November 6, 2007 4:00 AM PST

Book excerpt: 'The Entrepreneur's Guide to Second Life'

Editor's note: The following is an excerpt from The Entrepreneur's Guide to Second Life: Making Money in the Metaverse, written by CNET reporter Daniel Terdiman and just published by Wiley. The text below combines information from the book's introduction and a chapter on fashion.

When I've talked to people deeply involved in the Second Life community in recent months, especially those who are out speaking in public about it, they tell me that one of the first things that everybody asks them is, "How do I make money in Second Life?"

One person, who runs one of the most famous companies building big projects in Second Life for outside clients, told me that after giving a talk at a conference in Germany, he was besieged by a flood of attendees asking that question, and he ended up spending more than an hour responding.

So the goal of this book was to provide the answer to the question, and to anyone who wants to know, not just those who have the opportunity to ask it personally of someone in the know. If you read this book, my hope is that you will come away knowing (a) that you can make money in Second Life, (b) what opportunities exist for those who want to do so, (c) what you have to do to avail yourself of those opportunities, and (d) what the roadblocks are to potential success.

There are a few things you should know, though, before you set out on your grand Second Life entrepreneurial adventure.

First, despite some breathless press reports that suggest that making money in Second Life is as easy as shooting fish in a barrel, that really isn't true, and it would be irresponsible of me to suggest it was. The reality is that conceiving of and running a Second Life business is, in many ways, very much like doing so with any kind of business. Those who do well are the ones who come up with a plan, commit to it, put in the time required, and are willing to be flexible as conditions demand.

But for those who do those things, success can follow, whether your goal is to make enough money to pay for your Second Life fashion needs or to live on. There are people at every point along that spectrum, and it's vital that you understand that the ones at the more lucrative end of that scale are the ones who have put the most into their businesses, and who have treated them with the most respect.

SL goods for sale

The Second Life community, while an ever-evolving and multifaceted population, universally demands that you take them seriously, and that you offer something new and interesting. Otherwise, why should they patronize your shop? There is another one just around the way.

The point here is just to make sure you understand that you can't simply show up and expect the dollars to roll in. It takes work, and a lot of it. But if you are willing to put in that work, the rewards are there for the taking.

I hope this book will make it easier for you to find your niche, and to make the kind of money you'd like to be making in Second Life. Here's what you'll find:

The first three chapters focus on the concept and history of a virtual world economy like that of Second Life, as well as on Second Life business and marketing basics. Included are sample business plans for the most popular segments of the economy.

Chapters 4 through 9 cover the basics of, respectively, the fashion industry; the real estate industry; building and construction; the adult-oriented industry; gadgets and toys; and interactive opportunities. Each chapter gives an overview of the specific business segment, as well as a section on required skills and some marketing advice.

Chapter 10 discusses Teen Second Life, the version of the virtual world for those aged 13 through 17, and covers much of the same ground as the previous chapters.

And Chapter 11 looks at the future of business in Second Life, including interviews with key figures in the community, and a look at how new technologies will shape the future.

There are also three appendices covering additional reading, a sampling of prices of Second Life goods and a survey of how much you can expect to make in each segment of business in the virtual world.

Second Life is an exciting and vibrant place that is growing quickly and energetically. And it is a land of unending opportunity. I hope that after reading this book you will be ready to embark on your quest to leverage this virtual world to your financial advantage, all while having a great time. Good luck.

Fashion: The biggest business of all
If there's one common experience that just about everyone in Second Life has shared, it's customizing the appearance of our avatars. It's no wonder--the stock avatars, skins, and clothes we get when we sign up are, to be nice about it, boring. Useful, sure, because we have to have something when we go in-world for the first few times, but remember: the defaults tend to make people assume you're a newbie.

The nice thing about Second Life is that we can do just about anything we want and express ourselves any way we want. It's so easy, and relatively cheap, to change our avatar's looks, that each element of that look becomes a significant expression of individuality. And customers are clearly having a lot of fun with the Second Life fashion industry offerings, which are well priced for a little guilt-free retail therapy.

Whether for male or female avatars, furry or Goth, hugely tall or amazingly tiny, there's fashion for just about every taste, budget, and desire. But as with nearly everything else in Second Life, this is an industry created by the community, not by Linden Lab. All that haute couture--ball gowns straight from the court of French kings, shoes that Manolo Blahnik would envy, delicately freckled skins for redheads, and so much more--was created because the Second Life community wants to look sharp and is willing to pay good Lindens to do so.

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Second life?
What these folk need is a FIRST life!
Posted by godseyesore (28 comments )
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2ndlife sucks, just more propaganda!
This relentless propaganda for 2ndlife is one more example of the lies & lies out of Silicon Valley Big media. I mean no one but a few losers who know nothing about Technology or have no real life find 2ndLife interesting. But since 2ndLife is VC funded, which VCs can have their Big media brethren hype whatever they want, we receive this continuos BS & hype about 2ndLife by Cnet and countless other Big media sources.

Put it this way if 2ndLife was not in Silicon Valley (San Francisco) and had not received VC funding, you would NEVER be reading about it over & over here or elsewhere in Big media, after so many people have said that it is boring & useless. I mean who wants to download a 50MB software to chat as a silly looking Avatar with other
silly looking Avatars. And then have to download that 50MB software in 2 weeks as they change it.

After all, if people want to enter a 3D world to have a virtual world experience and to have fun then they will choose an game like World of War Craft which is media rich and action packed. If people want to have an online business class meeting they would use a product such as eauditorium which is instant to use and offers
application sharing & voice conferencing which are essential features for business meetings.
Posted by Sea of Cortez (67 comments )
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No one cares about Second Life, no one! I could see if you had a million WoW articles because that game actually matters. But SL? It's pretentious BS.
Posted by Yakk35 (7 comments )
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30k users logged into Second Life at any given time
30k to over 50k users logged into Second Life at any given time means that *some* people find SL a viable use of their entertainment time. c|net is simply covering a (growing) part of the entertainment computing industry, like WoW or The Sims Online.

While I often wonder what some Second Life users see in SL to devote so much time & energy to it, I also wonder what it is about SL that engenders as much energy (& perhaps as much time) spent in the denigration of SL. It's like the PC/Mac wars. Ultimately, use the right tool for the job - or spend your entertainment time using the gadget or program or service that suits you - whatever it may be.
Posted by toster (1 comment )
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problem is
The problem is the media portrays SL as generic family entertainment, when 10k of those users are men(likely some woman) pretending to be "slave girls" or escorts, another 10k looking for slave girls and escorts. the other 10k are fat lazy people who like to go clubbing in sl cuz they were to lazy in rl.
Posted by Draxon (94 comments )
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To Each There Own.
Some people like WoW- where goals are set for you.
Some people like Second Life- where you make the goal.

On a plus side, all Second Life users legally own IP Rights to anything they create. In games like WoW, you legally own nothing, it all belongs to Blizzard.

Besides all the hype, the number of Second Life residents making a "Sustainable" Living is around 400 or so. Not as big as the media would lead people to believe. I myself only make between $400-$600 a month. And thats from stuff I did in Photoshop about 2 years ago (all designs are copyrighted too). I pay about $15/month for Premium Membership, which is what I'd pay to play Warcraft too, yet I make 26 to 40x that back.

Honestly tho, trying to compare Second Life to other MMO's is Apple's and Oranges. One's an Open-Ended Platform, the others are games.
Posted by TGallag69 (18 comments )
Reply Link Flag
How do you make money in a game that Linden Lab continues to lose inventory. With creators nolonger supporting their products, if some poor newbie person loses money buy from a vendor and they don`t receive their item you just take their money right? OH! thats how you make $600.00 a month! Priceless! There you go a Second Life business man
Posted by play7 (926 comments )
Link Flag
Cnet deleted my first comment
Nice so now Cnet is deleting comments that are against Second Life?

I said I am sick of Dan Terdiman and Second Life, and that SL is a game for social outcasts and pedophiles who would rather wank it to cartoon images on a computer screen rather than go out and meet real people, and that it will run its course sooner rather than later and be forgotten about.

Seriously, why do people play this thing. Its only doing things you can do in real life. In something like World of Warcraft, you can play as a elf with swords and battle-axes fighting dragons and orcs and gaint monsters, and use spells. Thats something you cant do in real life, you use your imagination to "play" in a dream world, and its fun.

So what am I going to do in SL? LOOK AT ME, I'M SHOPPING FOR CLOTHES. WOW WEE!!!!! Cast level 10 change hair color to blond spell!!!

Also, I use to work for an internet company, and they lied about the number of people that visited the site everyday, all internet companies do, Linden is doing the same.
Posted by lowenbrau212 (419 comments )
Reply Link Flag
They are laughing
You make many important points. WOW and SL are to totaly different games. But the only thing that is worse is Danial Linden ( AKA Dan Terdiman amoung other alts). What is even worse he makes fun of its men users playing girls on sl. What the hell? he insulting people playing the game? Oh they provide the means for faking being a sexy woman. Then Dan Terdiman goes off insulting them? Well these types of people don`t even have a account. They only have it because its their job ( or should i say They feel they have a life) With people thinking people that play Second Life Don`t have lives). Reall Nice.
Posted by play7 (926 comments )
Link Flag
Why is it we are subjects to this incorrect. Totally waste of time time of BS about Second Life? If you love sex, underage children (11 to 17 mostly below 15 years of age) playing escorts and making about $50.00 a day faking being a woman on second life giving vr sex to some poor unknowning guy. Then second life is for you! If you can stand a slow laggy game with lindens always banning people for no reason. Nerds that think second life is real. Newbie clubs owners kissing the ***** of Linden Lab to get more and more power. But relaly don`t care of the new players. But only promoting themselves in real life. Then again you love second life. Its a wgreat place to be insulted. Enjoy Your Second Life. For when you done your checking account wil be empty and your life in the toliet.
Posted by play7 (926 comments )
Reply Link Flag
Why are you wasting your time?
It really is laughable reading these comments from those ******** about the C|Net coverage regarding Second Life. Sure, the virtual world has several issues that need to be dealt with regarding age restriction, scalability, etc. But C|Net is in the business of covering technology news. If you don't like an article's subject, then why read it or waste time posting your complaints? If you do not like the coverage of C|Net News you are free to get your news from another source, the web is a big place and there are plenty of other news sources out there. Perhaps those who are screaming about the coverage are just seeking attention, or possibly you are jealous because it wasn't your idea, or you just cannot seem to figure out how to monetize it. Anyway, so whether or not you like it, SL is not going to go anywhere. So save yourselves some anxiety and just learn to live with it!
Posted by jvastine (1 comment )
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