February 19, 2007 3:00 PM PST
A winning business plan for 'Second Life'
The honors, announced Monday, went to Minnesota-based Market Truths, which devised a market research and analysis system to help real-world companies figure out what works and what doesn't in the burgeoning virtual world.
The contest's judges rewarded the Market Truths submission because the team has conducted similar market research in the real world for years, and because it appeared to have the best profit potential of the four finalists.
"I was really impressed by the quality of (all) the ideas we received," said Susan Wu, a contest judge and a venture capitalist from Charles River Ventures. "Each one of these businesses could turn into a viable ongoing enterprise, not only in terms of Second Life, but as a service that stands across multiple virtual worlds."
The other finalists in the first-ever business plan contest in Second Life submitted proposals--in order of finish in the contest--for a suite of in-world communications and collaborations tools, an in-world music distribution system and a reputation-based search engine.
Wu said she voted for the Market Truths team--led by its managing director, Mary Ellen Gordon--because of its real-life market research experience and the likelihood that the team would be able to extend that experience into the virtual arena.
"I personally favored Market Truths because they had the best execution," said Wu. "It seemed most likely that they would be able to execute on their idea (and) the fact that (Gordon) already has experience doing this."
The contest, which launched in November, sought creative business plans with real profit potential. It was sponsored by The Electric Sheep Company, the largest third-party creator of projects and services in Second Life, and global public relations firm Edelman.
The Market Truths team will receive free access to a private Second Life island for six months, as well as a prize of 350,000 Linden dollars, the in-world currency--about $1,308 in U.S. dollars.
The proposal was for a system in which Market Truths would conduct regular focus groups, as well as surveys and other market research to determine the kinds of things that members of the Second Life community like and don't like about brands, products and services from third-party companies.
The research and surveys will provide analysis based on Second Life users' real-life gender, in-world gender, real-world age, time in Second Life, and other factors. That will give Market Truths' clients the opportunity to gauge users' attitudes based on a number of demographic factors, including the unusual ones that come up in a virtual world where a participant can take on any personality, gender, race, age or size they wish.
Gordon said her team will conduct focus groups inside Second Life and has already been doing so. Market Truths, she said, has been signing up Second Life users to participate in the studies who are being paid a nominal fee--in Linden dollars--and are required to have been in Second Life for at least 30 days in order to ensure that they have some investment in it.
For Market Truths' customers--potentially large corporations considering whether to set up shop in-world, following in the footsteps of companies including Toyota, General Motors, American Apparel and Starwood Hotels--Gordon said the idea is to provide information about how Second Life users will react to their brands, products and services.
Further, Market Truths' services will allow companies to market-test prototype products and to assess how Second Life users will react to them.
To the judges, the fact that Market Truths can help its clients evaluate how the Second Life community will respond to products, brands and services is an invaluable and potentially lucrative business.
"People will pay them a lot of money, so...it's a really good business," said Jon Goldstein, a contest judge and partner at Catamount Ventures, an early investor in Second Life publisher Linden Lab. "Another thing we considered in this contest is the effect on Second Life and its community...What (Market Truths is) going to be doing is working with big companies and helping immerse them in Second Life, and that's a great for getting more people involved and educated about Second Life."
24 commentsJoin the conversation! Add your comment