. And, he can do all this from the comfort of his own home. Second Life is not a new venue for musicians as much as it is a whole new medium with a new set of economics.
Architecture & Design
Wouldn’t it be great if you could prototype really expensive things like buildings in ways that generated lots of useful data and didn’t cost much? Aloft Hotels did just this when they designed and built a new hotel in Second Life. Unlike pictures or traditional architectural renderings, Aloft built a hotel you could go into, walk around and interact with. They then surveyed visitors with questions like whether they were able to find the front desk and did they like the rooms? Because Aloft was also able to track the actual movements of visitors, they were able to correlate actual actions with the given responses. Aloft took the data and gave it to the architects working on their “real” hotels.
Think of the implications for retail or other types of spaces. Apple spent a huge amount of time and money to prototype their retail stores in a product-like process in a warehouse near their Cupertino campus. What if they’d done it in Second Life, giving them the ability to interact with “customers?” Give some really smart people a couple of years to play with this potential while building upon what others are doing, and what Aloft did recently is soon going to seem as dated as the once ultra cool special effects in the original Star Wars movies look today.
Web meetings are pretty mundane, and the technology is tapped out, right? How about a group presentation where you can have individual, spoken conversations rather than text chats? Linden Labs is building a native capability for voice into Second Life which will enable you to have conversations while being aware of surrounding conversations. Much like a real meeting, you’ll be able to have one-on-one and one-to-many conversations while also able to listen passively to side-conversations without having to actively engage (initiate or accept) with the individuals talking.
If you have heard nothing else about Second Life, it is probably that some people are making a (real) living designing and selling virtual clothing to the virtual residents for real money. When you know more, the story gets even more interesting. Fashion and other entrepreneurial activities in Second Life benefit from extremely low barriers to entry. This means that the fashion business in Second Life is unusually competitive and fast moving. Real world fashion designers are used to producing two major seasons a year, but in Second Life fashion trends can last as little as two weeks. Just as Aloft was able to let people test drive their hotel, fashion designers will be able to test a much larger number of fashion concepts. The big question, and by that I mean more than $64 million dollars, is not if, but when and to what extent Second Life will become an originator of real world fashion trends?
Of course, there is nothing unique about the fashion business that cannot carry over to other types of entrepreneurship. In a tree loaded with opportunities, fashion is merely the fruit hanging closest to the ground.
As with any other form of virtualization, Second Life is all about breaking down barriers, whether they are new economic models, the high cost of capital, barriers to innovation or even the bounds of time and space. The one thing–and perhaps the only thing–that is certain is that there are fewer and fewer limits to how we interact socially and economically. If you think your business is impacted less than others, think about all the potential competitors, many of whom you’ve never even heard of–(yet), that don’t think that way.

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