Socially|Mundane

The problem most people who start or try to maintain a business in Second Life have is that it's business. Don't get me wrong here, in a departure from my usual in-your-face-truth-hurts ways, I am actually stressing that I do not want to insult anyone or their intellect when I say that those so-called business people really just don't know business.

And even if they do: they still don't know business. At least, not SL business. Friend acquaintance and fellow bloggerPeter Stindberg Im'd in-world and asked me "Hippo or Apez?" (And go read and subscribe to his blog - it's all good stuff.)

He's referring to the web-enabled networked vending systems available in Second Life. It is no secret I have used both for more than a year (Hippo since it was first released) and lean toward Apez because of what are to me amazing management abilities. Ironically, only last week my new book was published on Amazon and available in-world at SLX (sorry, it always will be SLX to me.)

There are some basic facts about business that must be understood if that business is going to survive and thrive: What are your products, who are your customers and where is the money?

What is your product? Meaning that you really need to understand your product and become a salesmen (sorry, women, this statement includes you, too.) You really need to make it clear to your potential customer not only exactly what your product is, but why should they buy it from you to begin with, and then why should they buy yours instead of the others.

Know your customer: Who exactly is your target? Where are they coming from? How are they finding you? What do they want in terms of design and features in your product?

Know your money: When your products are purchased, which vendor locations? Which products? If you have multiple lines, which product line makes the most money? Which product in each line? and so on.

Yes you can do all this with the standard "Transactions" report Linden Lab gives you, fire-up a spreadsheet like Numbers or Excel and build a table to calculate all this stuff. Suffice it to say the Apez handles most of this automatically. However, this isn't intended to be an article touting Apez, the Hippo system is very good, too, just a lot more limited.

The problem with "business" in SL is the management side of it. But also there are a lot of "business rules" that are turned inside-out and upside down. And a lot of people actually make wrong assumptions.

For instance: in first life the shopping mall is good. Allows the money-spenders an easy way to do the most shopping in the most convenient way in the least time. As a business retailer, you want that traffic. The more eyes that see your stuff, the more sales you'll make.

However, in SL, you want the opposite! You do not want a lot of traffic. If you judge a potential location based on traffic, lower is better - unless it is a location that you will treat as an advertising space rather than the main outlet.

A mall in SL is useless, other than a single purpose: having several lessees helps the land-owner pay their tier. For the merchant, it's only a place to drop and maintain prims. If that place is treated by the merchant as an advertising opportunity, then good. But too many actually expect sales from SL mall spaces. Mistake.

Why do you want low-traffic? Why don't bother with "malls" except as 'advertising' space? Why is the Apez system better than Hippo, business-management-wise? Read the book.

And the SL economy goes through wild seasonal swings: specifically the intensely scary dip every summer. People are out in the sun (except maybe our friends down under perhaps) - so there are fewer people in-world at any one time spending real money (it seems only the freebie-entitlement-attitude types remain.) And with the real worldwide recession sweeping the globe, I suspect this year will be worse than those in the past.

My point in all this is that most SL "business people" think they are that simply because they've created something and plop it into some prim and mark it for-sale. But that doesn't make them a "business person," it makes them a "merchant" and not all merchants are "business" people.

[Shameless plug: go in-world to my showroom and buy everything there, now, please.]

Real business people owe Linden Lab a big chunk of First Life Legal Tender every month - but never spend a dime. I owe Linden Lab an average of $600 U.S. First Life Legal Tender Real Money - every month. Yet, not one red cent comes from any of my first life bank accounts or wallet. My Second Life pays for itself. If I really wanted to, I can easily turn enough profit right now, right this second to pay for my monthly groceries or pay my monthly gasoline (petrol for you Euros) bill, and I use a lot of gasoline every month (/me is dumb American who loves his SUV.) (I know, I know... my answer is: read the book.)

New World notes just happened to post a story about "real business people" (my words) in Second Life - those who do turn a huge profit and actually cash it out. These are "business people," not simple "merchants.'

So, my questions to you are: do you consider yourself a real "business person" inside Second Life or not? And if you are honest with yourself and choose the 'not' answer, do you want or plan to be?

I don't know which vendor system Peter will go with. He's the one who must live with the system, how it works, it's bugs and idiosyncrasies every day, not the customer. And they both (well, all vendor systems) have 'idiosyncrasies'.

So, one more question: if you do consider yourself a bona-fide "business person" in Second Life... how's business?